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THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

ENTERPRISE Issue No.53

www.enterprise-africa.net

ATTACQ:

Strong Performance In Tough Times ALSO IN THIS ISSUE:

Oxford University Press / Falke Eurosocks / Goldplat / Pelchem


EDITOR’S LETTER

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

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. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Multimedia Ltd 2016

Welcome to our latest edition…

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In the past, we’ve learnt that people are the foundation of any business and building structures and cultures around your people is one of the only real proven methods of growing and expanding. However, developing people is different from creating a culture or installing systems and processes. Upskilling and education is one of the big challenges that South Africa is faced with today but many companies are making big efforts to provide for their people, pouring massive amounts of money into training and schooling. We should all know it; it was one of Nelson Mandela’s most famous quotes: “Education is the most powerful weapon which you can use to change the world.” Featured this month is Oxford University Press SA and Freedom Stationery who are both intricately linked to education, and who will both play a part in the professional development of the country alongside elementary and further education. Then there’s the South African Nuclear Energy Corporation (NECSA), who are training people in preparation for the imminent investment into new nuclear facilities in the country. K Carrim, the Pretoria-based building material and property group, places a large emphasis on people development, Argon Asset Management sends employees overseas to train at ‘international speed’, and one of Africa’s largest employers, G4S, tell us about major projects to upskill and develop the workforce. All of these programmes and schemes aren’t fruitless; apart from being morally applauded, they impact the bottom line. An educated and skilled workforce is obviously better for the consumer, and that’s the goal in business. Management and leadership speaker Simon Sinek said: “If you don’t understand people, you don’t understand business” and we think he’s right. Tell us about your people development strategy. We’re always online at @EnterpriseAfri1

Joe Forshaw EDITOR

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

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06/NEWS: The Month that was...

12/KGA LIFE: Grade A Service When It’s Needed Most

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

Among South Africa’s leading funeral insurance companies, KGA Life’s principal concerns are peace of mind and quick claims settlement. Enterprise Africa speaks with CEO Alex Kühnast, who explains how he is building on the past successes of the company to help propel it into the modern era.

126/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

8/ATTACQ: Strong Performance During Tough Times Attacq, the company behind the Waterfall City development in Gauteng, has managed to post positive results during extremely challenging times for local and international markets. CEO Morné Wilken tells Enterprise Africa more about the company’s success.

18/COOKE FULLER GARRUN: No Saving Reputation Two decades ago, South African household savings/disposable income was running as high as 9.7%. Today it is 2.3%, compared with Brics partners China – 30% – and India 26%. It’s a disturbing mindset and one that is not easy to change says Greater Durbanbased insurance and unit trust investment specialist Adrian Fuller.

24/MUSA: Seizing Opportunities Throughout Africa Boutique merchant-banking in Africa doesn’t come any better than Musa Capital, a firm that provides private equity investment and offers corporate finance advisory services throughout the continent.

30/ARGON: Trusted, Relevant, Global Argon Asset Management is an African investment firm with global standards. By growing its product portfolio, investing heavily in people and culture development, and by remaining true to its core values, CEO Mothobi Seseli hopes that Argon will continue to be one of the most trusted and client relevant asset managers in the industry.

38/OXFORD UNI PRESS: A New Generation of Educational Resources With some 100 years’ experience developing high quality and affordable educational materials and support, Oxford University Press Southern Africa is an educational publisher for schools and higher education and foremost in South Africa’s dictionary and literacy production, reaching millions of learners, students, teachers and lecturers each year.

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46/FREEDOM STATIONERY: Freedom Stationery Writes its Name in SA’s Educational History Growing one of the country’s leading stationery businesses in a market that is constantly changing has been a big challenge but Freedom Stationery has inked its name at the top of the industry. CEO Riyaz Hans tells Enterprise Africa more about the company’s history and its plans for expansion.


CONTENTS 52/ECONET WIRELESS : Building The Largest Pan-African Broadband Network A company that seems to be constantly signing deals that will benefit its customers, Econet is building all aspects of its business so that it can continue to distribute unrivalled offerings all over the continent.

56/NECSA: Leading the Growing Nuclear Charge With a wealth of expertise and experience in the nuclear industry, Enterprise Africa talks to NECSA CEO, Phumzile Tshelane to find out more about the success of the company and his own plans for the future.

64/PELCHEM: Pelchem: In Your World “Fluorochemicals have a huge range of applications and are found in almost every industry sector but not many people know about them,” says Pelchem MD, Rajen Naidoo. He goes on to explain how this innovative business hay an eye on the future with new products and new partnerships on the horizon.

94/SAOTA: Designed for Success SAOTA is one of South Africa’s leading architectural firms, with a history of delivering magnificence for clients all over the world. Currently working on a standout project in Clifton, this ambitious and dynamic business continues to lead the way with technical and design excellence.

100/GROHE DAWN: Taking Care of Our Most Precious Resource The responsible use of scarce water resources throughout Africa is an issue more important than ever right now, and to address it Grohe Dawn is developing a broad range of water technology products including faucets, shower heads and shower systems, and flushing and installation systems for bathrooms and kitchens across South Africa and beyond.

104/BIG 5: Definitive Duty Free Shopping

70/GOLDPLAT: A Golden Year Sees Goldplat Return To Profit

Boasting a world-class array of goods, from jewellery and liquor to perfumery and cosmetics, Big Five Duty Free strives to offer the very best s from the sights and sounds of the runway.

Working with the by-products of mining operations might not sound like an attractive business model but London-based Goldplat is now proving that it is a profitable and lucrative niche that can bring about positive results.

110/MAZDA: “We don’t want to be car-centric, we want to be customer-centric”

76/K CARRIM: Passionate About Brick & Mortar From a single small hardware store in 1964 to an integrated group of companies with industry leader status, the K Carrim Group has come a long way. Director, Aby Carrim tells Enterprise Africa more about the journey and how the business will continue to move forward.

82/FALKE: Threads Stitched Into South Africa

As Mazda emerges from the pack of international car makers in South Africa as a contender for pole position in the future, word is beginning to spread that this is an automotive business that wants to look after your investment by engaging an innovative, confident, welltrained and customer-centric dealer network.

116/G4S: G4S Builds Strong Business by Developing & Employing ‘Best People’

The oft-forgotten staple of fashion, Falke Eurosocks core business is the manufacturing of legwear such as socks and stockings, producing products both for their own brand and for export worldwide.

Developing and training people is perhaps the most important investment a business will ever make. . In Africa, G4S understands the importance of employing good people, investing in their development and has been recognised as one of the leaders in this field.

88/SYLKO: Sylko Delivers 2016 Product of the Year

122/PHOENIX AVIATION: Reinventing Air Travel

Whether you eat from its paper plates, wrap your food in its foil or present your cakes in its muffin cases, it’s likely that you’ll appreciate the value of a Sylko product without even realising it. CEO, Grant Attwood tells Enterprise Africa more about Sylko’s recent launch of new products and investment into new IT systems, all in the pursuit of ongoing growth.

Phoenix Aviation seeks to deliver quality, consistency and the highest level of professionalism to its broad range of clients. This stretches from its finely engineered aircraft to the superior maintenance of the fleet and training of its pilots, together with its famous no compromise approach to maintaining safety and ensuring peace of mind.

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SA WELCOMES 3M’S R120M INVESTMENT Trade and Industry Minister Rob Davies has welcomed 3M’s R120 million investment that will expand the company’s operations in South Africa. “Such investment is important and demonstrates the confidence that 3M has in the long-term future of South Africa as a regional manufacturing hub,” said Minister Davies of the science and technology company’s investment. He continued to say that the investment is a major boost for the manufacturing sector,

as the enhancement is designed to improve productivity and will position the Maple Park plant in Pamona, Kempton Park, as one of the globally competitive locations within 3M. The investment will create jobs for an additional 75 skilled individuals, with more opportunities arising across the company due to the extension of 3M’s domestic operations. Managing Director of 3M South Africa, Ismail Mapara, said the company believes that the investment in manufacturing and

the creation of new jobs further cements its history in South Africa and commitment to the same growth and skills upliftment initiatives that the Department of Trade and Industry (dti) promotes. “Our US $500 000 automotive line investment offers 3M customers the high quality products and service they expect, but with even more agility now that we are able to manufacture our film products for the industry with only a ‘to-scale’ drawing of the vehicle,” said Mapara.

ALL SYSTEMS GO FOR N CAPE MEGA WATER PROJECT Water and Sanitation Minister Nomvula Mokonyane has officially launched a major water project, turning the sod for the construction of the R18 billion Vaal Gamagara Water Project in the Northern Cape. Phase one of the project, which is an 82 kilometre pipeline, will stretch from Roscoe in Kathu to Black Rock. “The maximum capacity of the

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current scheme is 2500 m3/h and the new scheme will be able to supply a peak demand of 5200 m3/h, including future water supply to Botswana. The system will be upgraded by replacing the existing pipeline with a larger diameter pipeline,” the department said. The original scheme was built 56 years ago and is beyond its lifespan. It no longer has the capacity to

supply sufficient water to satisfy the increased demand brought about by mines, municipalities and agricultural production. On completion, beneficiaries of phase one will include 14 livestock farms, 12 mines, solar parks and the communities of Kathu, Olifantshoek and Hotazel, benefiting a population of 23,499.


NEWS ROUNDUP GAUTENG RECRUITS OVER 3000 DOCTORS, NURSES The Gauteng Department of Health has between January and August 2016 recruited 3256 medical doctors and nurses in an effort to capacitate employees at public health facilities. Gauteng Health MEC Qedani Mahlangu said an open ended block advertisement for clinical posts, which runs throughout the 2016/17 financial year for all vacant funded posts for doctors and nurses, was released by the department in May 2016. There was a net gain of 2227 nurses by the end of August and 1029 medical practitioners. MEC Mahlangu said the walk-in applications and improvement of working conditions through provision of medical equipment is also contributing to the recruitment and retention of staff. “The availability of health professionals is critical in building an effective health system and contributes towards the attainment of a long and healthy life for all. “The department addresses vacancies through recruitment and training. Gauteng has continued to be a province that produces the highest number of health professionals at its training institutions,” said MEC Mahlangu.

MARRIOTT HOTELS’ R3BN INVESTMENT A BOOST FOR ECONOMY

The SA government has welcomed hotel group Marriott International’s R3 billion investment in South Africa. Minister in the Presidency for Planning, Monitoring and Evaluation, Jeff Radebe said the investment will see the group complete five new hotels. The group announced in October that it will build three new hotels in Cape Town and two in Johannesburg. “The announcement demonstrates the investor confidence in the country and positive future prospects of the local economy,” said Minister Radebe.

Meanwhile, Cabinet noted the recent naming of South Africa as the best country for debt management and sovereign bond issuance in subSaharan Africa by Emerging Markets Newspaper, an affiliate of the IMF/ World Bank Annual Meetings. “The award comes after the World Bank acknowledged the country’s excellence in debt dynamics/ composition. These accolades are testament to the success the country continues to enjoy in global capital markets and the prudent manner in which the economy is managed,” said Minister Radebe.

www.enterprise-africa.net / Issue No.53 / 7


CEO MORNÉ WILKEN


ATTACQ

Strong Performance

During Tough Times PRODUCTION: David Napier

Attacq, the company behind the Waterfall City development in Gauteng, has managed to post positive results during extremely challenging times for local and international markets. CEO MornÊ Wilken tells Enterprise Africa more about the company’s success.

www.enterprise-africa.net / Issue No.53 / 9


INDUSTRY FOCUS: PROPERTY

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In an economy that has seen just 0.5% growth in the past year, only narrowly avoided a much-feared downgrade by the credit agencies, and still has issues with crippling unemployment and inflation, the property sector seems to be performing remarkably well. The South African listed property industry rose nearly 9% in the first nine months of the year, about double what equities achieved. One of the star performers in the industry, Attacq, released its results in September and CEO, Morné Wilken was extremely happy with what was achieved. “We were very pleased,” he tells Enterprise Africa. “Obviously, you always set yourself high-expectations but I think, with the circumstances in the market, we done very well. Our net asset value per share increased by 15.3% to R21.89, our growth assets increased by 18.6%, we have total growth assets of R27.6 billion. We also have a diversification strategy where we had exposure in hard currency of about 34% of our growth assets which is R5.8 billion. Net rental has also increased by 17.2% to a total of R1.1 billion so we are very excited. “The only negative we see is uncertainty in South Africa in terms of a potential downgrade which is looming in the market. That does make it difficult for people to make decisions as to whether they want to sign a long-term contract. This is especially the case for multi-nationals. However, there is turbulence all over the world with the elections in the US and the Brexit vote in Europe so that is why we diversified so that we can try and mitigate.” Attacq has consistently delivered growth in capital to its investors through its strategic property holdings and developments. Attacq has a total asset value of more than R27.6 billion with R5.9 billion of this value held in international market investments. Attacq has a market

capitalisation of more than R15 billion. Founded in 2005, the company is firmly rooted in the SA listed property sector. “It comes from the Atterbury stable which is a private company founded by Louis van der Watt and Francois van Niekerk,” says Wilken. “They started Atterbury in 1994 and in 2005 they took some of their assets and consolidated to form a public company – Attacq. It’s a capital growth fund and the major shareholders at that point were the Mertech Foundation, Royal Bafokeng Holdings and Sanlam. We had around 600 shareholders prior to listing. In 2013, we were considering listing the company as we had secured the Waterfall pipeline in 2008. We considered spinning out our income producing assets and listing as an income fund but we thought we could be unique to list a capital growth fund.” Wilken joined Attacq in 2008 following the company’s acquisition of development rights at Waterfall. Just a year later, he was appointed Chief Operating Officer and in 2011 he became CEO after a successful period of sustained growth. WATERFALL Attacq’s work on the Waterfall City project continues to make the headlines. The major project, close to Midrand, between Johannesburg and Pretoria, will see a whole new city developed containing headquarters for major international organisations, new residential developments, hospitals, hotels and the infamous Mall of Africa at its heart. “Waterfall remains the jewel in the Attacq crown as a catalyst for regional growth,” admits Wilken. “We are very positive about the way ahead. Following the catalytic momentum created by the opening of the Mall of Africa in April 2016, Waterfall City is rapidly becoming the favoured destination for beneficial corporate consolidation. Projections

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show that the Mall of Africa alone will attract more than 15 million people per year. Based on studies by Urban Studies, the projected growth in office space is expected to be almost 30% per annum until 2020. “The Waterfall City CBD will cover around one million m2, and the nucleus in the centre of the city will be the Mall of Africa. We’re also working on Central Park as we want to create an area where people can work, live and play. We’ve also secured the new head office for PWC which is about 45,000 m2 and is a 26-story building that will be completed in the beginning of 2018. We’re very excited about the CBD that we’re developing. On the other side of the highway, we’ve got a lot of land which is ideally situated for logistics and we have developed a lot of DCs. There’s around 1.8 million m2 ready to develop and to date we have developed 410,000 m2. The buildings we’ve completed include a Cell C head office, a Group 5 head office, a Novartis head office and a number of others over the last few years. “We have the benefit of giving corporates the benefit of potential savings. Although the environment is negative, we have an opportunity for corporates to come to Waterfall and make huge savings.” EXCITING TIMES Attacq holds the vision of being the premier property fund in South Africa, delivering exceptional, sustainable capital growth through creative local and international real estate developments and investments. This will be achieved through operational excellence – a priority at Attacq. The company is also active in markets outside of its home in South Africa and this diversification is vital, helping position Attacq effectively for future growth. “We have a whole portfolio that we manage consisting of four regional shopping centres, excluding


ATTACQ

the Mall of Africa, and we have some large mixed use developments,” states Wilken. “In South Africa, we focus on asset management and we do things ourselves. When we start going into other markets, we like to partner with a local player to utilise their local knowledge and we play more of a strategic role. We have a 41% shareholding in a company called MAS, a real estate company investing predominantly in Western Europe. They have subsequently changed their strategy and are now also investing in central and eastern Europe as well. “We also have interests in central and eastern Europe directly with properties in Serbia and Cyprus. “Since we listed the company, we’ve internalised the asset management business and the company has grown substantially.

Over the last three years, we’ve grown to 100 people,” he says. People are the drivers of any successful business and Attacq is home to some of the best in the business. The company believes that ‘the calibre of its people is a key differentiator in an increasingly competitive property sector’. “We try and make our people as happy as we can and we try and make this an exciting place to work. It’s an increasingly competitive environment but we would like to think we have an attractive offering for employees,” says Wilken. As we move towards the end of 2016 and start to think about the New Year, the focus at Attacq will remain the same: “In South Africa, Waterfall will definitely be our main focus,” says Wilken. “Obviously we will still be opportunistic but bolstering our

existing portfolio and making it grow remains a target. We will also remain focussed on our international investments to ensure that give out the returns that we expect. “It’s exciting; it’s going well. We have a young and dynamic team; a very diverse team from different backgrounds and cultures and that creates innovation and creativity in line with our values which are accountability, collaboration, creativity and integrity.”

ATTACQ +27 87 845 1136 www.attacq.co.za

JTSON Construction

COMMERCIAL I INDUSTRIAL I RETAIL RICHARD FRANKS +27 82 888 9555 OFFICE +27 87 286 5293 www.jtson.co.za

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KGA LIFE

Grade A Service

When It’s Needed Most

PRODUCTION: Timothy Reeder

Among South Africa’s leading funeral insurance companies, KGA Life’s principal concerns are peace of mind and quick claims settlement. Enterprise Africa speaks with CEO Alex Kühnast, who explains how he is building on the past successes of the company to help propel it into the modern era.

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INDUSTRY FOCUS: INSURANCE

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Right at the outset, Cape Group Scheme Advisors (Pty) Ltd was established in May 1986 as an insurance brokerage, a small group managing pension funds and providing financial services to its members. “Following this,” CEO Alex Kühnast continues, “there was demand to create a voluntary funeral scheme for one of the large church groups in South Africa. The success of this prompted interest from a leading insurer to administer their group funeral schemes, which resulted in the establishment of the first funeral insurance administrator in South Africa.” Years of valuable experience and the ability to settle claims within 24 hours led KGA Life Limited to open its doors as a registered insurer on 1

January 1999. “It was in this way that KGA originally positioned itself as one of the forerunners and frontrunners in the funeral insurance industry in South Africa,” Kühnast concludes. KGA Life strives for what it terms ‘Straight A’s’ within the service and care that it provides, namely Acceptability, Affordability, Accessibility and Awareness. As such, its products and service offerings will meet or exceed client expectations, and are solutions which are both affordable and tailormade. These products are available to everyone through a variety of platforms, while KGA remains always aware of its clients’ diverse needs. Its customers know that they are dealing with a veritable specialist, one which seeks to make their lives easier at every

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turn. “Since KGA shifted to the funeral focus all those years ago, that has been the principal concern of the company and its enduring core product,” Kühnast goes on. “There is most definitely a challenge for us in terms of maintaining our current position while looking to diversify going forward. We certainly have a real competitive advantage at the moment, as our singular focus means that we know the market extremely well and the market, in turn, trusts us absolutely. “At the core of what we provide,” summates Kühnast, “is peace of mind to families at a time when they are particularly vulnerable.” It is an approach which has borne the success and recognition among its users which is so central to KGA’s


KGA LIFE

mission, as Kühnast tells us. “In all the focus groups that we have conducted this is the feedback that we have had – that we specialise in this insurance space, and furthermore, we have given attention to the lower income bracket when it was largely ignored in the past. That has created something of a ‘trust base’ within the market which is hugely valuable to a company like us. We are trying to sell, sometimes to a somewhat inherently sceptical society, a product which is fundamentally based on the concept of trust, and it is crucial that we have this.” It is central not only to its current operations, but also to KGA’s plans for developing its offerings. “As the emerging middleclass grows up alongside our brand, their means will definitely increase

and provide a market on which we will need to focus moving forward. “In South Africa, we still see a lot of growth for our company,” continues Kühnast. “The funeral insurance market is still one of the fastest growing, and as the regulator pushes to formalise the market more and more opportunities continue to arise.” KGA Life’s recent moving of its head office to Stellenbosch was prompted in part by such views to expansion, alongside a host of other pull factors all geared toward improving the quality of its service offering. “When I joined the company in 2014,” says Kühnast, “it had already been on the agenda for quite a while, and was prompted by several push factors,” he explains. “The space had become outdated, some safety concerns had emerged and just in general, office spaces have changed a lot over the time we had been there.” These combined to provide an opportunity for KGA Life to advance some of its newer strategic intentions, centred around people engagement and seeking improved technological infrastructure all to further improve its services and service delivery. “We were looking to revitalise the energy of the company and encourage teamwork and communication. “I have spent a lot of time overseas and seen many different working spaces. In particular, in the Netherlands there is real importance placed on communicative, collaborative areas, and so we wanted to refresh our own working environment and provide a more enticing area which was safer and more secure, alongside a better technological infrastructure.” The move itself was only over a distance of between 18 and 20 kilometres, but still provided some significant advantages. “We were looking at Stellenbosch with a view to the long term,” Kühnast tells us. “One of the key factors which drew us there was the talent attraction that being

close to one of the best universities in South Africa would afford. Not only this, but Stellenbosch has a very rich history of housing successful companies, which means that there is a pool of talented people in the area, while from a tech perspective it is often called the ‘Silicon Valley’ of South Africa. “Being the only insurance company in the area is also an important differentiator, whereas before we were caught between a host of similar companies, now we have a real advantage in terms of tapping into the abundance of talent available here.” The move was completed on the 1st of April this year, and already KGA Life has begun to see progress toward the goals which prompted the location shift. “On the financial side, we have been able to improve our technological capabilities, with better infrastructure, without increasing costs, which had an immediate impact. Also with regards to talent acquisition we were quickly able to bring on board some valuable skillsets, which will be extremely valuable with a view to our own growth and strategic initiatives. This is partly related to our premises, not only the way it now looks and feels but also the physical location.” Among Alex Kühnast’s principal aims as CEO is to bring KGA Life further into the digital realm, and fully exploit the possibilities therein. He speaks at length of the technology at the company’s disposal. “We are still very much in the process of developing our technology, but we really have been exploring the full range of potential technological investment. Whether this is communication methods or system innovations, making things faster, more secure and more user-friendly payment facilitation is a big thing for us, for example.” It is here that KGA Life must so carefully balance the two aspects of its business and their differing needs; customers whose use of its services

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INDUSTRY FOCUS: INSURANCE

dates back many years alongside the newer, more technologically-savvy clients it hopes to attract. “In order to meet the needs of a changing society and the next generation of our policyholders, we will need to implement better communication and faster, on-demand services. We do have something of a dichotomy, a split market in this sense, with the older, rural market traditionally a big consumer of our product and purchaser of funeral insurance and very reliant on the traditional structure, but looking forward, technology is a key focal point for us.” According to its CEO, there are several key factors which have been behind KGA’s rise to the top of its sector: “We definitely play a leading role in our sub-sector of the industry. One of KGA’s strengths in the past has been the ability to get closer to

the policyholder in the rural & lessor developed areas via an intermediary, which makes us a leader in our niche segment of the market but we now need to grow our footprint whilst maintaining that feel and that warmth.” Perhaps most responsible for differentiating KGA historically has been its enduring claims pay-out policy, which is effected, “within a maximum of six business hours and generally still seen as market leading,” states Kühnast. “Part of the culture that I am trying to instil is that we look for any reason to pay out. If I see us repudiating a claim then it can indicate to me that somewhere along the line the expectation of a policyholder has not been met. As long as we have priced a product correctly, the fact that we can pay that claim out quickly is a good thing for us. It allows us to show the

community as well as the policyholder that we are there for a reason, and that we are meeting a sustainable need. Fast claims pay-out is essential in empowering our policyholders and beneficiaries to take care of funeral arrangements without additional financial stressors. The ultimate reason for our existence is to provide the community with that financial safety net in tough times, and any opportunity we have to show this can only be advantageous for KGA Life.”

KGA LIFE 021 944 6300 www.kga.co.za

//INNOVATION, FOR LIFE Technology has changed a number of industries over the past couple of decades - none more so than within the financial services sector. From intelligent workflows to smart apps, this industry has started putting the power back in the hands of its customers. KGA Life has taken this one step further with a solution that allows for, among other things, the release of immediate claims payments, resulting in improved client services. Created by MIP Holdings, this software solution was tailor-made to enhance KGA’s life business administration systems, and has seen the company’s operations improve significantly. “MIP’s longstanding partnership with KGA Life has offered us a unique opportunity to create a first-of-its-kind solution – one that has continued to evolve over the years to meet the needs of KGA, and of their customers,” says Richard Firth, CEO of MIP. The initial project, which was created to support the management of KGA Life’s voluntary and compulsory group product offering, went live mid-June 2014. This allowed for the functionality that enabled the release of immediate claims payments, and included the implementation of fully monitored workflow-driven business processes as well as debit order collection functionality. These features allowed KGA Life to improve management and control and simplify premium collections within multiple group schemes. Following its success, MIP’s Personal Finance division was tasked with an additional project to implement a business solution for all of KGA’s individual product offerings. Utilising the same technology, supported by a multi-tenant enabled Progress OpenEdge database, MIP created a system that allows for the management of multiple clients independent of each other while still allowing KGA to support each client directly. This project went live in March 2016. “This was the first live implementation of the Progress multi-tenancy capabilities in the southern hemisphere, and is what enables the functionality that allows KGA to manage their individual clients independently and directly. While we have extensive experience in servicing life schemes, the KGA projects were unique in that both group life and individual life system administration capabilities were developed for them successfully,” Firth explains. “We are privileged to be one of KGA’s strategic partners and proud to have been able to contribute towards their success. MIP would like to congratulate KGA in achieving their 30th anniversary year of existence in the South African financial landscape, and looks forward to being part of their exciting future.”

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COOKE FULLER GARRUN

No Saving

Reputation PRODUCTION: Colin Chinery

Two decades ago, South African household savings/disposable income was running as high as 9.7%. Today it is 2.3%, compared with Brics partners China – 30% – and India 26%. It’s a disturbing mindset and one that is not easy to change says Greater Durbanbased insurance and unit trust investment specialist Adrian Fuller.

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South Africans are renowned as big spenders and poor savers, a modern trend that spells a dire future for many individuals. The long-term consequences are serious warns John Loos, First National Bank household and property analyst. “People will not be able to afford to retire.” It’s a scenario familiar to Adrian Fuller, Director of insurance brokers and financial advisers Cooke Fuller Garrun. “South Africa is a nation of non-savers, a country where people do not put too much effort into saving for retirement. “This puts a lot of onus on advisers such as us to change this mindset and get clients to buy in to taking their retirement future very seriously. It needs a mind-set shift, and with many South Africans not prioritising their retirement

savings, it’s not one that’s easy to achieve.” RETIREMENT PLANNING Based in the leafy small town of Kloof in the greater Durban area, Cooke Fuller Garrun are specialists in estate and retirement planning in a multifaceted brokerage with over 5000 clients across a broad range of insurance-related products. The brokerage was founded in 1981 by Adrian’s father and present chairman, Australian-born Harry, who entered the insurance industry in Sydney in 1957 and later emigrated to Zimbabwe (then Rhodesia) before settling in Durban. Three decades on, Cooke Fuller’s staff of 45 is delivering a personalised ‘one stop’ service in short and long term

insurance. Adrian Fuller’s daily involvement is almost exclusively in the unit trust area, dealing with finance companies such as Coronation, Allan Gray, and Investec. “I put together investment portfolios using unit trusts as the building blocks, helping people save for retirement and live during retirement by drawing on their retirement capital.” Cooke Fuller recently formed a new partnership with the Garrun Group, one of the largest short-term insurance brokerages in South Africa. “It’s an exciting development, a merger that gives us a powerful pool of shared resources to draw from. ‘OLD FASHIONED VALUES’ “It means we can continue to deliver the Continues on page 22

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//LIBERTY SHIFTING THE RETIREMENT LANDSCAPE Saving for retirement is usually not top of mind for many South Africans. At least 6% of South Africans can maintain their current lifestyle throughout retirement. However, they do not factor in inflation, the rising cost of medical care, and the fact that people are living longer. In fact, it is predicted that this generation will live well into their hundreds, which means being retired for 40+ years. Insurer Liberty understands the current socio-economic landscape as well as the customer insights that talk to the above facts. Customers prioritise saving for other things, or simply save too little for retirement. The insurer also understands that many people decide to cash in their retirement, sometimes for capital to start their own business, among other things. David Lloyd, Managing Director for Innovation at Liberty, says that with the customer at the centre of everything that they do, trying to ease the retirement conundrum has kept them up at night. THE EVOLUTION OF RETIREMENT PLANNING The word “Innovation” has become rather ubiquitous in our global vocabulary over the last decade, and it’s easy to understand why. Organisations across industries are hungry to one-up their competitors, trying to come up with the next big thing, while consumers themselves are looking for a bit of creativity and originality when it comes to the products and services to which they have access. Liberty’s first foray into innovating new products for the retirement space was Liberty Evolve; the first pay-on-delivery investment solution. This year marks four years since Liberty Evolve was launched. So far there has been phenomenal adoption with an excess of R20 billion invested. RETIREMENT IS BECOMING MORE AGILE After the successful launch and adoption of Evolve, Liberty introduced Liberty Agile. Launched in 2015, the Agile Retirement Range is a pioneering product which combines the benefits of both certainty and risk to fit the individual’s circumstances when saving for retirement, and ultimately guaranteeing the monthly “salary” the investor would be able to draw in retirement – whether they live to 65, or 90, regardless of the market’s behaviour. Recently, worldwide events illustrated the vulnerability of investment savings. Agile eliminates retirement risks and guarantees your income. Since its launch, Agile well outperformed Liberty’s expectations. “Everyone who saves for retirement has the same objective: to replace the salary they will be unable to earn one day. People were doing the right thing and saving for retirement but financial organisations couldn’t tell them if they were going to have enough upon retirement. Agile gives you that certainty about what your income will be. We’re not saying certainty is the only and best way to save, ideally you should have both certainty and risk, but Agile gives you the ability to choose certainty,” says Lloyd A BOLD APPROACH TO RETIREMENT The last five years saw Liberty develop the pay-for-play solution in Evolve, they started guaranteeing retirement income with Agile and the Exact Income Fund, but there was still another concern: how do retirees grow their savings? The current global model is one that compels consumers to save on a regular basis, and then stop the day they retire, only to live off those savings for the next 10, 20, 30, 40+ years. Traditionally, retirees can’t afford to take risks; 30-year-olds can take as many risks on the stock market as they like, as they still have another 30-odd years to make up for any potential shortfalls. Retirees on the other hand, well, they don’t necessarily have that kind of time on their side. That was the rationale behind Liberty Bold, with its 80% high-water mark guarantee. It means that retirees (or any Liberty Bold policyholders for that matter) can take the risks they need to on the stock market, to grow their investments. After all, at this point, you’re probably not earning a salary anymore, so it’s essential your money works for you. Bold’s 80% high-water mark guarantee means that should the stock market take a dip, 80% of your investment is guaranteed. The water mark rises as your investment grows, and the water mark can only go up. “We set out to change the status quo, giving ourselves the objective to allow retiring investors to take the risks they needed too, without losing any of the flexibility of the LISP style proposition. It’s very exciting to be able to tell investors and advisers that with Bold they can make any choice of funds and change at any time, but once their selection produces an aggregate return of 25% from outset they can sleep peacefully knowing they cannot now experience a negative return for the rest of the guarantee period, irrespective of which funds they may choose going forward,” says Lloyd. “What you need to do as a customer centric organisation is to walk a mile in the shoes of your customer to understand their needs, and innovate accordingly,” concludes Lloyd.

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Knowledge. When knowledge rolls up its sleeves, it can answer even the hardest of questions. It’s how we took the question ordinary people asked us 40 years ago and turned it into the richest square mile in Africa. When those people asked us: Do you know how to make what little I have, enough for the day I no longer work, or for the day I’m no longer around? We answered by taking a piece of farmland and building Sandton City, the cornerstone of the richest square mile in Africa. Because when you are asked to grow people’s money to change their reality, you cannot answer with theory or opinion. You answer with action. You answer with your sleeves rolled up. You take your knowledge and you get stuck in. You put it to work, for people. And that’s the advantage we offer, every day... The Advantage of Knowing

Sandton City is owned by Liberty Group and 25% co-owned by Pareto Limited.

FOXP2 JOH AN N ESBURG/79


INDUSTRY FOCUS: FINANCE

Continues from page 19 highest level of service in every product offered while still firmly subscribing to the ‘old fashioned values’ of client service, where the customer comes first every time. We have been here a long time, and we believe in traditional values.” It’s a quality distinction with a powerful consumer appeal in an industry whose products are often viewed as a grudge purchase with a high cost and small benefits. “Yes there are some horrible perceptions and we do find it’s seen as a necessary evil, a grudge purchase if you like. But we find these perceptions change very quickly when the client is partnered with a broker that actually does add value at the time of a claim. “With all these direct insurers that are a dime a dozen now, the guys that promise to cut out the middle men will take the money without standing by the client when, for example, the claim is repudiated on some minor point. “We have had clients leave us to take the direct insurance route because of the cost and the grudge purchase issue, only to return after making a claim and finding how vulnerable they are without a broker to go in to bat for them,” says Fuller. INDUSTRY SHAKE-UP In his father’s early days “brokerage matters were settled on a handshake,” but since 2004 the insurance and financial services industry has been shaped and controlled by legislation similar to that in Britain and Australia. “It has made a huge difference and shook the industry up properly.” The tipping point he recalls, was a financial scam, “large by the standards of our country, which cost a lot of people a lot of money and I think led to 16 suicides. That was the moment when it was realised that new legislation had to be enforced. “And with this everyone had to raise their game. A lot more professionalism was brought into the industry and there were many more rules to follow.

Inevitably, the costs associated with running a brokerage increased sharply with levies, accreditation, gaining professional qualifications, memberships of professional bodies and staff training. “And straightaway it weeded out a lot of the guys whose conduct was probably the reason why new legislation had to come in the first place; fly by nights who came in to make a quick buck with no intention of being around in the years to come.” It’s a shady scenario far removed from the reputation for high professionalism and integrity enjoyed by Cooke Fuller Garrun. “Our company has existed for 35 years and has been where it is now located the past 30, owned and managed by the same people since day one. STABILITY AND TRUST “And this straight away instils trust. Many people come to us having had a bad experience with institutions like the banks, where there is high staff turnover and a client finds he or she is ending up with a new relationship manger and having to start again from scratch. “And of course this doesn’t lead to a good experience. Clients love the fact that we are well established and a family business with a stable staff and a strong succession plan, knowing that they will be dealing with the same people – in the case of my sister Emma for 25 years and with me for 15. “Because of our reputation this is a well sought-after company. Product providers look to use us, and in the same way people look to work here. We recently engaged a lady who for years had worked for a large insurer, and the talk there was that if you want to move away and become a broker, Cooke Fuller Garrun is the kind of company you should approach.” At Cooke Fuller Garrun, new products are driven by the initiative, experience and insights of its staff. “We give the account managers carte blanch in terms of how they want to grow their own book, bringing on lucrative new

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business ideas that will advance our company. For example, a member of our staff has recently included livestock insurance for animals and transit into her range of specialised products. CLIENT COMMITMENT “We owe all our success to our commitment to looking after our clients, dedicated to consistently improving all aspects of the company’s offerings and services and always keeping up to date with our client expectations.” While Mr Fuller forecasts further organic growth for his business, uncertainty in the South African economy grows larger, with Finance Minister, Pravin Gordhan announcing in his mid-term budget policy statement, a revised growth estimate for 2016 down to 0.5%. Mr Gordhan however is positive about future growth, anticipating an increase to 2.2% by 2019. This, he says, will be achieved by low inflation, a more reliable electricity supply, improved labour relations, a recovery in business and consumer confidence, stabilising commodity prices, and stronger global growth. To which Adrian Fuller adds the still comparative inducements of inward investment. “We are in a basket of emerging market countries, some possibly in a lot worse situation than ours - countries like Brazil. And in terms of choosing one in which to invest, South Africa is just about the most attractive. “Yes we do have problems, but in the bigger scheme of things they are not as bad as some other countries that fit in our basket. So, we are still an attractive investment destination.” Mr Gordhan has been in the spotlight for another reason of course, facing fraud charges that the State prosecutors have just dropped, allegations the Finance Minister – a forthright critic of President Zuma - has described as without merit and politically motivated. News of the charges last month rattled the financial markets, with the Rand falling more than 3%. Adrian Fuller is highly critical of this saga cum farce.


COOKE FULLER GARRUN

DAMAGE DONE “OK, the charges have been dropped, but the damage was done with the pending arrest. On the back of this, some 50 billion Rand left the economy - absolutely crazy. Enormous damage has been done to the currency and stock market, and the prosecutors can’t just walk away saying they’re sorry. It’s absolutely terrible.” Earlier this year the big three ratings agencies, Standard & Poor’s,

Moody’s and Fitch, granted South Africa a reprieve, choosing not to downgrade its credit rating towards or into “junk” status. Will continuing Government debt to GDP of over 50% and other factors trigger a reassessment? “Of course, come December there’s a possibility of a downgrade and this is very worrying. We have always had economic and political problems but people haven’t been

quite as aware of them as they are now. Today it’s very topical, and everyone is a bit anxious.”

COOKE FULLER GARRUN 031 764 8200 info@cookefuller.co.za www.cookefuller.co.za

DIRECTORS ADRIAN FULLER AND EMMA FULLER

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MUSA CAPITAL

Seizing Opportunities

Throughout Africa PRODUCTION: Timothy Reeder

Boutique merchant-banking in Africa doesn’t come any better than Musa Capital, a firm that provides private equity investment and offers corporate finance advisory services throughout the continent.

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INDUSTRY FOCUS: FINANCE

//

After more than 20 years now as a key player in the African financial world, Musa Capital is placed to offer a wealth of expertise and transaction experience across asset management, property development, structured finance and investment banking advisory services. Its primary focus is on private equity investment in Africa, executing profitable transactions on the African continent and thus creating wealth for its clients, investor partners and portfolio company principals. Enterprise Africa speaks with CEO, William Jimerson, who takes us through the earliest days of the business and the combined strengths of its founders. “Two of we three founding

partners came to the business with Wall Street backgrounds,” he says, “and the third from corporate America, and together we wanted to fully exploit the opportunity we saw to apply our Western skillset to the African market. All three of the founders are engineers by trade, that was our training, and so the ability to pull apart the ‘black box’, as it were, analyse the inputs and then tweak it to get the right outputs through an understanding of the systems, was at the core of our beginnings.”

Founded in 1995, Musa Capital established its first fund in 1996, principally sponsored by HRH Prince Al-Waleed of Kingdom Holdings in Saudi Arabia, which targeted high growth and undervalued African assets across telecoms, financial services, agri-processing and property. The success of the portfolio was evident; average annual dividends were in excess of 14% while dividend yield on some assets exceeded 20%. Jimerson details the importance of such perception to the nascent

//KEY TO OUR SUCCESS IS SEEING THE OPPORTUNITY TO BRIDGE THE RESOURCE TO THE NEED//

WILLIAM JIMERSON MUSA CAPITAL CEO

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MUSA CAPITAL

//SOUTH AFRICA HAS THE RIGHT INGREDIENTS OF TALENT, OF PEOPLE, OF RESOURCES AND OF INFRASTRUCTURE TO BE SUCCESSFUL// Musa, and its knack of identifying a market space to be exploited. “The financial markets are just that, a system, whereas we are engineers and investment bankers at the same time which has really driven us on throughout the lifetime of the business. This quickly became evident in one of our initial investments, which was in the telecoms space. In the US at the time we were going through another round of issuing the new telecoms licenses, and they were selling for $300 million per city. We were having to compete against these established US behemoths that have been in business for a hundred years, compared to the situation in Africa at the time, where two out of every hundred people had a telephone line. “It was an obvious opportunity to take the black box which had worked so well in the US to generate a mobile phone call, and drop it on the continent and give people the ability to make phone calls and hopefully make some money while doing it. Key to our success is seeing the opportunity to bridge the resource to the need. At the time mobile telephony was a global commodity, but it simply hadn’t been applied in Africa.” This is an approach which has served Musa well, as well as its commitment to continually diversifying wherever possible. “We have a number of products which impact lives,” details Jimerson, “which range from housing to food production and school feeding here in South Africa, but I think that what we do best and frankly what are in some respects the most profitable are our people services.

The advice which we can now bring to the table is not only profitable for our customers, but importantly it’s impactful. Being able to bring a diverse experience base not just from the US founders but from Ghana, Burkina Faso, Cameroon and Europe, is an opportunity to bring a world class service to our clients.” Through all that he has seen in his time, Jimerson remains an ardent proponent of the sector and the potential it still has to offer. “Among the turmoil and the chaos that we are seeing in the markets today, ultimately the fundamentals are still there, particularly for Africa.

If I weren’t in the business, I would certainly be pursuing it. It’s still the largest untapped consumer market, and it’s one of the largest untapped industrial markets at the same time given the amount of mineral wealth which is in the ground and how much of it goes unprocessed. There are still strong parallels to the telephone line situation back in 1995. You can find similar stats today not so much in telephony but in other areas of industrialisation, the tapping of which will benefit Africa.” The combination of intuition and experience has served Musa Capital well, and allowed it to weather some violent economic storms in recent years. “I consider our staying power, the very fact that we are still here, a tremendous success,

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INDUSTRY FOCUS: FINANCE

particularly given the number of high-profile, long-standing names which have disappeared or significantly scaled back operations in emerging markets like Africa in recent times. We had a significant dip in 2008-2009 in a number of our investments, which then in subsequent years brought some of our all-time highs in profitability, growth - all the ways by which we measure success - purely through our ability to adapt to the new markets. It cleared out some of our weaker business and thus allowed the stronger elements to survive and flourish. With the new, more competitive landscape which came about following that, we saw a lot of our business really push on.” William Jimerson is confident of Musa Capital’s standing among the competition today. “We believe that we have definitely established ourselves as a world-class African financial services firm. But not enough to become comfortable,” he qualifies. “We are humble enough to

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MUSA CAPITAL

//WE SAW THE OPPORTUNITY TO APPLY OUR WESTERN SKILL SET TO THE AFRICAN MARKET// realise that we are a modest-sized fish in an ever-growing pond and that ultimately, there is a lot of work still to do. For us, the transformation that we underwent a year or so ago where we expanded our service offering from beyond corporate financial services to become the industrial holding company that we are now has upped the ante somewhat. We have set a higher target for ourselves to not only be one of the best financial service firms, but to be best in class in the industries where we operate.” It is Musa Capital’s wealth of worldwide experience which will fuel its next stage of development, according to Jimerson. “At the outset we had exposure in South Africa, but we were really much more widespread, in Ghana, Nigeria, Uganda and Zimbabwe. So, while we have spent the last ten years consolidating and building our base in South Africa, we have done so to build the core to allow us to take that engine up continent again. That is exactly what we are poised to do, and have begun to do already.” Just weeks ago this expansion took the form of Musa’s closing a private equity fund in Namibia, one of the first to be approved by the Government Institutions Pension Fund. “We are pursuing similar mandates in Botswana, Tanzania and Kenya,” adds Jimerson, “with a focus on staying close to home within the industries that we know well, mostly in the West of Africa.” Also with an eye keenly on the future, Musa Capital has set itself the ambitious target of bolstering its ranks by a further 1000 employees. “It is a definite focus for us, but one we are approaching cautiously,” states Jimerson. “It’s one of those challenges that doesn’t really make

sense on the surface. Unemployment rate is through the roof, thousands and thousands of youths are without a job, and yet there is a real difficulty in finding skills. Filling seats with adequately qualified people is a real issue. Our approach to combatting that is through development education and training - which both take time, but we will fill those seats by making a lot of investment now, which will reap lasting rewards for us.” The key word that ties together everything that Musa Capital has achieved to date, and the goals it has set itself moving forth, is opportunity. “I believe in the continent, and I believe in South

Africa,” summarises Jimerson. “All the elements are here. In this market we still have to be cautious, because investments in some sectors will continue to go south, but at the core remains that opportunity, particularly if you’ve got patient capital. For us, we believe in the South African story and we’ll ride out the storm. We’ll continue to diversify into other markets, but we believe that South Africa has the right ingredients of talent, of people, of resources and of infrastructure to be successful in the African story.”

MUSA CAPITAL +27 11 771 6300 Info@musacapital.com www.musacapital.com

All-in-1 IT Solutions

011 875 2320 www.macroots.co.za

Sales, Support & Service on all major brands

www.enterprise-africa.net / Issue No.53 / 29


ARGON ASSET MANAGEMENT

Trusted, Relevant,

Global. PRODUCTION: David Napier

Argon Asset Management is an African investment firm with global standards. By growing its product portfolio, investing heavily in people and culture development, and by remaining true to its core values, CEO Mothobi Seseli hopes that Argon will continue to be one of the most trusted, client relevant asset managers in the industry.

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INDUSTRY FOCUS: FINANCE

//

The asset management business in Africa is still relatively young compared to other international markets and right now, as in any region, it presents a hugely complex web of issues; challenges and rapid changes that must be navigated successfully if investments are to be successful. Following the global financial crisis, the industry has witnessed increasing regulation, operational losses, outsourcing, advancing technology and enhanced risk management and compliance requirements. Therefore, building an asset management brand that is recognised for trust, good ethics and positive results is more important than ever. Africa represents a huge opportunity for asset managers – the continent is home to 15% of the world’s population, but just 3% of the world’s GDP and less than 1%

of the world’s stock market capitalisation. But wealth continues to increase; in South Africa, the growing middle class has created many opportunities, the number of domestic investors is on the rise, financial institutions are strong, and legal and regulatory frameworks are some of the most robust in the world. The future looks bright with predictions showing that asset managers are now looking to diversify product lines and find new opportunities. Regulatory reforms in Africa are encouraging a savings culture and local investment as well as technology advancements. It is predicted that traditional asset management will grow at CAGR of 9.6% across a number of the ‘more developed’ African nations. One asset manager that has positioned itself perfectly to take advantage of the growing appetite for

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investments is Argon Asset Management. With offices in Cape Town and Johannesburg, Argon has grown its brand since its formation in 2005 and is now recognised as an industry leader. Founder and CEO, Mothobi Seseli has used his experience, including a Stanford and Oxford University education to create an environment where customer relevance and trust is first and foremost in every activity. This has proved successful, and now the company is expecting further growth while continuously remaining at the industry’s cutting edge. “We are sitting upwards of R32 billion assets under management. We have nearly 50 important client mandates and we are expecting these figures to grow in the next 12 months,” explains Seseli. “It’s fantastic to realise that people recognise the name Argon and associate it with excellence.


ARGON ASSET MANAGEMENT

“Regulation in a space where money is involved is obviously critical. You have to protect clients’ interests and the regulators worry about how you manage someone else’s money - how are you protecting their interests, how are you making sure their end objective is realised. There cannot be rogue elements in the system and so regulation has increased over time but it has been necessary. For smaller firms such as ours, ensuring you remain compliant can be expensive and firms with much larger balance sheets are able to easily absorb these costs with minimal impact to their bottom line. Irrespective of the costs, complying with industry regulations is important to us as it builds trust. “Many people complain about the red tape and bureaucracy created by legislation but we see it differently. At Argon we always ask ourselves the

question: ‘If you took your own money to an asset manager, who would you want looking after it, people who are compliant and understand all of the legislation or those who are not?’ Investors want to deal with people who are educated in this space, who are constantly developing themselves and who are dynamic. With my own money, I would be looking for someone who gives me peace of mind and compliance is a part of that,” he says. TRUST Of course, when dealing with other people’s money, trust is the number one concern and building trust with clients and partners has always been a part of the Argon story. In the last three years alone the company has collected 17 local and international awards but the same values that have guided the firm for the past

decade remain in place. “There have been a number of changes at a company level but for me, the most important has been the personal development I have experienced over the last 11 years. When setting up a business, the entrepreneurial journey is something that you cannot be prepared for – there is no amount of education at any business school that can prepare you for the challenges that test you as an individual,” says Seseli, an economist by training who has previously also been a part of Alliance Bernstein and Alexander Forbes amongst other firms. “From the company’s point of view, we have better brand visibility in our chosen areas of focus and that is always a big challenge in the asset management space. We are dealing with other people’s money and it’s a space of trust, one of the Continues on page 36

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//PURE DESIGN Pure Design is one of Cape Town’s leading, Interior Design firms, founded nine years ago by directors Maria Cowie, Ricardo and Quinton Abrahams - a small team of extremely talented and very passionate creative professionals. PURE DESIGN CONSISTS OF A NEW BUSINESS DEVELOPMENT TEAM, DESIGN, PROJECT MANAGEMENT, SITE COORDINATION, PROCUREMENT, MARKETING, ADMIN, FINANCE AND LEGAL TEAMS THAT CAN HANDLE ANY COMMERCIAL BUILDING UPGRADE OR OFFICE DESIGN AND INSTALLATION PROJECT WITH EASE. WE DESIGN AND BUILD TAILORED BUSINESS ENVIRONMENTS. These days most business owners or corporates place very little emphasis on their built environment. If people’s behavior get influenced by their environment then why do most businesses view a professional design input as an unnecessary expense when in actual fact it should be viewed as one of their greatest investments. At Pure Design we have made it our business to understand the science of workspace development and it’s direct relationship to our clients’ bottom line. Instead of just creating accommodation for staff and equipment, we choose to create inspirational spaces where people can flourish to the benefit of the business. We spend multiple hours interviewing business unit leaders so we can understand how their teams function best and how we can best create an environment for those teams to thrive. Once we understand our clients’ objectives and their challenges, then we can formulate solutions that will enhance the team interactions and impact their bottom line positively. We had one client with a long stretched out floor plate and entrances and staircases on either end of the building, so there was no need for people on either end of the building to interact at all. When we were appointed we placed the kitchen and coffee pause areas smack bang in the centre of the floor. That also happens to be where the rest rooms were positioned. By doing this, people who were stationed on the far ends of the building were forced to go to the centre to use the rest rooms and kitchen area and ended up meeting colleagues they never knew before. With this type of insight we also understand how to upgrade older buildings to become suitable backdrops for the modern office workspaces.

WE HAVE A VERY COMPREHENSIVE DESIGN OFFERING, INCLUDING DESIGN CONCEPTS, SPACE PLANNING, 3D IMAGING, AUTOCAD TECHNICAL DRAWINGS, DEMOLITION LAYOUTS, CONSTRUCTION LAYOUTS, FURNITURE LAYOUTS, ELECTRICAL LAYOUTS, CEILING AND BULKHEAD LAYOUTS, FLOORING LAYOUTS ETC. We also work hand in hand with electrical, mechanical and structural engineers and facilitate integration of all the technical services. AT PURE DESIGN WE BELIEVE THAT AN OFFICE INTERIOR HAS ONLY FOUR KEY COMPONENTS. PEOPLE, BUILDINGS, TECHNOLOGY & FURNITURE AND THE KEY TO A SUCCESSFUL WORKSPACE DESIGN IS THE UNIQUE ABILITY TO CREATE SEAMLESS INTERACTION BETWEEN THEM IN ORDER OF PRIORITY RESULTING IN HAPPIER STAFF AND THEREFORE HIGHER PRODUCTIVITY... Energy efficiency and greening at any level is always a huge priority in each project we tackle. In the last five years we have explored creating spaces within the office without the use of structural walls and glazing wherever possible. We came to the conclusion that not all meetings are confidential so creating freestanding movable meeting pods was a brilliant option. This way if there were any team relocations for the sake of projects then there would be no need to break down walls that would end up on a landfill site and have drywalls that are not biodegradable at all. Where possible we also make extensive use of suppliers with low carbon footprints as every little bit helps. Up to eighty percent of the furniture and shop fitting we supply are manufactured in Cape Town with major emphasis on sustainable materials. A massive priority for us at Pure Design is people empowerment. We prefer to work with smaller sub contractors and suppliers wherever possible while still maintaining high quality standards. Pure Design has its own Site Coordination team that ensures that the awesome design that our team presented to the client actually is delivered on site without compromise. By working with the smaller contractors we manage to give our clients so much more value for their budget and simultaneously we are doing something about the unemployment in our country. So we believe if a small supplier or contractor shows promise then we will walk the journey with them and see how we can help them grow, and it’s never easy.

WHEN WE ARE APPOINTED TO DESIGN AN OFFICE SPACE, WE BELIEVE IT’S A RARE OPPORTUNITY FOR OUR TEAM TO POSITIVELY IMPACT THE LIFE OF EVERY INDIVIDUAL THAT WILL OCCUPY THAT SPACE ON A DAILY BASIS... WE DON’T TAKE THIS LIGHTLY...

EMPOWERMENT HAS TO BE AN INTENTIONAL SACRIFICE BY A FEW TODAY FOR A BETTER TOMORROW FOR ALL. Being a small business means that there are limits to what we can do as a team. WE CANNOT DO EVERYTHING, BUT WE WILL DO SOMETHING. So we choose to work with what’s in our hands.

WHEN WE INSTALL TENANTS, IT’S A FULL TURNKEY SERVICE. ONCE THE PROPOSED DESIGN IS APPROVED WE BUILD RECEPTION AREAS, WAITING AREAS, BOARDROOMS, MEETING ROOMS, SERVER ROOMS, STAFF PAUSE AREAS, KITCHENS, TRAINING ROOMS, AUDITORIUMS, EXECUTIVE OFFICES, OPEN PLAN OFFICES AND MORE...

With a business model like this we believe that our success does not depend on the sacrifices of the founders of this business, but rather on the hard work of every individual involved. We also believe that if our clients and every supplier, contractor, manufacturer can benefit from every project we get involved in, then we’ve been successful. Sustainable relationships are the ones where every entity and individual involved will benefit at every level and that is what we at Pure Design call true empowerment...

With many local and global clients we have been challenged to push the proverbial creative envelope time and time again. We’ve also adopted the approach of always doing better than the last project, thus stepping up the standards, time after time.

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NEXT TIME YOU MOVE OFFICE, CONSIDER US AND LET’S POSITIVELY IMPACT LIVES IN THE PROCESS...


DESIGN MANAGE PROCURE CONSTRUCT SUPPLY

WE DESIGN AND BUILD TAILORED BUSINESS ENVIRONMENTS www.puredesigninteriors.co.za info@puredesigninteriors.co.za +27 21 465 9843


INDUSTRY FOCUS: FINANCE

Continues from page 33 things we had to get right is our brand. Through various initiatives such as public relations and below the line advertising, we have increased our brand equity in the market, positioning ourselves as one of the most recognisable brands in the South African financial services industry. “Clients have recognised our money management expertise, we have a longer track record of success and we have built trust. I was clear from the get-go that I didn’t want to have a single product focus; I wanted to be able to have a broad investment conversation with our clients. That meant we had to set up different capabilities including; equity, fixed income and multi-asset class. Over time we also added a global offering through our partnership with Schroders Investment Management,” he says. GROWING AND CHANGING Traditionally, Argon has been hugely successful with ‘institutional products’ but in the past few years, ‘retail products’ have been added to the mix to ensure that the portfolio is diverse. This diversification and growth will continue as Seseli looks to maintain that dynamic, energetic offering that has proven so successful. “Historically, the retail asset management space was run through the life offices and the banks. There exists a real opportunity for non-life or non-bank asset management players to gain bigger market significance. We are looking to take our offering into that space; we’ve already started and it’s moving really nicely.” The CEO is also keen to ensure Argon solidifies its position as a global player or ‘an African investment firm with global standards’, and this continues through an important long-standing partnership. “Offshore we are working with our exclusive institutional partner, Schroders Investment Management, the largest listed independent asset management firm on the London Stock Exchange. We’ve been in partnership with Schroders for almost five years and the idea is to provide our clients with access to a full investment offering, including the broad investment and operating capability of

one of the best global money managers. We believe that this partnership with Schroders is also testament to Argon’s strength as a brand internationally, and it speaks volumes about our capabilities and provides our clients with an excellent opportunity to access global investment products. Through our experience we have found that investors want to entrust their money with a global partner that has on the ground presence where that money is deployed. Schroders has presence in 28 countries. Being immersed in the culture and nuances of investments in specific geographies is very important, not just for return opportunities but also for risk management. Schroders offers our clients that special opportunity,” he says. Also bolstering Argon’s portfolio will be growth in Africa, where demographics are changing and where new financial models and markets are constantly being developed. “We are interested in expanding on the continent. We are busy looking at what we can take into the market but the listed space is limited; unlisted and infrastructure are the more relevant and interesting vehicles we are considering when we consider expanding in the continent. There are many opportunities but we haven’t finalised where we will deploy our limited capital,” says Seseli. Years of growth and development have also allowed Argon to develop a degree of insulation to fluctuations in the economic climate. South Africa only narrowly avoided a downgrade to junk status recently, with many of the international credit agencies showing concern, but Argon has not been impacted in a major way. “Because of our institutional focus, which is largely pension funds with a longterm investment commitment and focus, we have been able to ride out the noise,” Seseli explains. “When we are exposed to the economic downturn, it’s with respect to unemployment and its effects. It’s a big issue, upwards of 25%, and that is meaningful. When the global and regional economies slow, jobs are shed and people withdraw from institutional

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savings such as retirement funds. We have seen that, but it has not been significant. Does the ratings story scare us? Yes. The cost of borrowing would increase, there are strong concerns about employment creation, there are retrenchments and therefore more drawdowns out of retirement funds and institutional savings but over time these things correct.” With the SA economy not expecting to realise major growth for some time, the decision on your asset management partner becomes all the more important. During periods of uncertainty, you need a firm that is well-established, with a reputable brand and with people that know the industry intimately. “Over the 11 years that we’ve been around, we’ve built quality relationships. People understand that we are trustworthy partners and I have seen that people will switch away from firms that are less trusted to firms where they feel comforted, understood and listened to. In difficult times, you want a trusted partner and as a brand we have proven to be that partner,” says Seseli. INVESTING IN PEOPLE As we discovered last month, people and culture development is now one of the hottest topics in business management circles; how can you constantly develop your employees while always building a structure around them which allows them to blossom? It’s a difficult task, but those who get it right reap the rewards. At Argon, the career and personal development of existing and future employees are catered for but the company is not hiring for the sake of it – each employee is an asset and everyone has to meet certain standards. “In an environment which is as dynamic as the financial markets space, where economic performance is very important, employers need to apply stringent criteria when selecting employees,” explains Seseli. “I want to be able to have a skillset that enriches our ability to be client relevant. We need to respond and stay ahead of change and ask ourselves the correct questions


ARGON ASSET MANAGEMENT

about how we are positioned relative to our client relevance. Client relevance is about growing wealth on behalf of your customer so if we are unable to navigate changing environments with our current skill set I would be very concerned. “With future staff, it’s important to have people coming into an environment with an appreciation for the global environment. Through our partnership with Schroders, we send our graduates to London to interact and learn about investing at a global level. In that programme, there are other young professionals from different geographies. When our graduates return to South Africa, they have been introduced to and accustomed to a global operating framework, which we believe is positive for our client relevance. I’m passionate about people development because I’m passionate about client relevance,” he says. “With our grad programme we screen candidates for three things: Firstly, academic capability, they must have above average grades; secondly, leadership potential or demonstrated leadership,

they must have a way that they carry themselves with accountability; and finally self-awareness, emotional intelligence is everything and people must understand themselves relative to others, which is an important element of building effective teams. Our seven current graduates scored highly in all of these areas.” The graduate programme, which takes place over three years, is something that has helped Argon unearth excellent talent, even some from outside of the popular South African metropolitan areas. “We will grow our presence slowly. As we build our assets under management, we will be able to deepen our strategies as well as broadening the range of strategies that we offer and this means we will always need more people. “We pride ourselves on creating an environment where you can define how far you want to go in terms of your own development. We introduced a coaching programme six years ago to ensure people are supported in their careers and we want an environment where people will share their ideas and are recognised for those

ideas – culture development is critical,” says Seseli. As the industry continues to change, thanks to Argon’s stubbornness to remain true to its values, the future looks very positive for this growing business. Fee models will be transformed, demographics will change, new breeds of asset manager will emerge, technology will continue to advance and regulations will always adapt, and where some will find these changes overpowering, Argon’s nimble and dynamic framework makes for an organisation that will thrive. “We’ve always been clear with what we want to achieve: Investment success on behalf of our clients,” Seseli concludes.

ARGON ASSET MANAGEMENT +27 21 670 6570 info@argonasset.co.za www.argonassetmanagement.co.za

www.enterprise-africa.net / Issue No.53 / 37


OXFORD UNIVERSITY PRESS SOUTH AFRICA

A New Generation of

Educational Resources PRODUCTION: Timothy Reeder

With some 100 years’ experience developing high quality and affordable educational materials and support, Oxford University Press South Africa is an educational publisher for schools and higher education and foremost in South Africa’s dictionary and literacy production, reaching millions of learners, students, teachers and lecturers each year.

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INDUSTRY FOCUS: EDUCATION

//

Through its exclusive use of local experts and authors, Oxford University Press SA has published over its 101 year lifetime more than 2,700 books across 11 languages, and recently reached a significant milestone in its operations: “We celebrated our centenary last year,” says Managing Director, Steve Cilliers, who went on to give Enterprise Africa a rundown of the company’s beginnings. “It all began in March 1915, following an agreement between Sir Humphrey Milford, the publisher at the London office of OUP, and Charles Mellor, who was representing other publishers in South Africa at the time. The mandate was to travel to schools, universities and trade institutions, with the propose of selling the full range of OUP’s published offering.” This mandate saw Mellor on the road for up to five months at once, at a time when travelling in South

Africa was an arduous undertaking, often necessitating horseback or cart between highly remote locations. Mellor passed away early in the 1930s, and was replaced by the son of the assistant manager of the London branch, Freddy Cannon. “He was manager between 1932 and 1970, so his tenure really shaped the press in South Africa,” Cilliers explains. “There were several attempts to publish in the early years, all unsuccessful, with the first titles coming out of South Africa only seeing the light of day after the second world war. OUP became a truly authentic South African publisher in 1946. “During Cannon’s time in charge OUP published widely and quite eclectically, everything from poetry in African languages to some very esoteric academic topics to cookery books. But the mainstay of the business was quite quickly identified as education, and this

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increasingly became the focus through the 1960s and onwards.” Change is constant in education, perhaps more than anywhere else. Learners’ needs and how best to serve these is an ever-evolving process, and Cilliers explains how OUP has not been immune to these pressures over the course of its illustrious lifetime. “After 1994 especially, there was a very strong push to completely overhaul the education system in South Africa, and replace what was called ‘Christian National Education’ with something much more progressive and which spoke for and represented the needs of the entire population. As a result, from 1997 until just three years ago, we have been going through more or less continuous curriculum reform which, in publishing circles, proves incredibly onerous. It essentially entails a complete overhaul of the core curriculum titles every two to


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INDUSTRY FOCUS: EDUCATION

three years, ’which is very resourceintensive for publishers.” This constant evolution applies most strongly currently to the shift towards the use of digital resources in education, a challenge which OUP has already taken up. “E-books are already with us,” states Cilliers, “but I think South Africa is probably five to eight years behind the curve compared to the European and US markets. This is not to say that education authorities are not extremely ambitious and aspirational, but the reality is that we have some enormous infrastructural challenges to overcome in order to achieve those objectives. Evidently, putting in the technology is hugely expensive, and has to be layered upon content and other resources. In order to provide useable resources for teachers there

//WE USED TO BE ABLE TO PREDICT WHERE THEY WOULD IMPACT THE EARTH ANYWHERE BETWEEN FOUR HOURS AND FOUR DAYS IN ADVANCE; NOW IT’S MORE LIKE AT LEAST FIVE DAYS// has to be a degree of sifting, of selection, and identifying what is appropriate for our curriculum and our context.” While not unique to the South African context, one major hurdle for OUP SA felt more strongly than elsewhere is the differing linguistic backgrounds of students and the impact this can have on their education. “The majority of children in South Africa learn in a language that is not their mother tongue, which provides a significant barrier to learning,”

explains Cilliers, justifying immediately the importance of this selectivity of resources. “Digital open access content that comes out of international English home language markets tends to be written at a level which is inaccessible to South African learners. Nor does it speak to the local context or the range of experience that these children will have.” However, despite the evident challenges - to be expected in a shift as important as this - with the

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OXFORD UNIVERSITY PRESS SOUTH AFRICA

relevant support in place, digital will be able to offer to a huge breadth of possibilities, building upon and supplementing what is currently in place. “The benefits of the digital offerings are widely recognised,” agrees Cilliers, “and in order for them to be fully experienced certain things need to be in place - significant teacher training for example, in order to get them to buy into the idea, as without that it is basically dead in the water. We also need the national infrastructure in place, which means schools having proper broadband and access. It is not yet ubiquitous in South Africa, and is still fairly slow and expensive with only schools in urban areas able to access it reliably. Then there is the issue of support and maintenance of IT systems. While many schools will have access

to a computer, or even computer centres, there are rarely dedicated staff to maintain them and they very quickly fall into disuse. “Digital content is going to move into the school space in a much bigger way, and in some provinces more quickly than in others. In Gauteng, I know that there is a real push to create ‘paperless classrooms’, and that will bring some successes. At present, though, students are not deriving the full benefits of what digital can offer. What digital needs to do is what print cannot do. Print is still quite efficient at conveying basic content - what it cannot do however is give feedback to the learner or to the teacher on where weaknesses are and what progress learners are making with the content. Print is typically not as engaging as rich,

interactive digital content, however it does not break down easily. It doesn’t run out of power, and is not limited in the case of rolling blackouts, as we saw a couple of years ago. “We are focussing our digital content development on areas where it can really make a difference.” Straying away somewhat from OUP’s core offerings in education, Cilliers also speaks of the opportunities afforded by alternative growing areas. “The vocational market has always been fairly sizeable in South Africa, but it is hugely fragmented. Around ten years ago the government introduced a new vocational curriculum, with a view to getting far more learners into vocational career paths, and enrolments

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INDUSTRY FOCUS: EDUCATION


OXFORD UNIVERSITY PRESS SOUTH AFRICA

have increased substantially probably by between 30% and 50%. However, we haven’t yet hit the target of exceeding one million leaders, and this is partly due to resource challenges. Vocational thus represents probably the single biggest content opportunity in South Africa, even across Africa, which hasn’t yet been tapped, and most governments now realise that it is an area that must be prioritised.” It is among the company’s key concerns moving forward. “Within South Africa our growth is going to come from some key markets, and vocational is one of these, alongside professional development. Digital is right at the forefront of our thinking as we prepare the next generation of education resources which are able to really make a difference.” While one of the major players in such a competitive field, there is so much more to OUP SA than simply publishing. It aims to support teachers by providing quality educational resources and training, while additionally, 100% of profits are reinvested in education,

research and scholarship through the University of Oxford and the Mandela Rhodes Foundation (MRF), by whom this South African company is owned to the tune of 74.9% and 25.1% respectively. “This is something of which, as a business, we are extraordinarily proud,” summarises Cilliers. “The MRF provides scholarships for disadvantaged students at universities in South Africa, as well as administering the Rhodes Scholarship locally, which is all part of the same entity and gives us a very close relationship with them. It also ties back to Oxford University very closely.” “Our efforts provide returns which genuinely make a difference in South Africa, and to the university, and ultimately to all of humanity. The mission of

the university and of the press articulates this very clearly, and sets out that everything that we publish must be focused on advancing excellence in research scholarship and education, which is right at the heart of all that we do.”

OXFORD UNIVERSITY PRESS SOUTH AFRICA +27 21 596 2300 oxford.za@oup.com www.oxford.co.za

CEO STEVE CILLERS

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24/10/2016 16:54:03


FREEDOM STATIONERY

Freedom Stationery Writes its Name

in SA’s Educational History

PRODUCTION: Manelesi Dumasi

Growing one of the country’s leading stationery businesses in a market that is constantly changing has been a big challenge but Freedom Stationery has inked its name at the top of the industry, CEO Riyaz Hans tells Enterprise Africa more about the company’s history and its plans for expansion.

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INDUSTRY FOCUS: EDUCATION

//

The South African education system has gone through many changes over the years. Schools, universities, colleges and other institutions have all been influenced by the country’s societal changes together with the movement through apartheid to democracy. Today, the Bill of Rights of South Africa’s Constitution states that all South Africans have the right to a basic education; this includes basic adult education and access to further education. The country has one of the highest rates of public investment in education in the world given that approximately 7% of GDP and 20%

of total state expenditure goes to education, more than any other sector. Suppliers of the educational segment have had to keep up with the constant development of this important sector and like any industry, the changes that came about post-94 have changed business models forever. Established in 1987 in Isithebe, Kwa-Zulu Natal, Freedom Stationery has been supplying a full range of scholastic and office stationery, for almost three decades. Of course, in the beginning, penetrating the market was difficult because of the political situation and the obstacles placed in the way of a

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ubiquitous educational system. “There were many long-established companies and like any new business, trying to break into the market was challenging, given the political situation during the apartheid regime, autocratic businesses controlled most of the government contracts. We had to persevere and through many years with a lot of effort, we eventually succeeded resulting in the company gaining momentum,” explains CEO Riyaz Hans. “From ‘87 to ‘94 we had built a good reputation as a reliable supplier and after 1994 things became easier. Previously we were regarded as a


FREEDOM STATIONERY

//WE PROVIDE GOOD VALUE STATIONARY WHICH INDIRECTLY HELPS THE NATION GET EDUCATED AND THERE’S A BIG FOCUS ON EDUCATION IN SOUTH AFRICA// racially disadvantaged company – we hadn’t been allowed to vote and had been marginalised by the previous establishment. When democracy and equality was introduced, it became easier to participate in government contracts. There was more opportunity for everyone; more people went to schools, the market grew and the government was the biggest spender on education.” AFRICAN EXPANSION Following years of growth between 1987 and 2000, Freedom Stationery

purchased Oyster Plastics in Cape Town and this was a big milestone for the business. Oyster Plastics specialised in the manufacture of goods including filing sleeves, display books, presentation files, secretarial folders, spacecases, rulers and other polypropylene products. In 2003, Oyster Plastics was moved to Isithebe and the Cape Town facility was turned into a Freedom branch. In the same year, the company acquired a distribution warehouse in Midrand and was able to increase market share. Also in 2003, Freedom Stationery purchased the

popular Marlin brand of stationery and then obtained machinery for the manufacture of lever arch files and ring binders, as well as a printing machine for design covers. The demand for these products was so large that in 2004 Freedom purchased South African File Manufacturers in Kempton Park. The company continued to grow and opened further branches in East London, Durban, Port Elizabeth and Bloemfontein while also becoming ISO 9001:2008 Compliant and a level two B-BBEE contributor. Importantly, the company has also gained traction in the ever-growing continental market. With some of the fastest growing economies in the world and with a renewed focus on education, African markets could provide major opportunities for reliable suppliers and Hans is keen to bolster the company’s presence in Africa.

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INDUSTRY FOCUS: EDUCATION

“We know that Africa is a new frontier when it comes to markets,” he says. “It’s underdeveloped, there’s huge opportunity and there’s big urbanisation from the youth population compared to other regions. Sub-Saharan Africa is certainly a growth opportunity and is certainly an area we are exploring to further our growth.” “We have already created a presence across our borders by exporting to Botswana, Namibia, Zimbabwe, Zambia, Congo and Mozambique. We are stronger in some markets and are strategically working aggressively on obtaining a stronger presence in these countries. Freedom Stationery aspires to open

facilities in other African countries but presently we are looking at using local distributors and local partners. We have a fantastic relationship with our partners in SA and we would like to recreate that in Africa.” An example is Freedom’s partnership with premier software developer of Warehouse Management System (WMS) solutions, DATASCOPE Consulting. The two companies have built a relationship over several years and now DATASCOPE provides integrated supply chain software development and implementation to ensure Freedom’s warehousing and distribution operations run smoothly. Expansion and development of the company, as the national

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curriculum in South Africa continues to change, is vital. Competitors are only able to take share from each other in an economy that doesn’t grow so Freedom must remain efficient. “We do feel the pressure from competitors everyday; there are six or seven other big players in our industry and there are many importers and distributors. We have to be as efficient and creative as possible to stay ahead. To stay at number one is just as hard as getting to number one; everyone targets us and that’s only natural. Everyone is looking for market share but the market and the economy isn’t growing so we have to defend our share or lose it,” says Hans.


FREEDOM STATIONERY

“We always have new products and innovations that come into play. Every year, we launch new products for the ‘Back to School’ period. Our product range has been expanding from our own manufactured products to products that we import from far and wide and distribute here,” he adds. ADAPTING & CHANGING MARKET One of the key areas of the focus in international education systems is how all learning institutions can benefit from the rise of connectivity and other technology. In South Africa, the first moves that have been made are with ‘paperless classrooms’, where tablets are given to students so that they can download the relevant learning material. This has had its pros and cons but the consensus is that this will be the way of the future, albeit a long way off yet. However, Hans believes that demand for stationery products will not be subdued by the advances of technology. “There is some movement in that direction in South Africa, there’s been pilot projects in Gauteng with paperless classrooms, but I think that people still have to learn to write. With textbooks, tablets and technology could eventually gain ground as people download books and store them in a quicker and easier way but when it comes to learning to read and write, there will always be a need for traditional stationery. “It is there that it is a threat, but it’s not yet at a stage that we should be reconsidering our entire business. South Africa is the most advanced economy in Africa so even if it took off tomorrow, we would still find business in other parts of the continent,” he explains. Even through the tough economic conditions and the everchanging educational landscape, the company remains the largest manufacturer of scholastic books

in the southern hemisphere and Hans puts this down to the family ethos of the business that has been instilled since day one. “This is a family business with family values which was established in 1987 after an opportunity was seen in the market. We never looked back since. I believe that hard work and perseverance goes a long way. We have built ourselves up and are now the leading manufacturer of stationery supplies in the Southern Hemisphere with five branches nationwide, boasting a total of 100,000 m² including our factories. Currently we employ 900 people across the country and that equates to around 4500 extended families so we have an economic impact.” Freedom Stationery will be celebrating their 30th anniversary in business and the company is

looking for more of the same; expanding into new African markets, building on its successes where it already has a presence, growing its fantastic product range and continuing to impact in a positive way on the lives of its people and all of the learners across the country. “We do have plans for our 30th anniversary celebrations next year and we are currently planning that carefully,” Hans concludes.

FREEDOM STATIONERY 032 459 2820 careline@freedomstationery.co.za www.freedomstationery.co.za

DATASCOPE WMS FOR SYSPRO

WWW.DATA SCOPE WMS.COM DO YOU RUN SYSPRO E RP ? HOW IS YOU R OPER ATION PER FOR MING ?

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ECONET WIRELESS

Building The Largest Pan-African

Broadband Network PRODUCTION: David Napier

A company that seems to be constantly signing deals that will benefit its customers, Econet is building all aspects of its business so that it can continue to distribute unrivalled offerings all over the continent.

//

Earlier this year, in June, Econet Global subsidiary Liquid Telecom announced that it had entered an agreement to acquire South African communications network operator Neotel. Over the past decade, Neotel has struggled to make an impact in a highly competitive South African market but following the acquisition deal, new owners Liquid Telecom and Royal Bafokeng Holdings (70%-30%) will create the largest pan-African broadband network, spanning approximately 40,000 km of fibre networks across 12 countries. Econet is ambitious and hopes to become one of the largest telecoms and tech corporates in Africa, Liquid has network infrastructure and service license in SA and Royal Bafokeng is looking for diversification. In March, after persevering for almost two years, Vodacom ended its bid to acquire Neotel and this paved the way for the Liquid Telecom and RBH deal, which is reportedly worth R6.55 billion. Enterprise Africa speaks to Econet Wireless Group Managing Director and CEO, Hardy Pemhiwa and asks what sparked the idea of acquisition. “If you look at our fibre footprint,

which covers east, central and southern Africa, you will see that we had a missing piece – the South African piece,” he says. “We had some fibre out of South Africa but we were not a major player in Africa’s most industrialised economy and a lot of the South African corporates that are doing business in the other African countries are our clients with fibre broadband so they were looking for somebody that could manage their telecoms end-to-end. There was already an imperative and the question was would we grow organically in the South African market, as big and competitive as it is, or would we try and find another way of acquiring growth. When the Vodacom acquisition of Neotel fell through, we just happened to be one of the parties that was ready.” Nic Rudnick, Liquid Telecom CEO, said: “We are excited about this transaction. Leveraging the strengths of Liquid Telecom, RBH and Neotel, we will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises across sub-Saharan Africa. For the first time, African companies will be able to connect with each other in a cost

effective and reliable way, all on a single fibre network. We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services.” Albertinah Kekana, RBH CEO, said: “This transaction is part of our diversification strategy and its focus on infrastructure is in line with our objective to invest in high growth sectors. As a long-term investor, we are pleased to be partnering with Liquid Telecom who has a very credible track record in rolling out fibre in challenging and diverse markets. This deal represents our long-term investment approach and our commitment to the African growth story.” Although the deal is still subject to regulatory approval, voices from within Liquid Telecom have said that any major delays are unlikely and the deal should be complete before the end of the year as Liquid Telecom’s existing operations in South Africa are very limited in size and as such competition issues are on a much smaller scale. “With fibre broadband, we have done very well by being a B2B company,” says Pemhiwa. “Our business is being a carrier of

www.enterprise-africa.net / Issue No.53 / 53


INDUSTRY FOCUS: TECHNOLOGY

carriers. Thinking about fibre infrastructure and having to roll out a fibre network and managing it for a mobile network operator (MNO), it is a distraction. The MNO business is a FMCG business whereas fibre is a quite boring part of the business that the CEO would rather not think about. Fortunately, that is what we do very well and that is what we will continue to do in South Africa. We will be the only company that can say to a South African corporate, ‘we can carry your traffic end-to-end, from Cape Town to Addis Ababa with no need to unload traffic to someone else’. “South Africa is the most developed economy on the continent and the regulatory environment is more advanced than we have seen elsewhere. It’s very professional in our experience and people know what they’re looking for.” DIVERSIFICATION Away from the Neotel deal, Econet has been busy building its product and service portfolio further, in order to continue delivering on its aim of positively transforming the lives of customers. A particular area of focus for Econet has been the launch and development of its TV offering, Kwesé – an internet TV service targeted at sub-Saharan Africa. “We’re in-line with what the industry is doing but we’re doing it in Africa,” says Pemhiwa. “If you look at Verizon, AT&T or BT, they’re all getting involved in TV and we believe that’s just natural progression for any serious telecoms player in Africa.” Kwesé Sports has signed a number of deals in the past 12 months which will see it broadcast some of the world’s most prominent sporting events to viewers across sub-Saharan Africa. In October, deals were signed with ESPN, Africa Netball and the world’s largest esports company and the global industry leader ESL; in August deals were penned to screen F1 and Brazilian Soccer; in July it was Formula E, NFL and Aviva Premiership Rugby; in June Cricket Australia signed up; in April the NBA confirmed; and in March a deal was done with the English Premier League. Econet has also launched Kwesé Free Sports - Africa’s first free Pan-African TV

channel which is now available in sixteen countries. Kwesé Free Sports is the first to offer premium sport viewing to sports fans across Africa for Free. “This is probably the most exciting time since I’ve been involved with the business,” says Pemhiwa. “Our desire is to be a large African business covering telecoms, media and technology. We have moved from being a mobile operator to providing fibre broadband to being successful in mobile money, and this is all part of the natural progression of building a telecoms and tech group.” In the US, AT&T – a company that started out as a telephone operator – recently announced its intentions to purchase multinational media and entertainment conglomerate Time Warner for $85.4 billion, highlighting the global theme that sees tech companies diluting the borders between telecoms, digital media, connectivity and related technology. POWER PLAY In a further diversification strategy, Econet Wireless continued with the group theme of ‘Inspired to Change Your World’ and is now marketing its ‘Home Power Station’ after successful testing. The Home Power Station is a solar energy solution for the home. It is a lighting and energy solution that allows for everyday tasks like charging phones, lighting, connecting a solar radio among others. Originally developed in South Africa, the Home Power Station was commercially trialled in Zimbabwe. Now available for just $99, the Home Power Station comes with a 20 Watt solar panel, a 12V battery, 4 phone charging ports and 2 cordless LED bulbs (5 Watt). These cordless LED bulbs are detachable and can be used as a torch. Pemhiwa explains that the Home Power Station addresses several issues, internally and externally for Econet. “Every Telco in Africa today is a big consumer of power and a big owner of generators; whether your located in Nigeria or South Africa or Kenya. The less reliable the power grid is, the more generators a Telco will

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have to order. Power comprises anywhere from 15-25% of your OPEX so this is part of dealing with the OPEX spend in our business but we can also make sure that we are benefitting the communities that we serve, it’s a win-win. There’s definitely demand in the communities and it’s complementary for us – if people can’t charge their phones then we have no business.” All things considered, the Econet group of companies and the innovative business of Econet Wireless in Africa remains on an impressive growth path, despite challenges and uncertainty in the global economic climate. The company says of itself ‘we are committed to finding the best way forward in a fast moving and highly competitive technological field. To remain at the top, we relentlessly pursue innovative solutions, with an uncompromising passion for excellence’ and to date, it seems as though this strategy is paying off. In the future, Econet will remain focussed on its home markets in Africa before furthering its reach. “We would look at opportunities outside of the continent to the extent that we can find opportunities where our skills and experience will travel well. Being African means we truly understand the importance of local knowledge. Our experience, relationships and local knowledge would have to be relevant to a local market for us to feel that we should expand outside of the continent. We think the continent is big enough; it still has a long way to go before we even talk about looking further afield. “Our desire is to be the largest fibre broadband company in Africa. As long as it’s an African country, we are going to try and find a way to be there. Wherever we are not currently a big player, we would like to be,” Pemhiwa concludes.

ECONET WIRELESS +27 11 996 5500 www.econetwireless.com


//KEEPING TRAVELLERS SAFE: HOW CAN YOUR COMPANY MEET ITS DUTY OF CARE REQUIREMENT? As global travel increases, especially in emerging markets, companies are placing more emphasis on risk management and duty of care. Travel is, after all, inherently risky because it places people in unknown environments and unfamiliar situations. Duty of care is about more than making sure your employees arrive safely at their destinations, it is also to ensure that you have managed the safety risks throughout your traveller’s entire trip. If your employees have to travel for business of any kind, it’s up to you to ensure their safety as far as possible and communicate to them what to do in the event of an emergency. Your travel management company should be able to assist you in analysing your travel programme to understand where your employees are travelling, and will help you to ascertain which health and security precautions would be prudent based on the risks associated with a particular destination. When it comes to managing business travel on the African continent it makes sense to deal with an expert who understands the challenges and has the experience to manage them effectively. At Corporate Traveller our people are firmly focused on providing 24/7 service that will deliver real value. You will also benefit from a suite of solutions such as online travel reporting, traveller safety and connectivity tools as well as assistance in streamlining your travel policy to help you manage travel risks. If you are uncertain whether your company is meeting your duty of care requirement, ask a Corporate Traveller travel expert to assist you. We can provide you with guidance as to the best tools to manage the safety of your travellers. Call 0877 40 50 90 experts@corporatetraveller.co.za corporatetraveller.co.za

Doing business in Africa may come with risks. Don’t let business travel be one of them. When it comes to managing business travel on the African continent, it makes sense to deal with an expert who understands the challenges and has the experience to manage them effectively. Econet do, and have been benefiting from this expertise for over ten years. For a better business travel experience bring an expert on board today.

0877 40 50 89 corporatetraveller.co.za Proud division of the Flight Centre Travel Group.

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CEO PHUMZILE TSHELANE


NECSA

Leading

the Growing Nuclear Charge

PRODUCTION: Karl Pietersen

With a wealth of expertise and experience in the nuclear industry, South Africa has long been recognised as a global leader in the peaceful use of nuclear energy. As the country gears up for a surge in the expansion of nuclear power and other nuclear projects, Enterprise Africa talks to NECSA CEO, Phumzile Tshelane to find out more about the success of the company and his own plans for the future.

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INDUSTRY FOCUS: ENERGY

NECSA CEO, PHUMZILE TSHELANE (L) ENTERPRISE AFRICA PM, SHAUN COUSINS (R)

//

South Africa has a number of world-renowned experts in the nuclear field. Just a handful of SA’s nuclear industry specialists include: Tebogo Seokolo, recently elected as Chair of the IAEA Board; Dr Kelvin Kemm, NECSA Chairman and a nuclear physicist and industry expert with many years’ experience; Tina Eboka, who was recently selected by The Organisation for Economic Cooperation and Development (OECD) Nuclear Energy Agency (NEA) as vice-chair for the HighLevel Group on the Security of Supply of Medical Radioisotopes (HLG-MR); Dr Rob Adam, SKA SA Project Director, President of NIASA and former executive

at Aveng Power; young prospects like Shalton Mothwa, a nuclear physicist and entrepreneur from North West; and then there’s Phumzile Tshelane, CEO at NECSA. As the country’s journey looks more and more likely to involve nuclear in a big way, these names (along with all of the other fantastic minds in SA’s nuclear industry) will be looking at how the country can benefit from a thriving but quickly changing nuclear programme. Of course, nuclear has so much to offer when it comes to electricity generation; an area where South Africa is embarking on largescale innovation and development, but there’s also many benefits to be had in other related

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industries such as manufacturing, training and research. An area where NECSA excels, and where the company has helped propel the country into an international industry leading position, is with the production of nuclear medicines. When Enterprise Africa spoke to Tshelane following his talk at the World Nuclear Association Symposium in London in September, he was keen to point out NECSA’s successes with nuclear medicine. “We are the second biggest market share holder in terms of medical isotopes,” he explained. “It’s very important to realise that although Canada has the largest share, we


NECSA

are ahead of all of the other major economies including the UK, USA, Russia, China, Japan, Korea and all the others we’re very proud of that. “We would like to increase our exports so that we can work on our balance of payments and that is why we are looking at new products that we can supply to international markets. “We export Molybdenum-99m which decays into Technetium which is injectable and can be used to diagnose cancer. You can pair it with other organic materials and it can eradicate cancer cells. That is our biggest export product. We also export iodine-131 which is used to treat thyroid ailments and that is our second biggest export. We sell most to the US and our second biggest market is Europe. “We would like to supply technology to other African countries. Our colleagues are aware of our capabilities

and talk to us on a continual basis. We use IAEA funding to train medical doctors as nuclear practitioners, we train technicians and we continue to do this as part of the Pelindaba Treaty. “We have the desire and we are daring, and that takes us places,” he said. QUALIFIED LEADERSHIP Tshelane holds a Bachelor of Science Honours (BSc Hons) degree in Nuclear Physics from the University of the Witwatersrand and he has been involved with various power projects in South Africa, as well as holding a number of leadership positions across different organisations. As the country enters a period where the nuclear industry will face a number of challenges, with the Nuclear New Build Programme progressing, the availability of an adequate supply of assured and

knowledgeable leadership will be vitally important – especially as NECSA will be at the forefront of the push towards diversified energy supply and developing export markets for nuclear products and expertise. “I am a trained physicist. I taught physics at the University of Transkei and Wits University,” explained Tshelane. “I joined the non-proliferation council, part of the DTI, and I then moved to Eskom in 1996. I worked with the Koeberg Nuclear Power Station, doing physics calculations and assurance work, until 1999 when I joined another Eskom project, the Pebble Bed Modular Reactor project, where I spent six years working as Chief Physicist amongst other positions. In 2005, I moved back into Eskom and started working on the nuclear build programme where I was Technical Strategy Manager and Senior

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INDUSTRY FOCUS: ENERGY

Manager for Project Development. When I left, I was the General Manager for nuclear build and I joined NECSA as CEO, but I had been on the board since 2006 and so I already had a good grounding.” Leading an organisation like NECSA is no easy task and Tshelane himself has been through a number of challenges in his four years at the helm. He has made no secret of the fact that he wishes to see another nuclear power station in South Africa, and following a commitment for an additional 9600 MW of nuclear power from the government, his position has become even more important as he is now one of the key links in the chain between the government, suppliers, international partners, media, industry peers and the public. Fortunately, the reputation of

NECSA is one of its major assets and its sterling record with safety and quality is something that the CEO is proud of. “The company was founded more than 60 years ago but it had several incarnations. First it was the Atomic Energy Board, then it changed to the Atomic Energy Corporation and now it’s the South African Nuclear Energy Corporation. The latest change came around in the 90s shortly after we signed international treaties and comprehensive related safeguards, on the path to a changed nuclear focus aiming at a different type of business, with expanded business related peaceful uses than the previous era. We wanted to ensure that the population benefits more from the use of nuclear technology. “There is opposition to nuclear power in South Africa but it is matched

by the number of people who want to get involved in the industry. People want jobs and people want the money that comes with it. People who live near our plant in Cape Town or near the reactor in Pelindaba are very comfortable. Koeberg has run for more than three decades, and Safari-1 for 50 years, without incident. Even when people ask safety-related questions, we can confidently answer and say that our facility in Pretoria is not prone to the types of incident that caused the Fukushima disaster, and our facility in Cape Town is massively over-designed to manage against all eventualities.” Tshelane has a calming demeanour and explained that he prefers to champion a relaxed atmosphere so that the 1500 NECSA employees and all of its partners feel confident and comfortable within their working environment.

//ROSATOM SET TO DOMINATE THE RESEARCH REACTOR CONSTRUCTION MARKET During the period of the Soviet Union, over 120 nuclear research reactors (including training reactors) were constructed in the USSR alone, and over the same period an additional twenty were constructed outside of the USSR. A number of these reactors constructed by the USSR are still operating efficiently across the globe, examples include, Hungary, Poland, Czech Republic, Vietnam, Bulgaria, and Germany to mention but a few. At present, there are 58 research reactor facilities in operation in Russia, while the USA has about 40 and ten in France and Germany respectively. The last Russian design research reactors commissioned over the last 30 years include IRT-1 at Tajura Center in Libya, DRR in Dalat, Vietnam, IBR-2M, SM-3 reactors, PIK reactor complex currently in commissioning phase in Russia. Over the years, Rosatom’s design institutes have continued to work tirelessly on creating safer and more efficient nuclear technologies for research purposes and commercial applications. Research reactors projects implemented over last decade in Russia, including very unique and highly sophisticated ones like MBIR project which is under construction, has helped boost Rosatom’s lead in the area of nuclear research applications. At present over 20 000 employees within Rosatom’s enterprises and R&D institutions currently support scientific and research platforms, which are offered by the company to potential partner-countries. Rosatom’s current operational fleet of research reactors gives Rosatom a unique position in the world, differentiating it from other vendors. The company is able to utilize the experience gained at its own facilities during the design, engineering and construction of new research reactors globally. Rosatom is able to offer a wide range of low enriched fuel research reactors with capacity from a few tens of kW up to 20MW with various sets of experimental laboratories and production capabilities. In August 2016 Rosatom and the Bolivian Nuclear Energy Agency signed their first commercial contracts for the

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construction of a Nuclear Research and Technology Center in Bolivia. The Bolivian project officially marks Rosatom’s resurgence into the high-tech market of global research reactor construction through the construction of this world class Nuclear Research and Technology Centre. The Center will include a research reactor with a capacity of 100-200 KW, and is currently the safest pooled reactor available on the market. This reactor’s design and operation mode are based on well referenced technical solutions and are very well suited for countries embarking on the path of the nuclear technology development and research applications. The project implementation will safely allow Bolivia to master nuclear technologies and help develop workforce capacity in the nuclear sector. The reactor and Center of Science will be applied for research and commercial activities in medicine, geology, agriculture as well as a string of other activities where nuclear can peacefully be used to improve the lives of humankind. Irradiation of food will also improve the quality and lifespan of local produce and create conditions for increased export of Bolivian agricultural products. The radioisotopes produced at the Center will be applied in diagnostics and treatment of cancerous diseases generally making the nuclear medicine more affordable for the population of Bolivia. The Center will also contribute to the improvement of the national education system by fostering higher levels scientific competency, and ultimately providing highly qualified specialists in various fields. The Center will be the most advanced in Latin America while also being very unique for the global nuclear industry. The site chosen by the Bolivians for the Center is in El Alto which is situated at a staggering 4100 meters above sea level, making it the highest altitude nuclear installation to ever be constructed in the world.


Rosatom Empowering Africa through cutting edge nuclear technology

Rosatom Africa (pty) Ltd Physical address: 7th Floor Sandton City OďŹƒce Tower, Sandton City, Johannesburg, South Africa Email: info@rosatom.co.za Phone: +27 11 784 2554

www.rosatom.co.za


INDUSTRY FOCUS: ENERGY

Even after taking part in the WNA’s New Build Hot Seat Interview, he remained remarkably unflustered and said that one of the main hurdles the organisation has faced in recent times is the current economic climate in South Africa which has effected all businesses, large and small, in different ways. “We are effected in multiple ways. The sluggish economy makes it difficult to bring new products into the market. One of the focal points we have at NECSA is looking at our output of R&D products and we are now ready to commercialise some of them but it is difficult when the economy isn’t strong. There’s also an advantage as we are not pushed to move too quickly. “In terms of the political environment, we would prefer it to be more stable and ensure there is more confidence from external markets in South Africa. We cannot change the exchange rates so we just learn to live with that. When we work on longlasting projects, the impact of changing indices such as exchange rates and

inflation can be huge.” In the future, when the Nuclear New Build Programme officially begins, there will be a focus on maximising local content and local involvement; some of the aforementioned names will come into their own, but there will also, inevitably, be international expertise called upon. Management of the costs involved and navigation through the constantly changing exchange rates will be vital. With the government looking to add 9600 MW of nuclear power to the mix by 2030, estimates of values of the work have been widespread; figures between R650 billion and R1 trillion have been mentioned. Of course, when figures are eventually finalised, it is not simply a case of handing over one cheque to one company – the network of transactions will need to be managed with the closest eye to detail and NECSA will be involved in a big way. Of course, Tshelane remains cool calm and collected, and highlights the positive fact that the attention of the global nuclear industry is now on South

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Africa as these plans develop. “In terms of plans to build between six and nine reactors, no one else is talking like that,” he said. “We’re not just talking about reactors, were talking about nuclear fuel cycles, the nuclear manufacturing industry, training and development – we have the biggest ambitions in the world at this stage. “Each time I go abroad, people want to hear what we have to say. We have many meetings, everyone wants to collaborate and it’s clear that we all want the same things. “I’m working hard to move NECSA from just doing R&D to doing broad-based product development and commercialisation. If I can leave here with that, I’ll be happy,” he concluded.

NECSA +27 12 305 4911 webmaster@necsa.co.za www.necsa.co.za


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PELCHEM

Pelchem:

In Your World PRODUCTION: Karl Pietersen

“Fluorochemicals have a huge range of applications and are found in almost every industry sector but not many people know about them,� says Pelchem Executive Director, Rajen Naidoo. He goes on to explain how this innovative business has an eye on the future with new products and new partnerships on the horizon.

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INDUSTRY FOCUS: CHEMICALS

//

As a global leader in the production of selected commodity and speciality fluorochemicals, South Africa’s Pelchem is a vital subsidiary of NECSA. With a long and diverse history that closely ties in with that of its parent company, Pelchem has extensive experience that is unrivalled in Africa and the company provides important chemicals to local industries including energy, manufacturing and steel. The company is also a player in international markets and supplies vital chemical products to the world’s manufacturing hubs in China, Korea, Japan, Western Europe and elsewhere. As a state-owned business, Pelchem is closely tied to government strategy but it is not publicly funded. Executive Director, Rajen Naidoo, explains that the business is always researching new products to ensure that commercial sales opportunities are maximised.

“We are a commercial company and our business strategy is to manufacture fluorochemicals and sell them throughout the world. Although we are state-owned, we are not funded by government and we do not have a grant like other state companies do. Our income is from commercial sales and sustaining the business and growing the business is an effective strategy to make sure you remain competitive in the market. We have a R&D programme through which we identify new chemical molecules for commercialisation and that identification is based on market demand and future trends. We focus on niche products that have specialised applications; high-value, low volume as opposed to commodity fluorochemical products.” Originally, fluorochemicals were used locally in South Africa as part of the nuclear fuel manufacturing process. The country’s only nuclear power

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station, at Koeberg in Cape Town, was completed in 1976 and, at that time, all of the power stations fuel had to come from South Africa as Naidoo explains: “At Pelchem, we have inherited our core plants for producing hydrofluoric acid and fluorine gas from NECSA which was established as part of the previous nuclear programme. “We were isolated from the rest of the world and we couldn’t buy nuclear fuel so we had to complete the entire nuclear fuel cycle, meaning we were mining uranium fuel, converting it, enriching it and reconverting it into fuel elements so it was a long complex process and that’s before we transported it to Koeberg. “Part of that process, the uranium conversion process, requires hydrofluoric acid and fluorine. Because of our isolation, everything was done here and we had to build the hydrofluoric acid and fluorine plants. When NECSA closed its fuel


PELCHEM

manufacturing programme in the 90s, as sanctions were lifted and fuel became available much cheaper from international partners, there was a big effort to commercialise our production. The government could’ve closed the plants and turned them into a ghost town but they made the wise decision to commercialise the plant and realised that fluorochemicals was a growing industry. This is how Pelchem was formed and this is how we became a subsidiary of NECSA. We started marketing products and developing new products – there was demand from the refineries and steel industry in this country for hydrofluoric acid. Fluorine was more difficult to commercialise quickly as you can’t transport it in bulk. We initially partnered with a company called BOC (now Linde), one of the largest gas companies in the world, and we started producing a range of speciality chemicals from fluorine for customers around the world.”

PHENOMENAL PRODUCT PORTFOLIO Fluorine has many chemical properties that make it particularly desirable for a wide variety of different industrial, commercial, and even medical applications but it is not the only area of expertise for Pelchem. The company’s product range includes calcium sulphate, hydrofluoric acid, hydrogen fluoride, fluorosilicic acid, molybdenum hexafluoride, nitrogen trifluoride, xenon difluoride, perfluoroalkane mixtures, sodium bifluoride, and sodium fluorosilicate among others. The company’s ongoing R&D programme has identified markets where new products can potentially be pushed and Pelchem is busy with this right now. One new product in particular is looking exciting and there has been talk of a large investment (R30 million) to support its development. “We have a pipeline of new products that we are continually developing and assessing based on

market feedback,” details Naidoo. “One of the many products that we are busy developing, that we are planning to launch in the next year is perfluorodecalin, it’s a fluorinated organic compound and one of its properties is its ability to absorb a lot of oxygen. This gives it applications in medical, when treating burns, as it’s a liquid product and helps cells regenerate quicker. However, its big application is in the cosmetic industry with anti-ageing and skin revitalisation creams. Perfluorodecalin is an oxygen carrying compound and it’s growing in popularity. We have had a lot of demand from overseas company for the product; we’ve developed it in the lab and demonstrated that we can do it on a larger scale, we’ve sent out samples across the world and the feedback so far has been positive. The next stage will be developing a plant and that is where part of the R30 million will come into play. The main demand is expected

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INDUSTRY FOCUS: CHEMICALS

come from the US and French cosmetic markets but we will obviously promote to other market sectors throughout the world and try and develop our own high-end cosmetic creams here in South Africa through partnerships with local cosmetic companies.” Another product which has the ambitious Naidoo excited is one which is widely used but not widely produced

- xenon difluoride. “Pelchem was the first company in the entire world to commercially produce xenon difluoride,” he says. “It’s amazing that a relatively small company on the tip of Africa produces this very special product. Today, we are one of two producers in the world and we would like to think we are the largest. “Xenon difluoride is an extremely expensive but very unique product and is used in very special applications with Microelectromechanical systems (MEMS) which are mechanical devices found on semi-conductor chips in products like cell phones, laptops, automotive computer systems which

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allows the devices to interact with the environment. Xenon difluoride is not fully commercialised yet but we predict it will be heavily used in the future and Pelchem will be well positioned to take advantage of that.” DILUTED ECONOMY Of course, any investment into new production facilities or marketing of new products will depend on the country’s economic situation. Every action and reaction in the economy, positive or negative, has an impact on Pelchem, whether through exchange rate fluctuations or international credit ratings, a strong local and global economy is generally beneficial for the company. Currently, competing on price against international competitors from the Far East is a big challenge but in local markets, the sluggish economy has not had a major impact. “The market we supply to locally


PELCHEM

is not a high-end, speciality market like the cell phone market, it’s more with petroleum refineries and steel manufacturers. Our customers in these industries have been taking maximum volumes so the recent economic downturn has not directly impacted us, in fact, we’ve seen demand to be slightly higher in the past two years than previous years,” explains Naidoo. “Internationally, it’s a different story. We see huge price competition from China as they have huge volume plants so it has been a challenge to maintain our share but at home in South Africa we’ve been successful and we hope it continues. “We are far away from the semiconductor market and we are producing chemicals that we ship to China, Singapore and Japan but they have plants that produce the same products right on their doorstep so competing with those plants is a big challenge.” One of the competitive advantages that Pelchem possesses is its workforce. Ensuring a productive, efficient and happy employee base is often the first step taken to negate against effects of slow markets. Currently providing employment for approximately 175 South Africans, the company invests in training and development to ensure skill, knowledge and experience are at the highest possible level. “The fluorochemical industry

is specialised and we employ many chemical engineers, chemists, scientists, safety officers and support staff,” says Naidoo. “Pelchem has a very good training programme where we develop our own engineers and scientists and we also have a good partnership with the universities where we work together at post-graduate level where people are becoming very capable with fluorochemical research and handling of fluorochemicals. When they are ready to come into the industry, they already have a good level of basic training. Combine that with the training we give and you get people who are very adept with fluorochemicals. “We have a very good internship programme where take in graduates and train them for two or three years and then they start to add value. The team we have has been bitten by the bug – we don’t have a high turnover of staff; we have a very strong team.” POSITIVELY CHARGED FOR GROWTH Along with the aforementioned products that are currently being developed, Pelchem has identified other markets where its unique products could be well received. Partnering with various companies across diverse industries, Pelchem is making moves that will see it gain further market share. “We have a partnership with a leading multinational fluorochemical company for the production of speciality elastomers which can operate in adverse conditions like extremely low temperatures. These products are used in industries including automotive. That partnership is ongoing and we are

looking at new products and growing existing volumes. “We are looking at positioning our other products and technical capabilities so that we can market independently and set up offtake agreements with other manufacturers to develop the products further. “We are also looking at the medium which carries electricity between the anodes and cathodes in lithium-ion batteries. It’s a fluorochemical compound and through our research programme, we’ve developed a method to produce this product which is novel and competitive. We are looking at a new plant for this but we’re still probably three or four years away just now. However a semicommercial pilot plant is planned for the next two years. We would require partnerships with battery manufacturers and possibly also in the end-consumer market and that is what we are pursuing just now,” says Naidoo. Clearly, the future is exciting for Pelchem. With the interesting new products, promising partnerships, and three decades of successful production and distribution, this is a business that has created a platform for extensive growth. An impeccable safety record, excellence in customer care, a highly skilled and capable workforce, and a market that will continue to expand combine to create an impressive business model, and one which will likely create ongoing value for its shareholders and South Africa as a whole.

PELCHEM +27 12 305 4444 cheminfo@pelchem.necsa.com www.pelchem.com

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GOLDPLAT

A Golden Year Sees

Goldplat Return To Profit PRODUCTION: Karl Pietersen

Working with the by-products of mining operations might not sound like an attractive business model but London-based Goldplat is now proving that it is a profitable and lucrative niche that can bring about positive results. Goldplat plc is an AIMlisted, African-focussed company producing around 40,000 ounces of gold per year from assets in South Africa, Ghana, Kenya and Burkina Faso and has a total resource of over one million ounces of Gold.

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INDUSTRY FOCUS: MINING

//

Goldplat recovers precious metals (primarily gold but also silver and PGM’s) from by-products of mining operations. With recovery operations in South Africa and Ghana as well as mining and exploration projects in Kenya, Ghana and Burkina Faso, the company’s competitive advantage in the niche metals recovery market comes from unique expertise in this market, many years of experience, a skilled and knowledgeable team, strong strategic locations, and diversity and flexibility of processing circuits. After recent turbulence, Goldplat posted pleasing results for the year ending 30 June 2016 with operating profit of £1,172,000, profit before tax of £1,942,000, increase in revenue of 21% and gold sold through own accounts increasing by 30%.

When former Chairman, Brian Moritz announced his retirement recently, he said that he was handing over a company in good shape, that is well placed for the future. “Goldplat is now targeting a period of renewed growth, having re-invested in infrastructure and equipment, and strengthened its management team, as well as its financial situation,” he said. The appointment of the vastly experienced Matthew Robinson to replace Moritz will help to continue the success that the company has generated over the past 12 months. Thanks to much hard work over the past 18 months, Goldplat has changed its fortunes, previously being regarded by CEO Gerard Kisbey-Green as “significantly distressed” to a business that is “positioned for growth and

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diversification”, and this was all done without having to resort to capital markets for financing. GROWTH & DIVERSIFICATION Goldplat has diversified its activities in a big way since formation in 1979, when it was known as Golden Dumps Research. It has gone through ownership changes, name changes, strategy changes and location changes, and today the focus is international. Expansion plans are ongoing in Ghana, new markets are being sourced in the Americas, the Recovery operation in South Africa is looking to increase capacity, markets in West and East Africa are being opened up, and the company expects to bring the mining operation in Kenya into operational profitability


GOLDPLAT

during financial year thanks to investment into a new processing plant and redeployment of assets at Kilimapesa from Ghana and SA. Goldplat has also announced that it is looking for JV partners to further expansion. “We have a producing mine, a 670k resource, a very prospective exploration license (with potential we believe of over 2moz resource), and great potential to develop partnerships with other players in the area to further develop mining potential,” explains the CEO. “The country has a newly approved mining act, a new and very supportive cabinet secretary for mining, and the development of minerals and mining is part of the economic development plan for 2030 so mining and minerals are getting a lot of attention. Even as a small mine, we get a huge amount of attention. “Adjacent to us, there’s around 70km of rich mineral resource land with various players on it and this gives us the potential for doing deals. “There’s a short-term opportunity to turn the current mining operation to profitability by expanding production and processing output, a medium-term potential to increase our resource significantly and a longer-term potential to deal with our neighbours and create a significant mining area on the Migori Archaean Greenstone belt. “Our plan is to move this into operational profitability in this financial year and that will make our shareholders much more comfortable with our long-term plan for Kilimapesa,” he says. Away from Kenya, Goldplat is looking to optimise its assets in Ghana and SA by servicing new clients from new markets. This will further enhance the company’s already positive reputation as a leader in its niche market. “We have talked a lot about diversifying into South America and

we are busy executing on this at the moment but it won’t be setting up an operation there. Our model would be to use Ghana, and where more appropriate, South Africa, to source materials from the Americas and elsewhere,” says Kisbey-Green. “We have a lot of potential to expand in Ghana. We operate in a free-trade zone, close to the Port of Tema which is very accessible, and the cost of freight and shopping is unbelievably cheap at the moment so if we can identify sources of the material in South America and elsewhere and import that to Ghana to process, it should be a good business. “We recently took one of the least profitable by-products, mill liners, and shipped a consignment from Brazil to Ghana and it was profitable for us so the model should stand up. If, over the years, we find

that there is enough critical mass to develop an operation in South America then we would look at it. In the meantime, we’ve set up a partnership with a local business that has strong and relevant networks in Brazil and elsewhere in South America, we’ve sent a sourcing manager to South America from Ghana to visit the mines, and we have a senior person travelling around Brazil, Peru, Venezuela and elsewhere to see what the legal, financial and tax environments are like to make sure we are compliant. Setting up there operationally is not what we’re doing initially but developing it as a market for imports to Ghana and South Africa is absolutely a target.” Even during tough economic conditions and a global commodity price crash, Goldplat has managed to continue progressing in East and

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www.enterprise-africa.net / Issue No.53 / 73


INDUSTRY FOCUS: MINING

West Africa, where there are many potential clients and where the logistics of delivering mining byproducts is easier. “Our primary source of byproduct wherever we operate is gold producers. We do business with most of the major players. West Africa in terms of the recovery business has its own challenges. Because of its proximity to our Ghanaian business it becomes an obvious choice and we are working with companies as well as regulators to unlock the issues. We’re already importing material from Sudan, there’s a lot of opportunities in East Africa; we’re getting a lot of material from Tanzania. We’re developing opportunities wherever they are to source material into our existing operations,” says Kisbey-Green. EXPERIENCED & KNOWLEDGEABLE With plant and facilities including crushing, milling, wash-plants, spirals, carbon-in-leach (CIL), rotary kilns, incinerators, elution plants, shotblasting and smelting, and with a skilled and experienced management team, Goldplat is unrivalled in its chosen niche. “It has been run by entrepreneurs, and in many respects like a family business. Doing things ‘The Goldplat Way’ means seeking to think outside of the box, find ways to make operations more efficient, doing things cost-effectively rather than cheaply, involving everyone and respecting everyone’s ideas and input, and finally, leading by example in all of the above,” explains Kisbey-Green. This approach is nothing new, and the company has been running like this since it was remodelled as Goldplat plc 10 years ago. “Goldplat plc was created and listed on AIM in 2006 by the then-CEO Demetri Manolis and Ian Visagie who was, and remains, the Financial Director. The primary asset was the gold recovery business in South Africa

and that was incorporated in 1979 as Golden Dumps Research,” details Kisbey-Green. “The company was formed to take advantage of the niche business of recovery of gold and other precious metals from by-products of mining operations. Goldplat has grown substantially over the 10 years since listing. “Numerous precious metals including gold, silver as well as PGM’s can be recovered from by-products of the mining operations. These byproducts include fine carbon, wood chips, mill liners, sludges and grease, and can also include plant cleanups and processing of rock dumps. Without an operation like ours, a lot of this material would go to tailings, dumps or end up in bags for potential processing at some point without the recovery of any gold or other products. “The recovery business itself is a niche area and Goldplat is very well positioned as a leader in the niche. Apart from our relatively small mining portfolio, we have limited mining technical risk but we still carry quite a lot of upside with the gold price so even today it is a good business to enter into. However, one of the main reasons we are a leading player is that we have a very experienced team, many of whom have been in the business for decades and such a team could be difficult to put together from scratch now,” he says. THE GOLDEN HURDLE Currently, the South African economy is not performing strongly. It only marginally avoided a downgrade by the international credit agencies, the IMF has lowered its GDP growth forecast for 2017 and unemployment remains more than 25%. This is the landscape for all companies and it is one in which you must be innovative to survive and thrive. At Goldplat, instead of worrying about macro factors that

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are uncontrollable, the company is working hard to make the most of elements that it can influence. “We have had far more significant issues to sort out over the past couple of years and have been focused on what is within our control and ability to change,” admits Kisbey-Green. “We operate in South Africa and we take it as it is. We can’t change the exchange rate or the gold price or who the Minister of Finance is, but we can control how we are operating and producing so we have been focussed on that. “We employ roughly 265 people at our South African recovery operation and their welfare is of huge concern to us. The tough economy has given rise to issues like illegal mining, associated security concerns as well as gold theft - problems which we have to deal with. We focus on problems associated with electricity outages and rising prices; the threat of water shortages; illegal miners and associated security issues. “On balance, with regards to the exchange rate, we sell our product – gold – in US Dollars – and during the course of our 2016 financial year we enjoyed all-timerecord gold prices in Rand terms. Of course, to the extent that we import machinery, raw materials and equipment etc., this has a negative impact. This clearly encourages us to support local manufacturers and indeed to manufacture and fabricate internally – and we do a lot of that. Our team has been around for a long time and we have fantastic skills to fabricate our own equipment internally,” he says. Thanks to the geographic spread and unique business in which Goldplat applies its trade, it is well positioned for growth and ongoing financial profitability, despite the bleak economic outlook in South Africa. Selling almost twice


GOLDPLAT

as much gold this year as it did last year, the company will be hoping for more of the same going forward. “We are certainly industry leaders. We can take any given batch of material and process it more cost-effectively than any competitor in most instances and that is where we do become an industry leader in the countries we operate in. “As long as global economies are growing and there’s a need for commodities, there will be mining. As long as there’s mining, we will have business as they will create by-products that we process,” concludes Kisbey-Green.

GOLDPLAT +27 (0) 11 749 6300 info@goldplat.com www.goldplat.com


K CARRIM

Passionate About

Brick & Mortar PRODUCTION: David Napier

From a single small hardware store in 1964 to an integrated group of companies with industry leader status, the K Carrim Group has come a long way. Director, Aby Carrim tells Enterprise Africa more about the journey and how the business will continue to move forward.

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INDUSTRY FOCUS: CONSTRUCTION

//

In today’s democratic South Africa, it is hard to imagine how difficult it must have been to build a successful business during the times of apartheid. Not being allowed to trade freely, being denied access to certain regions, having no hope of gaining government contracts, being rejected by the banks and being marginalised in almost every way made creating a business nearly impossible, and growing a business not much more than a pipedream. But when faced with challenges and negativity, it pays to look for the opportunities; to remain optimistic and look for the positives that can be used to grow. No one knows this more than the K Carrim Group – a leading supplier of building materials and property needs, founded in 1964 in extremely

challenging conditions. Director, Aby Carrim is a second-generation family leader and he tells Enterprise Africa that although the early days of the business were difficult, perseverance and a positive mind set have helped grow the company to where it is today – a diversified, award-winning organisation with almost 500 employees. “The times were very tough in South Africa with the apartheid era when my father started the business. As non-white, we were restricted to certain areas for business and so the company started as a small hardware store in the old Marabastad area which was an area in Pretoria earmarked for the Asian population to do business. Times were very hard and in the early days; we were selling various products including fencing, paint and cement in minimal

DIRECTOR ABY CARRIM

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amounts. The company operated on a day-to-day basis and would order products for the next day. “In difficult times, you are made stronger. We don’t pick up newspapers or listen to stories of negative news. We prefer to look at the other side of the coin – which is always there. Positivity breeds positivity,” he says. BUILDING A BUSINESS Over the years, as the country and the business changed and adapted to modern requirements, the attitude of always looking for the positives has paid off and K Carrim is now a turn-key supplier to the building and property industry while retaining its family-feel. “The business has changed over time, with the entry of my brother, Zaheed in 1983,” explains Aby. “He started growing the business further through purchasing more building materials and more products. He eventually started a wholesale division within the company and that was a milestone. When I joined the business, we grew the tile division and that is now an important facet in the group. “For a long time, we were in rented buildings and in 1990 we purchased our first building. This was when we first started to see real growth. The country was changing and we could start trading in mainstream areas, we could expand and things became easier.” Included in the K Carrim Group’s expertise is building materials, tiles, bathroom finishings, roof trusses, nail and wire products, door manufacturing, fleet and logistic services, commercial


K CARRIM

//PEOPLE IN THE INDUSTRY JOKE AND SAY ‘IF YOU CUT A CARRIM HAND, YOU WON’T FIND BLOOD, YOU’LL FIND CEMENT’ – THAT’S HOW PASSIONATE WE ARE ABOUT BRICK AND MORTAR// and residential property services and more. Following 52 years of successful growth, the company is now targeting the top, setting itself the aim of ‘becoming South Africa’s leading supplier of all building materials and property needs, distributing not only the mainstream, but innovative and trendy quality products at competitive prices’. “People in the industry joke and say ‘if you cut a Carrim hand, you won’t find blood, you’ll find cement’ – that’s how passionate we are about brick and mortar,” says Aby. Currently, the group is focussed on a number of prestigious projects in and around its home of Pretoria. These projects allow the K Carrim Group to showcase its full product and service portfolio. “We are busy with an office park in Pretoria East, we’re busy with housing developments in Pretoria East and Centurion, and we continue developing all the time. “We started as a little hardware store and over time, we branched into the wholesale division and then the tile division, then a door manufacturing plant and eventually we moved into real estate. We started developing property and it’s been hugely successful. Buyers recognise the quality of a K Carrim development – they know the quality and finishing is going to be good because we understand the industry,” Aby explains.

trends. Many of the major players in SA, and globally, are seeing an increasing amount of revenue coming from online sales, even with building materials and DIY products. A well-designed and correctly implemented digital strategy can be extremely beneficial for any type of retailer and this is why K Carrim is not rushing it. “It’s something we are working on,” says Aby. “We find that our finishings business is a touch and feel business. When it comes to the end user, we still get people coming in wanting to feel

the textures and touch the tiles. It’s still a physical, interactive scenario. “With building materials, online sales could work but we still have DIY people who love to come into the store and be interactive with the products.” In the building, construction and home improvement business, one thing that is hugely important is speed of delivery. Whether you order products online or instore, it’s vital that they arrive in a speedy fashion. For this reason, alongside its new online store. “We are introducing an online store and that should be in operation in the next few months and we have a very basic K Carrim app that we used to test the market with our clients and that has been very successful. While the online store and digital offering that K Carrim brings to the market may not be for everyone, Aby feels that some longstanding customers

BUILDING DIGITAL The next stage in the development of this knowledgeable and customercentric business is the uptake of a digital strategy, in-line with global

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INDUSTRY FOCUS: CONSTRUCTION

//BUYERS RECOGNISE THE QUALITY OF A K CARRIM DEVELOPMENT – THEY KNOW THE QUALITY AND FINISHING IS GOING TO BE GOOD BECAUSE WE UNDERSTAND THE INDUSTRY// could be converted, and this will be beneficial for the group “The clients we deal with are very loyal; some of them have been purchasing from us for 40-50 years and whatever direction we go, they will follow. We feel that we can grow the digital side of the business and generate additional business, increasing our turnover,” he says. BUILDING PEOPLE As a family business, K Carrim has people at its heart and part of its mission is to create ‘a diverse group of high calibre employees, performing at optimum levels; creating an environment that sparks innovation and positive thought’. Naturally, Aby is keen on people development and views the cost of training staff as a long-term investment. “Business is about people and community building. We’ve been nominated as a community builder of the year 2016 at an event held in Durban, South Africa on the 21st October 2016. “We have just under 500 people and we believe in people development as we want our team to be confident. Once you develop your people with self-confidence, motivation or skill, you’re developing the economy and that’s a win-win situation. “We are very hands on, we get very involved in the buying side of things to ensure we get the best possible prices. We want to know what it’s like to be on the ground – Mr Carrim had a saying that you always keep your eye on the door, see who is leaving and see if he is happy,” he says. Thanks to K Carrim’s unwavering focus on the ‘delivery of the best

possible advice, services and products punctually, ensuring it’s at the best value and quality’, it seems that more often than not, customer leave happy and willing to return. This is, of course, of vital importance in the challenging times that currently face all businesses. “My approach has always been that bad times are times of opportunity and time to grow through better negotiations and better value which you can pass on to your clients. The SA economy has had its trials but we have a great country and negativity is only a mindset which we must turn into positivity. There’s opportunity in every situation. Besides having a remarkably strong focus on positivity, the K Carrim Group is extremely wellorganised and managed. By focussing on delivering quality people, the company in turn delivers quality service to its customers and as long as it can carry on doing this then who would bet against the company making it to the next big milestones of 75 and 100 years in business? Changing with the times, remaining relevant to customers, building strong relationships, and innovating all the time have positioned this business perfectly to carry on achieving its goals.

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K CARRIM +27 861 522 7746 www.carrim.co.za


K CARRIM

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FALKE EUROSOCKS

Threads Stitched Into

South Africa

PRODUCTION: Timothy Reeder

The oft-forgotten staple of fashion, Falke Eurosocks core business is the manufacturing of legwear such as socks and stockings, producing products both for their own brand and for export worldwide.


INDUSTRY FOCUS: FASHION

The German knitting family of Falke first started in business in 1895. Franz Falke’s casting of the first stitch marked the birth of the company, a name initially associated with yarn making which has gone on to be synonymous with exquisitely crafted socks. Martin Grobbelaar is the CEO at Falke’s Belvilleheadquarters and he takes us through South Africa’s importance to the company in the present day. “Falke is a German-owned company that began in Schmallenberg in Germany’s High Sauerland District, and the decision to open up operations into South Africa was made in 1974. Initially this entailed making yarns for the carpet industry, but in the mid-80s it entered the sock manufacturing side of the market, as in Europe, and decided to make South Africa its sock manufacturing base for the Southern Hemisphere.”

Some 120 years after this first stitch in the Falke timeline, its collectives of craftsmen and women in Bellville and Pretoria truly have weaving and knitting in their blood, just like the Falke family itself all those years ago. Grobbelaar himself, an accountant by trade, joined Falke in 2003 as a cost accountant. From there he has truly worked his way up throughout the business in his own personal timeline. “Under the leadership of the previous MD of Falke South Africa I helped to develop the export side of the business, its manager from 2004 onwards, becoming the financial manager in 2009 before being appointed CEO in 2015,” he runs down. He is ideally placed to give us insight into Falke’s core aims. “Our main focus for the brand and for the product we make is threefold: fit, fashion and functionality. That is the

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promise we make to the consumer, that we are superior when it comes to the fit of the sock while every product we make under our brand actually has a function for the consumer. Finally, from a fashionability point of view we very much view ourselves as the trendsetters in this regard.” For a company with South Africa so deeply ingrained in it, Falke has relished the challenge of evolving the business and keeping it relevant while remaining true to its roots, as Grobbelaar explains: “The face of the business has changed globally over time. In South Africa specifically the biggest change has been that we are now very much focused on producing our own branded product. Initially when the business was started in South Africa it was essentially making commodity product for some of the bigger retail chains.” This switch of focus has brought


FALKE EUROSOCKS

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www.enterprise-africa.net / Issue No.53 / 85


INDUSTRY FOCUS: FASHION

some of Falke’s biggest successes over the past 12 months. “Our Falke brand footprint in the local market has expanded quite significantly. We are very well established in the sports market, but we’ve put a lot of research and development energy into growing our footprint in the fashion market. We’ve actually launched a new men’s fashion range alongside a new woman’s fashion sock range, which is the first time we’ve done so in South Africa. “Because of our European heritage, the fashion side of our business has always been traditionally fairly Eurocentric, while the African market is a lot more bold and daring in terms of design and colour by comparison. The biggest challenge for us has been to truly try and understand the African market, especially with the myriad of different cultures in South Africa - to develop a range which speaks to all of them and

Throw away your shoes,

not focus on simply one demographic in the country. “The other great success over the last 12 months is the growth we’ve experienced in our export market. The main one of these is the USA where we’ve had growth of 14% in volume; due to the exchange rate the value increase of this has been some 40%.” As the evocative Falke saying goes: “Every thread is a link to a common purpose,” and there has been something of a sea change in the perception of the African fashion market in recent years. Grobbelaar sees it now as representing a huge opportunity for growth. “There has been a significant change in both the South African and the broader African markets over the past 10-15 years. Traditionally, any overruns or spares from past seasons in the European and US markets - whatever couldn’t be

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sold essentially - would find its way to the African market. Now, the African consumer is not happy with that. We have very much become a global community and as a result the African consumers are very much aware of the global trends and want the very best. “It is definitely still an emerging market,” he continues. “It still holds enormous opportunity, especially with the changes we have undergone over the past 20 years. Our demographic in terms of income earners has shifted toward the African population, who are very much into global brands and focused on acquiring the best, prepared to invest in brands which they find credible and which satisfy their needs.” Falke’s commitment to aiming at the luxury goods section of its market has seen it able to swerve to a certain degree the effects of an ever-turbulent economy. “It is always a concern when issues like slow growth and unemployment are so prevalent, but we are very much pitching our brand at the top end of the market where there has been a lot of growth. Our business strategy over the past ten years has definitely been to decommoditise our brand, and by doing so we are not in direct competition with brands and manufacturers from the East especially. We are very much focused on the top 5% of the population.” Also helping to shield Falke from the weakening Rand is its notable export footprint. “This is an advantage as it’s Dollar based,” explains Grobbelaar. “We obviously buy in a lot of our raw materials from Europe and the United States, and also from a purely manufacturing cost point of view the currency does have an impact, and so the challenge for us over the last few months has been to recover any fluctuations in the exchange rate, primarily in the local markets. “The customers at whom we aim our brand are not so much influenced by price,” Grobbelaar goes on to explain. “It isn’t such a big barrier for


FALKE EUROSOCKS

them, rather they are looking for a value proposition and making sure that the brands they invest in are brands with integrity and speak to their needs.” While it certainly positions itself at the forefront of the market, Falke is not entirely free of pressure from its competitors, particularly with the draw of cheaper labour and production to be found elsewhere in the world. “There is still competition, certainly,” declares Grobbelaar. “Obviously most of the other global brands, and most of our biggest competition brand-wise from Europe and the US undertake their manufacturing in the Far East, but their design centres are in other parts of the world. The Far East is very much focused on big volumes and commodity product, while we consciously decided to keep production local and remain a ‘quality over quantity’ company. Falke’s are unashamedly luxury goods, then, and it follows therefore that large amounts of resources are regularly fed back into the processes behind their manufacture. “We try to invest at least 5% of our revenue every year into new equipment,” states Grobbelaar. “The dual main drives there are in the latest technology, as well as becoming more efficient in our production,” he goes on. “Additionally, we want to make sure we are always reducing the impact we have on the environment. Our commitment to our employees is to create more capacity so that we can service our markets more easily. From a technological point of view, on a global scale Falke is among the most well-served production facilities in terms of the newest available technology. Particularly on the knitting side, we have heavily invested in machinery that is more energy efficient, especially on scarce resources like electricity and water,” Responding to what has been a topic at the forefront of people’s minds in South Africa in recent years, this move toward greener technology

is a principal focus for Falke. “We are looking at solar energy as a means to fully supply our plant, which would require massive investment. At present we are very much looking at key areas where we are most energy intensive, to see how we can reduce our demands in those areas.” Grobbelaar concludes with a look to how Falke will maintain its position as the industry leader in South Africa. “On the design side, our belief is that we need to continue to be the trendsetters. We never copy what other people do, we need to be the premium brand in our market. We will do this in various ways, through our in-house design and development centre, where we look at global trends and connect with business partners in the US, Italy and the rest of Europe through our own footprint and stay abreast of trends. By continually

focussing on building our brand pillars of quality, innovation, modernity, consistency and reliability we will grow and sustain the brand in the years to come. We also bring in new people on a constant basis, to access new skills, as well as concentrating on upskilling the people we already have. We firmly believe, as part of the company culture, that while the majority of our assets depreciate over time, our people actually appreciate in value as they are up-skilled and gain experience.”

FALKE EUROSOCKS +27 21 951 2137 info@falke.co.za www.falke.co.za

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www.enterprise-africa.net / Issue No.53 / 87


SYLKO

Sylko Delivers 2016

Product of the Year PRODUCTION: Karl Pietersen

Whether you eat from its paper plates, wrap your food in its foil, present your cakes in its muffin cases or buy its greetings cards and other gifting accessories, it’s likely that you’ll appreciate the value of a Sylko product without even realising it. The often unnoticed necessity of Sylko products have resulted in fantastic growth for the business – keeping SA braaiing and picnicking for decades. CEO, Grant Attwood tells Enterprise Africa more about Sylko’s recent launch of new products and investment into new IT systems, all in the pursuit of ongoing growth.

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INDUSTRY FOCUS : MANUFACTURING

//

South Africa is a nation of braai lovers; the weather, landscape and happiness that go with sitting around a fire and cooking up make SA the perfect place for this trend that is universally adored around the nation. Across all of the country’s official languages, braai is one of the only words that is commonly recognised, and even though the modern country encompasses many distinct cultures, braai cuts across ethnicity, race and class. Obviously, for a successful braai, firstly you need quality foods. Secondly, you need associated products to help prepare and present eats and treats household foils and containers, wraps, plates, cups, cutlery etc. – and all of these are designed and manufactured by Sylko. Based in Durban, Sylko has been manufacturing world-class products since its inception in 1947

when two entrepreneurs saw a gap in the market for kitchen products including wrapping paper, rewound grease-proof paper, crepe, 1ply serviettes and wax paper. Through the following decades, Sylko expanded, adding to its product range, bringing in many more employees, and expanding its premises. Ownership changes, market changes and technology advancements saw the company become South Africa’s biggest manufacturers of paper converted products by 1980. In 2000, Chris Attwood purchased Sylko and in 2005, employees were given the opportunity to invest in the company. 2008 saw relocation to a new 8000 m2 facility in Prospecton and today, Sylko is the market leader in its chosen segments and has regional offices in Cape Town and Johannesburg, agents representing the company in East London, Port

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Elizabeth, Namibia and Botswana as well as employees located in the Orange Freestate, Eastern Cape and Northern Province. Supplying to all of the major supermarket chains and holding international quality accreditation, Sylko has come a long way and will next year celebrate its 70th anniversary. You’ll find Sylko products in stores all over southern Africa and CEO, Grant Attwood says brand management and innovation is key to the business strategy. “The economic situation and the exchange rate has put the pressure on, so supermarkets are pushing own-brand more. Price strategy as well as brand strategy is something we are always talking about and always need to be ready to change if necessary. “We try to source as much as we can locally in South Africa as our manufacturing base is there but


SYLKO

sometimes there are materials that are unavailable or are simply less expensive to source internationally so we do have to keep a mix of global and local sourcing. “The Rand has been fluctuating hectically and we have had to keep a close eye on that as it’s difficult to pass price increases on to our customers. If we’re not clever about how we buy, we can quickly get stuck in a bad situation,” he says. INNOVATION TWICE AS DEEP Through analysis of stores, till point information and consumer research, Sylko has been developed category strategies to meet various segments within the market. South Africa has a

broad cross section of income groups within its population, with varying disposable income. Part of the strategy has been to develop products that cater to these individual needs. Sylko aims to produce products that range from entry level to the uppermost premium end of the category, with price points aligned to the associated benefits that the product offers. The new improved premium Sylko paper plate is now twice as deep as Attwood explains. “One of our most exciting innovations that is just being launched is deeper paper plates. In South Africa, we have a braai culture and paper plates are a big part of that. We are the market leader in paper plates and our paper

plates won 2016 Product of the Year in the Food Serving Category recently. We’ve come up with a paper plate that is twice as deep as any plate in the market and it’s also stronger. “We spoke to our customers and found that their customers would prefer a deeper plate around the different regions. We started innovating the product and found that going deeper actually made it stronger so that was a happy side effect. Over the last 12 months, we’ve made a big investment in new tooling and machinery to produce these plates. “It will boost our turnover and we’ll probably see a switch away from existing styles to the new form. In terms of brand equity, I think it’s very

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INDUSTRY FOCUS : MANUFACTURING

important. We’ve been recognised as having the Product of the Year and now through innovation it’s two times deeper so with brand equity is where it will add most value.” From initial idea through design and production, product development for the new plates took around 12 months and Attwood says that this is normal for a new offering. “Development times depend on what the innovation is. If it’s just changing the length of a foil then it can be quick but for these new plates, we needed a complete redesign and retooling, and the tooling comes from Europe and then there’s testing, so it can take around 12 months for the entire product development lifecycle.” INFORMATION INNOVATION Staying in touch with customers and end users is highly important for any business; gaining purchase and stock information allows for effective planning. But how do you use the

information on market trends, stock levels and regional variations in sales? Sylko has undertaken major investment in its IT systems so that market information can be used efficiently. As Attwood puts it: “Everyone has data but it’s what you do with it that counts. “Over the past year, there has been a lot more data available to us from our customers. Previously, we could only see what was sold into the stores but now we can see what is being sold out of the stores and that is more important. We have spent a lot of time and effort developing our systems so that we can analyse that ‘through the till’ sales data and pick up trends and where products have moved into the store but not out of the store. If we can see that there is a backlog, we can address that through communication with our merchandiser and promotional activity. “It’s important for our customer as they are monitoring their stock levels carefully and we can help them to ensure our product is moving in and out

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of their store efficiently,” he says. These important IT upgrades were only recently completed but ensuring the technology is up to date will be an ongoing task. “Everything is installed and ready – it’s easy to utilise and analyse but we will obviously be making upgrades forever,” explains Attwood. BEST PEOPLE Considering Sylko’s position in the market - as an industry leader, producing a comprehensive range of products in massive amounts – you might think that the employee base would be major but, in fact, the company employees around 150 people. The skill and knowledge that have been developed over a number of years, and the way that the company rewards and recognises its people means that employees tend to stay. “Our business has been around since 1947 and next year will be our 70th birthday,” says Attwood. “Many of our staff members have been with


SYLKO

us for more than 20 years. We don’t have a high rate of staff turnover. Our people know the business well and are very skilled. We are proud of our BEE Level 4 Rating, we are proud that we have an excellent ratio of female/ male employees – particularly at management level. When we do have to recruit, we are quite particular in the types of people we want but I wouldn’t say we’ve found South Africa’s skills shortage to be crippling in any way. We have enough experienced staff to train and develop new recruits. We are committed to ongoing learning, be it formal education or on-the-job coaching and fostering a culture of mentorship. “We have embarked on a programme of LEAN and continuous improvement in the past two years and we encourage everyone to contribute to innovation. We give recognition to staff members who do come up with ideas for improvement. Our employees understand what it takes to implement an idea and this means that they have taken a lot more ownership since we have been running this lean programme,” he adds. FUTURE PROOF Thinking about the future, Attwood is keen to point out that innovation and expansion will not stop. It’s an ongoing focus for the company and something which will keep Sylko at the top of the industry. “We hope to launch entirely new product lines as part of our Category Strategies, and that is how we will grow our staff count and our business overall. Within the next six months, we will see some exciting new products coming through,” he says. As for further expansion, Sylko hopes to add to its already strong presence in sub-Saharan Africa, either through direct export or through export via customers. “We export into other African countries, mainly through our customers. We do export directly to a

few of the African countries including Mauritius, Botswana, Lesotho and Namibia. This is an area where we would like to grow but, as with any market or product, you want to have a unique point of difference. Innovation is key to our strategy and we want to increase the amount of innovation we are doing so export is important but we need to make sure our strategy for innovation is sound,” explains the CEO. As new products are engineered, new markets investigated, new strategies explored, and as the Sylko business continues to move from strength to strength, SA consumers will continue to find their kitchen, braai and related products originating from Sylko in Durban. This is a business on a growth path; one cooking for the future, while all the time sticking to its core values. “This is a family business with family values; we as a team have a close-knit

working relationship, employees are treated as family members who are empowered to challenge the status quo and take ownership in improving the way we do business. Being a family business, means we have no red tape, nor multiple hierarchies and reporting structures. This enables us to be more agile as a business, with speed of decision-making and therefore able to rapidly execute go-to-market launches. At the same time, we are a very professional and efficient business, and we are run on corporate governance principles,” says Attwood.

SYLKO +27 31 913 9500 ConsumerCare@sylko.co.za www.sylko.co.za

Right Time Right Place Cargo Logistics is a transport company in the road freight industry. Cargo Logistics is a small enterprise with 20 staff members and an annual turnover of approximately R15-20 million. We transport good from south Africa to Botswana and Namibia . We specialize in containers and Taut liners. Our services provides Stock checking, collection and delivery of goods, warehousing, registration of cross-border documentation and comprehensive insurance and our Windhoek warehouse functions as a distribution centre for small orders and large consignments are delivered directly to clients.

P.O Box 6440 Greenhills Gauteng 1767 South Africa

Tel: 011 6924575 Email: carmen@cargologistics.co.za

www.cargologistics.co.za www.enterprise-africa.net / Issue No.53 / 93


SAOTA

Designed for Success

PRODUCTION: Manelesi Dumasi

SAOTA is one of South Africa’s leading architectural firms, with a history of delivering magnificence for clients all over the world. Currently working on a standout project in Clifton, this ambitious and dynamic business continues to lead the way with technical and design excellence.


INDUSTRY FOCUS: ARCHITECTURE

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With projects completed including luxury villas in Miami and Ibiza; extravagant homes in Mexico; high-rises in London; magnificent structures in Dubai; beautiful buildings in France, Switzerland, Austria, Croatia, Portugal, Turkey, Russia; and a long list of successes in India, China, Thailand, Indonesia, Australia and New Zealand; you might think that we are discussing one of the world’s biggest and most well-established architectural design agencies. But in fact, this is all the work of South Africa’s very own SAOTA. Founded in 1986 by architect Stefan Antoni, this is a company with global vision; one which has made its mark in Africa and around the world, and is now increasingly recognised as a leader in technical and design excellence. Today, Stefan Antoni is joined at the helm of the business by Philip Olmesdahl, Greg Truen, Phillippe Fouché and Mark Bullivant and together, the dynamic Directors utilise their enviable experience and skillset to drive SAOTA across five continents, always staying at the sharp end of an ever-evolving industry. Adding to its portfolio of exemplary architectural work from around the world, SAOTA recently began work on a prestigious project at home in Cape Town – Clifton Terraces. A residential development in one of the most sought-after locations in Africa; surrounded by the worldrenowned Clifton Beaches, nestled between Lion’s Head and Table Mountain; Clifton Terraces is a project that will see the creation of one of the premier living spaces in the country. “No one had anticipated putting a project this ambitious together on this site,” says Olmesdahl. “Understanding the value, and understanding what can be achieved in these top-end of the market projects is essential, and

relies on a good understanding of the residential market. “We feel very positive being associated with the building and very proud to be involved with the project.” Bullivant is equally excited, saying: “The design and the secure nature, brings a product that is quite unique to the area and I think it will be very well-received. “Overall, the approach was to try and make this building as harmonious as possible with its surroundings.” The project which is being developed by Taupo Holdings, will see 10 apartments and two villas cascade down the rock face, with views across the Atlantic Ocean and the Twelve Apostles. Each villa has four garage parking bays, 24/7 security and its own private lift. Recently, ‘Northern Villa’ won an International Property Award for the category: Highly Commended

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SAOTA


INDUSTRY FOCUS: ARCHITECTURE

Residential Property in South Africa. The single unit residence has an internal space of 743 m² spread across five stories with 298m² of gardens, a private infinity pool and terraces. Blending the building into the natural surroundings whilst always using complementary materials was a key consideration during the design stage. “A key objective for us is keeping the building respectful of the property. It’s a very specific objective that the building terraces back as significantly as it does, it’s an objective that the colours, tones and materials attempt to blend in with the natural surroundings. “We’ve made great efforts to reduce the amount of wasted service space and focus all effort on maximising apartment sizes, having great external areas and capitalising on outdoor living. A lot of glazing allows for an abundance of natural light in the apartments, but the shading fixtures that have been included reduces the amount of glare in the apartments, so there’s many measures to create a passively comfortable environment for the owners,” says Olmesdahl. “We had to do a design that was strong enough to have a clear and defined character.

“The scale of the building is something which was very important for us to deal with. The way we conceptualised it was that the building would be made up by five parts and what we tried to do between those principle five forms was clearly delineate them with landscaping to break down the scale and perception of the overall building,” adds Bullivant. The interior design furnishings for this project will see a collaboration between ARRCC and OKHA, sister companies to SAOTA. Thanks to the experience of the SAOTA team, and a portfolio packed full of international awards and successful projects, the company was the obvious choice for this development. Truen highlights the company’s history in residential development. “The company was started 30 years ago by Stefan Antoni as a small studio working on domestic residential projects in Cape Town. Over the years this has expanded to include an interior architecture design studio, ARRCC and a furniture studio OKHA. Over time we have expanded our market and now have 200 people working on projects in over 40 towns and cities around the world.” Away from Clifton, flagship

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projects include Epique, an island development in Bodrum Turkey; NOOM a Pan-African hotel brand; the School of Engineering at the University of Cape Town and other high-end residential projects across the world. WELL-DESIGNED STRATEGY In tough times, like those that cloud the success of the South African market today, it pays to have a business model that is lean and flexible, and ready to adjust to changing market trends as required. Growth in the SA economy is slow (the National Treasury stating that growth sits at just 0.5% for 2016), unemployment remains high, and investor confidence is low – creating market uncertainty. In times like this, project work can slow down; people prefer to protect their money rather than spend it. Fortunately, the reach of SAOTA has helped to limit any possible dry spell thanks to activity in multiple markets, with multiple currencies and a strong base in its home market. “Generally, I think that the environment is quite difficult,” says Truen. “We are very busy but only because we work in so many markets and are able to work through cycles. The weak Rand has been positive


SAOTA

for us because of the nature of our offshore work. It’s not good for the industry as a whole, hardware and software prices are incredibly high so it’s more difficult to start a business or keep up to date. “I think we’ve created an unusual niche market which has given us many advantages. The biggest differences are the size of the market we work in, 44 cities at last count, and our focus on technical and design excellence. “In the Cape there has been an incredible demand for residential and commercial property in the city so our domestic market is still relatively strong. This demand will weaken though if the general economy doesn’t strengthen. “Our pipeline for the next two years is looking promising with some very good retail and hospitality opportunities. The demand for top end residential architecture is also very strong but we need a stable strong economy if we’re going to deal with the social problems we have as a country,” he adds. THE DETAIL IS IN THE PEOPLE In recent years, SAOTA has taken home the 2016 Architizer A+ Popular Choice Award, 2015 International Property Awards – Best Residential Development – Seychelles, 2014 Better Beach Awards - Miami Chamber of Commerce, and the 2014 SAPOA Award for Innovative Excellence and all of this success comes directly from the company’s highly skilled employees. “We’ve tended to employ talented young graduates and let them grow in the organisation. South Africa has some excellent design schools so it’s not necessarily difficult to find people, it just takes time for their skill sets to develop,” says Truen. “We hope that SAOTA is an exciting place to work. It’s a challenging dynamic environment and we have a lot of enthusiasm and energy in the studio. We give people

space to grow and contribute to design. We believe in teamwork and want people to grow.” Considering the focus that we have placed on culture and people development, and the positive effect that we have found a successful HR strategy can have on a business, SAOTA’s seems to be one that encourages expression and dynamism and without this, the company would likely be a very different organisation. “In the past 12 months, we’ve had a major focus on the people we work with and it’s been amazing to see the response and growth from them.” Going forward, SAOTA will be looking for more of what has seen it grow to what it is today – an internationally sought-after, multi-award winning South African architecture firm with projects on

five continents. As with any industry, advancing technology will play its part. “The changes in BIM technology and in Virtual Reality have completely changed the way that we design and the way that we communicate with consultants and clients,” explains Truen. With ever-growing demand in Cape Town, and around South Africa in areas such as Gauteng and KZN, and a presence in international markets backed by a robust portfolio, this is one South African business that is designed for success and perfectly positioned for future growth.

SAOTA +27 21 468 4400 info@saota.com www.saota.com

Winners of the

NSPI NATIONAL POOL OF THE YEAR 2016, 2015 and 24 previous gold awards

Office: 044 382 0319 islandpools@mweb.co.za

www.islandpools.co.za www.enterprise-africa.net / Issue No.53 / 99


GROHE DAWN

Taking Care of Our Most

Precious Resource PRODUCTION: Timothy Reeder

The responsible use of scarce water resources throughout Africa is an issue more important than ever right now, and to address it Grohe Dawn is developing a broad range of water technology products including faucets, shower heads and shower systems, and flushing and installation systems for bathrooms and kitchens across South Africa and beyond.

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INDUSTRY FOCUS: WATER

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Through its commitment to improving daily comfort and individual lifestyle, Grohe Dawn seeks above all to offer a range of products to facilitate the ultimate in showering and bathing pleasure, all whilst ensuring effective body cleansing and improving on daily hygiene. It achieves this from its Johannesburgbased headquarters and factories, which are supported by a South African production network consisting of five manufacturing plants. “South Africa is our major market at this moment in time,” states CEO Henk Suelmann, which is to be expected somewhat for a Group for which ‘Made in South Africa’ is such a central commitment. Alongside increasing investment in its people and brands in South Africa to become the leading innovator in the industry, Grohe Dawn will also look to further grow its base into Africa and towards global markets, as Suelmann details: “Already we have extended distribution into sub-Saharan Africa,” he continues, “and we have reached other areas of the world through our parent company, Grohe AG in Germany.

“We have a team on the ground in Nairobi, Kenya, which is taking care of these other markets.” To continue meeting its customers’ desires for individual, innovative and affordable bathroom solutions through sustainable technologies, Grohe Dawn works closely together in research and development with its global partners, Grohe, and the newly established Lixil Watertechnology Group. “Grohe Dawn was only established fairly recently, officially coming into being in 2014, but the roots go back much further,” explains Suelmann of the company’s history. “It goes back to the founding of Cobra in South Africa, by Friedrich Grohe, also the founding father of Grohe AG in Germany.” A world leader in water control technology, research and development, Cobra is unwaveringly committed both to quality and to a constant focus on global trends. It has long had a reputation for bringing to market the most cuttingedge products which are based on the most forward thinking designs, all whilst remaining one of South Africa’s most recognisable and popular brands with a proud heritage and a reputation for

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world-class standards. “We have grown to a team of 1700 people today,” continues Suelmann, “across manufacturing, marketing and sales, as well as supporting departments such as our finance department and supply chain. We are running five plants in total: a sales and marketing office in Johannesburg, three regional offices in Durban, Port Elizabeth and Cape Town, as well as our branch in Nairobi, Kenya, into which we recently expanded. “This has been one of our primary challenges in recent years,” he continues. “To integrate five independent companies into one coherent entity has been an extremely important process. We have found the tap and sanitary market to have been strong and even grown over this period, due to the increased demand for quality products – whether this be potable water or water for other uses.” Grohe Dawn is using this market strength to its full advantage, taking the opportunity to develop its own range of service offerings. “We are working on an extensive investment program throughout the organisation, to allow us to remain the innovation leader in the


GROHE DAWN

sector. We are also looking to innovate our existing products, to give our end consumers exactly what they want when it comes to water saving – sustainability, design and functionality, essentially.” The collaboration between Grohe and Dawn came about in July 2014, in the form of a R880-million sale of Dawn’s Watertech companies to allow it to globalise its manufacturing operations. At the time, Dawn CEO Derek Tod explained that in order to be globally competitive in terms of product manufacturing it was necessary to have full access to global technology, global manufacturing expertise and global dispersion of manufactured product through established channels. “As Southern Africa cannot always provide the volumes to factories in the longer term to warrant the investment in technologically advanced high-volume equipment to become a truly global manufacturer of product, Dawn decided to bring globalisation to its Southern African factories through the introduction of a global manufacturing partner in the form of Grohe.” Since its founding in 1936 Grohe has grown to become the global market leader, and as such was the obvious choice of partner for Dawn. It is the world’s largest single brand manufacturer of premium quality products guaranteed to always deliver the perfect flow of water, and one which stands for quality, precision and attention to detail. With design and product development facilities located in Germany, German production standards are the guiding principles in all its manufacturing facilities. In 2009 GROHE entered the subSaharan Africa market and engaged with local merchants to increase the product offering available to consumers in the market space, with continuous growth in the retail and project sectors. When pressed on what sets Grohe Dawn apart from its many competitors in what is a busy and well-populated market, Suelmann is unequivocal in his response. “We have a high-quality product made in South Africa,” he states, again reinforcing the importance of its

heritage to the company’s operations. “When it comes to taps and showers we are the only company who produces here, while everyone else imports either from Europe or from Asia. We call ourselves a South African icon,” he concludes. It is an industry which Henk Suelmann has seen evolve in his time with Grohe. “I think the biggest change has been the continuous increase in demand we have experienced due to an ever-rising urbanisation across the world, with water as a result becoming ever more scarce. As a manufacturer we need to be aware of and focus on this increasing group of consumers who are striving to use water in a sustainable way – no water leakage, for example. “Very often manufacturers are importers of cheap goods, and feel that the most important thing is to be able to offer the lowest price for a product. In fact, above all else the priority is the

provision of the right quality, and to offer a sustainable product to end users.” According to Suelmann, this is another way in which Grohe Dawn sets itself apart from others, and will further help Grohe Dawn to achieve the aims he has for the company. “This is another differentiating factor between a manufacturer who actively focuses on this, and a cheap importer. We are always looking at how to improve the quality of a product and make it last longer and work more effectively, rather than worry about maximising our own profits. My primary target is that our brand becomes the first choice in South Africa for our end users.”

GROHE DAWN 010 450 0500 www.grohedawn.com

Non-Ferrous Metal Works Group, The Premier Southern African brass plus copper alloy extruding manufacturer congratulates

Grohe Dawn Watertech Holdings Proprietary Limited

on its growth and international marketing endeavours, covering plumbing fittings plus faucets.

Non-Ferrous Metal Works +27 31 4807388 RonaldL@nfm.co.za

www.nfm.co.za www.enterprise-africa.net / Issue No.53 / 103


BIG FIVE DUTY FREE

Definitive

Duty Free Shopping PRODUCTION: Timothy Reeder

Boasting a world-class array of goods, from jewellery and liquor to toys and clothing, Big Five Duty Free strives to offer the very best in discounted airport shopping, just moments from the sights and sounds of the runway.


INDUSTRY FOCUS: RETAIL

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Big Five Duty Free is run today by the husband and wife team of Marina and Chris Harilaou, with the origins of the company dating back some 40 years to a time when the concept of duty free shopping had not registered in the South African conscience. “The formation of the company is a long story,” the pair explain, as they take us through its earliest days. “It was originally established by Marina’s father, an immigrant who came into the country from Greek origins. He started the business at grass roots level alongside a partner, at a time when duty free simply wasn’t present in South Africa. It’s fair to say that he was the pioneer of the duty free business in South Africa, helping to construct its foundations in the country’s airports and setting the foundations for where we see it today. “He had obviously travelled” adds Chris Harilaou, “and seen that there were duty free outlets in other countries, but not in South Africa at that

moment. Airports existed on a much smaller scale compared to what we see today, of course, offering maybe one international flight departure each week. He saw this gap in the market as a real opportunity and so approached our government with his proposal and long term commitment and he was given the opportunity to kick start this business in the country.” HISTORIC SUCCESS Subsequent governmental, political and environmental changes played significant roles in shaping the business moving forward, with its structure having been required to constantly adapt to the times over the course of its 40-year existence. “Jump forward to 1994,” continues Marina, “and South Africa becomes a democracy, which itself brings change within the country, as well as the airports themselves. The formation of ACSA, the Airports Company of South Africa, a

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parastatal, was influential in the direction that the business took. In 1999 they re-tendered for all the business at the airport, and one of the requirements was that the successful tenants have either a partner with an international background, or that the bidder themselves had it. This led my father to partnering with another four companies, and led us to the concept of the ‘big five’ - we were five companies in total.” From then until the present day the company has continued to evolve and today consists of three partners, with a staff compliment numbering around 430. “We have branches in all of ACSA’s international airports,” Chris explains, “including Cape town, Durban and Johannesburg. We are also heavily focussed on social and economic development within South Africa - that is a central concern of ours and forms part of our commitment to the furthering of


INDUSTRY FOCUS: RETAIL

the country as a truly South African company ourselves. We operate solely within the borders of South Africa, with no stores outside of the country.” As an innately South African company, for Big Five Duty Free the social responsibility element of its operations goes far deeper than for many others. “It’s fundamental; it’s one of the pillars of the company, a foundation. We have a whole team of people focussed on our campaigns and how we carry them out - Freddy the Teddy for example runs every December and we are now in our fourth year of running it, which offers our customers the opportunity to donate the bears to various charities which we fund, and children in surrounding areas are the recipient of the bears. We also have four schools which we subsidize each month, because government subsidies are not sufficient to allow them to operate month to month, with a particular focus on younger and disabled children.” FLYING HIGH Helping to keep Big Five Duty Free at the forefront of such a competitive and at times turbulent market is its approach of constant innovation. “We see the duty free environment as similar to a fashion brand,” explains Chris. “It’s essential to keep strong foundations to the brand, but equally important is to keep changing and providing something innovative, new and exciting for the consumer. After three or four years the business will need to be remodelled, and we are constantly in the process of upgrading our shops. Currently in our flagship store, in Johannesburg OR Tambo International Airport, we are redesigning a major section of our shop which includes the confectionary area - a big segment of our business. Brands themselves have also changed through the years, as Big Five have had to recognise. “We have

to keep up with the different markets and niche products which are evolving on a yearly basis. This also requires innovation as far as the units are concerned - the design, display and sale of products, all of which we are busy implementing now in one section of our shop.” Big Five prides itself on its ability to strategically undertake such developments in stages in order to prevent any disruption to its operations. “This kind of upgrade wouldn’t take more than a few weeks to effect completely. We’ve never closed a shop down because of necessary renovations, and have always managed to run in sync with keeping the shop open, however fragmented or temporary this may be. “We always look for international brands which we can bring in as add-ons,” continues Chris, as he talks us through some of the factors underpinning Big Five’s continued success. “A lot of big brands feel that South Africa’s airports are not ready yet for the expansion, while some have already felt that the time is right and invested. We can only trade with products that the market is ready for. A huge segment of the African market as a whole still comes to shop in South Africa, It is therefore imperative that we cater for our consumers specific needs. “For the moment though, in order to keep people coming back we offer value for money and are as competitive as possible, alongside a range of promotions which are in effect on a continuous basis in the shops. We do extensive marketing and place a real priority on service to our clientele - we have a lot of repeat customers, particularly on the business side, which has seen our strike rate increase in the airport itself year on year. We are showing double digit growth in an economy where passenger growth is single digit at the moment. While it’s not always easy in these economic times,

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we are constantly looking to offer our customers the best possible deal.” TAKING FLIGHT IN AFRICA? So focussed is Big Five Duty Free on cementing its position at the very top of the South African competition, that its immediate development plans centre around growth within the country itself rather than looking outwards. This is not without its challenges, as Marina explains: “As South Africans we are facing our own challenges, not least in the fluctuating nature of the currency at present. We are a very young country within a very young democracy, so Chris and I as leaders for the company want to stabilise Big Five in South Africa, and equally make it a truly African duty free company. “Only once we have achieved this will we look to take it even further, but we are not looking at expansion on our door step right now, and certainly not within the next two to three years. “We’ve tried to grow a business within the duty free market that’s recognised as a brand in South Africa or sub-Saharan Africa. If you look at our client base, a big percentage is European while the Americas are also important, but the African market remains one of our biggest. We welcome our African visitors who in turn spend a lot of money with us, and we strive to look after them, and as a result they recognise the brand. They know they will receive genuine products at competitive prices, and with the highest level of customer service. That’s really been our main focus and driving influence: to provide an A-grade shopping environment that’s as competitive as any other duty free operator worldwide.”

BIG FIVE DUTY FREE +27 11 390 2670 customercare@bigfivedutyfree.co.za


First Class Service Airports Company South Africa has owned and operated South Africa’s nine principal airports for the past twenty years. The airports are diverse in nature, ranging in annual passenger numbers from 50 000 to more than 19 million. As the largest airport authority in Africa, the company manages a network of nine major airports in South Africa, including the three main international gateways for O.R. Tambo International, Cape Town International and King Shaka International airports. • Airport technical advisory services • Airport operation and management • Transfer of airport operations from one airport to another

• Training and development • Investment in airport concessions

International Airports

Regional Airports

O.R. Tambo International Airport Cape Town International Airport King Shaka International Airport

+27 (0)11 723 1400 customercare@airports.co.za Charles.shilowa@airports.co.za Elsie.Rateiwa@airports.co.za

www.airports.co.za

East London Airport George Airport Kimberley Airport Bram Fischer International Airport Port Elizabeth International Airport Upington International Airport


MAZDA SOUTHERN AFRICA

“We don’t want to be carcentric, we want to be

customer-centric” PRODUCTION: Manelesi Dumasi

As Mazda emerges from the pack of international car makers in South Africa as a contender for pole position in the future, word is beginning to spread that this is an automotive business that wants to look after your investment by engaging an innovative, confident, welltrained and customer-centric dealer network.

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Mazda products are known globally for quality engineering and sleek design, innovation and forward thinking, and the Mazda brand essence is about ‘celebrating driving’. Mazda cars are hugely popular, all over the world, but in South Africa up until 2014, Mazda vehicles did not have a dedicated sales operation and were marketed in partnership with Ford. The company had a marginal market share and was finding itself lost in amongst the many other international brands scrambling for recognition – unfortunately customers were simply not getting the chance to celebrate

driving with Mazda. But that is now changing. In October 2014, Mazda Motor Corporation officially introduced Mazda Southern Africa (Pty) Ltd, an independent national sales and service company and distributor of all Mazda products. Based in Midrand, Mazda SA was buoyed by the introduction of SKYACTIV technology and its products are now some of the most attractive in the marketplace. When Mazda SA was formed, Managing Director, David Hughes arrived with a new business plan, saying that the mission was to become a brand of choice and claiming

that the company had started a journey towards being the most loved and sold car in the country. He tells Enterprise Africa that, to date, that dream is beginning to become a reality and Mazda is gaining traction in the market, even during these times of relative economic uncertainty. “The business model is working. Our CX-5 is now leader in its segment and we’ve been selling it for less than 18-months. It outsells the VW Tiguan, the Ford Kuga, the Toyota RAV4, the Honda CR-V and so we know there’s appetite there,” he says.

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INDUSTRY FOCUS: AUTOMOTIVE

“In 2014, we sold 4090 vehicles of which 60% were light commercials, utilities or bakkies and that was the stable of Ford here. In that year, we sold less than 2000 passenger cars and our market share was under 1% - it barley had a pulse. In 2015, the market was down 5% but our sales were 9067 so up by more than 100%. What’s interesting is that only 15% of those sales were utilities so we made great inroads with the private buyer and the business buyer that behaves like a private buyer in a down market. “We were starved of stock as we were still young. The network had 127 Ford dealers selling Mazda but they were only selling 5000 vehicles between them. We now have 50 Mazda dealers and they sold 9000 vehicles last year. This year, the market is down 11% and at the end of July, the private buyer market was down 20% but Mazda sales were up by 55%. We’ve been averaging 1038 sales for the past seven months which means we’re on track to do 12,000 and that will mean that we will probably be the only brand that grows, year-on-year, in South Africa. “Only 5% of our sales now rely on commercial vehicles. If you compare where we were in 2014 with passenger cars and compare where we will be at the end of 2016, I think you’ll be able to say that we’ve done the job,” he adds. BUSINESS MODEL Following the global separation of Mazda and Ford in 2010, the two brands remained tied together in SA until the launch of Mazda Southern Africa in 2014 but now that the control of the brand is independent, Mazda is forging its own strategic direction and adopting a unique but well-thought out business model that has the consumer at its heart. “The brand here for many years was sold under the distribution arm of Ford which did a very good job but the brand has moved on and is now more aspirational so were moving it from a price driven brand to a

premium alternative. “We don’t want to be car-centric, we want to be customer-centric and so we are focussing on the needs and wants of the customer and not just the desires of the manufacturer,” says Hughes. “In the spirit of looking after people, were not going to do fleet and rental, as it destroys resale values, and we’re going to uphold people’s investment and look after that investment.” When Mazda was trading as part of Ford, there was little marketing and no official Mazda dealers, but that has changed, with part of that change seeing a change in company culture which Hughes has helped to drive. “We’ve come here and changed the business so instead of just having two people worried about Mazda, we have a standalone national office with 40 people in sales and service, and another 40 in a self-contained warehouse that focus solely on Mazda. The ethos is ‘it’s ok to care’; we want to look after people; we want to sell and service vehicles as if we were selling to family. We want to look after people’s investments and know that in the long-term, that will pay off,” he says. “I’ve spent a long time working for Mazda and in Australia we get close to 10% market share; the brand is number one with private buyers, we don’t do fleet there and the ethos is the same. The business model applied in Australia is the same here and that’s why I was bought in. It’s so simple but it works. The first thing is not to worry about customer loyalty but think more about dealer loyalty as they are the custodians of the brand. They can destroy or make the brand based on their relationships with customers. Most manufacturers concentrate on wholesales; pushing as many cars onto the dealers as possible and this results in discounts. We don’t do that. We have three guiding principles with our dealer network: Profit, volume

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and customer satisfaction but not in that order. “We know that if we find good people to come into the dealership and they know they can make money, they will build good facilities and employ good people and that is a recipe for success. “We don’t pay incentives for customer satisfaction, we believe that should be done for nothing. We don’t unbalance the playing field by offering one dealer more incentives that another – there’s no secrets. It’s an open and honest approach to the dealer network and people find it refreshing,” he adds. GROWING FROM SCRATCH When Hughes first arrived in South Africa, there were many challenges to overcome. Of course, he had to reorganise the company internally and ensure all regulations and legalities were in place to operate a sales company. He then needed to attract people so that the Mazda dealerships could be established and managed, and the brand could be effectively marketed. “One of the problems I had at the start was finding 40 people from the industry to leave their safe jobs and come to a brand that was a little lost while putting this culture in place and it was difficult,” he says. “People will tend to fall back to the ways of the past but the challenge is keeping them with the Mazda culture and the business model. We’ve engaged consultants to help us with our training but it’s really very simple; well-trained people, that understand the business and have the freedom to make decisions and mistakes will want to work for you. We’re becoming an employer of choice because word is getting around we’re breaking through the pack, in a difficult time, as a leader, not just in sales but with our culture. “We’re making inroads. There’s a survey here about satisfaction with


MAZDA SOUTHERN AFRICA

//THE BUSINESS MODEL IS WORKING. OUR CX-5 IS NOW LEADER IN ITS SEGMENT AND WE’VE BEEN SELLING IT FOR LESS THAN 18-MONTHS// the OEM and we were voted number one in overall satisfaction.” While South Africa has become a manufacturing base for many international motor companies, Mazda does not make cars here and has to import. With the current exchange rate, that sees a weak Rand and a strong Yen, Hughes admits that matching demand with supply is another hurdle. “Another of our challenges is that Mazda can produce 1.7 million cars globally and there’s demand for more than two million. We simply can’t get enough production here and with the exchange rate, it does

make things challenging.” However, despite the challenges faced by the Japanese brand, it has managed to garner industry recognition and in February, Mazda SA was named ‘Company of the Year 2016’ by CAR Magazine. “Mazda has made very impressive strides in forging its own strategic direction,” said CAR Magazine. “Under new managing director, the canny David Hughes, those strides have gained further momentum, but such a surge can only gain lasting traction through quality products. And here Mazda has delivered, introducing several well-received new models such

as the 6, 3, and 2, the grin-inducing MX-5 and the CX-3 crossover to join its bigger CX-5 sibling. With this raft of well-engineered and competitively priced new models has come welldeserved commercial success, seeing Mazda buck the flat market to almost double its sales from 2014 to 2015 and increase its local market share from 0.6% to 1.9%.” FUTURE ACCELERATION So what can we expect from this reinvigorated brand in the future? How far can Mazda go, and how quickly? Can it really challenge the Volkswagens and Toyotas? Hughes believes 2018 will be a particularly strong year for the company as the product range moves into a whole new generation and on the back of this, Mazda is looking to boost its market share. “We’re still young and our first period was just about relaunching the

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INDUSTRY FOCUS: AUTOMOTIVE

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MAZDA SOUTHERN AFRICA

brand, transacting and doing things well. The second period is now about being customer-centric. In 2018, every model in our line-up will move to a new generation and that’s where our brand will move to the next level. We’ve earmarked 3% market share if the market returns to positivity. We won’t be adding more dealers or bigger facilities as we don’t need it,” he explains. “The next generation will contain new technology, more fuel efficiency, better transmissions, better diesel engines and more driving dynamics so we think by 2018, whatever downturn that is happening here now will be on an upturn and we’ll capitalise on that by emerging in a better position than when we went in. We’re already at 2.5% market share so challenging for 3% shouldn’t be too difficult and as the market grows we’ll have 50 dealers enjoying that growth.” To further bolster the company’s success, Hughes explains that new partnerships are being sought to ensure success in important markets; partnerships that could also help Mazda in its growth outside of SA. “North of South Africa is really a utility vehicle market and we don’t build one - we always have a partnership. Since the separation from Ford, we just haven’t had the product. The Ford Ranger and the Mazda BT-50 was our previous project but it’s public knowledge now that we’ve separated that project and the next project will be with Isuzu but that’s still in negotiation and when everything is settled we’ll look at how we can migrate into Africa. “We don’t have any concrete plans right now for Africa but we do believe it’s a market with big opportunities. Of course, there has to be an environment that welcomes investment. Just to set up our sales company here in South Africa, we had to go through endless applications just to get the licenses. It’s very difficult to register and get licenses to do business but that environment is changing,” he says.

By 2020, growth of at least 2% is expected to return to the SA economy, unemployment is expected to shrink and interest rates and inflation are expected to decrease. If these predictions playout, Mazda will have the perfect platform to attack the market and claim at least the 3% share that has been targeted. After that, if the company can continue to grow, important decisions will have to be taken about how the business takes its next step as mass importing from Japan will become inefficient. “I’m building this business for the future and I think that there is an opportunity for Mazda to come here, either on its own or in a joint venture, and manufacture and export so we will keep that option open,” says Hughes. By focussing on its dealer network, delivering quality service to customers and maintaining the unique and innovative culture that has been laid down in the business, Mazda could quite easily give its competitors a run for their money and emerge, just as Hughes wanted, as a brand of choice in SA. “Mazda is a brand that engages the customer, the car and the road. It’s about driving dynamics. “The product is good, it has good styling, it represents good value for money but there’s a lot of other brands out there that have this too. What sets us apart is the relationship we have with our dealer network – that is the key,” he concludes.

MAZDA SOUTHERN AFRICA 0860 069 700 customercare@mazda.co.za www.mazda.co.za

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G4S

G4S Builds Strong Business by Developing &

Employing ‘Best People’ PRODUCTION: Karl Pietersen

Developing and training people is perhaps the most important investment a business will ever make. People are your brand, your image, your product and your service – without quality people, a business cannot offer quality to customers. In Africa, G4S understands the importance of employing good people, investing in their development and has been recognised as one of the leaders in this field.

//

As we discovered last month, the work that is undertaken in Africa by G4S, the world’s leading private security company, is vital. It underpins the operations of entire industries and helps individuals and organisations by providing security products, services and solutions. But what is it that allows this mammoth, Pan-African business to perform such important work, 365 days of the year, to the delight of its customer base, and while regularly gaining recognition from various international

bodies? According to Regional President, Mel Brooks, it’s G4S’s 119,000 people in Africa that set it apart. “I believe that the great work our employees does to ‘secure your world’ and their continuous efforts to ‘live’ our company values, strengthens our image and supports us in unremittingly providing expert services to our customers,” he says. And he’s not the only one who understands the unrivalled importance of people in business. Former CEO of Xerox Corporation, Anne Mulcahy said:

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INDUSTRY FOCUS: SECURITY

“Employees are a company’s greatest asset - they’re your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company’s mission.” Microsoft founder, Bill Gates said: “The key for us, number one, has always been hiring very smart people.” Lawrence Bossidy, former CEO at Honeywell and executive at GE said: “I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.” So it’s clear that in the today’s modern, largescale businesses, human capital is a primary concern. Attracting people, developing them, maintaining them and rewarding them is a tricky business. The traditional HR model has evolved over time and people are no longer just motivated by a pay cheque. A happy and productive workforce is driven by a company-wide culture that is developed by the leadership and is made up of a mix of values, ideas, visions and traits that ultimately drive the business towards its goals. So when your

business is one of the largest employers on the continent, with people from diverse backgrounds and geographical locations, and the services you provide are so important to your customer’s operations, where do you even begin planning an effective people development strategy? According to Brooks, education, training and development are central. “With any growing economy, one of the key requirements is to drive education, training and development. A big percentage of people are under 25 and so programmes we put in place are to help us establish the workforce of the future and to develop skills that our market and our business will require going forward. At this moment in time, we do find shortages of certain skills and we struggle to find people at the level of competence that we want so we’ve set up programmes that will address that and help, particularly, young people to develop a career in security and enter the workplace with a good set of core skills,” he says. LEARNERSHIP PROGRAMME In May, G4S announced that 300

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previously unemployed men and women had entered into a training programme that would see them train towards accredited security qualifications with the goal of raising industry standards in South Africa. The trainees gained classroom and practical experience, and the high level of training received means that they will be able to not only market themselves as potential employees for G4S but also to the wider security industry. Tian Taljaard, Operations Director, G4S Secure Solutions (SA) said: “It is so encouraging to see the enthusiasm of this young group of South Africans who are excited by the opportunity to become a part of the private security industry and part of the G4S family. “This type of initiative is also good for business as it allows G4S to introduce new, well-trained personnel to our customers and to the broader industry.” The company is hoping that, depending on its needs, this scheme can become an annual process. “Although the security industry in South Africa is highly competitive, we are


G4S

all fighting for the same cause – a safer and more secure South Africa,” says Brooks. “The security standards that G4S teach the trainees during their three month theory session and eight month practical training are aligned with international industry standards and allow the trainees to market themselves in the security industry. Upskilled and trustworthy candidates are always in demand in our line of business. “We have already employed a number of these candidates and we have multiple cases where our customers (e.g. Neotel, Sahara Computers, Grand Central Airport) have specifically requested that these trainees be added to their permanent security detail, after observing the candidates during the eight months practical training deployment on their premises. The general impression that we receive from our customers is that these employees are motivated, well trained and punctual.

“I can sincerely say that we can see the benefits that corporate social investment programmes, such as our Learnership Programme in South Africa, has for the business. Not only does the programme improve our engagement with local communities, but it also provides us with an innovative way of upskilling our talent pool that is used for workforce planning,” he adds. The opportunities that G4S provides for its people are being clasped with both hands by enthusiastic employees who are excited about a career in security and Brooks says that within the company, there are case studies of how training programmes have helped employees climb the ladder. “Aside from the Learnership Programme in South Africa, we have several examples within G4S where an individual with no security industry experience, decides to make a career

of security and develop themselves from a trainee to supervisor and even managerial level. It is not only about G4S providing employees with opportunities but employees who decide to take charge of their own careers and develop themselves by actively engaging with the business, stepping forward and demonstrating that they do want to achieve more. In an organisation like ours, there are always opportunities for those who want to grow their careers and excel,” he says. “G4S is often required to recruit a large number of employees within a very limited customer deployment deadline. To have an available pool of upskilled candidates, who have already been trained in standard security practices such as bribery and corruption, allows us to provide our customers with high quality security officers at a much faster turnaround time,” he explains.

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INDUSTRY FOCUS: SECURITY

TOP EMPLOYER 2016 G4S’s fantastic employee offerings, extensive training programmes and unrelenting drive towards upskilling and developing its people, and the industry, has resulted in international recognition. In October 2015, the company was recognised by the The Top Employers Institute as one of Africa’s Top Employers 2016. The Top Employers certification is only awarded to organisations that achieve the highest standards of excellence in employee conditions. G4S is the only private security company in Africa that has ever been awarded Top Employer certification and marks further success following nine certifications in 2013, 11 certifications in 2014 and 2015, and now 13 certifications in 2016. Across Africa, G4S is recognised as a Top Employer in Botswana, Cameroon, Côte d’Ivoire, DRC, Ghana, Kenya, Malawi, Morocco, Mozambique, Namibia, Nigeria, South Africa and Zambia. The Top Employers Institute said of the company’s South African operation: “Our comprehensive independent research revealed that G4S South Africa provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees.” Elanie Kruger, Africa HR Director for G4S said: “Our business is defined by the high standards and expertise of our people, and our customers rely on us to provide high quality, screened, effective employees to secure their assets and business activities. “This award recognises the work that we do to make sure our colleagues are supported to be the best they can be, and we’re proud to be a Top Employer for the fourth consecutive year.” Brooks explains that, apart from making the company stand out when it comes to attracting top talent, international recognition like this is also beneficial for marketing G4S to potential customers – perhaps one of the most

underrated effects of an effective HR strategy. “We are very proud that G4S is the only private security company in Africa that has ever been awarded Top Employer certification. Being the largest private employer in Africa, it endorses our commitment to our people and means that we adopt world-class working conditions. Customers and employees alike want to be associated with a ‘good employer’,” he says. “Top Employer certification has strengthened our position as an ‘Employer of Choice’. Our career centre attracts thousands of potential employees per annum. “In todays’ market, potential employees are selective in choosing their next employer. Good people practices are integral in our operations and differentiates us from our competitors and our ability to attract talent. “Scores achieved in the independent Top Employer certification process, also allows G4S to benchmark ourselves against the other Top Employers on a global scale,” he adds. PAN-AFRICAN OPERATIONS While we learned last month that G4S is innovating its service portfolio and beginning to focus more and more on technology developments, manned security still remains a significant solution that is heavily in demand around the continent. Of course, working in 29 of the 54 African countries, with different threats, languages, cultures, political systems and legal requirements, G4S has to ensure that it is well-represented in all of its different territories and again, people are the key aspect in driving success across multiple geographies. But thanks to lacking economic development and poor educational systems, skills gaps can appear in certain markets and this is where G4S training programmes are so important for the company and its employees. “There’s an interesting fact that if young people in Africa get one years’ worth of work experience, they are 80% more likely to have work for the rest of

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their life so whatever experience we can give people as early as possible, it will underpin their future and their ability to maintain their families going forward,” says Brooks. “We work from Cairo to Cape Town and so the availability of security officers and management personnel to deliver the premium services that G4S wants to deliver means that we need people who are well-trained, well-educated and with the correct language capabilities. In some countries, these skills are just not there so we need to develop them ourselves. “Our ever-growing customer base in Africa and globally, continues to trust in the quality, integrity and expertise of our employees, products and services. The security industry as a whole and the sometimes complex and hostile environments in which our employees work, poses many risks and challenges. Our customers and the general public are not ignorant of this fact and applaud the professional manner in which G4S overcomes and handles these challenges,” he adds. With some of the world’s fastest growing economies and largely underdeveloped regions, Africa remains one of the most attractive markets for international companies looking for new growth prospects. However, doing business in Africa can be extremely challenging and Brooks says that having a meaningful impact on the communities in which you operate can bring big benefits. “In our region, we have many fantastic CSR projects, all of which primarily focus on the development and support of Africa’s youth, mainly through education, healthcare, welfare and development through sport initiatives,” he explains. “As an organisation that specialises in the management of risk, we also recognise the impact that our business activities can have on the environment. We have therefore partnered with our customers, employees and suppliers to invest in energy efficient technologies to reduce waste and water consumption. In 2015 alone, our employees participated in over 110 community projects and dedicated


G4S

over 9400 employee hours. “Our significant footprint across Africa means that the economic and social impact of our operations affects the lives of millions of people across the continent. Extreme poverty, illiteracy, safety and unemployment, continue to be some of the most challenging realities of doing business in Africa. G4S believes that community upliftment is key to a sustainable business model in Africa. If we do not invest in the upskilling and education of our communities, then we will not be able to employee the ‘Best People’.” PROMOTING CORE VALUES G4S’s core values, and elements which underpin its global HR strategy, are Safety First, Customer Focus, Integrity, Best People, Performance, Teamwork and collaboration, and Expertise. These values drive everything the company does and successfully applying the values to day-to-day operations results in the delivery of excellent customer service and, ultimately, strong financial performance. “Everything comes down to our core values as an organisation,” admits Brooks. “One of the reasons we’ve obtained Top Employer status is because it’s fundamentally underpinned by our company values. We treat our people with respect and we train them well. We pay our people well and they are well looked after. We aspire to give people a future and career opportunities and that isn’t always the case with organisations across Africa. When talking to our customers, it is also important to them and it’s a meeting of values which can be hugely important. The Top Employer award allows us to connect with companies that place a similar emphasis on the people they employ.” The constant promotion of these values, the development of a culture, the ongoing focus on training and development, and the collection of important accolades is proving to be a valuable tool for G4S, both internally and externally. According to LinkedIn

HR Contributor, Alasdair Hobbs: “The psychological link between a wellmotivated and highly trained workforce, and substantial business performance is a scientific fact.” Brooks agrees, saying: “During 2015, nearly 80% of all G4S Africa employees participated in our biennial Employee Engagement Survey. More than 80,000 employees confirmed that they are well trained to perform their jobs, understand how to behave in line with the G4S values and believe G4S takes safety in the workplace seriously. “It’s not only a measure of how well our values are being adhered to or absorbed but it allows us to show to our customer’s what type of organisation we are so it can have commercial value, without a doubt.” Perhaps the most important indicator that G4S’s HR strategy and people development programmes are successful comes in the form of feedback from the industry. “I think that if you were to approach a security officer irrespective of who they worked for and asked them who they aspired to work for, they would say G4S,” says Brooks. This recognition further bolsters the company’s brand and image and makes bringing on-board quality people - the key to success - that little bit easier.

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

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PHOENIX AVIATION

Reinventing Air Travel

PRODUCTION: Timothy Reeder

Phoenix Aviation seeks to deliver quality, consistency and the highest level of professionalism to its broad range of clients. This stretches from its finely engineered aircraft to the superior maintenance of the fleet and training of its pilots, together with its famous no compromise approach to maintaining safety and ensuring peace of mind.

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INDUSTRY FOCUS: TRANSPORT

//

BA private executive air charter company operating from Wilson Airport in Nairobi, Kenya, Phoenix Aviation aims to subvert the traditional notions of air travel, be that crowded terminals, long waits in security, or connection and check-in lines, in favour of a convenient and stress free approach. Its unparalleled air travel service delivers reliable and economic solutions tailored to meet a broad range of needs and customers, free of layovers and unscheduled delays and offering customers the opportunity to travel when and where they may desire. This freedom is one of the key concepts underpinning its existence, with aircraft which are able to take off and land at more and remote airstrips than conventional scheduled airlines, taking clients closer to their destinations at a time which suits any schedule. Opening its doors for the first time in 1994, Phoenix originally had a dual focus on the repair and maintenance of

light aircraft within East Africa, and air ambulance services. Even today, both of these operations still form a large part of its business. Phoenix Aviation currently possesses a large range of aircraft, with its diverse fleet comprising a Citation Excel C560, four Citation Bravo C550s, four Beechcraft King Air BE200s which all boast with pressurised cabins, as well as a Beechcraft King Air BE350, two Grand Cessna Caravan 208Bs, a McDonnell Douglas MD 83 and a Eurocopter AS350 B3. These are all equipped with the latest innovations in safety and technology, to succeed in meeting the demands of its diverse clientele, while the company also has access to a number of privately owned aircraft. Such an unparalleled fleet is a significant reason behind Phoenix Chairman Bill Parkinson’s assessment of the company’s standing in the market. “I regard Phoenix as the quintessential air charter company in East Africa,” he states. “We strive to lead the way on all levels of our business, and I believe that this is defined in our approach, ability, pilots, staff and state of the art technology.” As Managing Director, Satwinder Reel has some 45 years of experience within the field of aeronautical engineering. Holding licenses from

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C.A.A. UK, F.A.A., K.C.A. (Kenya Civil Aviation), TZ C.A. (Tanzania Civil Aviation) and U.C.A. (Uganda Civil Aviation), he applies this to his role of personally heading up the company’s engineering department. He is licensed on the Citation Excel C560, all Cessnas, Pipers, Beech Craft, Lycoming and continental engines, and as the only Engineer in Kenya qualified to work on the Citation Bravo, he has acquired a breadth of experience across the United Kingdom, United States, Canada and South Africa, including pre purchase inspections of aircraft for clients throughout the world. Phoenix General Manager Shaun Barretto goes on to make explicit the company’s primary concern: “Safety is the backbone of everything we do. Our attention to every small detail is what sets us apart from the competition.” Chief Executive Officer Steve Parkinson builds on this further, adding: “Phoenix Aviation is one of the oldest aviation companies in Kenya with a fully developed Safety and Quality system that exceeds European standards in some cases,” leaving no doubt as to the peace of mind on offer when employing the company’s services. Of Phoenix’s permanent fleet, the Citation Bravo is one of the most popular, cost-effective and versatile private jets with the ability to land at shorter and narrower airstrips than most other jets, whose luxurious leather interior comfortably seats four or five passengers. The King Air BE 350, meanwhile, offers a more luxurious version of the King Air 200, capable of faster speeds than but still able to land on some of Africa’s famously more challenging airstrips in both comfort and luxury. Phoenix’s Eurocopter AS350 B3 is, in contrast to a fixed wing aircraft, unique in its ability to hover and land without the need of a landing strip. Built with speed and precision in mind, flight transactions are guaranteed to be fast and fluid and, while Phoenix has been operating a state of the art Eurocopter helicopter since 2008, this was recently


PHOENIX AVIATION

upgraded and sees them boast the newest and most modern helicopter of its type in East Africa. At its core, Phoenix Aviation is focussed on delivering quality, consistency and the highest level of professionalism to its clients. This is true of the full range of its operations, whether this be its famously finely engineered aircraft, with Phoenix the only fixed wing ISO 9001/2008 certified charter company operating in East Africa, or the superior maintenance of the fleet and the training its pilots receive. Emblematic of this is Phoenix’s no compromise safety policy, which delineates that all of its charters fly with two pilots, while its safety certifications are second to none in the region. This allows it to take its flights through throughout Eastern and sub-Saharan Africa, Europe and even more exotic destinations, such as the Indian Ocean

Islands. “Our aim is to deliver reliable and economic solutions that are tailored to meet all air travel needs,” the company states. “Our dedicated team is available 24 hours, seven days a week to ensure that the experience with Phoenix Aviation makes flying fast, comfortable, convenient and affordable.” AMREF Flying Doctors Air Ambulance Service has been in operation for 55 years and is the largest air ambulance service in sub-Saharan Africa, leading the way in medical evacuations and as such performing over 1200 each year. Its close working relationship with Phoenix Aviation dates back more than a decade ago and in partnership they have created a unique service that is used by many of the world’s leading Insurance and Assistance companies. Operating as a fully equipped Air Ambulance, the Phoenix Aviation Citation Excel

and Bravo jets have the capacity to evacuate two patients at a time, which no other aircraft in Kenya is equipped to do to the same level of technology or specifications. The medical interior is complimented by AMREF Flying Doctors’ high tech sophisticated on-board medical equipment, and alongside Phoenix Aviation the pair are bringing operational and safety procedures together to ensure the best possible environment for both patient and clients.

PHOENIX AVIATION +254 (20) 4945 540 | 541 flightops@phoenixaviation.co.ke www.phoenixaviation.co.ke

THE

AFRICA CONNECTION Flying Doctors

Twice winner of the ITIJ air ambulance of the year award, EURAMI accredited, 60 years experience in aeromedical transport.

www.flydoc.org Tel: +254206992000, +254706811811 Email: Marketing@flydoc.org Located inside Wilson Airport, Nairobi Kenya

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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: THE BIG 5 CONSTRUCT EAST AFRICA Kenyatta International Convention Centre Nov 02-04 TANZANIA TRADEX Mlimani Conference Centre Nov 03-05 EDUCA ANGOLA Feira Internacional de Angola Nov 03-06 AGRIWORKS STELLENBOSCH Van der Stel Sports Ground, Stellenbosch Nov 04-05 WEST AFRICA BUILDING & CONSTRUCTION NIGERIA Abuja International Convention Centre Nov 08-10

THE BIG 5 CONSTRUCT EAST AFRICA NOV 02 | NAIROBI For the first time in the region, the Kenyan construction industry will come together bringing you The Big 5 Construct East Africa exhibition – with international and innovative products, certified educational workshops, JCB dancing diggers and more, ACoRCE conference organised by National Construction Authority and a host of activities during the National Construction Week in the first week of November this year. The theme for this year shall focus on ‘Nurturing the Transformation of Local Construction Industry on Materials and Technologies for Global Best Practice’. This hi-level construction conference is surely a must attend session for construction professionals.

EAST AFRIPACK 2016 OCT 12 | NAIROBI This event showcases products like packing and packaging technology, liquid filling & bottling technology, processing technology, package production & printing for plastics & paper, materials & consumer packaging, label track & traceability, material handling & logistics, systems and components for automation, services etc. in the Packaging Materials industry. AFRICA COM NOV 15 | CAPE TOWN AfricaCom is the largest and most influential Africa-focused tech event in the world – the meeting place for those driving Africa’s digital transformation. The event is now a week-long festival of thought-provoking content, immersive satellite events, and unique networking experiences.

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AFRICA COM Cape Town International Convention Centre Nov 15-17 CAIRO ICT Cairo International Convention & Exhibition Centre Nov 27-30


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

Issue 53  

November issue of Enterprise Africa - Issue53

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