Enterprise Africa August 2016

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

ENTERPRISE August 2016

www.enterprise-africa.net

SIYABONGA GAMA:

Transnet On Track for

Success

ALSO IN THIS ISSUE:

Autopax / Civils 2000 / Uniplate / MPD

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EDITOR’S LETTER

Joe Forshaw EDITOR joe@enterprise-africa.net Hal Hutchison SALES MANAGER hal@enterprise-africa.net Sophie Bolderstone SENIOR PROJECT MANAGER sophie@enterprise-africa.net Sam Hendricks SENIOR PROJECT MANAGER sam@enterprise-africa.net Shaun Cousins PROJECT MANAGER shaun@enterprise-africa.net Shannon James PROJECT MANAGER shannon@enterprise-africa.net Daniel Scott PROJECT MANAGER daniel@enterprise-africa.net Jane Larkman ACCOUNTS MANAGER finance@enterprise-africa.net Harvey Tarlton SENIOR DESIGNER harvey@enterprise-africa.net

Published by CMB Multimedia Chris Bolderstone – General Manager E. chris@cmb-multimedia.com Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-multimedia.com www.cmb-multimedia.com CMB Multimedia 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. Any resemblance to real persons, living or dead is purely coincidental. 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.

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Welcome to our latest edition…

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This month our focus turns mainly to the travel and transportation industries and we hear from some of the country’s biggest and most important companies in this space.

Transnet and CEO Siyabonga Gama tell us more about a pleasing set of financial results; Autopax Acting CEO, Bongani Kupe explains more about the bus operator’s growth strategy; Uniplate MD, Dev Naicker tells us more about how the company is looking to assist in crime prevention; Transaction Capital CFO, Mark Herskovits explains more about growing its SA Taxi business; and we also hear from Civils 2000, a construction company based in the Western Cape who are specialists in road building.

The travel and transport industries are vital to the SA economy and, like in any country, the government is investing heavily to improve and upgrade a sector that can make or break economic development plans. Fortunately, the companies featured this month are all experts in their fields and have mastered their trade meaning that their input to the industries they serve has become vital, and that is why they’re featured in Enterprise Africa!

In different sectors, we look at some other longestablished companies that are experts in their field including Barno, Kemtek Imaging Systems and McCormick Property Development. The one thing that ties the success of all of these companies together is attention to detail.

Keeping a close eye on the small details has helped them all to grow into organisations that are recognised internationally for their quality.

Tell us about your story of success, and what you’ve had to do to achieve it @EnterpriseAfri1

Joe Forshaw EDITOR

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

www.enterprise-africa.net / August 2016 / 3

06/NEWS: The Month that was...

A round up of some of the latest news stories from around the country

106/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/TRANSNET: Transnet On Track for Success Despite the current economic climate, Transnet, the largest and most crucial part of the freight logistics chain that delivers goods to each and every South African.

18/AUTOPAX Recapitalisation, New Routes and New Leadership to Galvanize Autopax Facing increasing competition, a slow economy and running an ageing fleet, Autopax has identified that a strategy change is needed to ensure the company can continue to grow in the future.

26/TRANSACTION CAPITAL Driving Business Forward In the current economic climate, building a thriving business has become more challenging than ever.

Enterprise Africa talks to Transaction Capital CFO, Mark Herskovits and asks how the company has managed to buck the trend and achieve outstanding financial results in such a challenging operating environment.

32/OR TAMBO Investments and Upgrades Leave O.R. Tambo Flying High As one of the busiest and most important airports in Africa, O.R. Tambo International is a triumph in the South African transport and travel industries. As demand for extra capacity increases, investments are being made to grow this already sizeable facility.

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CONTENTS

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50/

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38/UNIPLATE: Stepping Up To The Plate

78/EDCON: Edcon Responds to Retail Therapy

Uniplate is turning the humble vehicle registration plate into a customised frontline barrier to crime. “We are elevating the number plate to the same level of control as passport documents or social security card,” says Managing Director Devandran Naicker.

Fashion retailer Edcon’s strategy for a return to its former glory includes better cost control and launching more product lines. “It may take some time, but we will get there,” says CEO Bernard Brookes.

44/CIVILS 2000: Laying The Foundations For Future Success Civils 2000 places great emphasis on delivering each and every project on time and to the required quality specifications, in order to ensure client satisfaction in both the public and private sectors.

50/SHELL: Shell Looks to Coffee to Fuel Consumer Demand Shell South Africa is perhaps the most recognised fuel brand in the country, if not the world. But positioning the brand as the frontrunner in the industry doesn’t come easily.

The company is working hard to improve and increase its customer offerings.

56/G4S SOUTH AFRICA: From SA to The World The largest private security employer in Africa, and certified as one of the best, G4S is now bringing technology and ideas developed on the continent to the rest of the world.

66/KEMTEK IMAGING SYSTEMS Three-Dimensional Growth Kemtek Imaging Systems helps equip your business for success. This innovative company has been trading in South Africa for almost 30 years and, now on a growth drive, it looks set to solidify a leading position on the continent.

72/BARNO: Helping The Country’s Biggest Brands Make Their Mark As the South African industry leader in branded stationery and promotional items. If your company is in need of high quality, bespoke products created using full binding, leather craftsmen or the latest in digital printing technology.

84/MCCORMICK PROPERTY DEVELOPMENT Rural Retail Development Pioneers A local, family run business, McCormick Property Development has been leading its industry, while remaining committed to its values, since its establishment 33 years ago.

90/FRESNIUS-KABI Caring For Life The Fresenius Kabi manufacturing plant in Port Elizabeth creates a broad range of lifesaving medicines such as infusion solutions and intravenously (IV) administered drugs. Its products are used to help care for critically and chronically ill patients. This is a business that is people focussed and is looking to continue building its market share in Africa.

94/UBUNTU TECHNOLOGIES Raising the Bar in Telecommunications Ubuntu Technologies is an independent black economic empowerment company which boasts nearly 20 years of experience within the ICT industry in South Africa.

98/STADIUM MANAGMENT A Whole Host of Venue Possibilities South Africa’s leader in the field, the Stadium Management South Africa group (SMSA) has managed four flagship stadiums in the Metropolitan of Johannesburg since its appointment in 2009.

102/DEFY APPLIANCES Award Winning Appliance Quality Defy Appliances is among South Africa’s most popular brands and offers an industry leading combination of efficiency, quality and continual growth.

www.enterprise-africa.net / August 2016 / 5

R40BN INVESTMENT IN LIMPOPO SEZ More than R40 billion will be injected into the proposed Musina-Makhado Special Economic Zone (SEZ).

In a statement last month, the Department of Trade and Industry (dti) said the investment will go towards the establishment of an energy and metallurgical industrial park.

Last week, Cabinet approved Minister Rob Davies’ decision to designate the SEZ. This means that Minister Davies has been given the green light to designate the zone and issue a SEZ operator permit to the Department of Economic Development, Environment and Tourism in Limpopo.

The industrial park will include

power, coking, ferrochrome, ferromanganese, ferrosilicon, pig iron metallurgy, lime, steel and stainless steel plants. These projects will be implemented over a period of five years and are expected to create almost 21,000 jobs in the region.

A consortium of Chinese investors, led by Hong Kong Mining Exchange (Hoi Mor), will be investing more than R40 billion into the park, which they will also develop and manage.

The park will be operating within the SEZ, which will focus on the beneficiation of minerals and agricultural endowments.

Some preliminary work, such as

the identification of the land and environmental impact assessment, has already started in order to ensure that the proposed SEZ becomes a reality.

The SEZ programme is one of the tools identified by government through the Industrial Policy Action Plan (IPAP) to boost the country’s industrialisation and manufacturing capacity.

“SEZs will be designated to promote targeted economic activities, supported through special arrangements and support systems including incentives, business support services, streamlined approval processes and infrastructure,” said Minister Davies.

SA OPEN FOR ECONOMIC PARTNERSHIPS South Africa remains open for business and meaningful economic partnerships.

This was the message by President Jacob Zuma to the South Africa-France Business Forum, which took place last month, in Paris, on the side-lines of his two-day state visit.

Despite investments from France amounting to over R24 billion and creating more than 4000 jobs, President Zuma believes more can still be done.

He told the business leaders that he was keen to see increased industrialisation, localisation, job creation and skills development linked to the large infrastructure and energy contracts acquired by French

companies.

“We believe that there is further room to increase bilateral trade and investment. We want France to partner as we take further the transformation of our economy, to ensure inclusivity and sustainability.

One of the key programmes in this regard is the Black Industrialist programme which seeks to promote the participation of black entrepreneurs in manufacturing,” he said.

The President noted that the partnership with beneficiaries of the Black Industrialists programme will contribute meaningfully in any joint venture that will be undertaken with French business.

6 / August 2016 / www.enterprise-africa.net

NEWS ROUNDUP MEDICINE ‘ATMS’ COMING TO SA SOON South Africans will soon get their medication from self-service “ATMstyle” machines.

This was one of the announcements made by the South African Ministry of Health at the 21st International Aids Conference taking place in Durban last month.

The Pharmacy Dispensing Unit (PDU), currently being piloted at Thembalethu clinic in Johannesburg, is a self-service machine where patients can obtain their medication in the same way people withdraw money at an ATM, a process that most South African are familiar with.

To use the machine, all a patient needs to do is register for the service, after which they receive a card that is similar to a bank card. To “withdraw” their medication, users simply insert their card into the PDU machine, enter their PIN and select the medication they require from their prescription list.

The machine, immediately dispenses the selected medication, eliminating the need for the patient to wait in queues. The PDU also allows patients to communicate directly with a trained pharmacist directly from the machine using a built-in video conferencing function.

BILL GATES TO INVEST $5BN IN AFRICA

Microsoft founder and philanthropist Bill Gates is to invest $5 billion in Africa over the next five years.

Delivering the 14th annual Nelson Mandela Foundation lecture, in Pretoria, last month, Gates said over the last 15 years, his foundation had invested more than $9 billion in Africa.

“We’ve put a lot of this money into discovering and developing new and better vaccines and drugs to help prevent and treat the diseases of poverty.

“We’ve also invested in global partnerships that work closely with countries across the continent to get these solutions to the people who need them most,” Gates said.

He said he is optimistic about the future of this continent because he believes its youth can be the source of a special dynamism.

He encouraged leaders on the continent to invest in the lives of young people so that life in Africa will

improve and the inequalities can be erased.

“Our duty is to invest in young people, to put in place the basic building blocks so that they can build the future. And our duty is to do it now, because the innovations of tomorrow depend on the opportunities available to children today.

“Young people are better than old people at driving innovation, because they are not locked in by the limits of the past,” Gates said.

He said Africa can achieve the future it aspires to and that future depended on the people of Africa working together, across economic and social strata and across national borders, to lay a foundation so that Africa’s young people have the opportunities they deserve.

“We must clear away the obstacles that are standing in young people’s way so they can seize all of their potential,” Gates said.

www.enterprise-africa.net / August 2016 / 7

BUSINESS URGED TO INVEST IN ECONOMY Finance Minister Pravin Gordhan has encouraged business leaders to invest in South Africa’s economy.

Sharing insights with the business fraternity on building collective action for inclusive growth, Minister Gordhan said South Africans needed an investment of 30% of gross domestic product (GDP) for it to achieve growth as stated by the National Development Plan.

The county’s investment is currently 20% of GDP. Minister Gordhan was speaking last month in Johannesburg at a business breakfast hosted by the Johannesburg Chamber of Commerce and Industry, in association with Earnest & Young.

He called on South Africans to stop focusing on the negative and move to a level of cohesion and common purpose.

“We need to stop shooting ourselves in the foot all the time and shift from

reinforcing what economist call the vicious cycle… [We need] to shift to a virtuous cycle, notwithstanding the challenges that we face.

“In other words, if we keep on with the negativity, we will only get negativity as a result. We will get immobility as an answer. We will not get dynamism either in thinking or in leadership as we go forward,” Minister Gordhan said.

He said it was in the country’s interest to ensure that inclusion works because South Africa will benefit from it, as it will increase the country’s market, which will in turn get investors for the country.

“Let’s use the immense resources we have as a country to do things in a way which will both ensure that those who are already in the mainstream of economic activity benefit … [and those] that are excluded [must be] increasingly included.”

KUMBA IRON ORE ANNOUNCES LEADERSHIP CHANGES Kumba Iron Ore announced last month the appointment of Themba Mkhwanazi as Chief Executive Officer with effect from 1 September 2016, following Norman Mbazima’s decision to step down after four years to focus on his role as Deputy Chairman of Anglo American South Africa, with effect from 31 August 2016.

Themba has been CEO of Anglo American’s Coal South Africa business since May 2014. Prior to this, he was Rio Tinto’s Regional General Manager for the Americas and COO of Richards Bay Minerals.

Kumba’s chairman, Fani Titi said: “I would like to thank Norman for his impeccable leadership over the last four years. His leadership of Kumba coincided with tumultuous times for the mining sector and a steep decline in the iron ore

8 / August 2016 / www.enterpriseafrica.net

price. Norman responded swiftly to these challenges, never shying away from the tough decisions needed to ensure the Company’s sustainability. Throughout his tenure, Norman displayed the sort of temperament, technical insight and integrity which attracted the support of staff and stakeholders even as he led the Company through major changes. I wish him every success as he focuses on the wider imperatives of Anglo American in South Africa. I welcome Themba to his new role as CEO of Kumba. Sishen and Kolomela are world class assets, and I believe Themba’s proven technical, sales and management experience will add great value and will help secure the long-term future of these high quality iron ore mines. The Board remains committed

to the strategy of continuing to deliver a robust, sustainable long term business based on the revised mine plans, cost base restructuring and operational efficiencies that have defined the last two years.”

Themba Mkhwanazi commented: “I am excited by the prospect of leading one of South Africa’s great success stories. Kumba has a rich mineral endowment and a skilled and dedicated workforce enabling us to produce high quality lump and fine iron ore products to our steel customers around the world. My energies will be focused on maintaining Kumba’s strong track record in safe production, mutually beneficial relationships and further increasing productivity to ensure the sustainability of the business for the benefit of all our stakeholders.”

NEWS ROUNDUP FREE DIGITAL TRAINING FOR DISADVANTAGED JOBURGERS The City of Johannesburg and Microsoft South Africa have joined forces to train one million disadvantaged residents, free, on digital skills and literacy over a period of five-years.

The City’s Mayor Parks Tau announced this last month, in Johannesburg, saying registration commences early in August and the curriculum is expected to begin in September. The initiative is termed JoziMS1million.

He said 800,000 of the one million to benefit from the programme will be youth between 18 and 34 years of age, and the rest will be those above 35 but still need to access the job market at entry level.

The curriculum will cover five key

topics including Computer Skills; The Internet, Cloud Services and the World Wide Web; Productivity Programmes (Microsoft Office); Computer Security and Privacy, and Digital Lifestyles.

Mayor Tau said the partnership was motivated by the realisation that youth would need digital skills to break barriers to entry into the job market.

He said this is a result of continuous engagements that the city has been conducting with various private sector companies.

The Mayor said reports show that by 2012, 50% of the already existing jobs required basic digital skills, and this trend is expected to increase to 77% by 2022.

He said the programme will be using the Vulindlele Jozi portal to register the 800,000 youth. For those above 35, the Mayor said she will go to the centres provided by the city for registrations.

“We are breaking down barriers for the people of Johannesburg to get these jobs that will be available in the market that require skills.

“The investments on the overall project come from the City of Johannesburg and Microsoft, the participants are not required to pay a fee. This is very important for those people who cannot afford to pay fees to acquire skills,” said Mayor Tau.

www.enterprise-africa.net / August 2016 / 9

TRANSNET CEO - SIYABONGA GAMA ©TRANSNET

TRANSNET

Transnet

on Track for Success

PRODUCTION: David Napier

Despite the current economic climate, Transnet, the largest and most crucial part of the freight logistics chain that delivers goods to each and every South African, has managed to post positive results that provide a solid base for future growth under CEO Siyabonga Gama.

www.enterprise-africa.net / August 2016 / 11

BUSINESS PROFILE

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“In these times of economic uncertainty, we did release a pleasing set of results,” Transnet CEO, Siyabonga Gama tells Enterprise Africa.

Speaking of the yearly results for the period ending March 31st 2016 which were released in June, Gama was happy but indicated that there is still much room for improvement.

The company registered a 1.7% increase in revenue to R62.2 billion, an EBITDA growth of 2.6% to R26.3 billion, an increase in cash generated by operations of 1.7% to R27.7 billion, an increase of operational efficiency of 15.9%, and a host of other pleasing results.

“We would like to grow much more,” he says. “Most of our business is very much dependent on GDP growth in the country so we did make some progress in terms of our road to rail initiatives where we grew quite nicely

but a lot of the sectors in this country are depressed. If you look at our steel and cement business, they went backwards; coal did not really grow.”

Encouragingly, Transnet’s Market Demand Strategy (MDS) continued through 2015 despite the economic turbulence and spending as part of the capital investment program (which was initiated in 2012 to expand rail, port and pipeline infrastructure) hit R29.6 billion for the year taking total spending to R124 billion. With a further spend of R340 billion expected in the next decade, the MDS figures will likely reach an unprecedented half a trillion Rand investment in total.

“We have committed a lot of capital already to our MDS across various projects which are at various stages of completion. What we try and do with the MDS is validate the demand and we are now redirecting

12 / August 2016 / www.enterprise-africa.net

our investments to those areas that we believe have the potential for future growth opportunities. If you look at areas like the FMCG market and general freight, that is where we want to invest more as that is where road has a huge percentage of the market and we would like to attack that,” explains Gama.

One of the main goals of the MDS is to move a large percentage of freight from road to rail. The government says that it expects by 2019, Transnet Freight Rail (TFR) will increase its market share of container traffic from the current 79% to 92%. TFR is the biggest heavy haul freight rail company outside of the United States, excluding India, that is not a company but a Government Department.

The investment into 1319 new locomotives and around 2100 wagons has stimulated some success

TRANSNET

in Transnet’s push to move freight from road to rail and the project is beginning to yield positive results.

“I think that has been one of our saving graces,” says Gama. “We remain constant in rail. Even though containers in maritime were down by a couple of percentage points, actual railable containers were up some 5% and that gives you a measure of that fact that our penetration into the market continues. This was despite the fact that for most of last year the price of diesel was very low meaning that trucks could compete with us, even on price, but we continued to improve. As the price of crude goes up, which it has, we can fast-track and differentiate our growth in those particular areas.”

Of course, with all of the success of 2015 that was reflected in the results, there were challenges that

had to be addressed. Because of the economic uncertainty, there was a need to implement some costcontainment measures and this focus on fine details offered up a saving of R6.6 billion against planned costs.

Because of this success, Gama says that the cost-containment measures will not need to remain in place for the long-term.

“Through those measures, we were saying that we need to reshape the core of Transnet and that was largely just for last year – you cannot sustain cost-containment for long periods of time. I’m always looking at the revenues and looking for where we can grow because, ultimately, what we need to focus on is our growth trajectory going forward,” the CEO says.

In June, another indicator that the growth trajectory will remain

stable came from international ratings agency, Standard & Poor’s who confirmed that Transnet remains a resilient and attractive investment of choice. The ratings agency said while the macro-economic outlook remained negative, Transnet continued to perform despite a subdued and challenging economic environment.

“We regularly talk to the ratings agencies about our own rating as a stand-alone entity and, in terms of local currency, we are rated very highly at BBB+. With long-term foreign currency we are a BBB- and so it’s very important to us in terms of the price of credit as if your credit profile deteriorates then we will pay more and looking at our exposure, one percentage point on R155 billion borrowing is not a small amount,” states Gama.

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BUSINESS PROFILE

AFRICAN SUCCESS Like many of South Africa’s SOCs and big private companies, Transnet has realised the importance of growing its reach across the border into Africa.

Continental development has been a long-term aim for the company and for the year ending March 31st revenue from cross-border activities increased from R1.5 billion to R2.8 billion.

“Our African business is going to grow in importance because a lot of our neighbours are growing at a faster GDP rate than South Africa,” says Gama. “In terms of trade on our continent, we have to look at all of the missing links, all of the infrastructure finance, rolling stock finance so that we can improve and increase intra-African trade.”

An important deal on the continent was concluded in June

when Transnet Engineering handed over the last batch of passenger coaches it had developed for Botswana Railways. Transnet and Botswana Railways signed a contract last year for the design and manufacture of 37 passenger coaches that would form part of a system running between Lobatse and Gaborone.

“It was a very successful partnership and we were able to complete in record time – Botswana wanted us to complete the project in time for their anniversary of independence. We built the coaches in two of our factories, in Cape Town and Pretoria, and we are very happy with the outcome having delivered all of the coaches,” says Gama and he is hopeful that this project can act as a showpiece for other potential customers in Africa.

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“It also showcases our engineering expertise and our advanced manufacturing capabilities.

We are now an OEM for coaches; they were our own design and the coaches are something to marvel at.

“There’s always been a historical rail between Transnet and Botswana Railway and it has largely been with freight cars where we have delivered more than 500. However, this was our first foray into passenger rail in Botswana.

“We are emboldened by this and we are hopeful that other countries will follow in the correct tradition behind Botswana. They can see what we’ve done in Botswana and realise that these are some of the best passenger coaches you can get on the continent,” he says.

A LASTING SOCIAL IMPACT Obviously, the release of the financial results will spark the interest of numbers people and the accountants but there is also a social element to take from all the figures - a human component that is vitally important to a group that employs more than 60,000 people Transnet, as part of its capital investment programme, works towards the goals of the country which include various aspects of BBBEE, transformation, enterprise and supplier development (especially the localisation and industrialisation of key industries in which it operates), job creation, promotion of small business and skills development.

Overall, Transnet spent 3.6% of its total labour cost on training, and R248 million on sustainable community development programmes, during the period under review and plans to spend a further R7.6 billion on training throughout the MDS period.

“With sustainable community programmes, we run a health train called the Phelophepa. It goes to rural communities and under-

TRANSNET

Telephone: +27 16 454 0742 Fax: +27 16 454 0721 E-Mail: admin@hae.co.za

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STRONG HUMAN CAPITAL In recent months, there has been something of a shake-up of the top brass at Transnet. Gama was appointed as CEO, following a 12-month period as Acting CEO, in April and since then there have been a number of senior appointments to bring a new drive for advancement.

In February, Gama unveiled 10-year Transnet veteran Garry Pita as Group

strategy to deal with particular markets,” Gama explains. “I’ve created a top team of nine people that report to me and in terms of strategy and direction we want to move; it’s inevitable that there would be changes. We have very good leadership depth in the company and from time to time you need a change so that people understand that the pace has changed and bring about a sense of urgency and agility - we need to be able to read the market very quickly in these uncertain times.”

With regards to his own position, Gama seems to have taken to the role quickly and in a very positive way since being officially named CEO in April. When he was announced, Department for Public Enterprises Minister, Lynne Brown talked up Gama’s experience as a driver behind his selection.

“Mr Gama spent the past 14

CFO. In May, Transnet announced the appointment of Khomotso Phihlela as Group Executive for Research & Development, the first time that the company had appointed a dedicated executive at that level of seniority to drive innovation across its businesses.

Also in May, Makano Mosidi was appointed CIO after a successful career with Dimension Data, IBM, Ernst & Young and Accenture among others. In June, Molatwane Likhethe was named as Transnet’s Head of Communications after 12 years with the company. In July, Gert de Beer was named as Chief Business Development Officer and Mike Fanucchi as Group Executive: Commercial Sales and Marketing as the company looks to intensify its efforts to diversify sources of revenue, boost performance and enhance customer satisfaction.

“We are diversifying our sources of revenue so sometimes you need a new

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serviced areas, looking at things like dentistry, optometry, high blood pressure, diabetes and a whole range of ailments and, as health is such an important issue in this country, we will continue to spend R160-170 million per annum,” says Gama.

“We spend this money because we want to, not because we have to,” he adds. “We want to positively impact communities and we have to give something back – it’s not just a marketing spend, there’s a big social economic impact from the money we spend. We are assisting people in rural areas with development programmes and we’re assisting people who otherwise would not have access to services – it’s philanthropy with a purpose.”

And during a period of unstable, unpredictable and uncertain economic times, does the macrosituation pose a threat to this type of investment?

“This spending will continue regardless,” says Gama. “Part of what we do is investing in the training and development of people even though many of them will never work for Transnet. For example, we train around 3000 engineering technicians of which we will only need around 1000.

Transnet has a developmental agenda to impact the economy so what we do is create skills for the economy rather than just for ourselves.

“As we develop these people and upskill them, they are able to go and develop and run small businesses and this creates jobs through a multiplier effect.”

www.enterprise-africa.net / August 2016 / 15

BUSINESS PROFILE

years in various executive positions at Transnet and his extensive experience in transport logistics and infrastructure as well as his commitment to transformation has been key considerations in confirming the appointment,” she said.

The CEO says that holding the position as Acting CEO helped him adapt to the needs of the role and now he is solely focussed on driving the business forward and constantly

achieving positive results.

“I have enjoyed everything so far. The challenges are slightly different now because of the economic uncertainly but we are responding to that – it’s so far so good, there’s never a dull moment here. I’ve been around here for quite some time and the good thing is, I had a chance to acclimatise to the position. We’ll take things one term at a time. I have a five-year

term and I want to make sure at the end of the term, the company is in a better place,” he concludes

TRANSNET +27 11 308 3000 @follow_transnet www.transnet.net

//THE TRANSNET-NEOTEL PARTNERSHIP - BUILDING A NEXT-GENERATION ICT PLATFORM FOR GROWTH As South Africa’s largest and most crucial part of the freight logistics chain, Transnet requires a 100% reliable, nationwide, fully converged network, complemented by state-of-the-art managed services. This is why, in December 2014, Transnet announced that it had reached a strategic multi-year outsource agreement with Neotel as an integral part of the State Owned Enterprise’s turnaround and growth strategy.

“For over 10 years Neotel has inspired thousands of businesses, including many major Enterprises, to perform outstandingly by providing state-of-the-art ICT solutions. We believe it is because Transnet recognised our transformative capability that they selected us to play such a pivotal role in their organisation.” comments Moss Gondwe, Neotel’s General Manager - Public Sector and Strategic Accounts.

As Neotel Senior Solutions Architect, Thilo von Westernhagen explains, the partnership centres around an end-to-end outsourcing contract for the provision of a suite of managed services underpinned by Neotel’s extensive fibre-optic and microwave network: “It all revolves around a set of service pillars, namely Managed LAN, Managed WAN, Managed Video Conferencing, Managed Voice Telephony, Internet Connectivity, Security, Customer Services and Relationship Management. It involves a total refresh in terms of equipment which has reached end of life. A key focus is to bring the network right up to date - the cost and business benefits of a future-proof network will be enormous.

“We are also actively involved in driving Transnet’s digitalisation strategy,” Von Westernhagen continues, “for example, the deployment of Wi-Fi, not only in office spaces, but also on the operational sites, in the harbours and rail yards, is our responsibility. This gives Transnet a constant view over everything that is happening and everything can be controlled.”

Gondwe adds that the relationship between the two companies has been a huge success and something which Neotel hopes to replicate with other State Owned Enterprises: “Neotel is currently engaged with Transnet on a wide range of projects with up to 100 people working on various developments at any time. Transnet sees us as their strategic partner and we hold regular meetings with decision makers from both organisations to check progress on various projects and confirm future direction.

“Having taken over a number of Transnet staff during the acquisition of Transtel, Neotel has a depth and breadth of knowledge of Transnet that is invaluable to our highly productive working relationship. Together we are moving Transnet from its current operating mode to a more efficient, growth-oriented operating mode to ensure their end-to-end ICT platforms are ready for the future. It’s a big transition and it’s our main focus areas,” he adds.

Neotel looks forward to continuing to support Transnet’s vision to be a focused freight transport company, delivering integrated, efficient, safe, reliable and cost-effective services to promote economic growth in South Africa.

www.neotel.co.za

16 / August 2016 / www.enterprise-africa.net

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AUTOPAX

Recapitalisation, New Routes and New Leadership to

Galvanize Autopax PRODUCTION: Manelesi Dumasi

Facing increasing competition, a slow economy and running an ageing fleet, Autopax has identified that a strategy change is needed to ensure the company can continue to grow in the future. Acting CEO, Bongani Kupe tells Enterprise Africa more about what the company has planned to revitalise SA bus transport.

www.enterprise-africa.net / August 2016 / 19

BUSINESS PROFILE

//

Most of the world’s major economies have an established transport industry, acting as the backbone of the trade and development industries. It’s vital that people and goods can move from place to place, on time and uninterrupted. The movement of people is especially important as people are the drivers of business; the catalysts of commerce and the stimulants of economic success. But moving people is not an easy task; you can’t walk everywhere, flights and trains can be expensive, taxis are unreliable and costly, and if everyone used a car the environmental impact would be significant. So what about buses? You can get around 50 people on a coach; it’s comfortable, affordable and relatively efficient.

In the USA, Canada and Australia, Greyhound buses have become globally recognised; in the UK it’s National Express;

in Germany there’s Postbus; Japan has the JR Bus Network, and South Africa has Autopax, operator of Translux and City to City bus services.

Moving people across this vast country is no easy feat. It’s almost 2000 km from Cape Town to Musina and a car journey across this route would take around 20 hours of non-stop driving which is unrealistic. Even smaller journeys are not easy. It’s around 620 km from Johannesburg to Durban, two of SA’s biggest cities, but a journey by car would take almost seven hours and a flight would cost in excess of R700, one way, combined with all of the inconveniences that go with airports.

Fortunately, through Autopax and its well-recognised brands, South Africa does have a quality bus and coach offering; one which has over the years built a reputation for quality by

20 / August 2016 / www.enterprise-africa.net

delighting South Africans and tourists as they move around this beautiful nation.

Autopax is a wholly-owned subsidiary of PRASA (Passenger Rail Agency of South Africa) and its main focus is long distance road transportation of passengers while following a mandate of consolidating market share and operating on a fully commercial basis, supporting rail operations through effective feeder and distribution services and also offering services to cities and municipalities in rural areas. It has recently entered into commuter market where its initial services comprise of eight contracts in the Gauteng Province.

The company currently operates more than 520 buses and the fleet is made up of commuter, semi-luxury, luxury and ultra-luxury vehicles.

Like its international peers, Autopax

AUTOPAX

//WE ARE TRYING TO COLLABORATE WITH OTHER STATE OWNED ENTITIES TO SEE WHETHER WE CAN PROVIDE CROSS-BORDER SERVICES THAT CAN BENEFIT AND ADD-VALUE TO OUR CUSTOMER’S OPERATIONS// moves people across South Africa’s almost-800,000 km of road network. It has the biggest reach and coverage of areas in South Africa and crosses both urban and rural areas.

Translux is the luxury long distance scheduled inter-city operator, servicing more than 100 destinations throughout Southern Africa, and City to City provides semi luxury and no-frills regional bus transport service to various destinations across South Africa and Mozambique in its modern fleet, designed and built to world-

class standards.

Acting CEO, Bongani Kupe tells Enterprise Africa more about Autopax’s history and how the company is looking to technology improvements to fend off the ever-growing threat of competition and demands for effective and efficient services in the modern day business bus operations.

“Autopax operates both long distance and commuter services in South Africa,” he says. “We are in the process of expanding into the SADC region – we currently operate to

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Mozambique but we have applied to operate to Lesotho and Swaziland and we hope that soon we will be able to go to Zimbabwe and Botswana. We get permits to operate those routes from a cross-border agency so at the moment we’re waiting for approval from the agency and we are hoping that before the end of the year we will have the permits and next year we can start operating those routes.

“Namibia is also on our list but it’s not a priority right now. Lesotho, Swaziland, Zimbabwe and Botswana are the first priority and when we’ve established ourselves firmly on those routes we will then look at others in the SADC region. The goal is to eventually cover most of the SADC region as there are many people from this region who work and reside in South Africa, and there’s a lot of trade between these countries and SA, so there’s a lot of

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www.enterprise-africa.net / August 2016 / 21

BUSINESS PROFILE

movement of both goods and people around the SADC area.”

Autopax has the vision of being the leader in road passenger transport solutions and this vision is aligned with the vision of its parent company PRASA. “We are a government owned company and were established as Autopax in 2009. Before that, we were owned by Transnet. When PRASA was consolidated in 2007, it then took over Autopax after its formation in 2009. We only recently started to do commuter services, last year.

“We are in the process of investing in technology in a big way. We are looking at our ticketing systems, we’re looking at the internet and apps and, because of the rail modernisation project that is underway, we’re looking at an integrated ticketing system that would allow people to travel

seamlessly through various different modes of transport without a major effort,” adds Kupe.

ROAD BLOCKS Because of the current economic climate in South Africa, with growth rates down and unemployment rates remaining high, the business environment remains challenging. Autopax, like any business, is exposed to these macro threats but has managed to deal with the situation by focusing its attention on the most popular profitable routes on its list and consolidating on those which are not as prevalent.

“There are some routes that fall off during the economic downturn but despite the situation, we have experienced increased demand on some routes so what we have done is to try and rationalise the operation and focus on those routes

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with more demand and try to operate efficiently on the less popular routes so as to not incur a negative impact on the bottom line,” says Kupe.

Challenges from other areas, away from the economy, have also been problematic for Autopax as Kupe explains: “In the last few years, the challenges we’ve been dealing with include increased competition in the market, the ageing of our fleet which is now seven years old and, of course, the downturn in the economy.”

Then, just last month, there were serious problems in various municipalities following political protests. “In Tshwane municipality where we have one of our biggest commuter operations, 19 of our buses were burnt due to political unrest in the area. We had 547 buses but due to political unrest in some of the municipalities, some of our buses were burnt and so now we have 527,” says Kupe.

AUTOPAX

And of course there is the competition, which is growing all the time. In 2013, Greyhound South Africa introduced its double-deck ‘Dreamliner’ coaches to the market, offering a ‘businessclass experience’ with more leg-room, more comfortable seating, charge points and seats reclining to 150° with memory foam for sleeping passengers. The company now has more than 20 of these coaches operating between the country’s major destinations, and with other competitors also vying for market share, Autopax is looking at how it can effectively maintain and grow its position.

“We are in the process of putting together the whole recapitalisation strategy for Autopax and also looking at other areas where we can invest. Our fleet is almost seven years old and we’re hoping that we can recapitalise some of the components but the intention is to

buy a new fleet so that we can service the commuter market in South Africa and the cross-border market. We’re hoping that we can recapitalise for the commuter market in the next year and then for the cross-border market the year after,” Kupe explains.

“We have the biggest fleet, we can reach areas that are not reached by other service providers, we have a big network as an organisation and we pride ourselves on the service that we provide. From the market point of view, we are poised to be the leader in the provision of these services across the country.

“We want to introduce technology that will take us to the next level in terms of apps, integrated ticketing systems and technology on our buses. We also want to recapitalise the fleet and go green. Technology is changing; there’s a whole green economy now; buses can

be powered by gas or electricity, and we are focussing on being as economical as possible,” he adds.

Currently, Autopax has a focus on using the ‘greenest’ fuel PPMs and Kupe says that gas powered buses (already popular in Europe, North America, Australia, India and many more countries) could be the next step in the green revolution. “The next layer is to look at gas fuelled buses and then electrical buses, but that hasn’t really happened in South Africa yet – we still have two to three years before we will get into that sector.

When we recapitalise our buses, the first consideration is to go green so that we can contribute to the reduction of emissions as that is one of the policies of government and they want us to follow that in every process that we do,” he says.

Although there are many naysayers when it comes to environmental

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BUSINESS PROFILE

discussion, the Acting CEO is happy and proud to be part of a movement which is set to help future generations.

“When people are not used to things, there are issues with people arguing over what is best but the government has taken this policy so that we can preserve the environment for our kids and I think it’s something that we need to applaud even though people will shy away from it until there is an established method of doing things. We will certainly be going green; for us, it’s not an if or a but, it’s a when,” he says.

POLE POSITION One of the key strong points for Autopax, something which separates it from the chasing pack, is its employee

base. “We have almost 1400 employees,” says Kupe. The company lists human capital development as one of its top five strategic objectives and Kupe says that various different roles require different skills profiles and as such, lots of training and development is needed.

“On the driving side, we have detailed programs which must be completed. On the sales side, where people are regularly handling money, there is lots of training and generally training and upskilling people is a big target for us so that we can improve productivity.

“In SA, we do need to start thinking differently. Every country has challenges but ours is on the skills side, it’s certainly a major challenge but I think it’s

24 / August 2016 / www.enterprise-africa.net

something we can improve. We need to think differently so we are not stuck doing things the way they were done before. We need new methods and new skills so that we can face the new challenges that will present themselves to us. There are many graduates out there, and many skilled people and so we need to create the opportunities that allow them to help grow the economy,” says Kupe.

Also a strong attribute in the Autopax profile is the fact that it is part of PRASA, a government owned organisation that gives it increased clout in the industry and helps to offer complementary services for the benefit of all. “We are trying to collaborate with other state owned entities to see

AUTOPAX

whether we can provide cross-border services that can benefit and add-value to our customer’s operations. This will also assist us in expanding our footprint so that we are able to create more reliable outlets outside the country,” says Kupe.

And as the company expands, new leadership will bring new ideas and enthusiasm. With Kupe only set to remain in his role for a fixed period, the appointment of a new CEO will bring further stability to that which Kupe has already installed.

“I’ve been here for 11 months, I sit on the board of Autopax and while there was a gap I was asked to come in and assist in terms of operations as I have a transport background, I’ve been in the industry for more than 20 years. We are in the process of looking for a CEO and we feel there are major opportunities out there so I will assist the board with an appointment of a new CEO by implementing the correct infrastructure that will help the company forge ahead.

“We hope this appointment will happen in the next three or four months as we want the new CEO to start by April 1st next year.

In this country, approximately 70% of people are reliant on public transport (bus, train, taxi) in their daily lives. Whether it’s for going to school, attending work, accessing services or for social use, as one of the most reliable, efficient and cost-effective elements of the mix, buses remain hugely important to South Africa.

Through Autopax, South Africa has an operator that is ambitious and hungry for development and its expansion plans can only lead to positive outcomes for all stakeholders.

AUTOPAX +27 12 748 7500 www.autopax.co.za

www.enterprise-africa.net / August 2016 / 25

TRANSACTION CAPITAL

Driving Business

Forward

PRODUCTION: David Napier

In the current economic climate, building a thriving business has become more challenging than ever.

Enterprise Africa talks to Transaction Capital CEO, David Hurwitz and asks how the company has managed to buck the trend and achieve outstanding financial results in such a challenging operating environment.

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//

JSE-listed Transaction Capital is one of the country’s leading non-deposit taking financial services groups operating in under-served segments of the asset-backed lending and risk services markets. Founded in 2007 and listed in 2012, the company is driven forward by a team of highly experienced professionals and, across all divisions, its more than 3800 people are encouraged to take part in an entrepreneurial culture.

The beginning of Transaction Capital, in 2007, saw four companies - MBD, CMS, SA Taxi and Principa - merged with Paycorp and the group was formed. Total income in that year was R1,280 million. In 2008, Transaction Capital acquires 90% of Rand Trust and then in 2010, acquired 82.65% of Bayport. In June 2012, the company was listed and total income for the year was R3,882 million. In 2014, Paycorp and Bayport were disposed of in separate transactions and today the group consists of SA Taxi (comprising of SA Taxi Finance, SA Taxi Protect, SA Taxi Direct, Taximart Autobody Repair Centre, SA Bakkie and Zebra cabs) and Transaction Capital Risk Services (comprising of MBD, Principa, Rand Trust and BDB).

Thanks to an extremely well-thought out strategy and a unique business model, operating in market segments perceived to be of higher risk, Transaction Capital utilises excellent human capital, highly differentiated proprietary data and data analytics, and technology capabilities to consistently realise positive results – this is truly an example to follow for any company. After releasing its half-yearly results in May, Transaction Capital is celebrating a robust first half and CEO, David Hurwitz tells Enterprise Africa how the group managed to post 19% organic growth in headline earnings and headline earnings per share.

STRONG PERFORMANCE “We reported a 19% profit growth for the half year and that is against a back drop of a zero growth economy. In that context, it’s pretty impressive and we’re certainly very pleased with that result,”he says.

“We break down the business into two main parts; you have SA Taxi on one side and Transaction Capital Risk Services on the other.”

The South African economy has seen its outlook deteriorate over the past few years and, even though it escaped a downgrade recently, it still faces the possibility of junk status in future reviews. Fortunately, this position has not impacted Transaction Capital in a big way.

“In difficult times like this, individuals or consumers may well be feeling financial pressure, but they still need to use a taxi every day to go to work and back. Spend on taxi transport is a non-discretionary element of consumers budgets - people are taking taxis just as they always do; in fact, there’s evidence that there’s even more people taking taxis now as people who were using private vehicles can no longer afford to do so. That explains why, in SA Taxi, we’re able to grow our profit by more than 20%,”explains Hurwitz.

Currently SA Taxi only finances Toyota, Nissan and Mercedes given their superior mechanical quality. Prior to 2014 Chinese vehicle brands were also financed but these have historically proven not to last the term of loan, due to the rigours of the minibus taxi industry, and attract a less experienced operator.

“Our other division, Transaction Capital Risk Services, is also facing a difficult economy. Of the companies that operate on that side of the business, the biggest is MBD. MBD is the largest collector of consumer receivables in the country. We collect as agents on behalf of credit providers in South Africa including banks, retailers, specialist lenders and municipalities - they use us to collect on matters where they cannot collect anymore. We also acquire non-performing books of consumer receivables outright from credit providers and we collect as a principal for our own account. It’s roughly a 50/50 split between the agency and principal elements of that business.

“In an environment like we have today, where the consumer is under pressure and has less income available to repay debts, it’s more difficult and more costly for us to collect.

“What offsets that is our clients are clearly facing the same problems in trying to collect from their customers so they need our assistance more than ever and so the

28 / August 2016 / www.enterprise-africa.net

volume of matters that are available to be purchased or handed over to us to collect is on the increase. That is why we end up with defensive positioning and that is how the MBD business also managed to grow earnings by more than 20%,”says Hurwitz.

The company has also managed to contribute profits through its head office, mainly from interest earned on the excess cash available for future acquisitions – in most businesses with ascertainable profitability divisions, the head office is not often recognised as a profit centre.

“The final piece of the puzzle relates to the earnings of the head office which traditionally should be a break even entity as there’s no real activity that takes place.

However, right now, the head office is sitting with a lot of excess cash, going back to 2013 when Transaction Capital sold two of its businesses and we generated a lot of capital and cash thanks to generating a large profit. We paid out R1.3 billion cash as a special dividend but we were left with about R1-billion of cash which we plan to deploy into organic capital deployment opportunities within the group as well as into new business opportunities as the acquisition search continues. Right now, we’re still sitting with around R800-million cash and that has generated a return resulting in profit from the head office,”explains Hurwitz.

This strategy, which spans the entire group, directly contributed to the aforementioned 19% organic growth in headline earnings and headline earnings per share, and also an increase in return on average equity up to 15.9% and an increase in interim dividend, up 20%, amongst other positive results.

INVESTMENT & GROWTH Through the rest of the year and into 2017, Transaction Capital will seek further growth and evidence of the group’s hunger to achieve development is shown in the recent investment into a vehicle refurbishment centre, new dealership, and advancement of the group’s Zebra Cabs business (which is aiming for 3000 metered taxis in its portfolio by 2020).

“Zebra Cabs is a new venture for us; it’s

TRANSACTION CAPITAL

//INVESTING FOR GOOD IN TRANSACTION CAPITAL GROUP COMPANIES Mergence Investment Managers, a pioneer in impact investing, calls on all pension funds to seriously consider allocating funds to impact and infrastructure investments. The National Development Plan needs to be carried out. Government and the banks cannot go it alone. Impact investing not only creates jobs and boosts economic growth, but also builds communities - thereby creating a better society into which members will retire.

In June 2016, Mergence announced a strong six-year track record for its institutional impact and SRI/ESG funds valued at R2.7 billion.

Through its High Impact Debt Fund, Mergence has invested in various sectors, including companies within the Transaction Capital group. These include • SA Taxi Finance, an enabler of affordable, safe public transport to the estimated 19 million commuters who travel the roads of South Africa in taxis daily. Its secondary role is as a contributor to the financial empowerment of historically financially underserved and unbanked taxi owners who in turn are providers of employment to an estimated 400 000 drivers and rank managers and other ancillary employees.

• Rand Trust, which empowers entrepreneurs and businesses through tailor-made financial solutions that assist in business growth.

• In 2015 the Mergence High Impact Debt Fund was awarded a Four Star Gold Rating by the Global Impact Investing Rating System.

•

Mergence has also invested R1.2 billion in a renewable energy debt fund and has recently launched an infrastructure and development fund which will invest via unlisted equity and debt into infrastructure projects throughout Southern Africa.

Who is Mergence?

Mergence Investment Managers (Pty) Ltd is an independent, majority black-owned specialist asset manager with over R22 billion assets under management, 35 staff members and offices in Cape Town, Windhoek and Johannesburg. Our culture is entrepreneurial, transparent and performance driven. Working at Mergence brings with it a spirit of partnership and creating shared value.

Our clients are institutional and include some of the country s largest pension funds, parastatals, multi-managers and unions.

Our pragmatic investment approach enables a comprehensive range of products, including: • Multi-Asset Class (Absolute Return Funds) • Specialist Equity Funds • SRI / Impact Investments which includes specialisation in infrastructure and more specifically, renewable energy We also have a select range of unit trusts for the individual investor.

Committed to building Southern Africa, Mergence is also a signatory to the Code of Responsible Investing in South Africa (CRISA) and the UN Principles of Responsible Investment (UN PRI).

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Natal in the coming months. We only have one dealership in Johannesburg and it’s been such a success story so we want to replicate that.”

DAVID HURWITZ TRANSACTION CAPITAL CEO

early days but we see a very nice opportunity to enter the metered cabs industry and it’s catalysed by the start-up of Uber in this country which has been a big disrupter to the market, like it has been in every country.

“We’re looking to modernise the existing fleet of metered taxis in this country, which are old and undercapitalised, and change the image of the industry which currently lacks trust. If we can bring the industry into the modern world, by designing a booking app and creating a brand which is recognisable with exceptional service, then we think we have an opportunity to grow this young market,”says Hurwitz.

Zebra Cabs currently operates mainly in Gauteng under the SA Taxi business division.

Transaction Capital has spent approximately R6 million in the last six months acquiring three small metered taxi businesses, including fleets of drivers and operational infrastructure, and Zebra Cabs now has a fleet of approximately 180 Toyota Corollas. The business hopes to expand to the Western Cape and KZN in the near future. Zebra offers multiple booking and billing options, including corporate client accounts, making the process as simple and flexible as possible for customers.

The new auto body repair and refurbishment centre will service SA Taxi’s

existing minibus taxi fleet along with Zebra Cabs vehicles.

“The new facility, which falls under our Taximart business, is specifically related to our panel repairs or auto body repair shop.

We’ve always had Taximart in the business, which refurbs old or repossessed taxis, but we never used to undertake the external auto body repair work. Now that we have our direct dealership, we can bring that in house, creating better efficiencies. Both of these initiatives started earlier this year and are both areas that will benefit our business going forward,”says Hurwitz.

The recently opened SA Taxi dealership in Johannesburg is expected to sell, finance and insure around 2000 vehicles per year, specialising in new and pre-owned Toyota minibuses, Nissan minibuses, Toyota bakkies and the bespoke Toyota Corolla metered taxi vehicles.

“Dealerships is an area that we would like to grow,”says Hurwitz.“There’s a number of benefits when we originate loans through our direct dealerships when compared to loans that come from the external dealer channel out in the market. One of our strategic goals is to drive more and more traffic into our dealerships and that means we are going to open more dealerships elsewhere in the country, such as KwaZulu-

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EXCELLENT HUMAN CAPITAL One of the reasons that Transaction Capital has managed to continue driving business excellence, both internally and externally, is the fact that it is led by a hugely experienced and professional directorate who are all tumultuous, dedicated and ambitious and this leads to confidence from all stakeholders.

“Jonathan, Michael and Roberto, who founded Transaction Capital, are immensely experienced in this sector. They have been active in these market segments since the 90s, and have been involved in SA Taxi and MBD for a similar time period. They are all active directors and shareholders. This is an ongoing journey towards building a significant group and everyone is committed to do that in the long-term. The management are well known, well respected and investors take comfort from their involvement,”the CEO explains.

And this management team are now carefully planning the next steps forward for this innovative group. The development of the Zebra Cabs business will remain ongoing for the next three years at least and Transaction Capital will also look for further complementary acquisitions to bolster its portfolio.

“People have been asking us about acquisitions ever since we sold our two businesses in 2013 but we’re yet to conclude one and won’t put time frames on when we will. We are currently as active as we’ve ever been in terms of our search for appropriate acquisitions. We’re cautious and narrowly focussed – we want to buy something that sits in one of the two main focus groups for our business,”Hurwitz concludes.

TRANSACTION CAPITAL +27 11 049 6700 info@transactioncapital.co.za www.transactioncapital.co.za

Sharing. It’s the most powerful form of humanity. It is something we are taught before we can even walk. Because in sharing lies positive growth for all. The chance to prosper. To give and receive.

It holds the promise of a strengthened society. It connects us and evolves us. From learning to getting people ready to work. From dreaming of careers to studying for them.

From having fun to meeting responsibilities. It stimulates the innovators and inspires future leaders. Sharing is something we practice everyday. We listen, we care, we design, we add value, to your life and that of others.

We empower small businesses to think big and big businesses to remember the small. There is a beginning to Shared Growth.

But there is no end. And each time we share we know that some day, in some way, it will be shared again. When we share, we grow.

When we grow, we all prosper.

Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7

Share. Grow. Prosper.

O.R. TAMBO INTERNATIONAL

Investments and Upgrades Leave O.R. Tambo Flying High PRODUCTION: David Napier

As one of the busiest and most important airports in Africa, O.R. Tambo International is a triumph in the South African transport and travel industries. As demand for extra capacity increases, investments are being made to grow this already sizeable facility.

www.enterprise-africa.net / August 2016 / 33

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//

Oliver Reginald Tambo was an inspiration to many South Africans; his work in politics attracted much international attention and many international visitors to South Africa and now, just as he was a beacon for the country, pulling in guests from around the world, the international airport in Johannesburg that bears his name does the same.

The O.R. Tambo International Airport, located in Ekurhuleni, Gauteng, is South Africa’s busiest airport. You’ve probably travelled through its terminals and runways as one of millions of passengers that pass through each year. With capacity to deal with up to 28 million people per annum, the airport is recognised as one of the largest airports in Africa and one of the major gateways to South and Southern Africa with the domestic terminal and central terminal building alone covering 200,000 m2.

With two major runways, some of

the longest in the world, the airport deals with many types of aircraft and, because of the positioning of the airport 1700m above sea level where the air is thinner, it is recognised as a ‘hot and high’ airport. It is also one of the only airports in the world which offers non-stop flights to all six inhabited continents.

Of course, dealing with the huge amount of traffic that passes through the airport is no easy task and in recent years, O.R. Tambo International has received investment to ensure it remains a facility that can offer world class service to travellers and airlines.

In preparation for the 2010 FIFA World Cup, Airports Company South Africa (ACSA) reported that major upgrades had been made to deal with the influx of international guests. The international terminal was expanded, the R535 million international pier was expanded to increase capacity, the R2 billion central terminal building was completed in 2009, a R470 million parkade was added close

The airport industry is changing at warp speed. The traffic numbers we see today, will double within the next 15 years. This is a challenge for the entire industry, but also brings opportunities.

ADB Safegate is now one company – together to help you seize these opportunities. With the largest product portfolio on the market, and excellent operational knowledge, we are ready to boost airport performance all over the world. More and faster movements, without the need for expanding the infrastructure. Enjoy the journey – together towards the future.

TOGETHER

TOWARDS THE FUTURE

phone: +27 11 525 9346

34 / August 2016 / www.enterprise-africa.net

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to the central terminal building, and terminal A was upgraded to deal with increased volumes of international departures.

O.R. Tambo International acts as a hub for a number of local and international airlines including Airlink, Comair, FlySafair, Mango, Kulala, South African Express and the country’s largest international and domestic carrier, South African Airways.

In February, major refurbishments across various parts of the airport were announced. General Manager, Bongiwe Pityi told the Citizen that the aim was for the upgrades to have minimal impact on travellers.

UPGRADES “Our Retail Duty Free Mall was opened in 2001 and has over the years been subjected to normal routine maintenance and minor refurbishments.

“We have an appreciation of the fact that it is never an easy task

O.R. TAMBO INTERNATIONAL AIRPORT

to undertake construction in a live environment, to this end we appeal to our passengers, stakeholders and business partners to be patient with possible operational challenges that may be experienced during this period. Passenger satisfaction and ease of travel through our facilities remains our number one priority,” she said.

Refurbishments included upgrading of ablution facilities, replacement of directional signage, improvement of lighting, replacement of ceiling tiles, and upgrading of bulk services which includes amongst others replacement of air conditioning units to improve air circulation in the area.

And these are not the only upgrades and investments for 2016.

ACSA CEO, Bongani Maseko told Engineering News in July: “We have

a five-year planning cycle and in the 2015-2020 planning cycle there are plans to start work in the domestic terminal in Cape Town. In this cycle we’re also planning to start work on the mid-field terminal [at OR Tambo], between the runways.”

The need for expansion comes as the domestic terminals at both airports begin to reach peak-time capacity. This is on the back of increased international arrivals from all over the world and, according to Maseko, more international airlines are looking at the possibility of flying into Johannesburg and Cape Town in 2017.

The capability of O.R. Tambo International to host the Airbus A380 has also contributed. “We currently have three airlines that fly A380s into OR Tambo in the peak season - Air France, British Airways and Lufthansa.

And Emirates has indicated an interest to start flying A380s to Johannesburg next year,” Maseko told Engineering News.

In a bid to maximise efficiency, ACSA will also look at the potential for opening a new cargo terminal at O.R. Tambo International. “We’ve started the planning for a cargo terminal,” Maseko told Engineering News. “That will be funded on the balance sheet.

We don’t generate income from air cargo operators except for landing fees. So we’re in talks with air cargo operators about the interest they’d have in occupying dedicated cargo facilities at OR Tambo.”

AWARD-WINNING All of this improvement, which will only enhance the reputation and ability of the airport, comes after O.R. Tambo International was named

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BUSINESS PROFILE

as African Airport of the Year for 2015. As part of the Air Cargo Africa 2015 conference and exhibition, the awards ceremony was attended by senior figures from the global air cargo industry.

The largest cargo airport in Africa, O.R. Tambo’s award came after the airport signed a partnership agreement with Mitteldeutsche Airport Holding of Leipzig/Halle Airport in Germany which sees the two cooperate to expand market opportunities and share information for the benefit of both parties.

At the time, Pityi said: “We are especially proud as this is the second time in a row that our airport has been bestowed with this accolade.

“Together with our excellent location, accessibility and connectivity, O.R. Tambo International also has great and reliable infrastructure. We also collaborate well with the relevant stakeholders to continue providing efficient service to our cargo customers.”

SECURITY Airport security is clearly one of the most important and most topical issues surrounding the global travel industry right now and at O.R. Tambo International, major success in recent times have underlined the success of security features that have been installed and the work of security forces.

In February, a man was ceased at the airport with R4 million worth of crystal methamphetamine; in July, a bust saw a man arrested in possession of R1 million worth of heroin and cocaine, and in July, another bust discovered R3.2 million worth of crystal meth coming in from Nigeria. This follows on from the discovery of R7 million worth of illegal drugs that were confiscated

by SARS in May.

To further enhance security, the biometric system which initially had caused some delays at the airport has now been optimised and is operational. It is part of a strategy from the Department of Home Affairs to aid the movement of people through the airport. The system requires a scanning of finger prints on both hands as well as capturing a digital image of each traveller and is being phased in at airports around the country.

Following initial delays caused by the biometric system, Home Affairs Minister Malusi Gigaba said the problem has now been resolved and the department is working to help travellers navigate the system. “I have directed our senior managers to step up the biometrics’ communication campaign, effectively and sufficiently to inform the public about the biometric system and its benefits,” he said.

FLYING HIGH O.R. Tambo International remains poised for further growth and excellence, and as an industry leader, the airport will continue to grow as the tourism and travel needs of South Africa increase.

In May, Tourism Minister Derek Hanekom said that R110 million had been allocated to the promotion of domestic tourism.

“Amongst several other initiatives, a series of television commercials have been produced telling the stories of South Africans travelling for the first time and how much it means to them. This will inspire others to do the same,” he said.

Minister Hanekom said the Association of Southern African Travel Agencies and SA Tourism are forging a partnership to extend corporate travel into leisure.

He said a project has been initiated to take children on visits to the World Heritage Sites and

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attractions operated by the South African National Parks and South African National Biodiversity Institute.

“This will help ignite their curiosity about their country and the many special places to visit. It will also establish … their desire to become tourists in their own country.

“This is really just the beginning – the promotion of domestic tourism and the creation of opportunities for lower income South Africans to share in the wonders of our country is so important to us, that there is much, much more to come.”

In July, Stats SA announced that tourist arrivals in South Africa are continuing on a growth trajectory with 11% more arrivals in May 2016 compared to the previous year.

This brings the total tourist arrivals for January to May 2016 to over 4.2 million, which is an increase of 15.7% compared to the same period last year — more than three times the average annual global growth rates experienced in international tourism.

Of course, this is great news for O.R. Tambo International and backs up the decisions made to invest in the airport’s infrastructure.

As the leading international airport in Africa, O.R. Tambo is truly an example to follow, and stands as a business case that leads the rest in the travel and transport industry.

O.R. TAMBO INTERNATIONAL AIRPORT +27 (0)11 921 6262 customercare@airports.co.za www.airports.co.za

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UNIPLATE

Stepping Up To

The Plate PRODUCTION: Colin Chinery

Uniplate is turning the humble vehicle registration plate into a customised frontline barrier to crime. “It’s our intention to promote the number plate to the same level of control as you would find in a passport document or identity card,” says Managing Director Devandran Naicker.

www.enterprise-africa.net / August 2016 / 39

BUSINESS PROFILE

//

With as many as four in every ten number plates in Gauteng cloned, buying a fake number plate is as easy as ordering at a drive-through.

According to SA Number Plate Association CEO Zurika Louw, anyone can purchase the materials needed to clone a plastic number plate at a hardware store or a sign shop. “If you have a computer and a printer, you can make a number plate.”

With Gauteng’s experience mirrored throughout South Africa, a faked number plate is a frequent partner in crime, says Devandran (Dev) Naicker, Managing Director of Uniplate.

“It’s far too easy for members of the criminal enterprise to access materials to pirate number plates

which are then used on vehicles in perpetrating crime.”

Worse, the car owner – “a normal citizen” – might then be stopped at a roadblock only to find out that his vehicle has been identified as being used in criminal activity. This can, and has had serious consequences for far too many ‘normal citizens’ in South Africa.

MARKET LEADER Uniplate is the largest securitised licence plate company in Southern Africa, with its head office in Johannesburg and a factory in Pretoria. Established in 1957 it has been the sector market leader for the past 59 years.

Seven years ago Uniplate joined the German based international

License plate theft and cloning are global problems. Often criminals steal number plates to cover up heavy offences like tax evasion and traffic infractions. Only secure and unique identification of vehicles makes automated traffic surveillance possible and detects and prevents such crimes.

Thus, UTSCH TÖNNJES´ main objective is to provide customer specific vehicle identification and registration solutions. “With our global network of local partners like Uniplate we are constantly working to improve public security and road safety”, explains Jochen Betz, Managing Director and chairman of Uniplate.

With IDePLATE and IDeSTIX, number plate and windshield label with an integrated passive RFID-Chip, misuse or cloning of

40 / August 2016 / www.enterprise-africa.net

market leader in security license plates and vehicle identification solutions, Utsch Toennjes International (UTI), a partnership that has given the company an entry into new business segments such as vehicle registration services and identification solutions.

Since then Uniplate has become so much more than a number plate manufacturing business, says Naicker. “Driving the industry forward as we do, with many innovative technological advancements relating to security and crime prevention, we pride ourselves on being “out of the box” thinkers, offering industry a truly professional service.

“Our unique position in the industry is that we are an integrator of solutions. We have taken a stance

stolen number plates becomes impossible. Every Chip contains a unique and unchangeable identification number, which can be transmitted to authorized reading devices with the help of latest encryption technology. This identification number is linked with the specific vehicle data and ensures a clear identification. The holographic label IDeSTIX, placed on the inside of a windshield, supplies additional security: If IDePLATE and IDeSTIX do not correspond, it is a manipulated vehicle.

Number plates and windshield labels enable a rapid and accurate identification of a vehicle in moving traffic and open up a wide range of applications, including the regulation of licensing and border control, toll collection and the reduction of criminal offenses. Additionally a reliable vehicle registration system reduces costs, simplifies administration processes and forms the basis for the collection of taxes and duties.

Certified tests confirm the functionality of the IDePLATE under all weather conditions and at high speed. Countries like Peru and Latvia have already commenced using the IDePLATE. Secure vehicle identification can also be performed via Smartphone. In this case, the relevant data is integrated into a tamper resistant QR code or RFID chip on the number plate or windshield label. In the event of traffic or access controls, the IDeTRUST Verification App decodes and checks the vehicle data.

An internet connection is only needed for initial application of the app – after that, verification can also be done offline. The IDeTRUST Verification App can be installed on all standard smartphones and is also a convenient method of vehicle identification for private business applications.

UNIPLATE

on number plates that is very different from other companies out there.”

Uniplate’s diverse portfolio of identification and securitisation products include Radio-frequency identification (RFID) enabled number plates and, wind shield label solution as well as verification solutions for smartphones based on digitally signed and encrypted QR codes. These solutions can be used for a variety of applications, e.g. for tracing of fleet vehicles, access control or even automated toll road services. “It’s a very different and dynamic type of product solution offering than simply a number plate industry.”

Globally a number plate is often a piece of metal or plastic, says Naicker. “We are re branding it -

//WE HAVE SPENT R2 MILLION UPGRADING PRODUCTION LINES, PUTTING THEM INTO ONE PRODUCTION AREA, AND CREATING LEAN MANUFACTURING PRINCIPLES AND PROCESSES// especially in the Africa context – as a passport for your vehicle, to such an extent that you can secure, manage and control it in accordance with the relevant Government control and security behind it.”

The majority of Uniplate customers are in the number plates market, with governments setting the terms through standards and regulations. “We provide an offering into that space, in South Africa we currently provide just the number

plate and attachment frames. But in countries like Malawi and Zambia we provide a very simple but secure plate, whereby its laser marked, has holographic element, sequential numbering and an expiry date, all of which can be traced back to the owner.”

With sluggish sub-Saharan growth rates, and new car sales in South Africa down 12%, trading has become “very tough; very challenging,” says Naicker. “But

Electronic Vehicle Identification

Applications

License plate with integrated passive RFID-Chip

Electronic vehicle identification, Toll collection, Traffic management, Parking and access control, Section control, Border control, Traffic infraction control

Benefits The intelligent windshield label with fraud resistant data memory

Software solutions for the reliable registration and verification of vehicles and vehicle owners

www.utschtoennjes.com | info@utschtoennjes.com

· Identification under all weather conditions · Data can be retrieved contact free and in moving traffic · Enables multi-lane-free-flow functionality · Readable at high speed · Protection of privacy · Ideal monitoring – without additional camera technology · Off- and online verification · Passive UHF in accordance with ISO 18000-63

www.enterprise-africa.net / August 2016 / 41

BUSINESS PROFILE

despite this we have been able to maintain levels of profitability.

EXCEPTIONAL SERVICE “The only way we can do this is by providing our customers with exceptional levels of service and ensuring they have high quality products, delivered to them on time as and when they need it. From an internal perspective we have been creating teams of excellence which are well-oiled, lean culture and high performance organisation.”

Market leader for almost half a century, Uniplate innovating spirit continues to drive it forward.

“We are ahead of our competitors, the majority of whom still see the number plates as a piece of material. The only way we can step-change that game and raise

the number plate above a merely commoditised item is to adapt to a changing technology-dependent on fast information for the fourth industrialised world.

“In Africa today we have more cell phone users than any other part of the world, and if the person in the street can scan a number plate on a vehicle and marry the two with simple off line technology, how much could that assist in crime reduction?”

Daily crime statistics in South Africa make stark reading; 151 cars thefts - most exiting via South Africa’s porous borders and ending up in countries like The Congo and South Sudan – 31 hijacks, 300 thefts from cars, and 695 residential burglaries. “These are alarming figures, and we are trying

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42 / August 2016 / www.enterprise-africa.net

to provide a solution, and work with Government to eradicate the problem by creating a barrier of entry for the thief.”

In any incident of crime, 90% that are investigated are solved by eye witness assistance, said Naicker, a chemical engineering graduate with a BMW auto manufacturing background, who joined Uniplate in 2015 after eight years with Afrox.

“Most basic crimes are committed with a get-away vehicle in mind, and if you can identify the vehicle confidently you will be helping to reduce crime. With Uniplate technology you are helping law enforcement to police and solve crimes at a far faster pace, as well as providing an identity for the country, with a one set standard and not four or five hundred variants.

The South African Government’s first round of draft legislation has been out for public consultation for nine months. “We have all provided comment and are now going through the second round.

What we are looking at is a national plate very similar to the EU where

//OUR UNIQUE POSITION IN THE INDUSTRY IS THAT WE ARE AN INTEGRATOR OF SOLUTIONS. WE HAVE TAKEN A STANCE ON NUMBER PLATES THAT IS VERY DIFFERENT FROM OTHER COMPANIES OUT THERE//

UNIPLATE

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//I AM TRYING TO TRANSITION THIS OLD ANIMAL - SO LONG ON THE MARKET - INTO A NEW ANIMAL WITH A NEW TECHNOLOGY; SHIFTING THE LANDSCAPE AND MOVING US INTO BECOMING A HIGH PERFORMANCE ORGANISATION// there is one type of plate with GB or another nation specified. We can have a similar type, with the South African flag on the plate and have a national specification for that.”

INVESTMENT AND UPGRADES Meantime Uniplate is “pushing the envelope to say how we elevate the level of the number plate to the same level of a passport document.

To do this you have to provide the manufacturing infrastructure and

system upgrades, and over the last year we have spent R2 million upgrading production lines, putting them into one production area, and creating lean manufacturing principles and processes.

“Now we need to invest in online digital technology and verification software programs to manufacture the number plate encoded with all relevant details to provide the new solutions of a national plate.” Should the South African government decide

to roll out with it, Uniplate will be ahead of the curve, with all necessary equipment processes and capabilities already invested in the plant, says Naicker.

“We are trying to transition this old process - so long in the market into a new interactive product using technology; shifting the landscape and moving us into becoming a high performance organisation.”

UNIPLATE (01827) 310000 uniplate@uniplate.co.za www.uniplate.co.uk

www.enterprise-africa.net / August 2016 / 43

CIVILS 2000

Laying The Foundations

For Future Growth

PRODUCTION: Karl Pietersen

Civils 2000 places great emphasis on delivering each and every project on time and to the required quality specifications, in order to ensure client satisfaction in both the public and private sectors. MD, Justin Spreckley tells Enterprise Africa that ‘over two decades of success, the company is now uniquely positioned to offer a diverse service offering across RSA’.

//

In 1992, as South Africa’s journey towards becoming a democratic nation was gaining momentum, two Capetonian entrepreneurs took the opportunity to start their own business in the construction sector – a bold move in an unpredictable time. Robert Starke and Colin Shapiro were keen to offer

quality civil engineering services to a growing market and after initially excelling with projects in the private sector, their fledgling company began taking on larger projects in the public sector. Today, Civils 2000 is a multi-faceted commercial construction concern and in its 24 years has successfully constructed

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BUSINESS PROFILE

a host of roads, bridges, pipelines, building projects, renewable energy projects and other much-needed infrastructure developments throughout South Africa.

As the group grew and the founding members headed closer to retirement Civils 2000 sought new investors and subsequently partnered with Unipalm Investment Holdings, Ashraf Mohammed and Hussein Hirji. Given their individual business successes, this transaction introduced a new source of diverse business acumen and corporate governance, which has not only resulted in an improved BBBEE position, but has

also resulted in a refocussing of the strategy, vision, and leadership.

“Around two and a half years ago, the founders sold a significant share of the business to the BBBEE consortium with a view to changing the demographic of the business and also to bring in new energy, new thinking and new funding for the longer term. Since then, all of the partners have been actively involved in changing this business into a more systemised and structured endeavour,” explains Managing Director, Justin Spreckley, who is tasked with driving the company on its growth path; transitioning from a

46 / August 2016 / www.enterprise-africa.net

medium-sized company to a diverse and resilient business that has a robust platform for continued growth and delivery.

Following the addition of the new partners, the business is going through a thorough workover and transition to lay the foundations for future success, focussed on plant, people, processes and quality.

“They started off doing relatively small projects and grew the business way beyond their initial expectations - it’s a very different operation today.

For a number of years, we’ve been involved in projects not only in the Western Cape but also in the Eastern

CIVILS 2000

Cape in places like Port Elizabeth and Mthatha,” says Spreckley.

PROJECT EXPERTISE Some industry commentators have dismissed the South African construction sector as an ailing one. Just last year the so-called ‘Big 5’ listed construction companies were struggling with loss of share price and demand drying up, but by harnessing its quarter century of experience, Civils 2000 has managed to meet the challenges thrown up by the economic climate and remains on a strong growth path.

“We believe it is essential to remain nimble enough to adapt quickly to work availability, type and location. We have really focussed on investing in our resources and business infrastructure over the past two years to ensure this remains a

//THE BUSINESS IS GOING THROUGH A THOROUGH WORKOVER AND TRANSITION TO LAY THE FOUNDATIONS FOR FUTURE SUCCESS, FOCUSSED ON PLANT, PEOPLE, PROCESSES AND QUALITY// core strength,” says Spreckley. “Most of our clients are municipal and typically, municipal expenditure tends to increase by at least inflation every year so while it doesn’t necessarily guarantee a growing market sector, the same amount of work is still there year-on-year.

That said, the social demand for new infrastructure along with the increasing pace of renewal required on ageing infrastructure should see growth in this sector. We have seen

that private development has dried up slightly and that’s one of the reasons we focus on both private and municipal work.

“There’s a considerable amount of work to be done in South Africa.

Our infrastructure is at a stage where its renewal rate is increasing rapidly and that creates opportunities. We are exploring opportunities with our neighbouring countries and when the right opportunity presents itself we will go for it. Ours is a

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BUSINESS PROFILE

good sector be in as infrastructure spending can have a positive impact on the economy. It creates jobs, stimulates demand and drives education,” he adds.

Working closely with clients and partners, the majority of projects undertaken by Civils 2000 involve road construction and concrete structures. In the Western and Eastern Capes, the road system is made up of an excellent network of highways and roads but there’s always work to be done and, in order to keep a diversified portfolio, the company continues to push into new markets such as general construction and renewable energy.

“Roadworks, bridges, pipelines – that’s our main type of work but we have a general building service offering as well. We also have a subsidiary of the group - RoadSmart

//WE WANT TO REMAIN PROFITABLE, WE WANT CLIENTS TO ENJOY WORKING WITH US, WE WANT TO OFFER GOOD VALUE, AND WE WANT OUR EMPLOYEES AND THE PUBLIC TO HAVE GOOD EXPERIENCES WITH US// Asphalting - which is focussed on asphalt surfacing.

“Recently completed projects include two bridges at the Pacaltsdorp Interchange in George, several projects that form part of the roll out of the IRT bus service for the City of Cape Town, improvements to the Sable Road Interchange, civils work at the Clock Tower Precinct at the V&A Waterfront, surfacing and waterproofing at the StrandAdderley Street Intersection,

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48 / August 2016 / www.enterprise-africa.net

rehabilitation of Hout Bay Main Road, Sere Wind Farm, John Tallant Road in P.E, and many more,” says Spreckley.

These are just a handful of the projects that this ambitious company has completed recently and there are many more highprofile jobs coming in the future.

BUILDING FOR THE FUTURE Spreckley explains that there are a number of exciting projects on the horizon and, thanks to the change strategy that has been implemented over the past two years, the company is starting to achieve its new goals.

“Whist we are constantly on the lookout for work, we have a good amount of work for local and international clients in SA,” he says.

To illustrate the groups diversity Spreckley offered up some of the company’s current projects: “We’re busy with the Burgan Fuel Terminal in the Cape Town Harbour; the coastal protection works in Strand for the City of Cape Town; various works for the V&A Waterfront; priority projects with Siemens and Eskom in Mossel Bay; work for SANRAL on and around the N2 in George; construction of the Mthatha waste water treatment plant and some significant building projects to name just a few.

“The last two years has been focussed on consolidation, building structures and systems, training, and capital equipment renewal to ensure the company continues to grow from strength to strength. We want to remain profitable, we want clients to

CIVILS 2000

enjoy working with us, we want to offer good value, and we want our employees and the public to have good experiences with us,” he says.

LAYING FOUNDATIONS Companies within the Civils 2000 group are members of all of the relevant industry bodies including the South African Institute of Occupational Safety and Health (Saiosh), the Association of Construction Health and Safety Management (ACHASM), the South African Council for the Project and Construction Management Professions (SACPCMP), the South African Forum of Civil Engineering Contractors (SAFCEC) and the Construction Industry Development Board (CIDB).

The company provides SAQA/CETA accredited competency training, it is a level three B-BBEE verified business and is working hard to achieve further certification to enhance the quality base that has been built over the years.

“We’re registered as a CIDB 9CE/7GB company meaning that we can tender on unlimited value projects. We’re looking to focus on what we’re good at; we’re investing a lot in people, in structure, in systems, in equipment and subsequently in processes and quality, so we want to be as efficient as possible whilst delivering top quality. We’re moving towards ISO 9001 registration and these are all foundation exercises for a successful future,” says Spreckley Although highly skilled practitioners are a given in the civil engineering industry, Civils 2000 is intent on maintaining and developing the skills of artisans and tradesmen who are equally as essential in this sector. “Sound trade skills are becoming increasingly hard to find as traditional apprenticeship training has largely stopped,” says Spreckley.

“Quality bricklayers, carpenters and the like are not always easy to source, but we believe they are essential. More refined skills that require a Technikon diploma or degree are in reasonable supply. We make use of a lot of sub-contractors in an effort to not only keep ourselves

nimble but also to encourage small and medium enterprise to provide trade skills. Education is obviously the key but you also need a thriving economy to employ everyone when they have been educated. We train internally or employ people to train and certify our people but these private sector initiatives will not totally eliminate the problem,” he adds.

With the government announcing in the budget that it intends to spend R865.4 billion on public sector infrastructure over the next three years (on projects including housing, roads, rail, public transport, water, electricity and community infrastructure, with R30 billion for provincial roads maintenance), Civils 2000 is perfectly placed to continue offering its customers quality, value and satisfaction while always developing its people and processes internally.

JUSTIN SPRECKLEY

CIVILS 2000 +27-(21)-713-0129 info@civils2000.co.za www.civils2000.co.za

www.enterprise-africa.net / August 2016 / 49

SHELL SOUTH AFRICA

Shell Looks to Coffee to

Fuel Consumer Demand PRODUCTION: Daniel Scott

Shell South Africa has a nationwide retail network of strategically located service stations as well as interests in many business areas including manufacturing, aviation, chemicals, LPG and, potentially, natural shale gas. But is South Africa prepared for the challenge of producing shale gas and is Shell prepared to wait for the country to be ready?

//

Back in 2013 in London, England, a young entrepreneur started a business that saw him turn roast coffee beans into bio-energy. Coffee became a fuel and began to drive not only sleepy Londoners every morning, but also industrial boilers in large buildings. Coffee and energy have long been closely related; the caffeine-rich drink boosts your energy levels and keeps you focussed and awake.

In South Africa, coffee and fuel have once again been closely linked and it’s thanks to two of the country’s most pioneering businesses in their respective fields.

Instead of using coffee beans to create energy for generators, Shell South Africa and Vida e Caffé began a partnership three years ago that is now flourishing and providing quality fuel for South Africa’s people and their cars.

Shell has a strong retail network of conveniently located service stations across South Africa and Retail Marketing Manager, Yaasier Abrahams says that having service stations that are welcoming and able to provide a quality Convenience

retail offer including a strong branded coffee offer, has bolstered the company’s appeal.

“People’s lifestyles have evolved and consumers are looking for much more than just fuel when visiting a service station,” he says. “After conducting extensive research into the emerging trends in the South African market, Shell partnered with Vida e Caffé in 2013, as one of the strongest local coffee brands who were instrumental in establishing the coffee culture in South Africa over the past 15 years. Today Vida has over 50 high street stores outside of the Shell network and have become synonymous with a hip, vibey coffee experience entrenched in their Afro-Portuguese heritage.

“Over the past two years, Shell has invested significantly in refreshing its Convenience Store network and we’ve worked with Vida e Caffe to develop a fit for purpose format for the forecourt environment. Today we have well over 100 Coffee bars across the Shell network with the rollout set to continue across

50 / August 2016 / www.enterprise-africa.net

the Shell Select footprint over the next few years.

“Vida e Caffé started in South Africa and it’s been a phenomenal success.

Customers love it because they know they can get a quality coffee experience that they find in the high-street stores in more and more Shell forecourts across the country.”

The ‘coffee culture’ in South Africa has lagged behind the rest of the world but in the last two years, an upturn has been reported. Stats SA report that coffee shops have seen a 7.1% increase in income since 2014 with impressive growth across the country.

Vida e Caffé CEO, Darren Levy says that coffee is certainly on the rise: “There is a surge in the number of people who are drinking coffee and this is impacting on product awareness and product quality. Africa and South Africa look set to be superb spaces for growth for the coffee industry with plenty of opportunities for great providers of great coffee,” he told Africabusiness.com.

BUSINESS PROFILE

Combining the quality product from Vida with the footprint of Shell has resulted in major successes for the business; Abrahams explains that feedback from customers has been positive.

“It’s been absolutely phenomenal,” he says. “I thinks it’s particularly because the Vida e Caffé brand is so strong locally.

We’ve not had Starbucks, and McCafe

by McDonalds is probably the closest to an international chain of coffee shops competing with our local brands that we’ve had in the market.”

And Shell isn’t just catering to certain customers in certain demographics. Offering coffee that suits different schedules, different prince points and different tastes is very important to the company so it has worked with Vida to create a new brand that focusses on quality coffee to suit various tastes and affordability levels but also provides an innovative food menu.

“We’ve also developed a secondary brand of Vida e Caffé called ‘Torrador

by Vida e Caffé’ and the Torrador brand gives you the quintessential coffee and experience but allows us to cater the food range to different trading environments given the positioning, equity, menu and price points of the Vida e Caffé brand. Depending on the trade areas, Torrador allows us to tailor the menus and price points to cater for things that suit the local market, particularly with regards to food,” Abrahams explains.

COMPLEMENTING EXISTING BUSINESS Many of the Shell service stations are home to Shell Select convenience outlets which offer 24 hours, seven days a week shopping accessibility.

Select stores carry a range of standard convenience items and stock the leading brands so that you

52 / August 2016 / www.enterprise-africa.net

are guaranteed to purchase fresh, quality products. There’s also regular promotional offers that are always worth keeping an eye on.

Interestingly, Abrahams says that since rolling out the Vida e Caffé outlets, the purchase of other convenience items and related products has increased.

“Where we’ve put in the coffee shops, we’ve seen the basket size in the store increase and we’re also seeing an uplift in fuel volumes because we’re attracting more consumers from the forecourt into our stores. The customer is spending more time in the shop whereas before customers might have just come for a ‘fill and go’.

“The good thing is that because the Vida e Caffé brand is so strong with local market, they’ve also developed a signature food range catering for breakfast, lunch and light meals that are appealing to the on-the-go consumers.

SHELL SOUTH AFRICA

//CASH SAFE BOMBINGS ON THE RISE – HOW SECURE IS YOUR CASH DEVICE? Criminals and organised crime syndicates used to primarily target banks, cash in transit vehicles, ATMs and retail stores to get cash by means of armed robberies. Whilst this is not a new trend, 2015 saw a significant increase in the bombing of cash deposit machines, particularly at fuel retail sites. While official statistics are not available, it is generally believed that attacks in 2016 will be far greater than that of the last two years.

According to Richard Phillips, joint CEO of Cash Connect Management Solutions, “Light-weight cash deposit machines containing large amounts of cash are the new focus. The use of plastic explosives to gain access to the contents of devices has become a popular tactic of the criminals.”

Currently, there are 52 armed robbery attacks and 204 burglaries including device bombings on South African businesses every day.

Steven Heilbron, also joint CEO of Cash Connect Management Solutions says, “Cash Connect’s belief and goal is to enable businesses to operate more efficiently and securely.

“Our cash vault technology, which is built to SABS Category 4 standards, has been vigorously tested on numerous occasions over the past few years by determined and organised criminals using every kind of tool from explosives to sledge hammers. It has undeniably delivered on the level of deterrence and defence, necessary to discourage a repetitive continuance of the scourge of violent crime,” says Phillips.

If you look at the growth of the food category which has come with the Vida e Caffé experience, it’s been very encouraging,” he says.

Vida e Caffé in Shell Select stores, the same as in its own stores throughout the country, largely offers a full serve barista style sales model. This strategy has proved hugely popular in other parts of the world and it’s no different in South Africa. However, Abrahams is also keen to explore a self-serve model to again cater for a different segment of the market.

“With Vida e Caffé, their traditional model is a full serve barista model and that’s what we’ve got across most of the network. For other sites, where you wouldn’t traditionally have a full serve barista coffee offer, we’re also looking to develop a self-serve offer – take a look at Shell sites in the UK; they all have Costa Coffee but they are all self-serve.

“The full serve model makes sense as we’ve also got bakeries in our stores and with an energetic barista and freshly baked goods, the customers are very well catered for,” he says.

Light-weight deposit devices cannot reasonably be expected to deter robbers in their pursuit of easy money. The fact is that these devices are often readily and very quickly penetrated or even simply uplifted and stolen,” adds Phillips.

The South African market has been flooded with organisations who simply sell deposit machines. There are also a wide variety of service providers who offer cash management solutions including the supply of deposit machines as part of a broader, generalised range of services.

The belief that an automated cash management solution costs more, is simply a myth. So, when looking for the right service provider for your business, be sure to choose a provider that can reliably and effectively mitigate the risk in your business.

Cash Connect, which provides an end-to-end cash management solution to retailers, is an approved supplier of 3 of the largest banks in South Africa and boasts processing close on R40 Billion a year on behalf of its client base across the country. The company is also an endorsed service provider to blue-chip companies such as Shell as well as the Spar Group, Engen, Pick ‘n Pay and OK, to name but a few.

To find out more about the latest cash management solutions currently available in South Africa, please visit www.cashconnect. co.za or go to www.cashconnect3000.co.za to view the new compact Connectr 3000.u (under-counter) cash vault.

SPECIFICALLY DESIGNED FOR FUEL RETAILERS

NEW We supply retailers with automated cash management solutions that give an instant guarantee of value, removes the cash risk and ensures fast cash settlements, and more importantly, creates a safer and more efficient trading space for retailers, their staff and customers.

Our brand promise is ‘We take the risk’, from the moment you deposit the cash in our retail cash vaults, whilst in transit and until it reflects in your bank account.

info@cashconnect.co.za www.cashconnect3000.co.za

we take the risk

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RAMPING UP THE ROLL-OUT With over 100 Shell forecourts already home to Vida e Caffé outlets, Shell has plans to continue rolling out the partnership with a targeted approach for the rest of the network. This means that the quality coffee experience could soon be coming to a Shell Select store near you.

“We’ve taken a phased approach through segmentation; we’ve looked at where coffee would make the most sense, looking at national routes, looking at where the busiest sites are in terms of commuter traffic and what the consumer baskets are across the network, and we’ve rolled out there first. The rest of the network is soon to follow,” says Abrahams.

It is these offerings at the retail network that help set the business apart from its competitors (of which there is many) as the nature of the market for fuel in South Africa means that drawing people in with cheap fuel is not an

//WE’RE CERTAINLY LOOKING TO EXPAND AND ALSO REINVEST IN THE EXISTING NETWORK SO OUR STRATEGY IS TO LOOK AT HOW WE CAN ENHANCE THE OFFERS AT THE EXISTING SITES AND MAKE SURE THAT THE CUSTOMER EXPERIENCE IS GREAT// option.

“In South Africa, the fuels market is regulated so the pump prices for petrol across all competitors is the same and this makes it difficult to attract new customers apart from making sure that you have a very strong brand and that you can leverage your global assets. We’ve got a 113 year heritage in the South African market and some of our other strong assets are our partnerships and fuel endorsements.

We’re a technical partner to Scuderia Ferrari and that’s a long-standing relationship which has been going

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on since the 1960s and this reinforces the high quality fuels perception,” says Abrahams.

POWERFUL PARTNERSHIPS Away from coffee, Shell’s fuels are recognised as being amongst the best in the world. Along with the Ferrari technical partnership, another strong global brand in BMW M also recently endorsed Shell’s V-Power Nitro+ Premium Fuels in 2015.

In the summer of 2015, to celebrate the BMW M V-Power Endorsement locally, Shell held a giveaway competition, offering five BMW 3-series to five lucky

SHELL SOUTH AFRICA

winners over five weeks.

“Last year, BMW M-power endorsed Shell V-Power Nitro+ performance fuels and our competition was an extension of that partnership in South Africa,” says Abrahams. “It had a fantastic response from consumers as the BMW and BMW M brands also have a strong heritage in the SA market and have a strong appeal with ordinary South African consumers.

“We’re partnered with one of the strongest coffee brands in SA, we’ve got both the Ferrari technical partnership as well as the BMW M endorsement for our V-Power fuels, so you can see that we’re starting build a very strong and compelling CVP both instore and on the forecourt,” he adds.

When people hear a name, they conjure up a set of impressions that influence how they think and buy, and those thoughts define a brand. All of the hard work being done by Shell in SA, building partnerships, innovative marketing and offering quality service to customers, contributes to the building of a brand that holds significant weight

with consumers all over the country and further afield.

FOOT ON THE GAS As a global company, headquartered in the UK and the Netherlands, Shell is constantly on the growth path. Currently, the growth and investment situation in the energy industry is not conducive to large scale advancement thanks to slumping oil prices but nevertheless, Abrahams is confident about the future of the South African market place thanks to an emphasis on investment into both new and existing infrastructure.

“Obviously, we’re looking for opportunities to grow all the time, particularly as South Africa has a growing population and a growing economy.

We’re certainly looking to expand and also reinvest in the existing network so our strategy is to look at how we can enhance the offers at the existing sites and make sure that we offer South African motorists a welcoming customer experience whenever they visit a Shell forecourt.

“South Africa is seen as one of the growth markets for the Shell group,” he says. “The group has taken a long-term view on the future of South Africa and recognised that this is one of the markets that is going to be seeing growth and where it can realise a good return so the investment is definitely there. Given the fact that we have invested in the network already, we’ve shown that that is helping to sustain the business within the country. With the investment in enhancing our Convenience Retail Offer in addition to our strong and established fuels portfolio, we’re doing our best to ensure that our customers keep coming back,” he concludes.

SHELL SOUTH AFRICA +27 11 996 7000 info@southafrica.shell.com southafrica.shell.com

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G4S

From SA to

The World PRODUCTION: Manelesi Dumasi

The largest private security employer in Africa, and certified as one of the best, G4S is now bringing technology and ideas developed on the continent to the rest of the world.

//

Perhaps one of the world’s most recognised brands, not just in the security business but across the board, G4S is the leading security services provider in the world, with operations in more than 100 countries across six continents.

Its business models, technologies, ideas, solutions and service offerings have been replicated by companies looking to follow in the footsteps of this industry leader which started life modestly in 1901, entering South Africa in 1957.

Following a number of high-profile

successes in Africa in the last 12 months, G4S is buoyant and looking to continue on the growth path which has seen it develop to employ more than 119,000 people, servicing more than 75,000 customers across 29 of the 54 African countries.

G4S Regional President, Africa, Mel Brooks (formerly CEO of G4S India and South Asia) tells Enterprise Africa that the African continent presents huge opportunities for growth. The large-scale security challenges that are already present on the continent coupled with the ongoing influx of

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international organisations setting up here makes for a challenging but exciting environment.

“Africa is an exciting and important regional market for G4S,” he says. “Even though there are many challenges to doing business in Africa, the continent still remains an attractive market to tap into and presents enormous growth opportunities. A combination of proven approaches, services and technologies are essential to address the multifacetted security challenges Africa faces, and to instil continuous business growth.”

Brooks, a leader with experience in a number of senior line and functional roles in the defence and technology industry, is keen to modernise the business and integrate technology as an aid where possible.

“I believe that the future of the security industry will be heavily influenced by technology and that there is huge potential for technology in the

African market. Although our prime regional focus will continue to be our core services of manned guarding, cash security and facilities management, the intention is also to bring new energy and innovation to our electronic security sector and its consultancy role services in Africa,” he says.

In 2015, Africa was the world’s fastest-growing region for foreign direct investment. In 2014, the global greenfield FDI market grew by just 1% but Africa enjoyed a 65% increase in capital investment on the previous year, to an estimated $87 billion with the number of FDI projects in the continent growing by 6%. All of this investment means that global companies are clambering for a share in Africa, which has been described

by McKinsey&Company as ‘the last major region on Earth that remains largely unexplored’ and a region which will have ‘a prolonged phase of rapid growth’.

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G4S is experienced in Africa, probably as experienced with PanAfrican operations as they come, and Brooks is confident that the company can help to “hand-hold” as global business move onto the continent.

“We have a number of global clients already in Africa or who are showing interest to do business on the continent, where the security aspect is significant.

My promise to them is that we can be wherever they are and wish to be.

“We have several customers that require our services and expertise on a Pan-African level. G4S prides itself in understanding ‘the bigger picture’.

We have a diverse variety of services, ranging from Cash Solutions, Manned Security and Courier Services to Security Systems, Risk Services and even Justice Services, to meet our customers’ requirements and have a broad geographic footprint to meet demand for security in Africa and globally.

“We use our global expertise and

G4S

ALL ABOUT PROTECTING CASH

AllCash Technologies with a full ISO accreditation is a South African company employing over 50 full time staff and invests heavily in both Research and Development of cash management devices and protection products.

AllCash brand promise “All About Protecting Cash” emphasises our commitment to intimately understand G4S’s needs as we assist in eliminating risk and optimising operational efficiencies by delivering reliable, robust and secure software and hardware solutions to protect and manage their cash and assets today and into the future.

As the South African market leader our manufacturing division specialises in technology applications for the design, development, manufacture and support of cash management devices and protection products. Our range of

electronic locks and cross pavement carriers are used by local and international Commercial Banks, Cash In Transit service providers and Security Companies. AllCash is the licensed manufacturer and service partner for the CSIR’s (Council for Scientific and Industrial Research) vehicle vault protection system, PUDU – Polyurethane Dispensing Unit.

Our Software division is the Southern African and Integration Partner of Transtrack International.

AllCash also represents and distributes for American Fleet Management Software Developer – Omnitracs / Roadnet Technologies. The Roadnet software provides route planning, dispatching, tracking and reporting. We are a technology company driven by service and we focus 100% on providing our customers with the right solutions.

ALLEGRO LOCK

South Africa’s most trusted electronic safe lock This robust high security lock with standard footprint makes it the lock of choice for safes and ATM’s in the Banking and Retail Sector.

Top Features • Smartphone App for centralised access control and monitoring • Ethernet connectivity with site interlocking capability • Real-time lock status monitoring • NFC input unit for booth door access • Time delay time lock MADE IN SOUTH AFRICA

www.allcash.co.za

ALL ABOUT PROTECTING CASH

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BUSINESS PROFILE

//WE HAVE A NUMBER OF GLOBAL CLIENTS ALREADY IN AFRICA OR WHO ARE SHOWING INTEREST TO DO BUSINESS ON THE CONTINENT, WHERE THE SECURITY ASPECT IS SIGNIFICANT. MY PROMISE TO THEM IS THAT WE CAN BE WHEREVER THEY ARE AND WISH TO BE// knowledge derived from providing security solutions in diverse regulatory environments in over 100 countries around the world, combined with local knowledge to provide our customers in with elite and tailor-made security solutions in Africa.

“If we continue on our quest of providing our customers with tailormade, innovative and integrated security solutions, I believe that our business in the Africa region will reach new frontiers and continue to grow,” he says.

INNOVATION Globally, G4S has developed innovative products and services for the exact requirements of customers who operate in challenging situations. In Africa it’s no different. Recent innovations include the Bank Cash Accepting Device for Capitec, the mobile banking solution or ‘Bank-in-a-Box’ offering rural banking services, and an e-commerce solution for OLX in Kenya.

The partnership with Capitec Bank involves technology that is being used in a bank for the first time.

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“I am extremely happy with the development process of this product, especially when we look at the way that we have worked with our customer to assure that the product meets their needs, improves their security and increases overall efficiency,” says Brooks.

“Similar in function to G4S Deposita Cash Accepting devices already in use by retail customers, it is the first time this technology has been developed specifically for the banking sector in Africa.

“Each time a customer enters a branch to pay cash into their account, they hand it to the bank teller, who deposits the money in the device situated behind their counter, which counts it, detects any fraudulent notes, provides the teller with an amount to credit the customer’s account and then acts as a secure safe for the cash until it is collected. By automating the process of depositing cash, it increases the speed of deposit transactions,

G4S

services s. ers ind

minimizes overheads and also reduces the cash-in-transit and processing costs by ensuring the cash is processed closer to the source,” he explains.

“Deposita allows a retailer to do exactly what we’re doing with Capitec and that is to improve the efficiency of its cash cycle. Cash is taken from a cash office or till and is deposited into the machine. That machine gives real time acceptance and puts that cash into the retailers bank account immediately – real time recognition of cash, which is great for them as they can earn interest and they have cash flow instead of it being tied up in transit or in vaults.

“We have more than 4500 retail Deposita units across Africa and we are now talking to all of the major banks and financial institutions about how we can assist them with cash automation and bank branch automation. Our aspiration is to follow our customers

to wherever they need to be and that relies on the maturity of the banking environment and the local environment.

In South Africa, banking is moving towards an increasingly sophisticated service support branch where machines take care of almost every transaction,” Brooks adds.

The pilot project was so successful that G4S will now be installing a further 120 units of the Bank Cash Accepting Devices in Capitec Branches all over the country.

“Across the group, we have a huge cash solutions line and we have technology centres in the US, Europe and South Africa. South Africa is and has been the front line for our hardware development, particularly around the Deposita business which we bought many years ago. We’ve merged technology developed in SA with the capability and competence from

our US colleagues and now we have local technical expertise and global innovation so that we can provide a compelling solution.

“What Capitec Bank appreciates most, is the fact that G4S has formed a long-term sustainable partnership with them. We have listened to our customer’s challenges and worked alongside them, to develop a tailormade solution that meets their needs,” says Brooks.

The success of this innovation has resulted in international interest but G4S is focussed on continuing to tailor the service so that it constantly meets the changing needs of the customer.

“We are now moving towards taking this technology overseas and utilising it across the group. Customers in Asia, Europe and North America have all had a keen eye on this trial.

“With Capitec Bank, we have

“Cash-in-transit services are my business. And G&D delivers my peace of mind and flexibility.”

Creating Confidence. In the cash processing operations performed by cash-in-transit companies, security, speed and efficiency are key. Our one-stop range of high efficiency automated cash center solutions enable you to achieve the service standards your customers want. And our tailored engineering, service, and support packages deliver the assistance you need in your cash management operations. From compact desktop to full-scale centers, we streamline your efficiency. operationscounters performed by cash cash-in-transit compa-

essing ne-stop range of high efficiency automated cash center Giesecke & Devrient Southern Africa (Pty) Ltd rds your customersDirect want.

And tailored engineering, Tel: +27our (0)11 309 4914 Email: ce you need in your cashraj.lalla@gi-de.com management operations. From www.gi-de.com ers, we streamline your efficiency. www.gi-de.com

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BUSINESS PROFILE

done exceptional work to innovatively integrate G4S technology with that of our customer. However, the buck does not stop here. Even now, after the roll-out process has been approved, we continue to work with Capitec Bank to continuously improve our solution offered and to further advance the integration process,� Brooks notes.

BANK-IN-A-BOX G4S’s Bank-in-a-Box concept was launched in December 2015 and the premise of this uniquely African product is bringing secure banking to workers in isolated, rural communities.

Approximately the size of a standard shipping container and costing between $150,000 and $300,000 based

G4S

on specification, this solution is being heralded around the world.

“I am very proud to say that the actual unit was designed by G4S Africa,” says Brooks. “The concept is unique to the G4S Africa Region and utilises some of G4S’s main service offerings, including remote cash solutions, secure solutions, CCTV monitoring and response, first line maintenance, facility management and technology.

“In short, our Mobile Banking Solution (MBS) is a portable, fully equipped, plug and play, secured ATM unit that can be tailored to the customer’s needs – or as we would like to call it, our ‘Bank-in-a-Box’ solution. The idea is that our customer’s employees would be able to securely withdraw wages and be assisted in performing basic banking functions, as First Time Bankers (FTB’s) in remote locations.

//WE ARE ALWAYS KEEN TO FIND INNOVATIVE WAYS TO IMPROVE SECURITY, EFFICIENCIES AND OVERALL CUSTOMER SERVICE - THIS FORMS PART OF OUR BROADER TECHNOLOGY STRATEGY IN AFRICA// “The Bank-in-a-Box solutions is not seen as a replacement for a traditional bank branch, but rather a secured semi-permanent cash processing facility, that will save our customers and their employees, time and money,” he adds.

The invention can expand to three times its transportable size and will come equipped with a Technology Data Centre, eight CCTV cameras, industrial air conditioning, industrial diesel generator, underfloor UPS, G4S Deposita, two G4S ATMs (internal and

external) and can also include solar panels and staff toilets if required.

Like the Bank Cash Accepting Device, the Bank-in-a-Box has attracted attention from international companies, operating in the UK and Scandinavia, and G4S is hoping to offer the service in many markets as soon as possible.

“We’re even looking at border control. At a number of the borders around Africa, you have to use cash or transactions for Visa payments and so a small bank branch for people to

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BUSINESS PROFILE

draw or deposit money is perfect and it allows the banks to test services in remote areas,” explains Brooks.

INTEGRATED SOLUTIONS In Kenya, G4S has partnered with online classifieds company, OLX, to develop a system which utilises G4S’s extensive network to allow online shoppers to collect their purchases safely and securely. The simple system sees sellers taking their goods to any one of 141 G4S sites in Kenya, from where the packages will be securely transported to a convenient collection site for the buyer where security questions and ID confirmation ensure the package reaches the correct person. The package will arrive within 12 hours of it being deposited by the seller.

//THE CONCEPT IS UNIQUE TO THE G4S AFRICA REGION AND UTILISES SOME OF G4S’S MAIN SERVICE OFFERINGS, INCLUDING REMOTE CASH SOLUTIONS, SECURE SOLUTIONS, CCTV MONITORING AND RESPONSE, FIRST LINE MAINTENANCE, FACILITY MANAGEMENT AND TECHNOLOGY// “Our success in Kenya achieved with our e-commerce customers, is largely attributed to our wellestablished Transport and Logistics Business network in the country,” says Brooks. “G4S controls over 58% of the courier market in Kenya and we have been operational in this sector for the last 45 years.

We therefore already had the

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infrastructure in place, to roll-out a project of this magnitude.

“The retail market is rapidly changing and more-and-more of our customers are reverting to selling their products online.

“Only time will tell, but I am confident that we will be able to expand this service line, in an innovative and capable way, to

G4S

meet our customer’s needs. Malawi, Ghana and Morocco (Morocco forms part of the G4S Europe Region) might be some of the key countries to watch when it comes to providing similar services in future,” he adds.

Of course, these projects are just a few of the innovative solutions that G4S provides for customers all over the continent – today the company is so much more than just security guards.

Every month, demands and environments change and needs from an efficiency and security perspective need to be reviewed.

Thanks to its scale and history, G4S is perfectly positioned to meet the ever-changing needs of its modern customers and this is largely down to its people, after all, innovation is driven by people.

In the next edition of Enterprise Africa, we hear more from Mel Brooks and G4S about the challenges of managing such a large workforce, the excitement of being named a Top Employer and the strategies that G4S is building to help advance the level of skill across the security industry.

“We are always keen to find innovative ways to improve security,

efficiencies and overall customer service - this forms part of our broader technology strategy in Africa,” says Brooks.

+27 (0)10 001 4500 crm@africa.g4s.com www.g4s.com

//

“I have been in defence and security technology for a long time; I ran a number of technology businesses related to the UK Ministry of Defence, notably an organisation called QinetiQ where I ran underwater weapons and sonar programmes for submarine warfare. I also ran their digital security business in the UK as well as some energy and power businesses near London.

“At QinetiQ, I was involved in next-gen systems and also taking military technology commercial markets. For example, systems developed to find sea mines on the seabed and the algorithms developed for that are the same as those used for finding early traces of breast cancer.

“Originally, I’m a marine engineer but I attended Stanford Business School to build my technical and business skills.

Security was a good industry to get into having previously been involved with digital security, people screening and advanced surveillance technology so I was interested in getting into the physical security environment.

“While on the executive board of QinetiQ, I presented to G4S on innovation around port security so I was familiar with the company and when I heard about the opportunity to lead the business in Asia I was interested immediately.

“I was based in India which is one of G4S’s largest businesses with 135,000 employees so there was a different science in driving efficiencies and business performance. It was a great challenge professionally and a great success.

“I was in Delhi for a few years before coming to Africa and I’m now based in Johannesburg. It’s a beautiful country and a privilege to be living and working here.”

G4S REGIONAL PRESIDENT

MEL BROOKS

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KEMTEK IMAGING SYSTEMS

Three-Dimensional

Growth

PRODUCTION: Karl Pietersen

Kemtek Imaging Systems helps equip your business for success. This innovative company has been trading in South Africa for almost 30 years and, now on a growth drive, it looks set to solidify a leading position on the continent.

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BUSINESS PROFILE

//

Over the past decade, the printing industry has been the victim of a lot of bad press. Since the onset of the ‘green’ mind-set, people have made assumptions that printing is wasteful and bad for the environment, that it results in deforestation, and that it is expensive. But in fact, using the correct technology can result in cost-effective, environmentally friendly printing which results in brilliant marketing and other important benefits. Printing technology is also flexible – the industry has a responsibility to keep up with latest trends in order to remain sustainable and relevant. Whether it’s simple inkjet printing, digital printing or 3D printing, demand remains and the world’s tech companies continue to supply quality products to this important sector.

In South Africa, the current economic situation which has seen slowing GDP growth, below that of the rest of the continent, combined with the perceptions of the print industry has resulted in a challenging trading environment for printing companies and technology businesses that supply to the industry. Kemtek Imaging Systems (Kemtek) is one such company but instead of allowing negativity to impact on its work, the organisation is positioning itself for growth and maintaining a positive outlook.

“Business is about people” says CEO Mark Broude “and you can look at the economic climate, which is tough, and you can also look at the attitude of companies playing in these times and if you regard the situation as extremely tough, competitive, difficult and negative, then your business will reflect that.

“We’ve got a very clear understanding that, despite the global recession and economic downturn, we are not participating in that. We know there’s business out there, we know that good business is based around service and value-add.

“In distribution, you’re moving brown boxes that are pretty

unappealing – there’s not a colourful way to describe it – so what you have to do is wrap it with exceptional service.

Products are distributed through multiple channels in a market; our company has a vision that we want to be in the top tier and offering services that put us ahead of the rest so that we can grow.

“The currency price is a major concern – we certainly cannot run away from that but when you compete in our market, the Rand effects everyone.

It comes down to how you structure and how you operate and the way we operate is to have quality stock, happy customers and world-class service.”

EXPERT HISTORY Established in Johannesburg, Kemtek has been serving the print, labelling, bar coding and associated sectors since 1988. The founders of the company are all experts in the industry and have many years of experience. Growing the company was not easy - thanks to social, political and economic challenges – but through determination and a strong focus on staff, Kemtek is today recognised as the industry leader with five branches around the country, almost 200 employees and dealer agreements for international brands such as Brother, HP, Komori, Duplo, Scodix, Fujifilm, Epson, Argox, Honeywell, Datalogic and many more.

“It was an offshoot of a company that was started around 20 years before that. That company was then sold and some of the management got together and restarted in 1988,” explains Broude, “Essentially, the company was a printing company; a supplier of printing supplies and a couple of other products to the industry.

“Eventually, what they were doing evolved and they took on some AIDC (Automatic Identification & Data Capture) or barcode scanning lines with some agencies. The company expanded quickly and grew year to year.

“We’ve always been a small, family-

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type business although today we are much bigger than we were back in the beginning. We’ve grown organically, we haven’t bought any businesses. Our name in the industry means that we’ve had a number of vendors approach us and we’ve taken them on over time and grown to what we are today.

“Over the years, we’ve become a company that not only sells consumables, but also hardware and equipment that generate consumable sales,” he says.

THREE-DIMENSIONAL GROWTH Obviously, like any business, the goal for Kemtek in the future is growth.

Having achieved so much in 28 years is no excuse to slowdown and Broude explains that growth will come in three forms: expansion on the continent, expansion in the product range and development in the 3D printing market.

“Our vision is always to grow the business; we’re always looking for new opportunities and we also want to diversify. The latest addition to our stable is a company called Rapid 3D which we’ve started a joint venture with so that we can move into the 3D printing industry. We’re going to be looking at new technologies and hopefully adding a couple of new brands as in this business, some of the technology will go out of date very quickly. We’ve recently added a new branch, so we will be looking to the South African market and if it needs more branches then we will look at it,” he says.

“We’re probably getting close to around 200 resellers in 28 countries around Africa. Business isn’t flowing in all of these territories but we are doing a lot of communication, a lot of education and a lot of research into how we can best establish partners, and that’s starting to pay off and we are starting to see opportunities.

“We’re seeing good prospects in Zimbabwe, Zambia, Ghana, Kenya, Malawi, Mozambique and a number

Peter

Boardroom 1

Frank

Boardroom 2

Trish

Boardroom 3

Haylee Alex

Head Office

Tammy Call Forward Call on hold

Workshop Accounts Sales

Security

Marketing

Kitchen

BUSINESS PROFILE

of others. We’re looking at where opportunities arise, we’re looking for partners and we’re educating them.

We’re able to address many of the sectors in the market and there’s very few that we don’t touch. What we’ve done successfully is gain partners, bring them to South Africa, train them and maintain a strong relationship as you can’t just dump technology in a country; you have to take the right steps so that when the product is sold, it does what it’s expected to do and creates opportunities for more business,” he adds.

With 3D printing, there are significant opportunities for the African continent. Unemployment remains high, and some might see the 3D printer as a further threat to jobs in the manufacturing sector, but

Africa has a unique ability to quickly uptake new technology while missing out older, less efficient manifestations.

‘Like mobile phones, and possibly, renewable energy, 3D printing could be the killer app that enables Africa to leapfrog into a new age of industrial production, revive an industrial sector that has stagnated in many African countries over the past few decades, and provide many much-needed jobs’ states the Mail & Guardian Africa and Broude agrees.

“3D printing is a rapidly growing industry and companies have started to look at the types of materials they can push through these printers and that is what has helped the industry develop,” he says.

“It’s gaining momentum quickly in South Africa; it’s played a big role

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in the jewellery, medical and dental industries. It’s perfect for quickly producing prototypes. It’s allowed companies to get their products to market a lot quicker. Will it take over all manufacturing – no. It has its place and it will grow and it will probably be one of the most important technology developments of our time.”

Kemtek is starting with professional machines for professional markets, in line with what the company has been doing for many years. “That’s why we bought a stake in Rapid 3D as we realised that to be in this industry, you need to understand engineering and CAD and so we formed the joint venture, which operates independently, and now that it’s established we are already moving ahead with operations,” says Broude.

KEMTEK IMAGING SYSTEMS

CUSTOMER-ORIENTED The whole philosophy behind the Kemtek business is ‘to be a customeroriented solutions provider to the industries and markets in which it operates’ and today, the company has achieved this. As the industry leader in South Africa, Kemtek now enjoys favourable relationships with its many international brand partners and those relationships are mutually beneficial.

“It’s an interesting time” says Broude, “we are recognised as a leading distribution partner in South Africa and that’s extremely valuable as the SA market is one which is difficult because we’re a country that is mature, with a large demographic and you can’t come here and do business without partners.”

The focus on the customer experience at Kemtek goes beyond the sales process and incorporates after sales service, maintenance, repairs and everything that might be needed to ensure a quality experience. The company calls its staff its ‘major asset’ and through this asset it delivers a wealth of knowledge that simply is not found in other organisations.

“This is how we differentiate ourselves. We believe that when you sell technology you have to be able to support it, repair it, deal with warranties, deal with telephone support or whatever is required. A lot of products are in the wireless field and in SA there’s a number of laws and licenses that you need to legally sell these products,” says Broude.

All things considered, Kemtek is now perfectly positioned to achieve Broude’s vision of further growth.

With its stake in the 3D printing industry, its ever-growing African operations and its solid base in SA, this is a company that looks set to continue leading the way in the specialist sectors in which it operates.

“We want to continue to grow and we want to grow organically,” Broude concludes.

KEMTEK IMAGING SYSTEMS +27 (11) 624 8000 kemtekjhb@kemtek.co.za www.kemtek.co.za

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BARNO MD - HERMAN FOURIE ©BARNO

BARNO

Helping The Country’s Biggest Brands

Make Their Mark PRODUCTION: David Napier

As the South African industry leader in branded stationery and promotional items, Barno has been applying its expert knowledge to the market for more than 60 years. If your company is in need of high quality, bespoke products created using full binding, leather craftsmen or the latest in digital printing technology, then Barno is the provider for you.

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BUSINESS PROFILE

“Proud partner from inception of Barno’s high quality digital printing”

Tel: +27 21 510 8332 Cell: +27 82 8278888 www.sign-tronic.co.za

//

In these increasingly competitive times, how a company presents itself is now one of the most important aspects of any strategy. Branding has moved to the forefront of business planning and getting the right message to the customer base is more important than ever. You can’t be all things to all people; today you have to specialise. Your brand tells your customers what they can expect from your products and services, and it differentiates your offering from your competitors. According to Entrepreneur Magazine ‘your brand is derived from who you are, who you want to be and who people perceive you to be’.

But what about when one of the responsibilities of your brand is the effective delivery of someone else’s brand? This makes business that little bit

more difficult but if you gain the correct partner, you can derive huge benefits.

In South Africa, one of the leading suppliers of branded stationery, promotional items and professional printing services is Cape Town-based Barno. The company helps big name clients create branded products that are relevant, fresh and useful.

For example, using its state-of-theart technology, Barno can print logos and marketing material onto cheque book covers or credit card holders for the banks; it can create fully branded document folders for the leisure industry, and it can print effective marketing banners for exhibitions or advertising campaigns, ensuring that the client’s brand is projected in the desired way - and these are just a few of the services provided by this innovative organisation.

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Barno has a long history in South Africa having been formed in 1953 by two Dutch immigrants who came to the country with the idea of starting a PVC welding business. The pair became the pioneers of PVC welding in SA and piloted the business successfully for many years. Current Managing Director, Herman Fourie started out as the company’s auditor. A Chartered Accountant by trade, Fourie was involved in the business for some time before the owners eventually asked him to buy into the company. He tells Enterprise Africa that, after years of growth, Barno is now seeking expansion into new markets, new territories and new product lines.

“Our economy does not grow a lot and that means if you want to increase your slice of the pie, you have to take from someone else and that’s not always healthy. You can also move into new product lines and that’s what we’re doing – we’re always adding new product lines, we’re always trying to enter new markets and although the economy is not growing, we do grow our business,” he says.

Currently, Barno has a presence in Botswana and Namibia and this is something the company would like to increase. “We want to grow in Africa but it’s very difficult. Some of the economies are not as sophisticated as ours and business can be difficult. We always like to grow in areas that have a strong financial sector, with sound banks and building societies. We also like to grow in areas with a strong leisure industry – hotels, lodges etc – that’s an important market for us and for Africa,” explains Fourie.

Outside of Africa, Barno is looking to capitalise on favourable export conditions and take advantage of the weak Rand. The company has been dabbling in exports for many years, and a particular focus has been on the Australian market. At the end of 2015, Barno made a move to recapture market share down-under by restarting its Australian satellite office which had lost

BARNO

//WE’RE ALWAYS ADDING NEW PRODUCT LINES, WE’RE ALWAYS TRYING TO ENTER NEW MARKETS AND ALTHOUGH THE ECONOMY IS NOT GROWING, WE DO GROW OUR BUSINESS// momentum after initially opening more than two decades ago.

“We battled hard to break into the Australian market. We started by approaching companies and showing them the quality improvements they could have by switching to our products but they were not willing to pay more so now we are offering the same product, at better quality, but for a better price and we’re hoping that will attract customers.

“We’re very keen to grow the export market. We have the capacity, we have the time, everything is in our favour, we just need to build the

demand,” says Fourie.

At home in South Africa, Barno is looking to make technological advancements by adding 3D printing capabilities to its stable. Already morethan competent in the digital printing market, 3D printing is the obvious next step for a company like Barno as the competences of this innovative sector begin to hit the mainstream in South Africa and local companies begin to offer SA-made printers for reasonable prices.

“It’s the most exciting but daunting prospect that we have coming,” says Fourie. “We will offer 3D printing of

prototypes, for example with showhousing. It’s easy to look at, you can touch it and feel it and it gives a great indication of what the finished product will look like. Sales people will be able to use these prototypes to drive sales so it’s hugely beneficial.

“It’s very expensive to buy these machines and they can be very slow and we know that technology is constantly changing. We are very excited about it and now we’re just waiting to take the final decision.”

INDUSTRY LEADING Now more than 60 years old, Barno has carved out a unique position in the market and is trusted by some of the biggest names including ABSA, FNB, Standard Bank, Nedbank, Seeff, Rawson Properties, Pam Golding Properties, BMW SA, PWC, Toyota, BP, Absolut Vodka and many more. This leading

Discover the colourful world of vinyl films

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BUSINESS PROFILE

position is largely down the company’s ability to tailor its services to meet the needs of clients – something which many competitors are not prepared to do.

“We have huge competition from China, where people can buy huge volumes, but these products are not decorated and they are not prepared to offer smaller orders. We focus on decorating through digital printing, embossing or foiling so that the product stands out and you can be proud to be associated with it,” explains Fourie.

“We operate mainly in the Western Cape and we are one of two companies in this province that can offer these services. We have a sales office in Johannesburg and we will deliver our goods there after they are

manufactured here in Cape Town.

“We are very different from most of the competition. We are big in digital printing and others stay with silk screen printing. I definitely believe that we are industry leaders in our field,” he says.

But it hasn’t always been this way.

Barno has had to fight hard to come through tough times and, where other manufacturing companies have fallen to the wayside, Fourie and Barno have managed to thrive through wise investment, an in-depth understanding of the industry, and a committed and skilled workforce.

“Until three years ago, we would say that every single South African got one of our products because we printed the PVC cover of the identity book,” Fourie says. “Now the country

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uses a card system. The financial sector was our main focus; cheque book covers, credit card holders, leather ring binders and more but now, because of the rise in technology, people don’t use cheque books so we offer different services to the banks, who remain our main target.

“We’ve modernised the business and installed many new developments, the latest of which was seven years ago when we started buying digital printing machines. We used to do silk screen printing but today we have four flatbed digital printers and we are one of the top companies when it comes to printing onto PVC,” he explains.

“Another serious change to the business came 10 years ago when BEE regulations were introduced. This means you can go to a black investor

BARNO

//WE’RE VERY KEEN TO GROW THE EXPORT MARKET. WE HAVE THE CAPACITY, WE HAVE THE TIME, EVERYTHING IS IN OUR FAVOUR, WE JUST NEED TO BUILD THE DEMAND// and they will buy into your company but instead we decided to offer shareholding to our black employees who have a vested interest in the success of the company.

“This has been a huge success. We thought a lot about it and thought that the people that deserve a shareholding most are those who work here.

Everybody in the business is involved and everyone is keen to succeed as they are all shareholders.”

Barno employs approximately

160 people and all are affectionately known as the ‘Barno-bees’. These people actively contribute to the success of the business. “The essence of Barno lies in the fact that our people - Barno-bees - live the brand every day because they are the brand,” says Fourie. This all contributes to a culture of respect, where employees respect each other and respect all stakeholders, including clients, and this has helped the company to successfully perform every year.

Barno is a company built on passion and industry-leading expertise. More companies like Barno is exactly what the country needs during these tough economic times. What sets this business apart is its focus on quality and that is something that will not change.

“We can compete on quality, time and price with any company around the world. If people only want small batches, we can do it; if they want large batches, we can do it,” concludes Fourie.

BARNO +27215317571 info@barno.co.za www.barno.co.za

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EDCON

Edcon Responds to Retail Therapy PRODUCTION: Colin Chinery

Fashion retailer Edcon’s strategy for a return to its former glory includes better cost control and launching more product lines. “It may take some time, but we will get there,” says CEO Bernard Brookes.

//

Ten months after Bernard Brookes took control of Edcon’s faltering reins, South Africa’s largest clothing retailer is reporting a sighting of a long lost acquaintance - light over the horizon.

Until 2007, Edcon was the Cullinan Diamond of the retail sector; a prosperous South African icon with a vast, loyal following and a strong presence in eight other African countries.

But that year the US-based private equity giant Bain, founded by one-time US Republican presidential nominee Mitt Romney, moved in and bought the company for R25 billion in South Africa’s largest private equity buyout. And almost at once the global financial crisis broke, and Edcon took a direct hit.

From 2012 Southern Africa’s largest non-food retailer sustained a run of losses that continued well into last year. But in the final quarter of 2015, Edcon returned a R2.9 billion profit.

“Over the last 12 months, we have been able to reduce debt

by R4.5 billion and cash-pay interest burden by R1.0 billion as a result of a refinancing of existing indebtedness.” Says Brookes, who joined last September, four months after stepping down as chief executive of Australia’s largest department store chain, Myer.

ROBUST BALANCE SHEET Extensions of the maturities of outstanding debt instruments until December 2017 have also been secured, with the balance sheet “more robust and manageable.”

The Edcon group trades under three divisions; Edgars, serving the middle-and upper-income markets, Jet and Jet Mart, middle-to lowerincome markets, and the speciality division made up of brands such as Topshop, Calvin Klein, River Island, Doc Martens, Jo Malone, Red Square, Boardmans, and Legit.

And despite its long haul of troubles, Edcon’s market share of the Southern African clothing and

CEO BERNARD BROOKES

//WE ARE STILL PLANNING ON SPENDING OVER R600 MILLION IN CAPITAL EXPENDITURE OVER THE NEXT THREE YEARS, AND WE INTEND OPENING 62 NEW STORES ACROSS THE GROUP// footwear market is still twice the size of its nearest listed competitor, with over 1500 stores and 12 million regular customers.

Aside from South Africa, Edcon also operates 212 stores in Ghana, Zambia, Mozambique, Swaziland, Botswana, Namibia, Lesotho and Zimbabwe. Together they contribute some 10.5% of retail sales, and growth from these external operations remain an important part of the future of the group.

“Edcon has many iconic brands that still, after all these years, find a lot of favour with millions of customers, and we remain market leaders in key categories,” says Brookes.

“We may have lost some market share over the last few years, but we have plans in place to ensure that we recover some of this lost ground.”

Edcon has simplified its management and operational structures, eliminated complexities,

total store costs are well managed, and a new credit solution is performing well.

Changes on the shop floor include an increased focus on customer needs and a realigned plan to drive meaningful customer change in the near term and create long-term value.

“When I arrived at Edcon, I discovered we have over 12 million ‘Thank U’ cardholders and nearly four million account holders. To talk to and assist customers with the challenges of the current economic climate, we have now initiated a process where we are using these platforms, together CONTINUES ON PAGE 83

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EDCON

//WE ARE STILL PLANNING ON SPENDING OVER R600 MILLION IN CAPITAL EXPENDITURE OVER THE NEXT THREE YEARS, AND WE INTEND OPENING 62 NEW STORES ACROSS THE GROUP// CONTINUES FROM PAGE 79 with our traditional marketing and advertising, in a better and more focused manner.”

A key component is to get closer to the customer and enhance his or her experience with the Edcon offerings, says Brookes. “Of course, other channels of communication such as advertising, marketing, instore, and the media will also be used to ensure the customer is kept fully informed of Edcon’s progress, new product offerings, price and other promotions etc.”

Excellent stakeholder relationships are critical. “Without our suppliers and landlords for example, our ability to trade would be greatly impacted. This is why it is important to keep communication lines open.

“Edcon is in regular contact with all our stakeholders, keeping them informed of developments within the business. However, our customers remain our most important partners: without them we don’t really have anything.”

Communication to all other stakeholders, such as employees, suppliers, regulators, industry bodies and investors has been “significantly improved over the last year and I am happy to say we are seeing good progress and pleasing reactions to our efforts.”

Edcon’s operational change process has accelerated and advanced, while other plans “progressing well” include a new ’look and feel’, and better service levels and cost management. There is also a new focus on Edgars’ high-margin, fastfashion private labels and a greater

selectivity of international brands offered.

BRAND ENHANCEMENT “These are all starting to resonate well with customers. And despite the constrained environment, the overall shopping experience is being improved across all our brands with a better and more competitive offering through improved service, pricing and products that are more sought-after by customers.”

Like all retailers, Edcon is experiencing a tough trading environment as consumers tighten their belts due to the weakening of the rand, interest rate anxieties and numerous day-to-day cost hikes.

“We understand the declining use of credit and we are pushing better value for our customers to drive cash sales. We are also managing sales prices better, and minimising price increases.

Our marketing and promotional campaigns are more simplified and focused squarely on our customers.”

Edcon employs over 40,000, the great majority full time. “Our staff are focused every day on serving many millions of customers, and I can assure you that with every strategic business decision we make, we always take into account the people that make-up Edcon, and how and if, this may affect them.

“We fully understand the predicament we are operating in and the state of the global and local economies. Indeed, the overall trading environment remains challenging due to rising unemployment, rising interest rates and the sharp depreciation of the rand. We are certainly managing through this and making difficult

decisions as we move along,” Brookes explains.

77 years after it opened its first Edgars store in Joubert Street, Johannesburg, Edcon is embarking on what Brookes calls “a much needed journey on enhancing our in customer store service.

“We are still planning on spending over R600 million in capital expenditure over the next three years, and we intend opening 62 new stores across the group.”

But in a highly competitive market, the CEO who once said “I was a trolley boy, I was a buyer, I was a store manager, I was a general manager, I worked in such a multitude of tasks that now I understand all of the roles” is not minimising the scale of the challenge.

TURNAROUND IN SIGHT “We fully understand the predicament we are operating in and the state of the global and local economies. We know that this will not be an overnight change: in fact, we anticipate that we will start to see a meaningful turnaround over the next 12-18 months.

“I have been in this industry for over 30 years. Retail is part of me, and there is nothing I enjoy more than walking through a store that is providing top-quality product, at competitive prices, while at the same time offering world-class customer service.

“I have seen and implemented this in parts of the world, and that is what we are all striving to achieve within the Edcon stores. It may take some time, but we will get there.”

EDCON +27 (0)13 758 1015 customerrelations@edcon.co.za www.edcon.co.za

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MCCORMICK PROPERTY DEVELOPMENT

Rural Retail

Development Pioneers PRODUCTION: Karl Pietersen

A local, family run business, McCormick Property Development has been leading its industry, while remaining committed to its values, since its establishment 33 years ago.

//

When PwC released its report on ‘Drivers of change for the Real Estate Industry’ back in 2014 following an industrywide conference held in Sandton, Johannesburg, the conclusion was that the industry is on the cusp of major changes. The advent of technology, effects of globalisation, changes in key demographics and disruptions in financial markets were just a few of the drivers of these changes and, according to PwC Global Real Estate Leader Kees Hage, “there will be a need for more specialist roles in the industry. The quest

for local knowledge, expertise and good government relations has become increasingly important. Looking forward to 2020, it is the real estate managers and investors who have the vision and momentum to anticipate emerging trends in the medium term and prepare adequately for them, who will be most successful.”

But these predications are based largely on research in the urban and peri-urban regions, where populations are large and trends are easier to monitor. So what about the rural areas? What about regions which are

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BUSINESS PROFILE

//WE’RE A DEVELOPMENT, MANAGEMENT AND LEASING COMPANY ALL ROLLED INTO ONE SO WE ARE A FULL TURNKEY SERVICE PROVIDER// largely underserviced and where real estate development is not high on the agenda? This is where Pretoria-based McCormick Property Development (MPD) comes in – a family run business with more than 30 years’ experience developing retail-focussed centres in rural regions of South Africa and other emerging markets in Africa.

The company certainly has specialist, local knowledge; it certainly has good government relationships and it is certainly equipped with the vision to anticipate emerging trends.

Over the years, MPD has developed shopping centres in rural regions with the goal of creating wealth and

employment by investing in not only real estate, but entire communities in the process. Initially focussing on the former ‘homelands’ in South Africa, MPD’s reach now covers many subSaharan African countries.

Founded by current Chairman, John McCormick in 1983, the company is now run by second generation family leader, Jason McCormick. He tells Enterprise Africa that the company is today very different from its early days but its values still hold strong.

“As the markets have changed, our model has changed. What was good for people 30 years ago, is no longer good for them now. Levels of education, levels

• Civil, Public and Building Works.

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86 / August 2016 / www.enterprise-africa.net

of income and levels of aspiration have vastly increased. On the back of that, we’ve gone from small strip malls that were utilitarian with limited parking to fully enclosed malls with all the bells and whistles.

“We look at international best practice with everything that we do. We still do strip malls in the deep rural areas where there isn’t sufficient spending power because of population numbers, to justify a 30,000 m2 Mall, but we find that today the tenant mix has changed.

It used to be focussed on the lower-end, like food and other limited services, whereas now there’s more middleclass fashion in the deep rural areas and where there’s bigger shopping centres, we’ll have two supermarkets, entertainment, multiple banks and lots of parking.”

While all the time the market has been changing, the demand for the type of property that MPD is expert in has not dried up and, importantly, the company has secured positions in familiar areas with real potential.

“South Africa has the sixth highest ration of malls to population in the world so we are a mall-centric country and malls have very much become the ‘town squares’ of old, where people get together to socialise. South Africa as a whole has an oversupply of shopping centres in the urban areas and old towns but we’re in the last quadrant of the country that still has opportunities for new mall developments,” says McCormick.

Originally, this business was thought of by industry peers as a risky idea but over the years, as the wellthought-out strategy has displayed significant success, many competitors have entered the market or shifted attention from their operations in urban areas seeking growth. But MPD is the only company that can call on a wealth of highly specified information to plan with.

“The big change is that my father was the only person doing it for a

MCCORMICK PROPERTY DEVELOPMENT

long time but now there’s a massive influx of developers trying to get involved in rural areas because of the oversaturation in urban areas. Many of them have failed quite spectacularly because the models that we use to develop even a fancy mall are very different to what others are used to in the urban areas. Rents achievable per square meter are lower, building costs aren’t significantly lower but we have the advantage of 30 years of refining models; financial models, construction models, building models; to suit the same return on investment but at a lower rental income,” McCormick explains.

“We’ve changed as we’ve moved.

I’ve been in the business for 14 years, we saw the influx of competition coming and we prepared for that by working consistently to land-bank prime property in our chosen areas and now we have in excess of 30 land parcels that we will develop as and when the need arises,” he says.

And unlike some competitors, MPD is not shackled by massive labour costs.

It takes a lean approach to operations, remaining nimble, and this has always been the way since John McCormick started the business in ’83. “Out of necessity, this company has always been very lean. Because we are lean in terms of staff numbers, we are able to go through downturns in the economy.

Other companies that manage shopping centres will have teams of seven or eight people managing one centre and we don’t do that as we can get the same done with our resources, thanks to the systems and models we have in place, with fewer people,” McCormick states.

MPD is even managing to help other businesses grow in these tough times. By growing its existing properties, it opens up more space for tenants who are looking to new locations, and of

course, this is another benefit to local communities.

“We have customers like Mr Price, Truworths, Foschini and others that realised their growth was stagnating in the urban areas and so they wanted to push into our markets and that’s been one of the facilitators of growing our existing shopping centres.

“We have acquired land up front that allows us to continually expand our shopping centres so if there’s ever a threat, we have first mover advantage and we’re able to add whichever tenants may be looking to come into the market,” explains McCormick.

With 58 properties developed, 26 under ownership and management and the 59th, 60th and 61st developments currently in progress, MPD’s model has proven to be fruitful and it remains an example of how innovation and ‘out of the box’ thinking can result in all-round

WHAT ECONOMIC PRESSURE? In June, South Africa narrowly avoided the dreaded downgrade to ‘Junk’ status but the economy still sits on the edge of a knife. Unemployment crept up in the second quarter and the IMF cut South Africa’s growth forecasts to 0.1% down from 0.7% predicted in January.

In 2015, the construction sector felt the pinch with the ‘Big 5’ all reporting tough trading conditions and loss of share price and these effects filtered through the industry.

But McCormick is not feeling the pressure; in fact, the opposite is true.

“Generally speaking, we’ve benefited.

We’re seeing a continued increase in our trading densities across the portfolio and we’re fortunate to be in the positon we’re in in the market that we’re in.

“It’s a great time to develop when the construction industry is down as everyone is looking for work and everyone has spare capacity so we’re developing at the same prices now as we were a couple of years ago,” he says.

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BUSINESS PROFILE

positive effects. But McCormick is clear that nothing is left to chance and laurels are not rested upon.

“We manage all of our own properties – we would never let anyone else manage our properties,” he says.

“We have by far the lowest vacancy rates in the industry, we have the lowest expense ratios and nothing goes unnoticed. Every month, we have large management accountant meetings, we go through everything with a finetooth comb and we monitor things meticulously. We own these properties so we have a real vested interest – there’s a huge amount of focus that goes into management and it’s one of the things that we are most proud of.

“We’re a development,

management and leasing company all rolled into one so we are a full turnkey service provider.”

RURAL AFRICA With growth in rural areas of SA physically limited, MPD has broadened its scope and is now searching for opportunities north of the border. Already active in Africa, and with a strong position in some sub-Saharan nations, McCormick says that there are huge opportunities to be had if you can do business correctly.

“Growth in Africa has been a target for us for that last five years but Africa is tricky. Some cities have in excess of 10 million people and

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they all need to eat but there is a lack of formal retail space – if everyone spends $1 a day, it quickly turns into a lot of money so there’s no doubt that the opportunities are there but it’s difficult. There’s a huge, quickly growing population, with quick urbanisation so the opportunities are massive but not without risk.

“There are countries that we are interested in but we’re taking a cautious approach while commodity prices are supressed.”

The sheer number of sites and prospects that MPD is pursuing is an indicator of its strength.

“We have two prime sites in Zimbabwe that we’ve land-banked while the economy turns around. East

MCCORMICK PROPERTY DEVELOPMENT

Africa is very exciting – Kenya and Tanzania are showing a lot of promise.

It’s amazing how countries like Uganda and Rwanda have developed in recent years. For us, being in northern Mozambique, it’s logistically suitable so we see them all as markets with huge potential.

“Property is a long-term investment and we take long-term views on countries,” says McCormick.

When opening up in a new location, the same scrupulous attention to detail that underpins a SA development goes into each African project – of course, it’s easier when you can travel without restriction.

“We would set up satellite offices in the countries we develop in but run everything through our head office in SA. We have four pilots in the company (including my father and myself ) and we own our own airplanes so there’s no waiting for flights or trudging through airports and this makes developing in very rural areas easier,” explains the MD. FUTURE FOCUS MPD is recognised for its involvement in many high-profile projects and in the future this will continue. The company has secured development opportunities, across southern Africa, that will keep it busy for some time.

“Mall de Tete in Mozambique is an important project and will be our next to open, at the end of October. The really exciting one for us all is Alex Mall in Alexandra near Sandton where we’re doing a 30,000 m2 double-level, fully enclosed mall with lots of new upmarket concepts.

It will have soccer fields and netball courts to allow the local schools to play in the day and then at night we will have soccer leagues with the aim of getting kids of the streets and into organised sport. This will open in March 2017,” explains McCormick.

“Phola Park began this month and that’s an exciting project, just

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short of 30,000 m2. Capital Mall will probably be the biggest shopping centre we’ll ever develop in South Africa and that has a first phase which is over 70,000 m2.

“Then there’s the fantastic project in Matola in Mozambique which will be part of a large mixeduse development called Cidadela Da Matola. Alongside Mozambique’s largest shopping Mall of 47 000sqm, it will have two hotels, a casino, a gymnasium, a private hospital, government buildings, apartment tower blocks, filling stations, commercial office space, so it’s a big scheme and we’re building a large development there which will grow over time,” he adds.

It’s clear that by using its extensive local knowledge, positive relationships and that ability to read

market trends, MPD will remain at the forefront of the market, ride the waves, and lead by example when it comes to sustainable and financially sound property development. By 2020, when PwC re-evaluates the market, MPD will undoubtedly remain one of the most successful organisations in southern Africa.

MCCORMICK PROPERTY DEVELOPMENT 012 - 654 - 6330 @McCormickProp www.mccormick-property.com

www.enterprise-africa.net / August 2016 / 89

FRESENIUS KABI SOUTH AFRICA

Caring

For Life The Fresenius Kabi manufacturing plant in Port Elizabeth creates a broad range of lifesaving medicines such as infusion solutions and intravenously (IV) administered drugs. Its products are used to help care for critically and chronically ill patients. This is a business that is people focussed and is looking to continue building its market share in Africa.

//

‘Caring for life’ is the corporate philosophy of global healthcare company, Fresenius Kabi. The company’s speciality is lifesaving medicines and technologies for infusion, transfusion and clinical nutrition and its products and services are used to help care for critically and chronically ill patients from all over the world.

The company’s roots stretch as far back as 1462 when the Hirsch Pharmacy was opened in Frankfurt am Main, Germany and eventually the Fresenius family assumed ownership in the 18th century. In 1912, Dr Eduard Fresenius formed a pharmaceutical manufacturing company that specialised in injection solutions, serologic reagents and Bormelin nasal ointment amongst other products, and in 1933, the manufacturing company was separated from the Hirsch Pharmacy and moved to Bad

Homburg, just outside of Frankfurt.

Over the next few decades the company grew exponentially and its product range, market place and employee base became larger and more diverse. In 1999, Fresenius Kabi as we know it today was born following the combination of the Fresenius Group’s Pharma division with the infusion solution business acquired from Pharmacia & Upjohn (Kabi). Following a number of important acquisitions, the company continued to grow around the world and today, Fresenius Kabi has operations across all continents and employs more than 33,000 people. In 2015 the company reported sales of more than €5.9 billion.

Opening in South Africa in 1999 as a sales and marketing operation based in Midrand, the company added an established manufacturing facility in Port Elizabeth to the portfolio in 2000,

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under the new name Bodene (Pty) Ltd. Fresenius Kabi Manufacturing South Africa (Pty) Ltd, as it is known today, came into being late in 2010.

Fresenius Kabi has enjoyed success thanks to its strategy of being close to its customers and supporting a decentralised production network.

Fresenius Kabi has many manufacturing facilities across the world and sales departments in many countries. The production site in Port Elizabeth is the only Fresenius Kabi manufacturing plant for pharmaceutical products in Africa. Plant Manager at the company’s manufacturing site in Port Elizabeth is Rémi Helmig.

PRODUCTS One of the innovations from Fresenius Kabi, and one of its most important containers, is the Freeflex® infusion solution bag.

Freeflex® is an entirely PVC-

BUSINESS PROFILE

free bag that shows improved drug compatibility compared to PVC bags and is easy to use and environmentally friendly.

Freeflex® bags are recognised globally and have won awards in France for innovation from leading independent hospital physicians and pharmacists.

Freeflex® is an IV bag of high quality using state-of-the-art, fully integrated manufacturing processes and consists of container sizes ranging from 50 ml up to 1000 ml.

A strong resistant central hanger and high strength welded seam enables the Freeflex® bag to be used in combination with a pressure cuff device. The safe and simple reconstitution methods will avoid any airborne contamination, when used in conjunction with the Freeflex®

reconstitution device. Freeflex® bags are easily identified and the infusion and injection ports are easy to open and have tamper evident break-off ports, that do not require additional cleaning before first use. Importantly, the bag also consists of a multi-layer polypropylene primary bag film, free of PVC, plasticizers, additives or latex, with excellent drug compatibility, low gas and water vapour permeability compared to PVC, high transparency, and sterilized at 121 °C. Due to a special design of the ports, leakage is prevented, even after the removal of the administration set.

The Fresenius Kabi manufacturing facility in Port Elizabeth focusses on Freeflex® manufacturing, along with production of other critical care products.

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PEOPLE On the African continent, the healthcare industry is not an easy one in which to operate. Valter Adão, Life Sciences and Healthcare Industry Leader at Deloitte said in the company’s 2015 healthcare industry outlook: “The public sector struggled to recruit and retain enough skilled medical staff. The government is pursuing bilateral and multilateral agreements aimed at discouraging other countries from ‘poaching’ South African health care workers. However, most countries - contending with their own staff shortages - have not been very responsive to these agreements.”

But despite the conditions Fresenius Kabi leads by example when it comes to sourcing and developing people who contribute a range of invaluable services to the country’s healthcare industry.

This focus on people development, and the number of staff employed in Port Elizabeth, means that Fresenius Kabi has become a major player in the local community.

The company’s excellence is created by people – expert, knowledgeable and motivated employees. Supporting the further development of their staff is a key mission for them.

Overall, this is a company that is set for growth in South Africa and across the African continent.

Achieving success like this during a difficult economic climate is something which has perplexed many but thanks to its nature, the company has managed to forge an excellent business model.

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UBUNTU TECHNOLOGIES

Raising the Bar in

Telecommunications PRODUCTION: Timothy Reeder

Ubuntu Technologies is an independent black economic empowerment company which boasts nearly 20 years of experience within the ICT industry in South Africa, with an excellent track record of successfully awarded and managed contracts across the Government, State Owned Enterprises and Corporate sectors.

//

Attaining the objectives at the heart of a successful business is at the core of everything that Ubuntu does, which it achieves through a policy of consulting, designing, implementing, managing and supporting IT infrastructures services and solutions best suited to the requirements. Since its inception, Ubuntu Technologies has set out to fulfil its company mission of providing customers with the expertise and assistance they need in order to render their organisations efficient, reliable, predictable and, perhaps most crucially, flexible within markets whose forces are constantly changing.

Originally formed in the late-90s to address what was a severe shortage of truly empowered companies operating in the South African technology

space, Ubuntu today is placed to offer the full range of business services.

Ubuntu’s competences range all the way from initial strategic infrastructure needs-analyses, through the accurate specification of exactly the infrastructure required to satisfy these requirements, to the configuration and rollout of the requisite solutions to the customers’ premises. Its after-care work is also noteworthy, and comprises support and ongoing maintenance services as well as the retirement, disposal and replacement technology with more current solutions - a vital component in such a fast-moving sector.

Doubtlessly in large part due to work of companies such as Ubuntu comes the news that Public Sector ICT spending in South Africa has never been

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higher than at present, and is forecast to rise yet further to $707.6m by 2019.

New research by Frost and Sullivan on this expenditure in South Africa predicts this vast rise from the $615.9m spent on ICT platforms in 2014, 73.1% of which was accounted for by investments in what it labelled, “managed services, combined with fixed and non-cellular connectivity,” according to the research.

Naila Govan-Vassen, the ICT industry analyst at Frost and Sullivan, said the projected increase in public sector spending in ICT will “centre around updating IT hardware and data centres and on supporting systems integration, especially within the health, education and administrative departments.

“South Africa’s National Development Plan, the National Integrated ICT Policy Green Paper, and

BUSINESS PROFILE

the Broadband Policy are expected to drive the development and uptake of e-government services,” Govan-Vassen added. This will be reliant on some significant infrastructure investment, however, as well as the tackling of legacy issues and security concerns around cloud computing, in order to ensure its successful implementation. The research report highlighted that, currently, the majority of public sector expenditure on ICT is limited to covering day to day requirements, and that, “defining clear roles for ICT agencies and building partnerships with the private sector will be crucial to this endeavour. The breadth of knowledge and expertise that the private sector can bring on board will complement the government’s commitment to strengthen ICT

96 / August 2016 / www.enterprise-africa.net

UBUNTU TECHNOLOGIES

integration and accelerate digitisation in the South African public sector,” the report concluded.

Ubuntu’s own growth over a relatively short lifetime has been remarkable, from a small technology consultancy supplying hardware to the provincial and local government of the Free State, to where it stands today as a powerful group of companies with a national footprint possessing the ability to span networking, communications, client, server, storage and audio visual environments. Its remaining at the pinnacle of such a drastically ever-developing industry has been dependent on the formation of important, influential partnerships over its lifetime. Perhaps most historic among these has been its teaming up in 2014 with leading global telecoms company, Aviat Networks, bringing

together two companies with a combined revenue of over R6 billion.

The forming of Aviat-Ubuntu Telecommunications sought to bring Ubuntu’s 17 years of local experience together with the technological edge at Aviat’s disposal, given its 50 years of providing microwave network solutions the world over, and thus provide best-of-breed products and a full range of service options to both public and private telecommunications operators.

“Aviat-Ubuntu intends to be a force to be reckoned with in the telecommunications sector,” said Ubuntu CEO, Wandile Bereng at the time. “By joining forces, our two companies will be able to compete aggressively in the telecommunication sector, and will be able to expand our client base significantly.”

The new company has continued

to be headed up by CEO Allen Tshabangu, whose more than 20 years of business experience has taken in the acquisitions of Sandton City, the V&A Waterfront and Canal Walk.

“Aviat-Ubuntu aims to support the development of the country’s economic potential by leveraging off the unique expertise of the two partners,” he described. “We’re the new players on the telecommunications block, and we aim to make our presence felt in a way that will benefit all operators and the South African people as a whole.”

UBUNTU TECHNOLOGIES (012) 347 7944 info@ubuntusa.co.za www.ubuntusa.co.za

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BBBEE IRT Projects is a Level 1 BEE contributer with 100% PDI ownership and management, servicing a wide spectrum of customers both in the public and private sector.

Our philosophy IRT Projects prides itself in being a solutions based company. We always provide solutions to customer needs and in so doing build long relationships with our customers. From our careful choice of product and services we are able to realize our philosophy on an ongoing basis thereby steadily growing our customers’ confidence in IRT Projects.

Unit D1, Deco Park Phase 2, New Market Road Northlands Northriding, Johannesburg E-MAIL: info@irtprojects.co.za TELEPHONE: 0861 000 478 www.irtprojects.co.za

www.enterprise-africa.net / August 2016 / 97

STADIUM MANAGEMENT SOUTH AFRICA

A Whole Host of Venue Capabilities

PRODUCTION: Timothy Reeder

South Africa’s leader in the field, the Stadium Management South Africa group (SMSA) has managed four flagship stadiums in the Metropolitan of Johannesburg since its appointment in 2009. SMSA independently funds the commercial business of the multi-purpose, adaptable stadiums, which sees them play host to world class events ranging from football and rugby matches, concerts and festivals to political rallies.

BUSINESS PROFILE

© CHRIS KIRCHHOFF - MEDIA CLUB SOUTH AFRICA

//

Of these four stadiums under SMSA’s stewardship, the iconic FNB Stadium is, at a capacity of 94 736, the largest venue in the whole of South Africa. Located in Nasrec in the south of Johannesburg, its unique design is highly-regarded the world over, having been in recent years the subject of an R3.3 billion investment to fund its reconstruction in time for the first ever African World Cup in 2010. It has had an integral role in a variety of historic events ever since its previous incarnation as Soccer City, not least of which was its hosting the first speech from former President Nelson Mandela in 1990, coming just days after his release from 27 years of imprisonment.

The Orlando Stadium sponsored

by Lafarge, meanwhile, is located in the heart of Soweto. Originally built in 1959, A further example of necessary demolition and rebuilding from scratch sees this stadium now able to house a capacity crowd of 40 000 spectators, alongside a raft of hospitality suites and VIP suites, conference rooms, a gymnasium and a 200-seater Auditorium.

Home of the 2012 champions of South Africa’s oldest football cup competition, MTN8, as well as 2011/2012 South African Premier Soccer League runners-up, Moroka Swallows, the Dobsonville Stadium is a multi-purpose venue which is used primarily for football matches. It was the site of fixtures played by 2012 London Olympic Games participants

100 / August 2016 / www.enterprise-africa.net

Banyana Banyana, the South African national women’s team, as well as an historic first international fixture for the national mens’ team Bafana Banana and their African Nations Championship qualifying fixture in 2015. Also the object of significant investment on the part of SMSA it has undergone refurbishments to the tune of R69 million to ensure that the stadium, originally built in 1975, can now accommodate a capacity crowd of some 17,700 people.

Looking to the south of Johannesburg turns up the final jewel in SMSA’s collective crown. Its Rand Stadium was originally built between 1949 and 1951 and, in 1976, famously staged what was the first ever fixture for a multi-racial South African

STADIUM MANAGEMENT SOUTH AFRICA

national football team. During the Apartheid era, they hosted Argentina as an ‘International XI’ in order to avoid a ban from world soccer body FIFA. Widely regarded as possessing one of the best playing surfaces in the country, its more recent landmark moments have been Bafana Bafana’s international fixture against Mauritius in April 1993 and the 2009 Nedbank Cup final between Moroka Swallows and the University of Pretoria, with the original heritage scoreboard still in use at this all-seater stadium.

For a group which prides itself so obviously on a policy of continual update and modernisation, this year also brings with it the renaming of SMSA’s colossus, FNB Stadium. The naming rights held by First National Bank for the country’s biggest sporting venue, already nicknamed Soccer City and Calabash by Kaiser Chiefs fans and soccer aficionados respectively, expire during this month. The Department of Public Works entered into an agreement in 2009 with the City of Johannesburg on the management of the stadium, while SMSA manages the stadium on behalf of the city. Stadium Management South Africa’s CEO‚ Jacques Grobbelaar‚ spoke of the impending change and the mystery which currently surrounds it. “We are aware that FNB‚ Department of Public Works and City of Johannesburg met‚ of which the outcome is not known to us. The stadium will continue to be named FNB Stadium until such time that we are directed otherwise by the City of Johannesburg.”

It is precisely its adaptability and the strength in depth of Stadium Management South Africa’s assets that allows Jacques Grobbelaar to speak of the notable success that SMSA has enjoyed over the first half of the year to date. “In the first three months of the year,” he explains, “FNB Stadium hosted two further Soweto Derby fixtures which brought a total of five matches and over 375,000 patrons to

watch Orlando Pirates playing Kaizer Chiefs at this venue in this 2015/16 Premier Soccer League football season, to whom we are most thankful.” As Grobbelaar goes on to describe, SMSA has once again benefited from the sheer range of services it is placed to offer. “We also hosted successful events over the Easter Weekend with the Revelation Church of God and Grace Bible Church, who continue being inspirational partners of ours as our relationship continues to grow.

“With this being year of local elections in South Africa, our venues have also been utilised by the Economic Freedom Front at Orlando Stadium and the Democratic Alliance, at Rand Stadium, for their manifesto launches that were well attended and both staged in April.” To follow these foundations to an extremely successful year meanwhile are events at the heart

of what SMSA does, and guaranteed to experience the same overwhelming popularity as has historically been the case. “The ever-popular Carling Black Label Cup is also back and confirmed for 30 July at FNB Stadium to kick start the 2016/17 Premier Soccer League season when the two Soweto giants – Pirates and Chiefs – lock horns again.

Last year, it was a record 94, 807 in attendance who enjoyed the festivities.

The dawn of a new campaign sees new players being unveiled, and this year promises to be just as big.”

STADIUM MANAGEMENT SOUTH AFRICA +27 11 247 5300 @OfficialSMSA www.stadiummanagement.co.za

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www.diligencesecurity.co.za www.enterprise-africa.net / August 2016 / 101

DEFY APPLIANCES

Award Winning

Appliance Quality

PRODUCTION: Timothy Reeder

With now more than 110 years of operational experience at its disposal, Defy Appliances is among South Africa’s most popular brands and offers an industry leading combination of efficiency, quality and continual growth.

//

The Defy name first became known during the 1920s, leading to the company’s producing the first electric stoves in South Africa in 1932. Defy Appliances (Pty) Ltd is now Southern Africa’s largest manufacturer and distributor of major domestic appliances, operating out of its head office is in Jacobs, Durban. Rajan Gungiah, Defy Marketing Director, describes how the company’s approach has remained loyal to its original intentions, despite the fast-moving nature of the industry. “Even in

its very beginnings the company looked to bring innovation to all the different sections of home appliances in order to transform consumers’ lives. At each juncture we ensure that the appliance we introduce is environmentally friendly and will make a difference to people’s lives, allowing them to prepare, store or clean in the most effective way possible and with the latest available technology.”

Defy’s three factories in Jacobs, Ezakheni and East London all boast the all-important ISO 9001-2009 accreditation, enabling the most

www.enterprise-africa.net / August 2016 / 103

BUSINESS PROFILE

safe and efficient manufacture of wares ranging from freestanding stoves, built-in ovens and hobs, tumble dryers and console air conditioners to electric refrigerators. Its famous slogan ‘You can rely on Defy’ has over many years come to represent the legendary product quality and consistent approach to product innovation consumers associate with the company, and sees it enjoy what is likely the strongest appliance brand recognition in Southern Africa. As well as holding the top spot in the South African Major Appliance market, the company also exports to a variety of markets, including Africa and the Indian Ocean Islands.

In a market which has grown immeasurably more competitive during Defy’s lifetime, its enduring success is, according to Gungiah, due in large part to it focus on remaining local in its operations.

“Our ability to locally manufacture most of the products that we sell in the market is fundamentally important, as it gives us the ability to constantly add new features and benefits and offer a better value proposition in a market which remains very competitive.

We have poured a huge amount of time and investment into research and development which has resulted over the decades in our having relevant products that are competitive with the very best in Europe.

“A massive focus on quality and consistency works alongside what is arguably the most comprehensive service and aftercare infrastructure in the country. It is so important that our customers know that they have the peace of mind of knowing that full backup is provided in terms of local parts and capabilities to resolve any issues or changes which may arise with their machines over time.”

The power of the brand can be a transformative influence, as Defy has come to experience over its long lifetime. Above and beyond simply catering for the needs and wants of consumers, some brands go on to become symbols within people’s lifestyles. Ask Africa’s KASI Star Brands seeks to recognise this fact, rewarding those brands which are used most loyally by South Africa’s township consumers and which have become weaved into the fabric of vibrant South African townships. Regardless in this instance of background or living standard, they are simply the brands that define a common experience, to which South Africa’s township consumers are committed and will shop accordingly to demonstrate this commitment.

It should come as no surprise then, to learn that Defy has been placed at number one in four categories at the 2016/17 KASI Star Brands™ Survey. Official acknowledgement of its peerless performance in the sector, Defy found itself named winners across the Microwave Ovens, Refrigerators, Small Domestic Appliances and Stoves/Ovens/Hobs categories. This is an extraordinary feat, and even more so given that the KASI Star Brand Survey by Ask Afrika is by far the largest of its kind in South Africa. Here, opinions are sought across 19 sectors, scores of product categories and thousands of brands are included in the measurement in order to provide the most accurate conclusions possible.

The African market is, of course, an ever-developing one, and holds great potential for businesses operating in the consumer retail market. KPMG is a global professional services firm whose 2015 report ‘White Goods in Africa’ details exactly how beneficial this could be to companies such as Defy.

“Africa has a population of more

104 / August 2016 / www.enterprise-africa.net

than one billion people, presenting a massive potential consumer market. However, the retail sector is relatively under-developed at present, and in particular, the market for white goods in Africa – and in particular major kitchen appliances – is on aggregate still small and remains underresearched.”

While many companies remain unconvinced by the notion of investing in underdeveloped African nations as they believe expenditure to be directed solely toward necessities, the report highlights the growing number of consumers to be serviced in the near future.

“Still, an increasing number of consumers are on the cusp of the US$1,000 annual income level, which will allow for the expansion of consumption beyond just the basics. The continent’s middle class totals almost 40 million.”

With this in mind, Gungiah concludes with his thoughts on what the future holds for Defy.

“We are incredibly positive about the future. We believe that there are some segments, such as dishwashers, where we only have a 7% penetration in the country, that hold massive opportunities for us to grow over the coming years.

We believe that the investments we are making for Africa, outside of all the external factors which affect business performance like the economy and politics, give us a great foundation to expand and the signs point to even greater success to come.”

DEFY APPLIANCES +27 31 460-9844 @Defy_SA www.defy.co.za

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.

//TABLE OF ALL EVENTS: 100% DESIGN SOUTH AFRICA Gallagher Convention Centre 05-09 August WOOD WORLD SOUTH AFRICA Expo Centre Nasrec, Johannesburg 16-20 August ECOAFRIBUILD Expo Centre Nasrec, Johannesburg 17-20 August INTERBUILD AFRICA Expo Centre Nasrec, Johannesburg 17-20 August THE COMMERCIAL UAV SHOW Sandton Convention Centre 23-24 August

33RD INTERNATIONAL PITTSBURGH COAL CONFERENCE 2016 08 - 12 AUGUST | CAPE TOWN The conference was originally conceived by the University of Pittsburgh following the Oil Embargo in 1973. The PCC is the “premier” annual event devoted to all aspects of coal, energy and the environment.

It aims at fulfilling the ultimate goal of efficient and effective use of coal while protecting the environment. The Conference is dedicated to providing a unique

opportunity for in-depth and focused exchange of technical information and policy issues among representatives from industry, government and academia throughout the world.

Ò

MY BUSINESS EXPO 25 AUGUST | CAPE TOWN The National Small Business Chamber (NSBC) brings you My Business Expo, Africa’s biggest show for anyone starting or growing a business, also incorporating, Business Start-Up Expo, Access to Finance Indaba, The Franchise Show, Trading Across Borders and Build a Business LIVE. It’s the most successful show of its kind in Africa.

WOOD WORLD SOUTH AFRICA 17 – 20 AUGUST 2016 | JOHANNESBURG Wood World South Africa provides companies in the woodworking, forestry, furniture, and other related industries the platform to take advantage of the significant growth the industry has experienced in the past few years. Interact with key decision makers from across Africa and showcase Ò the latest products and services that will help your business branch out.

With South Africa and North Africa boasting the highest per capita furniture consumption and significant industry growth, Wood World South Africa is the perfect platform to generate new business opportunities and sales leads across a wide variety of industries.

106 / August 2016 / www.enterprise-africa.net

PROJECT KENYA Kenyatta International Conference Centre 12-15 August UGANDA TRADE EXPO UMA Exhibition Centre Lugogo 03-05 August MY BUSINESS EXPO Cape Town ICC 25 August 33RD INTERNATIONAL PITTSBURGH COAL CONFERENCE 2016 Cape Town ICC 08-12 August

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