THE BUSINESS MAGAZINE FOR AFRICAâ€™S INDUSTRY LEADERS
ENTERPRISE Issue No.54
SAREL VAN ZYL:
Digitisation Driving Development for FNB Namibia ALSO IN THIS ISSUE:
Eddels Shoes / Pierre Cronje / Imperial Holdings / NECSA
Joe Forshaw EDITOR email@example.com Hal Hutchison SALES MANAGER firstname.lastname@example.org Sophie Bolderstone SENIOR PROJECT MANAGER email@example.com Sam Hendricks SENIOR PROJECT MANAGER firstname.lastname@example.org Shaun Cousins PROJECT MANAGER email@example.com James Clark PROJECT MANAGER firstname.lastname@example.org Shannon James PROJECT MANAGER email@example.com Peter Littleboy PROJECT MANAGER firstname.lastname@example.org Jane Larkman ACCOUNTS MANAGER email@example.com Harvey Tarlton SENIOR DESIGNER firstname.lastname@example.org
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Welcome to our latest edition…
In this, the biggest edition of Enterprise Africa ever to be released, we talk to some of Southern Africa’s industry captains to find out how they are steering their businesses towards a thriving 2017. Just a few of our exclusive interviews come from Sarel van Zyl - CEO FNB Namibia, Dr Kelvin Kemm - Chairman NECSA, Mark Lamberti – CEO Imperial Holdings, Roland van Gameren – MD KONE Elevators, and master wood craftsman Pierre Cronje. Each of them explains more about plans for the future; how they will attack new markets and introduce new products and services, and although the economic situation in the region remains uncertain, attitudes are universal – worry about what you can influence and don’t get caught up in issues that you can’t control. We also hear from some specialist players in the market including Eco Tanks, RSS, Pabar, Sanji Security Systems, Eddels Shoes and Celrose Clothing who also have eyes on increased market share. With 2017 set to be an exciting one for all businesses, big and small, our last edition of 2016 will give you a flavour of what to expect in the coming months from some of the most progressive and innovative businesses in Africa. Despite widespread negativity, the final quarter of the year seems to have thrown up some positives - the dreaded ratings agency downgrade was avoided, GDP grew in the third quarter, the country formed agreements with international partners including China, Azerbaijan and Algeria, and many big-name organisations committed to investments in SA. As we break for Christmas and reflect on the successes of the past 12 months, perhaps now is the time to think about how Enterprise Africa could promote your story in the future. Get in touch and tell us about your 2016 story of success and plans for continued improvement in 2017 - @EnterpriseAfri1 Merry Christmas and a Happy New Year from all at Enterprise Africa.
Joe Forshaw EDITOR
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06/NEWS: The Month that was... A round up of some of the latest news stories from around the country
158/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/FNB NAMIBIA: Digitisation Driving Development for FNB Namibia FNB Namibia is growing its product portfolio so that it can efficiently and effectively handle the requirements of its growing customer base. With important acquisitions, unique service innovations, and a commitment to developing people, this is a business that is positioning itself for long-term, organic growth.
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CONTENTS INDUSTRY FOCUS: ENERGY
INDUSTRY FOCUS: AUTOMOTIVE
18/NECSA : Eskom & NECSA to Spearhead SAâ€™s Nuclear New Build
88/SANJI SECURITY: Caught In A Jam
26/NTP: Nuclear Medicine Powerhouse 32/SASOL: Project Pipeline Strong for Sasol 40/MITSUBISHI HITACHI POWER SYSTEMS AFRICA: At the Heart of Power Generation
INDUSTRY FOCUS: EDUCATION 44/PEARSON: Embracing the Digital Dawn
94/IMPERIAL HOLDINGS: Imperial Measures 100/BAW SOUTH AFRICA: China Hails The Cab
INDUSTRY FOCUS: MANUFACTURING 106/TWINSAVER: Making Multimillion Rand Manufacturing Investments 112/ECOTANKS: Growing East London Company Addressing SA Water Security Challenges
INDUSTRY FOCUS: FASHION
118/PIERRE CRONJE: High Quality Craftsmanship and Design Excellence
52/EDDELS SHOES: Best Foot Forward
126/PABAR: Diversify And Multiply
58/TCI APPARREL: A New Look for Textile and Apparel in SA
INDUSTRY FOCUS: CHEMICALS 130/FERRO SA: New Year Light In Dollar-Drought Markets?
INDUSTRY FOCUS: RETAIL
INDUSTRY FOCUS: POWER + AUTOMATION
64/RSS: Opening Shops On Time
136/ABB SA: A Global Powerhouse
70/SHOPRITE: Basson To Hand Over Group In Strong Position
INDUSTRY FOCUS: ARCHITECTURE 142/SAOTA: Designed for Success
INDUSTRY FOCUS: PROPERTY
INDUSTRY FOCUS: AGRICULTURE
76/ATTACQ: Mall of Africa is Platform for Further Attacq Growth
148/TWO-A-DAY GROUP: Growing Markets for Apples and Pears
82/KONE ELEVATORS: KONE Elevators and Escalators spreading its wings in Africa
INDUSTRY FOCUS: TECHNOLOGY 152/DG STORES: Growing With the Cloud www.enterprise-africa.net / 5
MOST POPULAR DESTINATION IN AFRICA = JOBURG The City of Johannesburg said recently that the Mastercard Global Destinations Cities Index has named Johannesburg as the most popular destination city in Africa for the fourth year. According to the City, the Index rating affirms Johannesburg’s position as the economic capital and heartbeat of trade and economic activity on the African continent. City of Johannesburg Mayor Herman Mashaba said: “The index confirms Johannesburg’s status as a destination that attracts repeat visits due to its continually evolving tourism offering, from popular shopping destinations such as our malls to a wide
range of lifestyle, sporting and business events.” The 13 African cities ranked in the Index are Johannesburg, Cape Town, Durban, Cairo, Casablanca, Accra, Nairobi, Beira, Dakar, Kampala, Lagos, Maputo and Tunis. According to Mark Elliott, Division President, South Africa, Mastercard, the city is expected to welcome 3.6 million international overnight visitors in 2016. This is a 6.2% increase on last year’s 3.39 million visitors. Cairo in Egypt is the second most visited African city with 1.5 million international overnight visitors followed by Cape Town (1.4 million visitors),
Casablanca in Morocco (1 million visitors), and Durban (831 000 visitors). Elliot said tourism remains an important driver of the South African economy. “Tourism remains an important driver of South Africa’s economy, and the steady rise in visitor numbers indicates how the City of Gold’s fascinating mix of iconic attractions is proving ever more compelling to today’s international traveller.” Shopping is one of South Africa’s key attractions for international tourists, accounting for nearly 44% of the money visitors spend in Johannesburg and Cape Town.
BUSINESS AWARDS HONOUR EXCELLENCE At a glittering ceremony held at the Sandton Convention Centre on December 6th, some of South Africa’s hardest working businesspeople were recognised at the 4th Annual Premier Business Awards. An annual event hosted by the Department of Trade and Industry (the dti) in partnership with Proudly South African and Brand South Africa, the awards recognise business excellence and honour enterprises that promote the spirit of success and innovation as well as job creation, good business ethics and quality. Renowned businesswoman Gloria Serobe - Founder and Executive Director of Wiphold, and Non-Executive Director of the Johannesburg Stock Exchange and Nedcor Bank – was honoured with a lifetime achievement award. “What we need in this country
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is business excellence, role models and people who can show the way to others to move our economy forward,” said Trade and Industry Minister, Rob Davies. He used the platform to highlight the successes of the Black Industrialist Programme. “… 24 black industrialists have been supported by the programme. Our target is to support 30 [industrialists] this financial year. We are looking to support 30 more in the next financial year and 40 more in the third financial year, which will be the first target of a 100.” Thata uBeke Manufacturing (Pty) Ltd received the Black Industrialist Award. Other winners of the night included Baclan Energy Pty Ltd trading and e-Waste Africa, which received the Young Entrepreneur Award. In the SMME Award category, Computers 4 Kids cc and AM Group (Pty) Ltd were the joint winners.
TRADE & INDUSTRY MINISTER, ROB DAVIES
NEWS ROUNDUP MINIMUM WAGE WILL INCREASE POSITION OF LOWEST PAID In his last question and answer session of the year, Deputy President Cyril Ramaphosa said once implemented, the National Minimum Wage will improve the welfare of the lowest paid in South Africa. “Once implemented, the National Minimum Wage will significantly improve the position of the lowest paid workers in our country. “Currently, up to 47% of working people in our country earn below R3 500. 50% of the people working in our country also earn below R4 000 and 51% of many South Africans live on less than R1 036 a month. “If we have a minimum wage that can be agreed upon by our social partners at Nedlac, we will have a radical shift with regards to addressing the issue of wage inequality in our country,” he said. United Democratic Movement caucus leader Bantu Holomisa had asked the Deputy President if the proposed National Minimum Wage will cover all workers, particularly those that get exploited by employers in the hospitality and agriculture industry. Last month, a panel of experts that was appointed to deliberate on the National Minimum Wage recommended R3 500 a month, or R20 per hour. Ramaphosa said once an agreement has been reached on the level at which this minimum wage will be set, it will cover all employees in the country regardless of their nationality. “Employers who do not comply, whether their employees are South African or whether they come from other countries, will face penalties. “The National Minimum Wage should in the end not be seen as a recommended wage. It is a wage which forms the floor below which no employee may be paid in South Africa.”
GOOD NEWS FOR SA SOVEREIGN CREDIT RATING
Ratings agency Standard and Poor (S&P) has decided not to downgrade the South African economy, a decision welcomed by the National Treasury. S&P affirmed the country’s sovereign credit rating at one notch above junk status and kept it at BBB with a negative outlook. This is investment grade rating. S&P has been assessing South Africa’s economic and political outlook for the past six months. The Treasury said the outcomes of the grading had been the result of hard work and partnership. “This is the result of working
together as South Africans to ensure that the country remains an investment grade. Rising risks have, however, resulted in the agency’s decision to lower the long term local currency debt rating from ‘BBB+’ to ‘BBB’, a rating that is still two notched above sub-investment grade,” said the Treasury. It noted that the latest announcement by S&P means that all three rating agencies including Moody’s and Fitch have retained South Africa in an investment grade. The Fitch ratings firm last week kept South Africa one notch above junk, but dropped its outlook from stable to negative.
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Â© FNB NAMIBIA
Digitisation Driving Development
for FNB Namibia
PRODUCTION: Manelesi Dumasi
FNB Namibia is growing its product portfolio so that it can efficiently and effectively handle the requirements of its growing customer base. With important acquisitions, unique service innovations, and a commitment to developing people, this is a business that is positioning itself for long-term, organic growth.
Founded in 1906, FNB is celebrating 110 years of business in Namibia. As the largest and one of the most innovative commercial banks in the country, FNB Namibia is vitally important to trade and development, and the company aims to provide a range of products and services to suit customers personal and business financial needs in order to make a difference to the lives of fellow Namibians.
An important development for the bank was publicised in October when FNB Namibia announced its acquisition of financial services group, Pointbreak and technology and cell phone banking specialist, Ebank, subject to regulatory approvals. As FNB Namibia continues with an ongoing plan to diversify its product offering, and to speed up digitisation across its customer base, this transaction provides an excellent platform for future growth.
“We’re excited about the opportunity and it fits in very nicely with our overall strategy,” says FNB Namibia CEO, Sarel van Zyl. “These acquisitions have three drivers. Firstly, digitisation. Ebank has few branches and uses electronic channels so we hope to bring those alongside our branch strategy. Secondly, wealth and advisory skills. We’ve been hugely successful with transactional banking and lending and Point Break will bolster our abilities with
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INDUSTRY FOCUS: FINANCE
wealth advisory and investment management. Thirdly, asset management. The transaction also helps us to set up Ashburton properly in Namibia.” Part of the South Africa-based FirstRand group (58% shareholder in FNB Namibia), Ashburton will provide Namibian customers with appropriate solutions to their investment challenges. “Our group philosophy is moving away from just transacting and lending to focussing more on investment and insurance. We’ve introduced our investment bank, Rand Merchant Bank (RMB), to Namibia and that is starting to gain
serious momentum. We’re busy with the application process for Ashburton which comes off the back of our acquisition of Point Break. Establishing RMB and Ashburton and make FNB Holdings in Namibia a fully-fledged financial services group, not just a bank, that is a big challenge and I’m very happy to be a part of it,” says van Zyl. The CEO expects the regulatory approval process to be complete in the first quarter of 2017 and admits that business like this can take time because of the complexity of the deal. “It’s an intricate transaction as it talks to Central Bank regulation for the banking side, and Namfisa (Namibian Financial Institutions Supervisory Authority) for the non-banking side, with insurance
and investment management. We’re involved with the Competition Commission, the Bank of Namibia and Namfisa and the transaction must pass through all three and that takes time,” he says. When the acquisitions are finalised, FNB Namibia’s position at the pinnacle of the industry will be further solidified and this is something van Zyl is very happy about. “We have been the industry leader for the last ten years and the way that we look at it is not just from a balance sheet point of view. FNB philosophy is not just about market share of balance sheets; it’s more about market share of profit pools. Our intention is to deliver superior and sustainable economic returns for shareholders. We don’t do things to
FNB NAMIBIA CEO SAREL VAN ZYL
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//WE’VE BEEN IN NAMIBIA FOR 110 YEARS THIS YEAR AND WE INTEND TO BE HERE FOR THE NEXT 110 YEARS// say that we have a big balance sheet or revenue stream. From a profitability point of view, we are definitely the market leader in Namibia,” he says. DIGITISATION As the market for digital service and electronic banking in sub-Saharan Africa continues to mature, the opportunities for market share growth are large. In 2014, McKinsey&Company stated ‘in regions where financial inclusion is limited, such as subSaharan Africa, mobile money promises a lower-cost, more scalable alternative to traditional banking’. FNB Namibia is already active in mobile money, having successfully launched its eWallet solution in 2012. The eWallet is continuing to grow and the acquisition of Ebank should bolster this growth. “eWallet is a digital cell phone banking product for transferring money,” explains van Zyl. “This product is exceptionally popular and of the 2.4 million people in Namibia, roughly 1.4 million people have used eWallet in some way or another. We have relatively good telecommunication infrastructure and the use of digital products is gaining momentum. The need from customers to go digital and the infrastructure that we have, helps us to set up a fantastic offering for our customer base.” Widely recognised as one of Africa’s most innovative businesses, the FNB group utilises the best industry leading technology to better service its clients and make their banking experience smooth and efficient. This drive to be innovative for the benefit of customers forms a key element of the company’s strategy.
“In Namibia, we are trying to digitise more of our business – that is a prominent part of our strategy,” explains van Zyl. “FirstRand in South Africa owns 58% of our shares and the other 42% is local Namibian shareholding and we leverage a lot of the innovation that comes from the FirstRand Group. Within the group, we drive innovation in a very strong way and in recent years, the FNB group was named as the most innovative company in the world. This year, we’ve been named as the most innovative bank in Africa. A lot of this surrounds technology and
how we use it to make transactional banking more affordable for our customers and more accessible and convenient.” Accessibility and convenience is not just about access to services but also about communication. In an effort to drive communication, and make it easy for customers to contact the bank with any type of query, FNB Namibia recently launched a new customer CARE system which is designed to streamline compliments, complaints and queries logging and management “Initially, the intention was to find a tool so that if customers have a complaint, they can report it and customers can track the progress of their issue. It then evolved from a complaints management system to a bigger query management system,” explains van Zyl. “Enquiries go
A 100% Namibian company providing ICT services to corporate Namibia Our service offering includes infrastructure, software, hardware and software sales, professional and consultancy services. “We offer an all-in-one support package – you are completely in our care” Unit 1 Garthanri Park, Corner of Thorpe & Voigts Street Windhoek Namibia
+264 (0)61 416 300 firstname.lastname@example.org www.green.com.na
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INDUSTRY FOCUS: FINANCE
through to the relevant department and if they are not responded to then the issue is escalated and passed to the head of that department. “We’ve found since we launched the product that it is used less for complaints and more for general enquiries and that is brilliant. With our drive to digitise, we’re excited that customers are taking up electronic media to enquire with us.” In the coming months, FNB Namibia hopes to launch another product aimed at improving consumer communication, and this idea is something which has already started to work well in other international markets – an online video chat tool.
“We’re busy with it and we hope to get to market soon. It’s a communication tool where customers won’t need to make appointments to get into the branch, they can chat face-to-face with their relationship manager through digital platforms. We’re busy piloting that at the moment,” says van Zyl. FNB GREEN Away from digitisation, FNB Namibia has taken a firm position on developing its ‘green’ credentials, in line with international standards. A major step in the right direction came last year when the FNB Namibia Freedom Plaza building on Independence Avenue in Windhoek
was awarded the official 4 star ‘best practice’ Green Star SA Certification from the Green Building Council of South Africa. With a combination of water fixtures and fittings, rainwater harvesting, grey water collection and a unique filtration system, the building has been designed to surpass the most water efficient benchmark as set by the GBCSA – vitally important in a country as dry as Namibia. “It’s a part of our wider strategy and we are also working with our customers in this area. We’ve had a bigger appetite on the lending side to fund transactions with green projects. In our branches, we have a big drive to reduce the usage of paper, we are Continues on page 14
//CORNASTONE PURSUE NETWORKING MARKET SHARE WITH ARUBA Hewlett Packard Enterprise (HPE) has engaged in a strategic acquisition & disposal strategy over the past number of years. In May 2015, HPE acquired Aruba Networks. Since acquiring Aruba, HPE has reorganized its WLAN and wired access switching portfolio under one brand, namely Aruba. HPE now offers a networking portfolio that ranges from the FlexNetwork core switching and branch routing products to the Aruba wired and wireless LAN access product family. Aruba also offers a cloud product through its Aruba Central offering, end-to-end location services with remote beacon management tools via Aruba Meridian, and the ability to proactively monitor network performance to address issues before they affect the end user via Aruba Clarity. As a Gold Enterprise Partner, Cornastone will be working closely with key clients in the local market to enhance their current networking blueprints. Some of the key products that HPE & Cornastone will look to supply to the local market include Aruba’s ClearPass; which provides guest access, device profiling, posture assessment and onboarding; Aruba Clarity, to proactively monitor network performance to address issues before they affect the end user; and the Aruba wired and wireless LAN access product family.
Mildy Samaria – Managing Director
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The Cornastone Group started from humble beginnings right in the midst of the IT bubble burst in 2000. Like many ultra-successful IT companies, it too started in the garage of the home of one of the founders. Where many would view entering the market in the midst of an economic crisis a challenge, the two founders, Lufuno Nevhutalu (Group Chairman) and Manuel Teixeira (Group Sales Director), saw this as an opportunity. Shortly after opening in South Africa, Cornastone opened its doors in Namibia in 2001. Cornastone was founded on the sound principles of good governance, employee engagement and customer satisfaction. This, along with their want to be visionaries, has led to Cornastone providing customers with the highest levels of quality. As a business, Cornastone has regularly been recognized for its excellence in delivery by the industry, customers and competitors. When asked about the Namibian business, Managing Director Mildy Samaria states: “Cornastone Namibia has always been a business that puts all of its focus on empowering Namibians and ensuring that we deliver the highest level of quality to the market. It is important that the quality delivered to the local market is as good as or better than anywhere else. Cornastone was also one of the first, if not the first, ICT business in Namibia to implement an empowerment ownership programme which has seen the business retain some element of black ownership over the past 15 years. In addition to this, a significant amount of the annual profits get re-invested in training Namibians to ensure we are both the employer of choice and supplier of choice to the Namibian and Southern African market.” Ms Samaria goes on to say: “One of Cornastone’s founding pillars is Empowerment and as a business we follow through on this regularly. The two founders are keen to see those directly involved in the business’ success grow and ultimately be part of it. As a woman I have been given many wonderful opportunities here, both to further my personal studies and grow within the organization.” LEADING THE WAY Cornastone recently went against the grain of most local ICT businesses and appointed a woman as the MD. Whilst this is a common practice amongst many major global ICT organisations such as HP and IBM, it has been less so in the local marketplace. When questioned about it, Ms Samaria states: “Cornastone is all about fair and equal opportunity. Being given the opportunity as a black Namibian woman to lead a company like Cornastone is a great honour. Not only is it a vindication of all my hard work, but
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hopefully it goes on to inspire other Namibian women to achieve the same and more.” Ms Samaria has been with Cornastone for more than seven years and was previously involved in the diamond mining industry. Over the years Ms Samaria has held several roles within finance at Cornastone and in more recent years has Sales added to her portfolio. Qualified with a Bachelors degree in Finance & Accounting from the Namibia University of Science & Technology, Ms Samaria is currently studying towards her MBA through the University of Edinburgh. In years to come Ms Samaria hopes to get more involved in social entrepreneurship as part of her contribution to the upliftment of previously disadvantaged communities in Namibia. “It is important that those of us that can assist do so,” she says. Ms Samaria has a real energy and vibrance about her. She uses this energy to motivate her staff and ensure that they remain constantly passionate and focused on their goals. THE MARKET Cornastone has been operating in the local market for the past 15 years. Over the years it has established itself as a true leader in HP Enterprise products. “Our relationship with HP can be traced back almost 36 years, in some shape or other. One of our founders worked for HP from 1980 – 1997. As a business we have built a strong relationship with HPE and HP Inc over the decades. HP is and will always be a strong partner as they are the reason Cornastone started up in the first place. Today though we have grown to be a significant group of companies and HP is just one of the many offerings we have in our stable. We have strong ties to SAP and other global brands as well. As a group we employ several hundred highly qualified people and are involved in numerous innovative projects. It’s been an incredible journey and one many can learn from,” say Ms Samaria. When unpacking the local market, there are some interesting observations made by Ms Samaria. “Namibia is an interesting market. There are as many opportunities as there are challenges. As a market, I believe there are far too many players. The ICT sector is saturated and we don’t all compete at the same level, although we all want to win the same business. I find this disappointing. More often than not the aim of owning an ICT organization in our market is about self-enrichment rather than true social empowerment and providing the right solution, at the right price at the right level of quality. It is not an easy issue to correct, but I do believe
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that all stakeholders have a critical role to play to ensure that we become a reputable knowledge based economy that is able to sell its services to Africa and the rest of the world. “The local market is also very conservative. We have a business as usual mentality and avoid moving too far away from the norm. I would really like to see us break that norm and take on more innovative projects. Part of developing a knowledge-based society is to challenge the norm and become pioneers. We need to provoke thought through being different, something that we are not always good at in this sector. The opportunity to be different is there though, but we need to embrace change. Many Namibian millennials have chosen IT as a career of choice and bold ideas typically come from them. We must just ensure we support them and their ideas,” says Ms Samaria. THE FUTURE FOR CORNASTONE “Our future looks promising. We have such a wonderful team. In the coming years we have several targets to achieve. Firstly, we would like to conform to NEEEF. Whilst the act is yet to be gazetted, we have already started the ground work to ensure we meet and even exceed requirements. In the main, it has been quite easy to do as Cornastone has always had empowerment as one of its founding pillars. I think as a business we have already achieved so much in this space and we plan to do more. I would love to see us as a model for what good looks like. “Moving on from there, we are also looking to grow the business further. In mid-2016 we completely restructured our business so as to allow us to focus on new areas of opportunity and geographies. We have already started to gain traction in the targeted areas and will hopefully continue to see this trend in the coming years. It is of course a process as we first need to lay the correct foundation before we move forward aggressively into those areas. As I have previously mentioned, key to our success is having the right people with the right skill. “Finally, we are looking to continue to lead the way. It is not uncommon to see our ways of working and strategies being imitated by others. It is a real validation of our ability to lead. In the coming years we hope to get into more social entrepreneurship projects. Our plans are underway and we believe this will be another step-change in the local market. We invite any interested stakeholders to join us on this incredible journey which I myself am extremely passionate about.”
INDUSTRY FOCUS: FINANCE
Continues from page 12 using solar power to save electricity, and we will continue to roll out these strategies across our environment. “We believe it’s the right thing to do. The group in South Africa started with this a few years ago and we’re following. We are the market leader in Namibia and there’s not many other companies that are doing this, especially banks,” says van Zyl. The company’s focus on green business isn’t a marketing exercise to satisfy popular trends; it’s embedded in the values of the business and will continue indefinitely as van Zyl explains: “Our core strategy is built on four pillars. Firstly, it’s building successful
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partnerships. Secondly, we focus on people. Thirdly, we focus on the planet. We hope that strength in these areas feeds into the last pillar which is profitability. “When we talk about our planet, we ask ‘how do we contribute to the development and protection of the economy, society, and environment?’. Our green building is not a one-off thing; it’s part of our core strategy, creating an environment that we can continue to grow in. We’ve been in Namibia for 110 years this year and we intend to be here for the next 110 years. We understand that if we don’t look after the planet, our operating environment, then we will not have a market to work in.”
ECONOMIC WOE? The Namibian economy faces challenges and, like many others around the world, is headed towards an uncertain future. With global politics causing havoc with investment confidence and a number of local factors having different impacts, the economic situation in the country is something which FNB Namibia is monitoring closely. “The times are tough” admits van Zyl. “Our business doesn’t grow as fast as it did three years ago but we expected this. We don’t foresee growth rates of 20-25% that we have realised recently but we do expect a recovery. As an economy and as FNB, we’re in a consolidation
© FNB NAMIBIA
phase. We’re spending a lot of time improving infrastructure, ensuring risk management practices, and we’re also setting ourselves up to become more efficient in what we do.” The effect from slower trade, as other countries in the region struggle, has also hampered the development of the economy and van Zyl says that slowdowns in mining and agriculture, and a serious drought have piled on the pressure. “As a country, we don’t operate in isolation. We are bordered by Angola to the north which is going through a tough time. We border Zambia which is in a difficult period and we border South Africa. South Africa is our main trading partner for both imports
and exports. When SA struggles, we struggle. “With uranium, copper, diamonds and gold, we are big in mining and with commodity pricing where it is, there’s a big impact. The Namibian Dollar is pegged to the SA Rand and that has caused some difficulties. Also, there’s been a bad drought recently and that doesn’t only effect the water situation in agriculture, it also effects infrastructure development such as construction of properties. Currently, we do hear stories about people being laid off because of economic circumstances. This is largely due to a slowdown in government spending which makes up around 40-50% of our economy,” he says.
In November, the Economic Association of Namibia, in partnership with the Hanns Seidel Foundation and The Namibian, hosted a review of the country’s economic climate and stated that Namibia ‘continues to face a number of social and economic challenges, ranging from high levels of unemployment and inequality, to fiscal challenges, education, health and housing issues and service infrastructure constraints’. But the review also pointed out that ‘none of these challenges are insurmountable’. Despite economic challenges, FNB Namibia continues to work internally on strengthening its position so when the cyclical nature of economic peak and trough turns
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Â© FNB NAMIBIA
//OUR GROWTH IS NOT A RESULT OF OUR NUMBERS; IT’S A RESULT OF THE INVESTMENTS WE’VE MADE INTO UPSKILLING AND TRAINING PEOPLE// around, the bank will have a strong platform for further growth. “We remain in the market from a brand visibility point of view and we focus on our internal core processes, systems and procedures to make sure we digitise and provide a more efficient banking experience to the Namibian population,” says van Zyl. “Over the last six years, the number of commercial banks has increased from four to 10 because a lot of banks see opportunities for growth. The financial services sector in Namibia is solid; it’s very stable and well-regulated so it’s a positive route for banks that want to enter Africa.” FNB = INNOVATIVE PEOPLE FNB Namibia is a big employer, supporting the lives of many people directly and indirectly. As one of the key pillars in the company’s strategy, people development does, and always will, attract much attention. Companies that invest in their people in the right ways inevitably reap the rewards and FNB Namibia is no exception. “We are very proud that we don’t have one international work permit among our employees. We have around 2500 members of staff and they are all Namibians. That can only happen thanks to investment in recruitment, providing the right training and coaching, and ensuring people are placed in the right area. It’s an aggressive area that we spend a lot of time and energy on. Our investment in staff is growing year-on-year. People may argue that now is not the time to invest in people but we insist on investing in infrastructure, which includes our people, to generate the yield that we need going forward. Investment in
people, infrastructure and systems will not stop,” confirms van Zyl. “We don’t have a drive to employ as many people as possible. We want the people that work here to be as efficient as possible. Our growth is not a result of our numbers; it’s a result of the investments we’ve made into upskilling and training people. Investing more in less people is something that we drive very hard,” he adds. Sarel van Zyl himself is a product of FNB’s investment in people and has built his career around the growth of the company. Joining the bank straight after leaving school, van Zyl has worked his way through various departments before taking the reins from Ian Leyenaar as CEO in December 2014. “I am Namibian, I’ve been here my whole life. During my career, the only time I’ve spent outside of Namibia was when I worked for four years in Zambia, where I was the CEO,” he says. His time in Zambia was a huge success and he regards this period as one of the highpoints of his career to date, preparing him perfectly for his current role. “When I started in Zambia, they had three branches and it was a loss-making entity. It was a greenfield operation and we were the 19th biggest bank, with 11,000 bank accounts. When I left, we were fifth biggest, we had 20 branches, 200,000 customer accounts and we were making profit. The four years building and growing the brand and the business, employing and training people, establishing the bank properly, that’s a key highlight in my banking career,” he says.
FNB FOR THE FUTURE The acquisitions of Pointbreak and Ebank will help to bolster the FNB Namibia product portfolio and this is something which excites the CEO. He is also positive about serious growth returning to the economy in time, as Namibia is home to an abundance of opportunities. “The next 12-18 months is going to be tough, we’ve accepted that but we will continue to bring new products and processes to the country. I’m excited about RMB and the introduction of Ashburton and the wealth management offering that we will bring to the market - I think there’s great opportunity there. “There’s good opportunity for agriculture growth in Namibia and also tourism. We believe that commodities are at the bottom of the cycle and will pick up in the next 12 months. We are also very excited about SMEs. We established a SME department a couple of years ago and we have a lot of ideas in that segment so that we bank people not only with lending and funding but also transactionally, and bring as many people as possible into mainstream banking. The ability to service SMEs through the Ebank channel is something that we are extremely excited about.” With innovation, digitisation, people development, green investment, and a drive for constant advancement, the future holds great potential for this Namibian organisation. “We are very positive and very confident about what the future holds,” van Zyl concludes.
FNB NAMIBIA +264 61 299 2111 email@example.com www.fnbnamibia.com.na
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Eskom & NECSA to Spearhead SA’s Nuclear New Build
PRODUCTION: David Napier
A Cabinet announcement has confirmed that Eskom and NECSA will jointly lead South Africa’s Nuclear New Build. NECSA Chairman, Dr Kelvin Kemm, talks to us and confirms that this project is a major opportunity for the country, addressing a few concerns at the same time.
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INDUSTRY FOCUS: ENERGY
In November, it was announced that South Africa’s ambitious Nuclear New Build programme would be led by a joint procurement team made up of the country’s power utility, Eskom, and the South African Nuclear Energy Corporation, NECSA. After a long period of uncertainty surrounding the project, this Cabinet announcement solidified the country’s position on adding 9600 MW of nuclear power to its energy mix. Dr Kelvin Kemm, Chairman of NECSA and CEO of Nuclear Africa, a long-time advocate of nuclear energy, tells us that NECSA is pleased with the announcement and is eagerly awaiting the commencement of the bidding process. “Eskom will be responsible for the construction of the power stations and NECSA will be responsible for the fuel cycle – everything from mining through
to nuclear waste. That doesn’t mean we’re going to get into mining but anything nuclear will need Eskom and NECSA working together on it,” he says. “Progress is continuously being made. The announcement concerning the initiation of bidders is imminent and is currently in the hands of the Minister of Energy. “The probable site has been identified and is now in the hands of the Minister of Environmental Affairs. There’s more than 10 years’ work that has been completed including environmental and legal requirements and the final recommendation for the site near Port Elizabeth has been delivered to the Minister. We could start work on the site very quickly, without deciding on any foreign partners. There’s roads, bridges, water, electricity, and harbour access and a great number of things that can be given attention.
MAKING OUR WORLD
TÜV NORD Southern Africa is a Broad-Based Black Economic Empowerment Compliant company and supports the upliftment of economic opportunities of South Africa’s designated groups. It has achieved a BEE Level 2 status through its ownership, management, procurement policies and workforce.
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Unit G3 & G4, Bayside Oﬃce Park 41/43 Erica Road Tableview, 7443 Tel.: +27 21 521 6800 Fax: +27 21 557 4405 firstname.lastname@example.org
“We are looking at three new nuclear power stations, in different locations, totalling 9600 MW. On each site there will be either two or three reactors depending on discussions with potential bidders. “The bid process will go rapidly. In 2014, all countries in the world that have potential suppliers were invited to come to a vendor parade in the Drakensberg Mountains. Everyone was given the opportunity to bring as many people as possible so that we could fully understand everything that could be put on the table. Now we are getting ready to send out the bid and then build on those initial discussions.” MISCONCEPTIONS Following the announcement that NECSA and Eskom will work together to spearhead the Nuclear New Build programme, there was some concern raised by anti-nuclear lobbyists who see the project as too expensive, unnecessary, and rushed. Dr Kemm is quick to counter those concerns, especially those surrounding cost, and says that the whole idea has been wellconsidered and meticulously planned. “The anti-nuclear lobbyists talk as if we have foolish people on the engineering side and foolish people on the finance side. Of course, that is not true. Our scientists and financiers are equal to the world’s best. People act as if three or four engineers sat around a table and made a snap decision – that’s crazy,” he explains. “There were many people putting in hundreds of thousands of hours of formal investigation. There’s also a thought that to calculate cost, we just take the price of the most expensive reactor in the world and roughly exchange it into our currency – that’s just totally inaccurate. “The price of R650 billion is a cost that was calculated by nuclear engineers at North West University who have taken a keen interest in nuclear financing and who have been studying financing and economics from an engineering perspective. At NECSA,
we have contracted consultants from London to calculate the costs and they came up with around R750 billion. There’s quotes in newspapers of R1 trillion or even R2 trillion and these figures are not referenced and cannot be trusted at all. “The scientists are saying 650, foreign consultants are saying roughly the same, and we know pretty accurately exactly what we want so the next step is for bidders to offer what they think is suitable and we will negotiate with them. We’re not going to accept whatever anyone tells us. We will negotiate what we do, how we do it and who does it. “When people say that we have no idea what we want to buy and we’re starting at step one, that is completely untrue – we are far down the road. We will be getting a generation 3+
pressurised water reactor system. We know the size and the general specs and it’s just a case of finding which suppliers fit into our extensive plans. “It’s a common misperception that a foreign country could get the contract and overnight they will arrive and build a reactor and hand it over. That will not happen. “There’s another misconception that the entire capital cost for all three power stations, that will be built over a ten-year period, will all be paid on day one. That is not at all how this is planned. It’s a much more phased and staged approach,” he says. EXPANDING WITH MEDICAL Last month, we discovered more about NECSA’s nuclear medicine business and CEO, Phumzile Tshelane told us that South Africa is the second
biggest market share holder in the world, behind only Canada. NECSA and its subsidiaries export a range of products such as Molybdenum-99m and Iodine-131 all over the world and both Tshelane and Dr Kemm are keen to see this side of the business grow. “NECSA has been working for some time on a new nuclear reactor to be installed in parallel to SAFARI-1. It will be a CP (commercial production) reactor, as one of its prime jobs will be to produce more nuclear medicine so that we can expand our footprint in that market,” says Kemm. “The primary market for our products has been diagnostics for diseases such as cancer. The therapeutics market is now starting to grow – where you can administer a higher dose in a carefully targeted
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INDUSTRY FOCUS: ENERGY
manner, irradiating the cancer from the inside-out rather than using existing methods which work from the outside-in. We see the diagnostic market still in its early growth stages but the therapeutics market is even more infantile and so there’s massive growth potential. We also see the possibility of putting nuclear medicine centres in a number of African countries – we’re busy developing a plan right now and we’d welcome African nations to contact us in this respect. We would like to see our medical products placed there and other African medical professionals liaise with our medical people to build up centres of excellence to which we could supply.” Of course, in Africa, the challenges of supplying nuclear medicines are unique but Kemm is confident that NECSA’s African heritage gives it an advantage. “Half of our success is related to the fact that we can make the isotopes. The other half is down to our excellent logistics and how we move the isotopes all over the world, to more than 60 countries. Because the isotopes are so short-lived, we have to get them from the reactor to the patient in under 36 hours so we have become good at moving products fast. “The logistical challenges in Africa are immense. We understand them because we live here and we are not daunted by a few thousand kilometres that doesn’t have roads or infrastructure.” To date, there has been no firm order placed for a new CP reactor but NECSA has been considering various designs. The new reactor will not be a be a research reactor and SAFARI-1 will continue to be used for research purposes. “We believe there’s still 20+ years in SAFARI-1 and there’s no vision of it closing down anytime in the next couple of decades,” says Kemm. “We’re proud of the fact that SAFARI-1 has performed at more than
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100% of its scheduled capacity in the previous year. It’s widely regarded as the most effectively utilised reactor of its class in the world so we’re proud of our staff who have kept it going 24 hours a day, seven days a week, beyond the 100% capacity mark.” EXCITEMENT IS BUILDING A big benefit behind the nuclear idea is the amount of fuel required to power a station. A coal fired power station of a similar size to Koeberg Nuclear Power Station would use roughly six train loads of coal every day. Right now, Koeberg uses one truck full of nuclear fuel each year.
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INDUSTRY FOCUS: ENERGY
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//ESKOM WILL BE RESPONSIBLE FOR THE CONSTRUCTION OF THE POWER STATIONS AND NECSA WILL BE RESPONSIBLE FOR THE FUEL CYCLE// DR. KELVIN KEMM NECSA CHAIRMAN
You could store that amount in your garage – how do you store 2190 trains of coal? NECSA is already hugely experienced in the fabrication of fuel elements and management of the nuclear fuel cycle, and this experience will be invaluable in the future. “This is a wonderful opportunity for NECSA and for South Africa,” says Tshelane. “NECSA is fully cognisant of the responsibilities and aspirations it will carry for the country and for the nuclear industry worldwide. This obligation will be delivered with due diligence and transparency, in line with developing South African nuclear technology to contribute to the economy, and to localisation in the Nuclear New Build programme, leading to employment opportunities and enhanced industrial skills.” The opportunities for economic development are massive and with the government looking for a big part of the design and build to be handled by locals, the prospects for the country and its nuclear industry
are obvious. “South Africa is aiming for 50% localisation which we do have the capability to achieve,” explains Kemm. “High-precision machining, project management, welding, and all those things, we have already got up to standard – we just need to integrate them. South Africa built Koeberg this way 40 years ago and it was perfectly successful. It’s a French design but it wasn’t built by French hands. When you went to the site, you saw South Africans everywhere, building the reactor.” Away from South Africa, there is equal appetite for the project with other nations keeping a close eye on progress, hoping for inspiration and direction for their own plans. “We’re extremely excited. I’ve been invited to talk all over the world, in Vietnam, Turkey, Russia, Paris and many other places, and everywhere I’ve found great enthusiasm for what we’re doing. Everyone tells me they’re watching us with keen
interest because if we can pull it off as well as they hope we will then it will provide inspiration. I’ve also received correspondence from the US, the UK, France, India and other countries, stating that they’re right behind us as they’re inspired by how our plans are unfolding.” With Eskom and NECSA now confirmed as the joint procurement team, it’s now just a matter of time before more momentum is added to this quickly moving project, taking South Africa closer to the beginning of one of the most exciting energy projects in the world.
NECSA +27 12 305 4911 email@example.com www.necsa.co.za
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NTP supplies a third of the world’s most important medical radioisotope Helping to provide
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NTP is a global supplier of radiation-based diagnostic imaging and therapy products, including medical radioisotope molybdenum-99. We export to 50 countries and our products are used in between 8-million and 10-million nuclear medicine procedures each year, contributing to the diagnosis and treatment of life-threatening diseases including cancer and heart disease.
the expertise for tomorrow’s healthcare services
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As a world leader in the production and supply of medical isotopes, NTP Radioisotopes is serious about investing in tomorrow’s talent. Our mentorship programme gives young scientists and researchers – especially young women – the opportunity to develop expertise in the field of radiopharmaceuticals and radiochemicals so they can make a significant contribution to the diagnosis and treatment of many life-threatening diseases.
South African Nuclear Energy Corporation SOC Limited
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+27 12 305 5115 +27 12 305 5960 firstname.lastname@example.org www.ntp.co.za www.necsa.co.za
Road R104 Pelindaba Pretoria, South Africa PO Box 582 Pretoria, 0001 South Africa
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12 5115 +27 12 305 5115 TT +27 +27 12 305 305 5115 +27 12 305 +27 12 305 5960 FF +27 12 305 5960 5960 email@example.com EE firstname.lastname@example.org email@example.com www.ntp.co.za www.ntp.co.za W W www.ntp.co.za www.necsa.co.za www.necsa.co.za www.necsa.co.za
Road R104 Elias Motsoaledi Ext RoadR104 R104 Road R104 Pelindaba Pelindaba Pelindaba Pretoria, South Africa Pretoria, South Africa Pretoria, South Africa PO PO Box 582 PO Box Box 582 582 Pretoria, 0001 Pretoria, 0001 Pretoria, 0001 South Africa South Africa South Africa A Subsidiary of Necsa
PRODUCTION: Karl Pietersen
NTP is one of the world’s largest producers of commercial medical radioisotopes, providing a range of radiation-based products and services, with strategic partners and associates ranking among the world’s leading providers of nuclear technology products, nuclear imaging services, and pharmaceutical producers and suppliers. From its base near Pretoria, NTP’s proudly South African business impacts on the lives of millions of people every year.
The SAFARI-1 nuclear reactor at the Pelindaba facility of South Africa’s Nuclear Energy Corporation (Necsa) has anchored Africa’s largest nuclear technology programme for more than five decades – it celebrated its 50th anniversary in March 2015. Initially developed as a research reactor, since the late 1990s SAFARI-1 has been used predominantly for the production of radioisotopes, the most valuable of which are specific radiochemicals used in nuclear medicine procedures. Under Necsa subsidiary NTP Radioisotopes, the radiochemicals business has grown into a global concern and NTP has established itself as one of the world’s top three producers and suppliers of medical radioisotopes.
Last year SAFARI-1 reported a record 303 operational days, making it one of the most highly commercially utilised research reactors in the world. “SAFARI-1 is the best-operated research reactor in the world right now,” says Necsa CEO, Phumzile Tshelane. “SAFARI-1 has performed at more than 100% of its capacity for the past two years,” adds NECSA Chairman, Dr Kelvin Kemm. “It’s widely regarded as the most effectively utilised reactor of its class in the world so we’re proud of our staff who have kept it going beyond the 100% capacity mark.” At the heart of SAFARI-1’s production line are two radioactive isotopes (radioisotopes), molybdenum-99 (Mo-99) and iodine-131
(I-131), both of which are created through a process of fission inside the high-flux reactor core. NTP supplies these radiochemicals in bulk to large medical imaging and radiopharmaceutical clients in South Africa and around the globe – nearly 30% of its market is in North America, followed by the Far East (21%), and Europe (over 15%). Mo-99 – the most important radiochemical, from both a commercial and medical perspective –decays into radioisotope technetium-99m (Tc-99m), which is used in over 80,000 nuclear medicine procedures each day. Medical radioisotopes are used in a number of applications including cardiology, oncology, neurology, and endocrinology (specifically thyroid conditions).
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INDUSTRY FOCUS: MEDICAL
International market demand for Mo-99 is approximately 9,000 6-day curies per week, at the end of processing (A curie is a measure of radioactivity; the 6-day curie measures how much radiation is left six days after the Mo-99 leaves the processing facility). According to NTP Group Managing Director Tina Eboka, NTP supplies up to a third of global Mo-99 demand and the company is expected to increase its market share as additional dissolver cells at its Pelindaba campus are brought online. NTP is also looking to increase its exports, including “new radioisotope products that we can supply to international markets,” says Tshelane. For the past two years, NTP has been producing and participating in clinical trials of a promising new medical radioisitope called lutetium-177, which has applications in the diagnosis and treatment of prostate cancer. Within this market, it is important to keep in mind that medical radioisotopes have varying but short half-lives – one of the features that makes them safe for use on humans – which means they cannot be stockpiled, and have to be produced in fresh batches almost daily. Critically, South Africa’s Nuclear New Build programme will see essential investment in a new research reactor, which will take over from SAFARI-1 when the older reactor reaches the end of its operational life, ensuring a secure, uninterrupted global supply of life-saving medical radioisotopes. OECD HIGH-LEVEL GROUP In July 2016, NTP was put in the global spotlight when, Mrs Tina Eboka was named as the vice-chair of the OECD Nuclear Energy Agency High-level Group on the Security of Supply of Medical Radioisotopes (HLG-MR). The OECD HLG-MR was established in 2009, following a global shortage of Mo-99 that resulted from an unexpected reactor shutdown in Canada. The group works to ensure the long-term security of supply of molybdenum-99 and its decay product technetium-99m. It is
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made up of representatives from some 40 governments and international agencies with interests in nuclear technology products, including the International Atomic Energy Agency (IAEA). Although South Africa is not an OECD member, it has been included in the HLG-MR since its inception because of the key global role it plays in the manufacture and processing of medical radioisotopes. Mrs Eboka the first South African to hold the position of vice-chair, and the first major isotope producer to be chosen to serve in the HLG-MR executive team. “This is more than just a great honour for South Africa, it signals that isotope producers – who carry the industry – should not take secondary roles in guiding the industry. Mrs Eboka’s appointment is a real acknowledgement of NTP Group’s role in global leadership,” says NTP Board Chair, Dr Namane Magau. One of the mandates of the OECD HLG-MR involves carrying out studies related to the security of supply of Mo-99, evaluating progress towards the implementation of the HLG-MR policy, engaging closely with downstream supply chain participants, communicating the need to implement the HLG-MR policy approach to governments, sharing of information on the status of the Mo-99 and Tc-99m market and regular reporting on developments within the market, and many other activities, making Mrs Eboka the perfect candidate. Mrs Eboka has been with NTP since 2014, when she took over from retiring MD, Don Robertson. Robertson had worked at Necsa and NTP for over 40 years, and had been involved in NTP’s successful commaercialisation programme, transforming the company from a loss-leading concern with just 30 employees into a profitable global business. Under Mrs Eboka’s stewardship the company has continued to post significant gains, reporting revenues of over R1,2-billion in 2016 together with profits after tax of R183-million. The group’s profits have allowed the company to assume responsibility for the bulk operational costs of SAFARI-1,
reducing reliance on state subsidisation – an ongoing challenge for many nuclear programmes internationally, and one which often inhibits full-cost recovery strategies. GLOBAL OPPORTUNITIES Over the next five years, the global nuclear medicine market is expected to grow at between 9% and 12% CAGR, reaching a market value in excess of US$7-billion. Drivers of this growth include increasing use of SPECT and PET analysis technology, increasing incidence of cancer and cardiac conditions, new applications for radiopharmaceuticals, and growing public awareness of nuclear medicine. NTP is well-positioned to embrace this growth and its position as a logistics expert when it comes to the cross-border movement of nuclear medicine products (the company also supplies licensed containers for the transportation of radiation products) also augurs well for future expansion. “Because the isotopes are so short-lived, we have to get them from the reactor to the patient in under 36 hours so we have become good at moving products fast,” says Dr Kemm. And it’s not just export markets where NTP applies its trade. The company provides 100% of the local requirements for key medical radioisotopes. Working with the South African Department of Health, NTP also supports isotope-based diagnosis and treatment at leading state hospitals, including Steve Biko Academic Hospital in Pretoria, Charlotte Maxeke Johannesburg Academic Hospital, and the Tygerberg Academic Hospital. As a profitable ISO 9001:2008 quality certified business, and with a global reputation for excellence, NTP is perhaps the best example of a SOC in Africa.
NTP RADIOISOTOPES +27 12 305 5115 firstname.lastname@example.org www.ntp.co.za
Strong for Sasol PRODUCTION: Karl Pietersen
2016 has seen Sasol complete some important projects that will assist the company to grow in the future. With a strong pipeline of projects to keep the energy and chemicals company busy in 2017, this is an exciting South African organisation that will continue to make the headlines for business excellence and success.
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INDUSTRY FOCUS: ENERGY
PETROCHEMICAL PIPING SERVICES (Pty) LTD SCOPE OF BUSINESS PPS offers a shop fabrication service, as well as a field installation and maintenance service.PPS also has the project management skills to offer statutory and shutdown maintenance projects on a turnkey basis. SERVICES Workforce are qualified in accordance with ASME IX and are experienced in the application of fabrication codes ASME VIIIDIV 1 & 2 • • • • •
Shutdown maintenance General installation & maintenance Equipment modification Turnkey Projects Shop Fabrication
44 Drakensberg Street, Secunda, 2302 P.O. Box 7781, Secunda, 2302 Tel: (017)631 2586 Fax: (017)631 3728 E-Mail – email@example.com
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• • • •
Pipe Systems Structures & Walkways Tanks Pressure Vessels
SSF – Pipe shop c/o Road 10 & 2D Sasol Site, Secunda, 2302 Tel: (017)610 3020 Fax: (017)610 4612 E-Mail – firstname.lastname@example.org
Rosebank-based Sasol is one of South Africa’s corporate success stories – founded in 1950 as a coalto-liquids (CTL) synthetic fuels producer, today the company is an international integrated chemicals and energy company with more than 30,000 employees across 33 countries, listed on the JSE and NYSE. The success of the business over the years has created a platform on which significant growth has been achieved, at home in South Africa and also in foreign markets, including North America. That growth will continue as we move into 2017 as Sasol recently unveiled the C3 Expansion Project, a major capital expansion project in South Africa. Part of Sasol’s dual-regional, multi-asset hub growth strategy in Southern Africa and North America, the C3 Expansion Project enables Sasol to increase its polypropylene production capacity by 103,000
tons per annum (to more than 625,000 tons per annum) from its Secunda Chemicals Operations, while also realising improvements in environmental impact. As one of the world’s most widely used petrochemical products, polypropylene is a versatile polymer which has a variety of applications including packaging for consumer products, plastic parts for various industries including the automotive industry, fibres, hygiene products, yoghurt tubs, paint containers, car batteries, garden furniture, carpets, and film and textiles. The company has been producing polypropylene since 1990 but the C3 Expansion Project’s specific goal was to reduce the percentage of propylene not utilised in the production of higher
//WE WILL CONTINUE TO FOCUS ON PURSUING ZERO HARM, BUILDING A RESILIENT ORGANISATION FOR THE FUTURE, NURTURING OUR FOUNDATION BUSINESSES, DELIVERING SUSTAINABLE GROWTH AND CLARIFYING OUR FUTURE INVESTMENT OPPORTUNITIES// value chemicals. “This particular investment further entrenches Sasol as a global chemicals player. With more than R1 billion invested, we are proud to unveil yet another major capital investment in South Africa, our home.” said Stephen Cornell, Joint President and Chief Executive Officer, Sasol Limited. The increase in polypropylene production will service both local
and export markets, with local consumption growing by more than 4% year-on-year for the past five years and export markets (including China, South America, Europe, the US and the rest of Africa) taking more than 420,000 tons. “It was a three-year effort to design and construct this project, creating almost 1000 jobs during construction. The increased capacity was made possible by de-
VGI Consulting (Pty) Ltd is a proud Multidisciplinary Engineering, Procurement and Construction Management service provider to Sasol since the early 1970’s. Some of our recent projects which were successfully completed for Sasol include the following: • 140 Km 26” Natural Gas Rompco loopline 2 in Mozambique • 150 Km 26” Natural Gas pipeline between Secunda and Sasolburg • 146 Km 10” Multiproduct pump line between Secunda and Sasolburg • New Alrode Bulk fuel storage depot • Upgrading of the Pretoria West Bulk storage depot.
VGI Consulting (Pty) Ltd. is one of the leading multidisciplinary consulting Engineering, Procurement and Construction Management (EPCM) companies in South Africa specializing in Petrochemical, Civil and Structural projects, with more than 45 years’ relevant experience. We provide a one stop engineering, procurement, project and construction management service, including all required engineering disciplines to our clients. VGI Consulting is a member ﬁrm of Consulting Engineers South Africa (CESA). To protect the interests of our clients we are insured under a Professional Indemnity Policy. VGI has an IRCA 5-star safety rating and is a ISO 9001:2008 registered company.
Address: Highgrove Park nr 4, C/O Olivenhoutbosch and Tegel avenues, Highveld Postal Address: P.O. Box 68968, Highveld, 0169 Email: email@example.com Tel: +27(0)12 682 9140
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INDUSTRY FOCUS: ENERGY
bottlenecking our existing plants, with most of the work being done while the plants were operational,” Cornell said. The investment was welcomed by Deputy Finance Minister, Mcebisi Jonas who said: “The reality is that our success as an economy will depend on the extent to which we can leverage the economy from capital. Without investment there is no growth.” SEISMIC IN THE INDUSTRY Another area of great potential was discussed by Sasol in October when the company announced the completion of the first-ever 3-D onshore seismic programme in Mozambique. Having previously worked offshore Mozambique, 1,836 km2 and 2,100 km2 in the M10/Sofala and Blocks 16/19
//THE ACQUISITION OF THE 3-D SEISMIC DATA IN THE INHASSORO FIELD WILL SIGNIFICANTLY ENHANCE OUR UNDERSTANDING OF THE STRUCTURE OF THE OIL ACCUMULATIONS THROUGH BETTER RESOLUTION AND MORE DEFINED CHARACTERISATION OF THE RESERVOIRS// respectively, Sasol is experienced in the country but this is the first time a 3-D seismic campaign has been conducted onshore. Completion of the programme involved acquisition of 115 km2 of data in the Inhassoro field, in the south east of the country, part of the onshore Production Sharing Agreement (PSA) licence area. The plan is to develop in phases with the
THE SMART SOLUTION At Phakisa Holdings, we pride ourselves in the fact that we do not simply provide a service, we supply a full function staffing solution by actively engaging and partnering with our clients at their businesses’ core functionality. Phakisa Holdings is people driven, resulting in a customer focused commitment, allowing us to become a leading brand in reliability as a business partner for turnkey human resources and strategic labour logistics intervention solutions. Services include: • Payroll Administration • Staff Loan Administration • Permanent & Executive Placements • Comprehensive Labour Outsourcing
• Contract Co-ordination • Handling of Industrial Relations • Training, Inductions and Medicals • Industrial Action Solutions
Tel: 011 916 1737 | Fax: 011 916 2905 | Toll Free Number: 0800 745 745 17 Robin Street, Elspark, Germiston, 1459 www.phakisahldg.co.za *Phakisa Holdings was recently evaluated by Empowerdex as an AAA – Level 2 Contributor
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first phase of the PSA licence area proposing an integrated oil, LPG and gas project adjacent to Sasol’s existing Petroleum Production Agreement (PPA) area. Sasol showed its ability when it comes to developing international relationships, contracting Polish company Geofizyka Torun to acquire 2D/3D seismic data using Vibroseis trucks. In a similar way to
䴀甀氀琀椀ⴀ䐀椀猀挀椀瀀氀椀渀攀 倀爀漀樀攀挀琀猀 䌀漀洀洀椀猀猀椀漀渀椀渀最 匀漀氀甀琀椀漀渀猀 䤀渀搀甀猀琀爀椀愀氀 倀氀愀渀琀 匀栀甀琀搀漀眀渀猀 䤀渀搀甀猀琀爀椀愀氀 倀氀愀渀琀 䴀愀椀渀琀攀渀愀渀挀攀 倀爀漀樀攀挀琀 䴀愀渀愀最攀洀攀渀琀 倀攀爀猀漀渀渀攀氀 匀瀀攀挀椀愀氀椀猀攀搀 䴀攀挀栀愀渀椀挀愀氀 匀攀爀瘀椀挀攀猀 刀攀洀漀琀攀氀礀 倀椀氀漀琀攀搀 䄀椀爀挀爀愀昀琀 匀漀氀甀琀椀漀渀猀 䌀爀椀琀椀挀愀氀 倀愀琀栀 ㌀䐀 倀氀愀渀渀椀渀最 匀漀氀甀琀椀漀渀猀
how ultrasound is used in medical applications, the trucks send an acoustic wave into the ground and the response of reflection between rock layers is measured, creating an image of the subsurface and helping to determine future well locations. “The acquisition of the 3-D seismic data in the Inhassoro field will significantly enhance our understanding of the structure of the oil accumulations through better resolution and more defined characterisation of the reservoir. While initial results appear encouraging, it is still too early to give further detail,” said Senior Vice President for Sasol Exploration and Production International, John Sichinga. The wider project is something which Sasol has been focussing on for some time and the first well was drilled back in May. Sasol has
indicated that the first phase of this project will cost approximately US$1,4 billion. “The tests conducted thus far have produced encouraging results. During the course of the drilling of the second well, we encountered previously unknown accumulations of hydrocarbons within the development and production area, which indicate the presence of both gas and oil. We have issued a Notice of Discovery to the Mozambican authorities as per the PSA and will continue our evaluation of the data,” said Sichinga. Sasol already has a central processing facility in the region, servicing its developments at the Pande and Temane fields. RECORD PRODUCTION These stories of growth and
advancement are backed by a strong Sasol financial position which, in September, reported solid operational per formance across most of the value chain, record production volumes at Secunda Synfuels Operations but with some disappointing elements including a decrease in operating profit mainly due to a slowdown in global commodity pricing. Joint President and Chief Executive Officer Sasol Limited, Bongani Nqwababa said of the results for the year ending 30 June 2016: “We have been working together over the last six months to clearly define how we will lead Sasol, address the challenges the company is facing and pursue the exciting opportunities ahead. “Sasol’s global operations continue to per form well, with
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INDUSTRY FOCUS: ENERGY
匀瀀攀挀椀愀氀椀猀攀搀 圀攀氀搀椀渀最 匀攀爀瘀椀挀攀猀 愀渀搀 䤀渀猀瀀攀挀挀漀渀 䌀漀渀猀甀氀琀愀渀挀礀
眀眀眀⸀渀攀眀愀最攀ⴀ攀渀最⸀挀漀洀 38 / www.enterprise-africa.net
㜀 㘀㌀ 㔀㈀㠀㈀ ⼀ ㈀ 㔀㈀㈀ ㈀㘀㠀㤀
our Secunda Operations reporting record production volumes. Our cost reduction and cash savings initiatives are exceeding their targets, which places us on a sound footing as we gear up our balance sheet to complete the world-scale, company-changing investment in Louisiana in the US.” Sasol is currently working on a $8 billion petrochemical complex Lake Charles, between New Orleans and Houston, in the south-western corner of the US state of Louisiana. A ground breaking even was held in March 2015. Sasol also hope to build a larger gas-to-liquids plant at the site. Stephen Cornell said: “Although the capital expenditure for our Lake Charles Chemicals Project has increased, we remain
confident that the fundamental drivers for this investment are sound. The cost and schedule review process, which was completed in August 2016, has set a solid platform for the continued execution of this project. In Mozambique, we continue to advance our growth projects to further develop our footprint in that region. We look forward to building on Sasol’s past successes, as we lead the company forward and continue to grow in both Southern Africa and North America. “In the medium-term, we will continue to focus on pursuing zero harm, building a resilient organisation for the future, nurturing our foundation businesses, delivering sustainable growth and clarifying our future
investment opportunities.” As we move to the end of the calendar year and enter 2017, Sasol will concentrate on building its focused and strong project pipeline in order to create value sustainably. Completion of the C3 Expansion Project and the company’s progress in Mozambique will help strengthen the already robust platform from which this SA giant continues to grow.
SASOL +27(0) 11 441 3111 firstname.lastname@example.org www.sasol.com
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www.enterprise-africa.net / 39
MITSUBISHI HITACHI POWER SYSTEMS AFRICA
At the Heart of
PRODUCTION: Timothy Reeder
Mitsubishi Hitachi Power Systems Africa is a technology and project management implementation company involved in engineering, supply, construction, commissioning, rehabilitation and the ser-vicing of thermal power plants in South Africa.
While the company in its present form was only established very recently, in March 2014 following the merger of the power activities of Mitsubishi Heavy Industries and Hitachi Power, this belies what is a long and proud history of involvement in South Africa which dates back to the 1960s. MHPSA is a technology and project management implementation company which has involvement in the spheres of engineering, supply,
construction and the servicing of thermal power plants in South Africa. It is a globally focused energy plant constructor which describes itself as, “bent on becoming the world’s number one” in conventional power plant construction. Central to its establishment of such a strong current presence in South Africa has been MHPSA’s work on the Medupi and Kusile power station contracts in Lephalale, located in Limpopo Province and eMalahleni,
Mpumalanga Province respectively. These involve the construction of six 800 MW boilers for each project, which when completed, will account for more than 20% of South Africa’s total power generation capacity. Not only are the Medupi and Kusile projects currently the largest power generation projects in South Africa, they are also the largest coal-fired steam generator pro-jects in Africa as well as the largest air cooled plants in the world.
www.enterprise-africa.net / 41
INDUSTRY FOCUS: ENERGY
Medupi is also the first supercritical power station on the African continent, with 1400 artisans, 60 engineers and numerous maintenance workers being trained in highly technical skills to benefit job creation and ensure the sustainability of the industry well into the future. Medupi will be the fourth largest coalfired power plant, and will also be among the biggest power plants that MHPS has built, boasting a planned operational lifespan of some 50 years. The Medupi and Kusile power stations are slated for completion in 2019 and 2020, respectively, with two power stations set to offer a combined 9,600 MW high-efficiency power generation. At the time of its launch in 2014, MHPSA’s chief executive officer for South African operations, Stephen Moore, commented on how, “the Mitsubishi and Hitachi merger [would] create a new group of companies endowed with a high level of technical competence and a wide product range creating new and exciting business opportunities in Africa.” Alongside this, he pointed to the com-bined might which could be tapped by the merger of two such significant forces. “MHPSA
42 / www.enterprise-africa.net
has ac-quired HPA’s management and employees and will conduct its business from the premises previ-ously occupied by HPA. Consequently, business continuity will be maintained and the transition will be seamless. The formation of this merger is good news for all concerned; the strength of MHPSA will certainly benefit the delivery of the Medupi and Kusile power station projects,” he concluded. The drawing together of the two companies under the Mitsubishi Hitachi Power Systems Africa umbrella sought primarily to integrate both parties’ power generation systems operations, each of them with long histories and strong traditions, and to subsequently accelerate its global expansion while building an efficient and stable business operation base. MHPSA is equally serious about overcoming global energy and environmental issues through its highly efficient geothermal power generation technology, Gas Turbine Combined Cycle power plants, Integrated Coal Gasification Combined Cycle power generation and air pollution control equipment. The primary business of MHPSA
since its inception has been the twin concerns of Medupi and Kusile, following the award of the two power station contracts in 2007 and the manufacturing of whose boilers commenced in 2009, and it follows that there have been a number of important mile-stones in the ensuing years. Not least among these was the synchronisation of Medupi’s Unit 6 with the National Grid on 2 March 2015, which enabled it to deliver its first power to the grid. MHPSA’s boilers provide the very heart of each unit at the power station, and produce the steam that drives the turbine generators so central to the project as a whole. “We were especially proud of the contribution that our team made in supporting Eskom as it achieved this important milestone,” said MHPSA, as it shifted its focus to Unit 5 as the next to come on line, and then swiftly onto the remaining boilers at Medupi and Kusile. In the same year, MHPSA successfully delivered Medupi’s Unit 6 boiler for commercial operation on 23 August, with official opening coming at the close of the month. This was conducted by President Jacob Zuma, and wit-nessed by a number
MITSUBISHI HITACHI POWER SYSTEMS AFRICA
of other high profile dignitaries including Public Enterprises Minister Lynne Brown, Energy Minister Tina Joemat-Pettersson and Eskom’s Acting Chief Executive Brian Mole-fe. With South Africa currently taking steps to strengthen its power generation capacity to cope with the country’s rapid industrial expansion, the completion of the Medupi and Kusile power stations will bolster Eskom’s power supply capability by 20%, set to make a huge contribution to the South Afri-can economy. There was much to report form Kusile over the same period, with the last of its four new Wolff 1250B cranes installed at the end of September 2015. The first of these heavyweights, fondly re-ferred to as Kusile’s “red elephants”, was installed in February this year between Units 2 and 3. The second is situated between Units 3 and 4,
the third between Units 4 and 5 and the fourth between Units 5 and 6. “In the past, the company hired crawler cranes from various suppliers, but it was ex-tremely costly and the biggest problem with these type of cranes is the space which they occupy on the pad,” explained Stanley Langkilde, Construction Services Manager at Kusile, before going on to underline the improved efficiency which would be brought by the new arrivals. “The Wolff cranes will reduce the overall project duration due to their faster operating speed and they are better suited to erect tower boilers.” Amongst such innovative and vital work safety must be of paramount importance. The Kusile Boiler team notched up 2,500,000 lost time injury free hours in August last year, the significance of which use not be underestimated as it ramps up progress
on these colossal projects. “We want to thank everyone for the part they played in achieving this milestone,” said MHPS Africa CEO Toshinori Shigenaka. “Without you this success would not have been possible. We are mindful of the fact that working safely is what differentiates us in an industry where serious injuries and fatalities are a reali-ty. We continue to count on the support of our experienced employees in reaching the highest safe-ty standards worldwide.”
MITSUBISHI HITACHI POWER SYSTEMS AFRICA +27 11 260 4300 www.mhps.co.za
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PEARSON SOUTH AFRICA
Digital Dawn PRODUCTION: Timothy Reeder
Excellence is the keyword that underpins everything at Pearson, the world’s leading education company; both in the content it produces and the results of the learners who use it. Its 40,000 em-ployees are spread over 70 countries, while South Africa’s best-known and mostrespected names in publishing - Longman, Heinemann and Maskew Miller - came together to form Pearson SA in 2010.
Pearson provides learning solutions to all, from early childhood learning through to professional cer-tification, offering curriculum-based materials, e-learning content and tools as well teacher training and testing programmes to millions of people worldwide. While far from being the only learning company in the South African market, Pearson MD Ebrahim Matthews identifies a number of key areas which help to differentiate and cement its position as the
number one provider and creator of innovative solutions which will improve both learner achievement and institutional effectiveness. “On the higher education side, in our institutions the focus on digital is clearly a differentiator for us from our competitors,” he explains. “The relative size of the class - the number of students per lec-turer - means that we can offer a lot more individual attention than others are able to. We also have quite a strong focus on employability, preparing a graduate
for the next step, and as such we have employability centres at a number of our campuses where we guide students on how to avoid the many potential pitfalls and instead flourish in finding employment. “In terms of the content we produce, it is largely the quality which sets it apart. We have around 45% of market share in provision of textbooks to public schools in South Africa, and are by far the biggest publisher in that space. This is down in part to legacy, having been around Continues on page 48 www.enterprise-africa.net / 45
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Continues from page 45 for quite some time and founded some highly-respected brands, but more importantly we pride ourselves on effi-cacy, where we measure the impact that our content has on the learner. At the nub of this we believe that our content truly makes a difference in the learning experience and subsequently en-hances it.” In 2010, Pearson South Africa was created from a group of companies comprising Maskew Miller Longman, Heinemann, Prentice-Hall, and Addison-Wesley. Together this body is placed to provide extensive local educational knowledge, and combine it with the global resources at the disposal of the world’s leading learning company. Significant investment into this new entity was made in 2012, primarily in new technologies and services, which
48 / www.enterprise-africa.net
meant that Pearson South Africa was able to gain yet more access to topquality, global content to further its product offerings, and as such re-main the world’s leading learning company today. “Our core business is, in essence, to improve the lives of our learners through education,” summates Matthews on the driving force behind Person SA. “We have two major lines of business,” he goes on, “which are in themselves specific to South Afri-can operations; it may not tally up exactly with the way in which things are done in the rest of the world. Firstly there is obviously the production and distribution of content which enhances learning, while alongside this is the delivery of higher education in one of the 12 institutions which we own and
manage across South Africa.” This last point relates to a significant portion of the company’s organic growth, which sees Pearson South Africa deliver direct education through its own inde-pendent educational institutions. These are CTI and Midrand Graduate Institute (MGI), and at pre-sent the CTI Education group has over 14,000 students spread across its dozen campuses throughout South Africa. Its operations in 11 countries in sub-Saharan Africa see Pearson SA publishing in over 58 African languages, combining extensive local knowledge with global expertise and resources to give Southern African education the best possible products and services. The importance of providing learners with resources in their own tongue is so often stressed,
PEARSON SOUTH AFRICA
to afford them the very best chance of comprehending the content. This is another area in which it excels, as Matthews ex-plains: “South Africa alone has 11 official languages, and quite clearly we are committed to provid-ing content in indigenous languages. That is at the core of what we do, and so much more so in South Africa. “The way in which textbooks are produced in our particular market sees us identify a need or a pro-ject, and then we call upon experts in the industry who may not necessarily be Pearson employees, but maybe teachers or educators in the industry, who combine to help us put the publication togeth-er at that point in time. We do call upon a lot of people who are not necessarily permanent Pearson members to put together our materials.” The company is continuously looking to expand and grow its current crop of digital solutions and learning services on offer, while at the same time ensuring the print side of business remains in its market leading position. In 2013 alone, by way of example, Pearson distributed over 23 million text books into schools across South Africa, and trained over 80,000 teachers. “It’s been an interesting few years,” Matthews begins, despite these impressive figures, on the subject of Pearson SA’s re-cent performance. “In our higher education business we have had a couple of really difficult years. We are very reliant on the number of matriculants coming out of the South African schooling sys-tem,” he explains. “The introduction by the South African government of a new curriculum only three years ago impacted Pearson SA directly. “Initially as that process is ongoing and the first cohort is coming through the system, the pass rate is inevitably going to be affected,” Matthews continues. “As well as impact from curriculum chang-es we have also had some issues entirely
//WE ARE BACK INTO A POSITIVE GROWTH CYCLE FOLLOWING A CHALLENGING TWO OR THREE YEARS// of our own doing which caused diminishing student num-bers, but we are now firmly back into a positive growth cycle following a challenging two or three years on the higher education side.” The content arm of the Pearson SA business has experienced a similarly difficult period, before returning to health over the course of the last year. “This aspect of what we do pertains to things like our production of textbooks, but equally importantly to our teacher training and development and assessments, which had a particularly good year in 2016,” Matthews clarifies. “Similarly to
the higher education side, it has been under a fair bit of pressure over the last four years or so. “Government is our single biggest customer, and we are thus very much tied into whatever hap-pens in the public-school system, meaning the budgets that government sets aside for the purchas-ing of textbooks or for teacher development, for example. We are almost exclusively dependent on what happens in the government and in the public-sector spaces.” Pearson South Africa is working tirelessly to convert the entirety of its publications into e-content, to ensure that it can remain at the forefront as
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www.enterprise-africa.net / 49
INDUSTRY FOCUS: EDUCATION
the shift into digital classrooms really takes hold. “In our higher education classrooms,” Matthews says, “we encourage almost exclusively digital learning, which means that ICT is hugely important. We are one of the very few institutions in South Africa where all of our students receive tablets, and delivery of content takes place on a Pearson learner management system and so that entire experience is a digital one. “In the schooling environment, the move to digital and ICT is one of the imperatives identified by the Department for Basic Education; at a national, government level we are seeing this push towards digital and as one of the key content providers in the country, naturally we are key
in supporting all of those projects. We are supporting governments in three of the nine provinces in the implementa-tion of ICT projects in their various stages of development: in Gauteng, in KwaZulu-Natal and in the Free State. “In some of these we are simply the provider of digital and interactive content, while in others we are also providing the learner management system alongside it.” This continuing dawn of the era of interactivity in the classroom, regardless of the stage of learning, has clearly deeply impacted Pear-son South Africa, and looks set to form the backbone of its operations moving forward, as Mat-thews concludes. “It is a big push for Pearson, not just in South Africa but globally,
because that is the way that the world is moving and at an increasing rate. Clearly, we believe that we can use digi-tal to enhance learning, particularly in an interactive space, and it is therefore absolutely crucial to us that we maximise what it can offer in order to assure that we continue to offer the excellence for which we have come to be known.”
PEARSON SOUTH AFRICA +27 21 532 6008 firstname.lastname@example.org za.pearson.com
CTP Printers, Cape Town have enjoyed a unique and mutually beneficial relationship with Pearson for many years and this relationship has been instrumental in the growth and development of the operations at our plant in Parow. By working closely together we are able to develop joint initiatives which in turn have allowed us to streamline processes and procedures and challenge norms. CTP Printers, Cape Town are the market leaders when it comes to book production, in particular education text books and have over many years continued to invest in the latest technology to ensure that our clients are offered the most cost effective solutions for production and distribution of their publications, at the highest standards of quality. This is assured through stringent quality processes and our commitment to quality is demonstrated by our Continual Improvement Programme, which, amongst other things, ensures that key business processes are continually evaluated for opportunities to effect improvements, manages our lean manufacturing initiatives and analyses business performance. CTP Printers is the only printer in Africa to have achieved the prestigious FOGRA Process Offset Standard certification in both web offset and sheetfed printing. 2016 saw the commissioning of a new Lithoman 32-page web offset press with dynachange capabilities. This press, a first of its kind in Africa, was configured to address the specific requirements of the book and magazine markets in South Africa and has many unique features and allows web offset production from 3,000 copies up. The establishment of a digital print department within the company during this year will further enhance our ability to offer publishers a complete solution for all their requirements under one roof and one management team.
50 / www.enterprise-africa.net
PRINTING BOOKS THAT PEOPLE LOVE We may have the latest technology. But what really sets us apart is an old-fashioned passion for what we do. And we think that comes across in every book, magazine, diary and newspaper we print. telephone: (021) 929 6200
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EDDELS SHOES CELROSE CLOTHING
Forward PRODUCTION: Colin Chinery
With new calls for South Africa’s manufacturing sector to fastgrow its GDP ranking, John Comley joint CEO of Kwa-Zulu Natalbased Eddels Shoes and Celrose Clothing says industry and the future cannot wait on what Governments may or may not do. “As a businessman, a captain of industry, and as a citizen, you’ve got to determine your own success.”
www.enterprise-africa.net / 53
INDUSTRY FOCUS: FASHION
Time for South Africa to follow India’s nation-first manufacturing procurement campaign with a ‘Make in South Africa’ strategy? Philippa Rodseth, Executive Director for Manufacturing Circle sounded a sympathetic message recently, saying that at its current stage of development, South Africa’s manufacturing’s contribution to the GDP should be double the current 14%. And Chief Director of Economic Research and Policy Coordination at the Department of Trade and Industry, Mr Nkosiyomzi Madula, has weighed in urging South Africans to take responsibility to grow the economy through buying locally produced products. It’s a theme that finds a forceful ally in John Comley, joint CEO of two of the
country’s most successful surviving independent companies, Kwa-Zulu Natal-based Eddels Shoes and Celrose Clothing. MANUFACTURING CRUCIAL FOR SA “Manufacturing and great manufacturing companies are vitally important for the future of this country,” says Mr Comley. “We need manufacturing to get back to 25% of our GDP contribution. “Yet ironically every year we are seeing manufacturing shedding jobs and becoming a smaller part of the GDP contribution, and all the time unemployment growing. You can’t talk about unemployment levels of 27% in this country. It mustn’t happen or the country will burst.” Famous for brands such as John Drake, QC, Riccardo, Aeroflex
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and Freedom, Pietermaritzburg shoe manufacturer and marketer Eddels has been providing South African consumers with quality footwear for over one hundred years. Celrose, operating in Tongaat near Durban since 1975, was the clothing manufacturing arm of the Edcon retail group until 2006 when Edcon divested and John Comley, Eddels CEO and one of Edcon’s most successful suppliers, was brought in as Celrose’s new CEO. Since then, advanced technology combined with professional management and extensive computerisation have established Celrose as one of the most modern garment producers in the world, with products ranging from men’s trousers to ladies tops and with fabric variations from chiffon and cotton, to knits and twill. “Back in 2006, Celrose had an annual turnover of some R98 million and had been losing substantial money every year. Last year, 2015, that figure was around R375 million and Celrose has been turned into a profitable business,” says Comley. FAST FASHION LEADS THE WAY Eddels Shoes’ business model is based on ‘fast fashion’, a relatively new concept in the industry. The result is rapid production of cost-efficient fresh products in response to fast-changing consumer tastes in as near real-time as possible, and drawing consumers back to the retail experience for successive visits. Mr Comley joined Eddels as production manager in 1987, working his way through the ranks to Production Director and eventually General Manager and Managing Director. Then in 1997 together with his management team, he bought the business out when SA Breweries began selling its non-core assets. “Most people at the time thought I was crazy, wondering why I would buy a shoe manufacturing business that had to compete against China.
EDDELS SHOES / CELROSE CLOTHING
“But our strategy was never to compete against China as such but compete on a very different equation all around quick response, fast fashion development, repeating products of value for our retailers, and at the same time making sure we advertised and marketed our brands exceptionally well. And all this has happened.” It’s a production methodology that has equipped Eddels with through-put times of less than a week in a drive to provide retailers with reduced cost and risk and quick-response logistics and replenishment to counter Chinese subsidised low prices. TOP CLASS WORKFORCE Tough-call competition, but Eddels and Celrose success goes beyond the borders of the business says Mr Comley. “We have wonderful retail partnerships, and great support from the most important part of our business - and that’s our labour force. “We spend a lot of time training and investing into training and upskilling, both internally and externally. Many of our management team were machinists or craftsmen working on the floor two years ago, and have now become very effective managers. We also have an extremely low staff turnover. “Even though the market is tough - and there are real concerns out there - we see next year as a good one for us. Our partnerships are working, we are very loyal to our key retailers, and we are blessed to have the best 2,850 South Africans working for us.” With year-on-year growth for each of the past three years, the performance of the Eddels/ Celrose business models is impressive. “We work very hard with our customers to prove to them that we are a value-added supplier and offer a point of difference. “We work extremely hard on product diversity, flexibility, and become that first name or phone number in the customer’s mind. Not only will they get top service quickly, they will get guaranteed quality and
//MANY OF OUR MANAGEMENT TEAM WERE MACHINISTS OR CRAFTSMEN WORKING ON THE FLOOR TWO YEARS AGO// after sales service and support. “That’s been our game, and it’s worked wonderfully for us. In 2013 we returned R340 million and this year we will close the books on R575 million. Its remarkable growth, and the thing that excites me the most of all is that it has taken a combined labour force of 1,200 people to 1,800, which doesn’t include some 1,000 heads that work for manufacturing partners that work exclusively for us. And we intend to take on a further 465 jobs in the coming year within our group.” Given the various vested interests and social demands, it remains to be seen whether policymakers will
eventually push through the structural economic reforms needed to make South Africa a more business-friendly environment. John Comley remains watchful and cautious. “Now this is going to offend some people, but the policies of the present Government have not been sufficient; they haven’t been professional enough, there has been a lot of misguided waste, and we see unemployment levels increasing yearon-year and consumers becoming more and more cash-strapped. Retailers, the darlings of the stock market a few years ago, are starting to lose their shine.
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EDDELS SHOES www.enterprise-africa.net / 55
INDUSTRY FOCUS: FASHION
Where good advice & years of experience come free with every purchase Unit 15 Access Park 2 Albizia Place Maxmead Pinetown 3610 Tel: +27 (0) 31 701-6868 Fax: +27 (0) 701-6870 E-mail: firstname.lastname@example.org
We would like to thank Eddels and Celrose Clothing for their loyal and Sincere support for the many years of our business endeavour. We would also like to take this opportunity to wish them, all the success in the future. Kindest Regards, The Shoetech Family
Machinery & Equipment Suppliers to the show and Leather industry
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SELF MOTIVATION A MUST “The Government is supposed to give direction, but business is very wary of the relationship between Government and labour; it’s a cocktail of inefficient and development-unfriendly socialism. However, we have worked constructively with labour unions for the most part. You can’t base your business and the future waiting on what Governments may or may not do. As a businessman, a captain of industry, and as a citizen, you’ve got to determine your own success. “Nevertheless our operations, and the Clothing, Footwear and Textile Sector have also received considerable support from Government Agencies particularly the DTI and the IDC which have favoured development of key industry clusters and assisted in funded them to become internationally competitive with state-of-art equipment and ‘world best practice’ training, methodologies and systems. The Productivity Improvement (PI) program has been particularly effective.” Clothing and Footwear have been identified throughout the world as one of the least cost and quickest
EDDELS SHOES / CELROSE CLOTHING
avenues to industrialise developing populations. These industries can train a person to competency and earning in a matter of months with a fraction of the investment necessary, for instance, in mining. China certainly identified this, but so have Britain, and the USA in the past and, more recently, Mauritius, a slew of South East Asian countries, Turkey and even Ethiopia. It’s a mind-over-matter outlook in which Mr Comley sees considerable opportunity. “People have to think hard about how they handle their forward order books and how they deal in a Dollar-based world with a depreciating currency. This means things have to be done a lot faster and the supply chain become a lot more flexible. “This is how we have engineered our businesses, re-positioning our business into different segments of the market where you find volume, and limit the risk both for ourselves and our customers. “And being a local manufacturer with an understanding of the South African consumer we spend a lot of time analysing consumer trends so that
we are developing products that meet the consumers face level and better positioned to look after consumers with disposable income and money in their pockets.” Looking ahead Mr Comley plans for expansion into Zimbabwe, Angola and Zambia. However “the next big jump” is set to be the UK market. “We used to be there years ago, and it’s time to go back.” FORWARD TO PAR WITH TURKEY But the ambitions of the Eddels Shoes and Celrose Clothing CEO extend far beyond mere geography. “In six years’ time I would love South Africa to have a clothing industry the same size as Turkey. And that would mean employing some one million people. “The South African retail industry is currently importing around 200 million pairs of shoes a year. In other words, South African retailers are employing about 200,000 people in other countries to manufacture those shoes. “We only employ 18,000 people in our footwear industry, and I want to see how close we can get to that 200,000 employed in my own country, not
necessarily through my businesses but throughout the industry, repatriating that work back to South Africa. These jobs are desperately needed. “If you ask me from a managerial point of view whether I have the will, the want or the energy to be part of that, my reply is, absolutely, most emphatically. I’m a patriotic South African and I want to make a difference, not only in my life and that of my company, but for the greater part of South African society.” Meantime against a backdrop of new range shoe and clothing designs including five pocket jeans, John Comley and his workforce are busy applying the finishing touches to the winter ranges, braced for the Christmas rush. “Right now this place is frenetic.”
EDDELS SHOES / CELROSE CLOTHING (033) 342 8111 email@example.com www.eddels.co.za
JOINT CEO JOHN COMLEY
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A New Look for Textile and
Apparel in SA
PRODUCTION: Timothy Reeder
South Africaâ€™s textile and apparel industry is in the midst of a huge period of revitalisation, with TCI Apparel one of the leading forces behind this charge. It sets out to create a collaborative, integrated ecosystem and enhance social and economic stability for South Africa in a market at risk of being dominated by a growing tide of imports. www.enterprise-africa.net / 59
INDUSTRY FOCUS: FASHION
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The story of Trade Call Investments Apparel is one steeped in tradition and innovation, which began in 1957 with the formation of The Seardel Apparel Group by Aaron Searle, employing just 38 people at the outset. Growth of this entity was steady over the ensuing years and marked by many acquisitions along the way, before it achieved something of a zenith in 2003, with an annual turnover of R4 billion achieved by the combined efforts of its more than 20,000 staff in the clothing and textile sectors. Seardel produced top brands such as Nike, Adidas, Speedo and Triumph and locally was a major supplier to Woolworths, Edgars and Truworths, also exporting product internationally to major customers in USA, UK and Europe.
In 2014, Seardel was acquired by TCI Apparel and has established itself as, in its own words, “an agile, progressive, forward thinking company.” The acquisition came at a time when the former business was facing near certain closure, due to the availability of cheaper imports together with high duties on material, stacking up against a waning clothing and textile manufacturing industry. Herman Pillay, current CEO of TCI Apparel, was approached by the South African Clothing and Textile Union in order to revitalise the company and, in so doing, save some 2300 jobs. He instantly recognised talent and passion in its employees, and was able to build up key support from retailers. Pillay spotted the opportunity to rework the business model and convince
more than 2000 employees to stay on board, in his quest to solidify TCI Apparel’s standing in this potentially volatile market. “It was my job to convince the staff that, if they were to choose to remain with the company, then I would create for them a sustainable model,” Pillay says. “I couldn’t have asked for a better staff compliment we grew employment from 2260 on April 1st 2014 to 2930 to December of that year.” TCI Apparel has shown steady growth ever since, which has included an increase of its staff compliment by some 1700 employees. From its humble beginnings in South Africa, TCI has grown to become a global leader in apparel design and manufacturing, and is today the largest clothing supplier in the southern
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www.rubitex.co.za www.rubitex.co.za www.rubitex.co.za
Rubitex QP.indd 1
2014/09/17 10:23 AM
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INDUSTRY FOCUS: FASHION
//THE STAR KNITWEAR GROUP GIVES US ACCESS TO AN INTERNATIONAL CUSTOMER BASE AND OVERSEAS TRENDS// hemisphere. It takes seriously the responsibility which comes with its position as a global leader in apparel design and manufacturing, leading the way with green efficiencies and minimising the environmental footprint of its many and varied operations. Illustrative of this commitment is TCI Apparel’s development of a state-of-the-art design centre in Cape Town, which is at the cutting edge of local design, interpreting future trends and making them customer relevant. Not only a global leader in apparel design
and manufacturing, TCI is also leading the way in the field of green efficiencies and of reducing its environmental footprint. Herman Pillay sums up the importance of these concerns to the company’s future endeavours. “We have invested a large amount of money is this area our design centre is the first of its kind in South Africa to be green. “We have planted many trees and plants around it to reduce our carbon footprint and employed a full-time horticulturist to ensure that the vegetable harvest is
Supporting the South African apparel industry for over 50 years, we pride ourselves on Product Quality, Customer Service & Delivery Performance. We offer a wide range of weft knit fabrics in a variety of substrates and blends. Products available in piece dyed and printed versions: • Single Jersey • Interlock • Rib • Fleece • Stretch products and more
Sales: +27 (0) 31 7190336 e-mail. email@example.com General Enquiries: +27 (0) 31 7190305 e-mail. firstname.lastname@example.org
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sufficient to nourish our staff. We do not discard any waste at the facility and all discarded food or vegetables that has passed its shelf life is recycled back to the vegetable garden in the form of compost.” TCI Apparel is leading the way in redeveloping the textile and apparel value chain, in accordance with its key values of integrity, passion, community and sustainability. The South African textile industry has found itself hit hard in recent years by the growing menace of cheap Chinese imports, and this year there was a renewed push to breathe life back into the once mighty South African garment sector. Over the last 15 years, an estimated 150,000 jobs have been lost in the industry in South Africa, historically one of the biggest clothing producers on the African continent. The South African Clothing and Textile Workers Union, Sactwu, hosted the 2016 Clothing, Textile and Leather (CTFL) Imbizo - a forum for discussion of policy. It said that despite significant investment and government support in recent years, the industry is still struggling to move from its current survivalist to the infinitely preferable expansionist mode. Leading industry thinkers came together at the summit to plan how best to maximise and grow the industry’s export footprint. Despite its challenges, however, Sactwu General Secretary Andre Kriel spoke of the recovery signs which are beginning to be seen in the industry today. “Our industry has stabilised, or certainly is stabilising, after many years of jobs losses. As a union we realised that we cannot relax now that things are on the up, rather we have to have a vision of where we want to lead the industry going forward. Exports seemed like an
obvious focus to have in our bid to grow the industry yet further.” Clothing and textiles is an industry which has received government investment totalling over R3 billion over the past three years. In spite of this, Herman Pillay described how South Africa needs more intervention in order to make a success of exporting its wares. He spoke of the pressing need to fix the supply chain for the industry to be able to export, before describing the acquisition by TCI Apparel Group of a stake in The Star Knitwear Group, based in Mauritius, last October, to bridge the gap in the export industry. “ The Star Knitwear Group is a complete vertical operation, from fabric development to fabric knitting, fabric dying, fabric printing and also manufacturing,” he said. The group is one of the largest knitwear suppliers to such top international brands as Top Shop and River Island in the UK, “which give us access to an international customer base, overseas trends and their trading strategies. “ The problem in South Africa is if you don’t fix the supply chain and you don’t have incentives to do exports, we will never be competitive enough to do it. If we want to be competitive the govern-ment needs to firstly lift the duty on imported fabric and logistically find a solution to get garments to the international market faster, such as preferential rates on air cargo,” said Pillay of the current situation in the country. It is what Pillay terms this, “resistance to change,” that he sees as the most significant challenge facing this South African industry leader. “It is this very fear that restricts our growth,” he goes on. “We have overcome many challenges of indignation in the past and our pioneers have fought for freedom yet we have not fully
//WE HAVE TO HAVE A VISION OF WHERE WE WANT TO LEAD THE INDUSTRY GOING FORWARD// allowed this to truly liberate us socially and economically. This requires unconditional support from government in order for us as South Africans to elevate our country.” Pillay remains adamant in the opportunity he perceives in the country as a whole. “I think there is a lot of potential in South Africa. I believe in South Africa, and I believe that if we as South Africans make a concerted effort to look within then we can really make this a proud and stable nation. We can impact society in a positive
way. As business owners and entrepreneurs, if we place our focus on our homeland and on the people in our communities, the result of that will be unanimous with regards sustainability and stability in our economy.”
TCI APPAREL (+27) 21 508 5700 www.tciapparel.co.za
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RETAIL SHOPFITTING SERVICES
Opening Shops On Time
PRODUCTION: Manelesi Dumasi
If you’ve walked into a fashion retailer in one of South Africa’s shopping malls or high streets, you will have experienced the work of RSS – one of the country’s leaders in shop fitting and refurbishment.
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INDUSTRY FOCUS: RETAIL
The retail store looks set to change in a big way in the future. Thanks to a global shift in consumer shopping trends over the past decade, with the growth of online shopping and now the development of self-service and the Amazon Go concept, retailers will need to reimagine their store ideas to ensure that customers are left satisfied and delighted. In South Africa, according to PWC, despite local constraints and despite considerable challenges, all major retail and consumer products companies have started to either expand into the rest of Africa or increase the presence they already have there, some more aggressively than others. The global professional services company found in its Retail and Consumer Products Outlook 2012-2016 that ‘total retail sales continued to expand steadily from 2012-16, driven in particular by the continued emergence of a black middle class’. This is something with which
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Mike Lewis, CEO Retail Shopfitting Services, agrees. “The very successful retail outlets have been expanding. At Menlyn Park and Mall of Africa, the retailers are doing incredibly well. There’s been a huge movement of emerging middle class people who are starting to shop at larger shopping centres and that is helping the retailers. We’ve also had a movement of international retailers into the country such as Zara, H&M and Cotton On and that creates opportunities as they try and establish their footprint.” Retail Shopfitting Services (RSS) is one of the country’s wellestablished shopfitters, providing a complete service including planning, design, manufacture, installation and project management. With 8000 m2 factory space, 160 dedicated employees, a strong relationship with contractors and sub-contractors, and management with decades of industry experience, RSS actively contributes to the success of some of
our favourite retailers as they open new, and refurbish existing, stores. “Because of the niche market that we’re in, the retailers have to continually reinvent themselves and they have to be fresh and current. That means that they have to constantly refit their stores and refurbishment is a large portion of our business that we are really good at,” says Lewis. A HISTORY IN RETAIL RSS has been helping retailers achieve their visions for three decades. Over the years, the company’s leadership has changed but the goal has always been the same: to open stores on time. Lewis explains more about the journey of the business to date, and highlights strong partnerships as a driver behind growth. “I was with another shopfitting company and I was approached by a national retailer to start a shopfitting division for them as
RETAIL SHOPFITTING SERVICES
they were expanding and saw the opportunity to reduce costs by bringing shopfitting in-house,” he says. “We did that for them but we remained in the open market and they agreed that we wouldn’t work exclusively for them. As that company grew and progressed, they felt that they no longer needed a shopfitting company and decided to consolidate, and that’s when I took over through a management buyout. There wasn’t any entrepreneurial drive behind the buyout, it was more to save 120 people’s jobs. “I’d been in the shopfitting industry for seven or eight years and the national retailer was one of my clients with whom I’d built a strong relationship. The operation we built for them was very successful and we grew with them in a symbiotic relationship. “There’s been a huge number of challenges along the way. There’s a fair amount of red tape and it’s not easy to set up a business or keep a business going, particularly when you get to be a medium-sized company and you’re treated like a large national entity with major resources – it puts your admin and financial staff under pressure to try and cope with all that red tape.” Another of the challenges faced by RSS is acquisition and retention of top level skills - both management and artisan – a problem which is becomingly increasingly prominent for manufacturers and contractors around the country. FITTING SOLUTIONS “There are problems getting the right staff, that are trained to the right level. There’s been a huge movement of artisans out of South Africa to other countries which has left us in a predicament so we must train people in-house. We put a lot of effort into this process. “The economic situation that we are going through doesn’t help at all.
We are in a niche market and as soon as things get tight, it’s easy for retailers to turn off the taps,” Lewis explains. Although 2016 has not been a bad year for RSS – Lewis says the past two years have been “good for business” and he has “no complaints” the SA economy has showed signs of weakness and this resonates through to consumers who ultimately drive retail success. With this in mind, RSS has pursued a strategy of diversification to complement its existing growth strategy, investing in glass facilities and steel manufacturing capabilities. “We are definitely moving into the glass business,” Lewis details. “We find that with every facet of the business that we don’t control that involves an installation, the moment we hand it to someone else, we become vulnerable. We want to be in a position where we have total control over everything
whether it’s the glass of a shopfront, or the ceiling, or the cleaning of the stores, or the transportation of materials to a store – if we can take over all functions ourselves, there’s scope for improved profit.” Of course, many of the components that RSS manufactures and installs in client’s outlets are made from steel and this is an area that the company will also look to bring in-house where possible. “We find that the limited amount of steel that we have been making has been extremely well-received so the idea is to make the better quality shopfitting steel components and gain a fair price,” says Lewis “There are so many people out there trying to produce steel shelving and fixings, wall posts and stands and so prices are incredibly competitive along with what is coming in from China and other places. Because of this, we’ve
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INDUSTRY FOCUS: RETAIL
been happy for retailers to source their own steel at the best price and then we will complete the joinery work. It means we don’t have the stress and burden of competing on another level.” HANGING AT THE TOP Now prominent at all major retail shopping developments around the country, RSS is part of an elite group of industry leaders operating in its niche sector. But competition is stiff and RSS does not rest on its laurels. “It would be presumptuous of us to think that we are industry leaders but I would confidently say that we are there with the top five,” says Lewis. “We’re positioned differently - most of the
larger service providers like us produce a lot of the steelwork and we don’t yet produce much steelwork. We are much stronger on the fitting-out phase and the joinery side and there are very few other companies that can field as many site teams and fit out as many stores as we can.” When asked about standout projects, that symbolise the quality and excellence that RSS offers to customers, Lewis highlights installations that have been completed for one of the country’s leading retailers, the Foschini Group. “We have a number of sites in the Foschini Group which we would call flagship. Everyone of their flagship stores has been fitted by us and we
work with a number of their brands. I’ve been working with them for 30 years so our relationship goes back a long way. It’s service based, there’s no connection between us, we’ve served them well and built a strong relationship based on quality and price.” RSS also list the MRP Group among their key clients having a loyal and successful relationship with them spanning several decades. A relatively new addition to the RSS portfolio (opening its first store in SA in 2011) is one of the fastest growing retail groups in the world, Cotton On. With more than 100 stores in SA, and Lewis is proud of the
//“NEW LACQUER” TRENDS FOR THE SHOPFITTING MARKET For more than 50 years, the main lacquers of choice in the SA shop fitting industry have been nitrocellulose followed by acid catalysed [AC] lacquers. Although these lac systems do the job they are now becoming outdated by many of the lacquer systems available overseas. The major concern with AC lacquers has been, firstly, its smell as they contain urea formaldehyde, which can hang around for some time even after been manufactured. Secondly, discolouration or ‘yellowing’ of the lacquer over a short to medium period of time. Technipaint have seen a significant interest from designers, shop fitting customers and their clients with regard to international standards. This interest ranges from harder wearing surfaces, colour stability, less pungent smell and an environmental commitment. Technipaint have been working on a number of ‘new’ lacquer systems to meet with our customers’ requests. These products include: • ELVOTHANE WOOD LACQUER. A solvent based polyurethane lacquer that has excellent colour stability/’non-yellowing’. Household-chemical resistant and very durable. Advantages for the manufacturer is fast drying and easy to use properties. • HYDROLAK PU (2 RANGES). A polyurethane water based lacquer with excellent colour stability, fast drying, odourless, household-chemical resistant and excellent durability. For extra durability on desk/counter tops, we recommend our HYDROLAK ‘GRANDE’ which is a 2 component version. • ENVIROLAK. A water-based lacquer with excellent colour, odourless, fast drying and good durability. Suitable for shelving and general carpentry work, not recommended for high wearing/ traffic areas like table/counter tops. • ALL the above lacquers come in a wide range of colours and gloss levels, from gloss to flat matt • We have a national distribution network, so can assist your company anywhere in SA. We invite you to be part of the TECHNIPAINT TEAM and to enjoy the experience. Please see our advert for our contact details.
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RETAIL SHOPFITTING SERVICES
growing partnership between the two businesses. “We’re starting to do a lot of work for Cotton On who have recently moved into SA from Australia. We’ve developed a great relationship with them and we are now starting to make fixtures which we are exporting to the USA.” As we move into 2017, this unique business is set for a busy time. Although Lewis admits that retailers don’t want RSS around during the festive season, he says that the early part of the year sees his order book full. “We’ve got a strong order book through the first quarter and there’s various projects coming up in Ballito and other areas that we have already started manufacturing for. When we move into new shopping centres, we usually have six to 12 projects to complete and that takes time. “Ballito is an area that growing phenomenally quickly and they’ve had a number of shopping centres open in recent times. There’s a new centre opening there soon so we have a fair amount of work there.” The fulfilling nature of seeing a project go from nothing to something special is still a concept that Lewis has bought into, and he says that, in this ever-changing world of retail, his is an exciting business. “The contracting business is a hard business. It’s pressurised, you move around the country, you work long hours, but I do believe that it’s an exciting business to be in. There’s nothing more satisfying than seeing something come from a blueprint to when you walk in and see the shelves full of merchandise – it’s very rewarding.”
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RETAIL SHOPFITTING SERVICES +27 11 372 6500 firstname.lastname@example.org www.retailshopfittingservices.co.za
Website: www.technipaintdbn.co.za www.aiyellow.com/technipaintholdings Contact: Tel: (031) 465 0365 Fax: (031) 465 0398 Email: email@example.com
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Basson To Hand Over Group In
PRODUCTION: David Napier
When long-serving Shoprite CEO, Whitey Basson retires at the end of December, he will hand over an organisation in a very strong position to current COO, Pieter Engelbrecht.
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INDUSTRY FOCUS: RETAIL
CEO WHITEY BASSOON (L) AND HIS SUCCESSOR PIETER ENGELBRECHT (R) © SHOPRITE HOLDINGS
The build up to the Christmas period is massively important for the country’s big retailers. As shoppers flock to the stores to purchase everything from decorations and gifts to food and home electronics, our retail chains must have their houses in order to effectively meet the increase in demand, and to provide the seasonal must haves. As we know, the big-name supermarket chains of South Africa – Shoprite, Pick n Pay, Massmart, Spar and Woolworths – control an impressive share of the market and when demand rises in December, they are unwilling to loosen their grip. Each brings a fantastic offering to the various segments of the market and so it’s important for each to ensure it performs optimally during such an important time. Shoprite, perhaps the most recognised and established of ‘the big five’, has proven in recent months that its ability to perform remains flawless as it has consistently reported strong operational results as we enter the busiest time of the year.
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STRONG PERFORMANCE In August, the Shoprite Group released its results for the 12 months to June 2016 and, considering the current economic environment, the numbers made for pleasing reading. Trading profit was up by 15% to R7.278 billion, total turnover was up by 14.4% to more than R130 billion, and the Groups staff complement grew to a figure of just of 137,000 – one of the largest employers in Africa. Importantly, Shoprite’s business from its 14 markets outside South Africa posted a best ever set of results increasing its customer base by 16%, with sales growing by 32.6%, increasing contribution to 17%. Considering the global commodity price crash and the effect that has had on the economies of sub-Saharan Africa, this growth is nothing short of remarkable and Shoprite’s famous CEO, Whitey Basson puts the success down to experience. “We are delighted with the overall results we have achieved on the back of a record one billion transactions in a single year, but especially with those from beyond South Africa’s borders. We
see the rest of the African continent as the source of much of our future growth. Like any market, the continent has its problems, but after more than 20 years of trading here, we have gained the knowledge and experience to deal effectively with the challenges it presents,” he said. “Despite intense competition in the local market, consumers continued to flock to our stores in increasing numbers – 76% of adults in South Africa (29.1 million people), up from 72% a year ago, now shop at the Group’s supermarkets. “We thus continued to be leaders in food retailing not only locally, but also in those countries in Africa where we trade. Throughout the reporting period our market share remained above 30%, increasing in June to the highest level in three years.” Away from South Africa, Shoprite managed to open 18 new stores in Angola, Zambia and Nigeria, and in Angola, where a severe lack of foreign exchange left many supermarkets with little or no stock, Shoprite was able to keep its shelves full, boosting turnover. In South Africa, during the same
period, the Group opened 49 new stores. Interestingly, the results in South Africa saw turnover increase by 10.9% to R94.167 billion. Checkers, one of the key brands of the Shoprite stable, saw a turnover increase of 11% and Basson put this down to its positioning in the market. “Our two major supermarket brands – Shoprite and Checkers - are positioned to serve the specific needs of their individual target markets. Collectively, they cover the spectrum from LSM 4 to 10 – a much wider range than any of our competitors. “The repositioning of Checkers over the last few years has seen it become the supermarket of choice for a great many higher-income consumers while Shoprite has, over a period of 40 years, remained true to its promise of offering the lowest prices,” he said. While trading conditions are not
expected to ease up any time soon, with some predicting that significant GDP growth will not return to the SA economy until 2020, Basson said that the company’s focus would remain constant – low prices and a commitment to the communities in which it operates. “We are extensively involved in our communities which play such an important part in sustaining our business,” he said. “We see as our primary responsibility offering food in our stores at the lowest possible prices. Then we focus particularly on helping to alleviate hunger in all the communities in which we have a presence. During the year, we made surplus food from all our stores, valued at R109 million, available to hundreds of verified non-profit organisations for distribution to thousands of people. “Over the years we have acquired
the skill to operate successfully even under the most adverse conditions, and we believe we shall be able to do so again.” In October, the Group gave an update on its operational performance and stated that it had continued in the same vein as the previous year, increasing turnover by 15.7%. in South Africa, sales increased by 12.4% and in Africa, turnover increased by 35.1%. The Group stated that it remained optimistic about the medium-term, despite the challenges that face the industry. Shoprite was founded in 1979, when eight Cape-based supermarkets were bought for R1 million. Over the next four decades, the company would grow to become a R113.69 billion business that is globally respected and impacts on the lives of millions of Africans every day.
Proud Supplier of Fresh Produce to the Shoprite / Checkers Group For more information: (t) +27 23 316 2366 or (email) firstname.lastname@example.org Also visit www.laastedrif.co.za
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CHANGES AT THE TOP Apart from excellent financial results, the major story to come from Shoprite in recent months is the pending retirement of Basson, who will leave his office at the end of this month after 37 years with the company that he founded in 1979. Basson is originally from the town of Porterville in the Western Cape. After finishing school, he toyed with the idea of entering the medical industry but decided to focus on business. He completed his BCom CTA at Stellenbosch University and qualified as Chartered Accountant in 1970 after serving his articles with ER Syfret & Co (now known as Ernst & Young Chartered Accountants). From
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1970-71, he practiced as a Chartered Accountant with Brink, Roos & Du Toit in Cape Town (now known as PriceWaterhouseCoopers) and then joined Pep Stores Ltd. In 1974, he was appointed to the Board and held his position for 30 years. In 1974, Basson dropped the title of Financial Director and became head of operations, responsible for building the Pep Stores brand and company. Through this position he found his love for building companies that had previously been troubled. He acquired the small eight store Shoprite business from the Rogut family in 1979 and would go on to build the business into the largest food retailer in Africa. Many consider Basson to be one
of the greatest African entrepreneurs and, considering the aforementioned financials, it looks like he is leaving the business perfectly positioned for incoming CEO, Pieter Engelbrecht â€“ a long-term Shoprite man who has been close to Basson for many years. A Chartered Accountant by profession, Englebrecht holds an Honours degree in Accounting Science from UNISA and a Bachelor of Commerce (Accounting) from Stellenbosch University. He joined Shoprite Checkers (Pty) Ltd in 1997, helping to establish new brands into multi-billion Rand businesses â€“ including LiquorShop. He was named as COO of the Shoprite Group in 2007 and will start in his new position on
January 1st 2017. “I have been privileged to lead the Shoprite Group from small beginnings to one of the continent’s greatest companies. After so many years with the Group, it’s time to pass the baton to a new generation of leadership,” he said. “Given the quality of Shoprite’s current management team and their exceptional track record I foresee that the company will continue to grow from strength to strength. Fortunately, effective succession has always been a key focus for the management team and over the last few years many of the key operational responsibilities had already been successfully handled by the senior management team. “I look forward to being a sounding
board for Pieter Engelbrecht and his team as they take the company forward and continue the high standards we have always set ourselves as the supermarket with the lowest prices and the highest level of customer satisfaction,” he added. Chairman of the Shoprite Holdings Board, Christo Wiese said of Basson: “Whitey has been a very strong and charismatic leader, who has managed the company through market transitions and challenging times, taking calculated risks to turn the supermarket group into the leading food retailer on the continent. He fully deserves his reputation as one of South Africa’s retail giants. His continuous service to the company, its
employees and stockholders, as well as to the broader South African business community has been remarkable.” As we enter the festive season under the last days of Basson leadership, Shoprite will look to tighten its grip on market share by attracting shoppers all over South Africa, and further afield, so that the start of 2017, and the start of Mr Engelbrecht’s rein, will continue to be just as pleasing as the preceding years.
SHOPRITE @Shoprite_SA www.shoprite.co.za
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Mall of Africa is Platform for Further Attacq Growth PRODUCTION: Karl Pietersen
The magnificent Mall of Africa at Waterfall City is one of the most important commercial retail projects completed in South Africa in recent times. it has bolstered the portfolio of Attacq and is positioning the company for success in the future. Attacq CEO Morné Wilken tells us more…
One of the commercial construction marvels in South Africa in recent times, the Mall of Africa is the country’s largest shopping mall ever built in a single phase. The 131,000 m2 boasts more than 300 shops, with substantial anchor tenants and a carefully selected retail mix including both local and international brands. Add offerings from Woolworths, Checkers, H&M, Zara, Hamleys, Cotton On, Forever 21, Forever New, River Island, Mango and Versace to a choice of world-class entertainment and restaurants and you realise that the Mall of Africa truly offers a shopping experience like no other. Located in Gauteng, conveniently between Johannesburg and Pretoria, close to Sandton and Midrand, the Mall of Africa forms the heart of Waterfall City. Currently being developed by JSE-listed capital growth property fund, Attacq, Waterfall City is one of the most ambitious projects currently underway
in South Africa. The Mall of Africa is owned 80% by Attacq and 20% by Atterbury Property Developments. The plan for Waterfall is to create a new CBD for Gauteng; a sprawling urban development that will offer companies of all sizes and residents the perfect place to live, work and play. Following the opening of the Mall of Africa in April 2016, Attacq CEO Morné Wilken says that the project has been extremely well received and only expects things to continue going well. “We had a fantastic opening – it was quite amazing. On opening day, we had 123,000 people coming through the mall. In the first five days, we welcomed around 500,000 people,” he explains. “We’re seeing around 1.1 million people coming through each month and it’s trading very well so we’re quite excited about it. Obviously, I think trading will improve over time as the city densifies. “When we opened, there was around a 1% vacancy rate and that Continues on page 80 www.enterprise-africa.net / 77
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the production of membranes with a lifespan of more than 40 years internationally, and 30 in South Africa. DERBIT SA provides a comprehensive product range designed to satisfy the requirements of a wide range of building structures, from concrete to wood to steel decks to re-roofing and below ground waterproofing. We are also fully equipped to provide an effective service to participants in the construction industry, including design and assessment of installation. We further benefit from an extensive network of professional roofers fully trained to provide an efficient installation service.
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INDUSTRY FOCUS: PROPERTY
Continues from page 77 has been filled. It wasn’t that we didn’t have demand, it was just a case of getting transactions completed on that specific site.” Louis van der Watt, CEO of Atterbury says: “In line with the Atterbury vision to create working, shopping and entertainment spaces for everyone to live to their full potential, the development of this breath-taking shopping and leisure destination introduces an unmissable, unmatched retail experience. Mall of Africa’s exceptional scale, design, location and retail mix places it at the forefront of development.” Along with the recognised local and international brands that now call the Mall of Africa home, a host of other global names have marked their first move in the country with new stores - Armani Exchange, Helly Hansen, Asics, Zara Home, The Kooples, Under Armour, Mango Man and Soap Stories to name just a few. The scale of the Mall of Africa is seriously impressive. Its construction area covers a massive 550,000 m2, the equivalent to 78 rugby fields. If you walk the perimeter, it’s a 1.75 km journey; inside, there’s six km of shopfront and during construction, 205,000 cubic metres of concrete was poured. It contains 50 sets of lifts, 40 escalators, 26 entrance ways, and a one of a kind glazed roof, said to be one of the largest of its kind in the world. Adding to the entertainment on offer at the mall is a state-of-the-art nine-screen Ster Kinekor cinema complex with more than 1100 seats. Enhancing its green credentials, the mall also boasts one of the biggest photovoltaic installations of any mall in South African along with efficient lighting design and state of the art air conditioning to conserve energy. “Following the catalytic momentum created by the opening
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of the Mall of Africa, Waterfall City is rapidly becoming the favoured destination for beneficial corporate consolidation. Projections show that the Mall of Africa alone will attract more than 15 million people per year,” says Wilken. “Based on studies by Urban Studies, the projected growth in office space is expected to be almost 30% per annum until 2020. The opening of the 26-storey PwC Tower will accelerate this growth even further,” he continues. WATERFALL CITY Waterfall City is often referred to as the ‘jewel in Attacq’s crown’. The company acquired the development rights in 2008 and has been making progress ever since. To date, the Mall of Africa has been constructed and opened, the new PwC Tower is under construction, new head offices have been built for Group 5, Cell C, Novartis, Cummins, Dräger and many more, and Wilken believes that in the tough economic climate, consolidation at Waterfall offers potential clients real opportunities to make savings. “One must note that Waterfall, with Waterfall City as its nucleus, is in the centre of Gauteng as the economic hub of the country. It is the ideal infill development between Johannesburg and Pretoria with excellent access and infrastructure. “Tighter economic realities call for corporate consolidation. Companies can reap real significant benefit from consolidation to Waterfall City, through reduction of rented space, use of green technologies, culture gains and having a more efficient workforce all located centrally in the province.” Perfectly situated next to the Allandale Interchange, access to Waterfall is quick and easy. There’s also a convenient Gautrain bus route from the nearby Midrand Gautrain station. There’s even
dedicated pick up and drop off points for Uber drivers at the mall – a first for the country in a retail space. Prior to development, Waterfall (or Waterval) was farmland and the original title-deed-holders were the Gibson brothers who arrived into South Africa from England in 1871. They bred cattle and operated a stage coach business between Jo’burg and Pretoria before selling the farm to Moosa Ismail Mia in 1934 and he built a religious training facility and a school for Indian and black orphans. Over the years, the land became extremely valuable, primarily due to its positioning. “One of Waterfall’s biggest advantages is that it’s right in the centre of Gauteng,” says Wilken. “Everything has developed around it and, given its central location, it makes it ideal for corporates to consolidate their offices. For example, if a company has offices in Johannesburg and Pretoria, Waterfall is perfectly situated to consolidate. We have brilliant access from the Allandale interchange.” The new R160 million Bridal Veil Road overpass bridge that crosses the N1 highway south of the Allandale Road interchange and north of the Buccleuch interchange, providing a new eastwest transport route, along with the new R40 million, 1km S-bend dual carriageway extension to Bridal Veil Road brings people directly to the doors of the Mall of Africa in the heart of Waterfall City. However, while much progress has been made, there is still a very long way to go before Waterfall City reaches its full potential. “We’re looking at 10-15 years. We’re effectively building a whole new city and that takes time,” says Wilken. ECONOMIC IMPACT The figures show that the
development of Waterfall City is already starting bring about huge benefits to the South African economy – an economy that has looked uneasy since 2008/09. After avoiding a downgrade to junk status by international credit agencies earlier this year, confidence has waned but at Waterfall, corporates have moved in, jobs have been created and money is flowing. “Our big advantage is that we supply work for a lot of contractors as well as professionals and that’s beneficial for the economy. The Mall of Africa created around 3500 permanent jobs during construction and around 4500 after it was completed. It’s exciting in terms of giving economic uplift to Gauteng and South Africa,” says Wilken. And internally the company has benefitted, posting positive results
in September including total asset value growing by 18.6% on the previous year to R27.6 billion. Attacq continues with its pursuit of the vision ‘to invest in quality real estate, develop great properties and grow a strong rental portfolio in South Africa, as well as other emerging and developed markets’, and the focus for the future remains with Waterfall. “In South Africa, Waterfall will definitely be our main focus,” explains Wilken. “The mall has been designed to allow for an expansion of 25,000 m2 and we look forward to significant value upliftment in years to come. “Waterfall remains the jewel in the Attacq crown as a catalyst for regional growth. We are very positive about the way ahead. “With the opening of the Mall
of Africa, Attacq confirms its pursuit of sound capital growth, delivering its strategic business model for long-term returns for all Attacq’s stakeholders. Attacq will continue to develop, invest and grow wisely as a sound listed capital growth fund with a strong investment and development pipeline beyond this major milestone. We will continue to pursue good business opportunities in South Africa, developing markets as well as established markets,” he concludes.
ATTACQ +27 87 845 1136 www.attacq.co.za
COMMERCIAL I INDUSTRIAL I RETAIL RICHARD FRANKS +27 82 888 9555 OFFICE +27 87 286 5293 www.jtson.co.za
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Â© KONE CORPORATION
KONE ELEVATORS SA
KONE Elevators and Escalators
Spreading its Wings in Africa
PRODUCTION: Manelesi Dumasi
KONE means ‘machine’ or ‘device’ in Finnish and this global engineering and service company continues to install, upgrade and maintain some of the world’s best elevator and escalator machines and devices in South Africa whilst growing its presence on the African continent.
2016 marks the sixth year in a row that KONE has been ranked as one of the world’s most innovative companies by business magazine, Forbes. As a global leader in the elevator and escalator industry, KONE was positioned 56th on the list of the world’s top 100 most innovative companies; 8th most innovative in Europe and the only elevator and escalator company on this list of the
world’s most venerated companies. “Once again, we are proud to have been recognised for our innovation by Forbes. Changes in market dynamics and technologies mean we have established new areas for growth and built new partnerships,” said KONE Chief Technology Officer, Tomio Pihkala in September. In the same month, the company was also celebrating a robust quarterly
report, with President and CEO, Henrik Ehrnrooth commenting: “I am pleased with our continued solid performance in the third quarter… Over the past years, we have focused on understanding the needs of our customers even better.” In South Africa, KONE South Africa operates as part of the Europe, Middle East and Africa (EMEA) business unit and this was a region that performed well in the third quarter. “The market in the
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EMEA region was rather stable, while the market continued to grow in North America,” the company stated. “Also the market in the EMEA region is expected to grow slightly with slight growth in Europe and a more stable development in the Middle East.” Roland van Gameren, MD of KONE South Africa tells Enterprise Africa that the goal of the company locally matches that of its international parent: To deliver the best people flow experience, and so far, this is exactly what it has done. “We want to continuously grow in a sustainable way; that is our main objective. In terms of image, product, innovation, and partnerships with customers, I would say we have emerged as one of the industry leaders. When it comes to providing solutions, we are at the international level, where KONE is the market leader with new equipment around the world.
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“Typically in South Africa, we see a lot of urbanisation and there’s a lot of new developments. This presents opportunities for our people flow solutions as we are continuously growing with new equipment for elevators and escalators,” he says. NEW HEIGHTS With the local and global economic environment throwing up new challenges every day, you may think that it is harder than ever for companies of size to grow and build upon previous success. While this does seem to be the case right now, KONE South Africa continues to develop and is regularly gaining new contracts. Importantly, a mix of new installations, maintenance and upgrade contracts, geographic spread, and changes in regulation is helping KONE. “There are some new regulations
in the elevator industry and from March 2017, all new elevators will have to comply with these regulations and we can already supply elevators in this way,” explains van Gameren. “We are working on some big projects where we are installing destination controls. We have seen that people flow is extremely well managed by this new system; it’s not just pressing a button at a certain elevator, it directs you to the most convenient route, whether you’re one person or a group, and brings you to your destination quickly. “These products have been developed by the international KONE group long ago and are starting to become more popular in South Africa. We already have a lot of experience working with these products and are rolling them out here because we are seeing many multi-use complexes develop and there’s several people flow movements within a single building. With these innovations, we can control flow in buildings where there is a combination of offices, hotels and apartments moving through one entrance. “We have seen in Durban and Cape Town and also in the centre of Pretoria and Johannesburg, that the buildings are older and they require modernisation and the replacement of existing elevators. For example, in Pretoria, you see new equipment going into the surrounding areas and the modernisation and full replacements happening in the centre,” he says. van Gameren is also keen to point out that KONE places value on both large scale and smaller projects – ordering a single stop elevator for your home will receive the same quality product and of course traffic calculations and specialist teams provide their same expertise and attention to a multi-disciplinary installation in your corporate head office. “For us, all orders are valuable,” he says. “We have the same interest in building one single elevator with
KONE ELEVATORS SA
only a few stops as we do for a multidestination control set of elevators and escalators. There is a movement in the residential market for housing with elevators. A lot of people are also moving into secured estates with multiple levels homes and that offers us opportunities for elevator installation.” As with many companies that find success in South Africa, KONE will look to use its achievement as a platform for growth on the continent. With major urbanisation and infrastructure development, the likes of which is not seen anywhere else in the world, Africa is the perfect market for KONE. “We have a strong presence in South Africa and a good presence in West Africa. We have recently opened in Morocco and we are also investigating opportunities in other southern African markets including Botswana, Namibia and Mozambique. We haven’t finalised any decision yet but we are investigating multiple options as each market is different. We don’t have the same strategy in each country and it depends on the market, the situation, the development and the opportunity. “We keep track of all of South Africa’s major developments and have just finished a project with the Rosebank Towers using our destination control products. We have worked on shopping malls around the country and recently started work on the Cape Townbased Table Bay Mall and Media 24 and other mega projects,” says van Gameren.
buildings are still going up; just driving through the big cities you can see the cranes and the work that is happening.” Overall though, KONE SA has not experienced any slowdown. “We have a very good financial position and the economic situation is not currently effecting our investment and growth plans. We all know that soon enough the economy will recover and we just have to wait and see. “We will continue to grow in a sustainable and controlled way. We look for new projects, modernisation projects and also maintenance contracts. We are also looking for opportunities with the customers that we already work with to ensure we continue building on our excellent partnerships and can grow alongside them. If opportunities come about to acquire other companies, we will
always investigate” the MD details. A key factor that is spurring the growth of the business is the way that KONE manages to create partnerships with other industry leading organisations, allowing it to focus on its core business. “As an international company, working all over the world, we have our own developments and have succeeded in creating partnerships with other businesses. For example, we work on the digital side with HP and on the connection side with Vodacom and all of this is in order to combine these solutions to optimise people flow and connection with the new digital world. “We frequently meet with our customers and ask what they are missing and how their daily lives could be made easier from a people flow perspective and we take that
BOTTOM LEVEL - ECONOMY While many industries have been impacted significantly by an ailing economy, KONE has remained insulated from difficulties to date. However, two areas that have placed hurdles in front of this growing business are currency markets and investment into maintenance as van Gameren explains: “GDP growth is estimated to be zero for this year and that is not helpful. It causes hesitation when it comes to investment, especially in existing buildings. New
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Â© KONE CORPORATION
KONE ELEVATORS SA
feedback to our R&D department so that we continually try and develop products and solutions that fit our customer needs for now and the future,” explains van Gameren. LIFTING PEOPLE UP Around the world, the KONE group employs some 49,000 people. With a South Africa Head Office based in Edenvale, Johannesburg, the SA elevator operation is home to around 300. Of course, people are the most important asset of the company and their development is vital for ongoing commercial success and development in both the African and global market. “A lot of young people do not think about working for an elevator company while they are at school but when they have their first taste of the industry they realise it’s an attractive offering. You work with innovative solutions, for a growing company with a strong financial position,” explains van Gameren. KONE products and solutions are high-tech and innovative and therefore, the company looks for engineers and technicians of a high skill level. As this is not always easy to find, the company also invests significantly in training and education – a must for any growing business. “Acquiring, hiring and training the right calibre of people, can be difficult in this market,” says van Gameren. “But because we offer international knowledge through our training programme we can afford to take apprentices who we can continuously train to get them to the internationally recognised level we require. We give them education and experience and because they are on the frontline with our customers, it’s important that we invest a lot into this area of our service development. In addition to this, we are proud to promote
diversity in our organisation by actively recruiting learners form previously disadvantaged communities and partnering with specific community projects like the Mashup Community Development in Westbury, Johannesburg, we believe these types of programmes are vital in adding social value in African communities. “We invest heavily in employee satisfaction but we know that there’s a chance people will leave us. This of course is what we try our very best to avoid.” van Gameren himself is a happy KONE employee and although only relatively new in the big job in SA (starting in June 2016), he is confident about the future prospects of KONE SA. “Having recently opened in Morocco, we are also investigating
opportunities in other southern African markets including Botswana, Namibia and Mozambique. I’m proud to work for KONE; I’m trying to achieve the next level of quality workmanship and customer satisfaction. This is a country with a lot of opportunities and I see a bright future for both South Africa and for KONE in South Africa spreading its wings right across Africa.”
KONE ELEVATORS SA 011 997 4000 email@example.com www.kone.com
Forever lifts commenced trading in March 2009. We specialise in service, repair, maintenance, assembly, disassembly and installation of elevators and escalators. We are currently subcontractors of Kone Elevators SA.
We intend to grow higher & higher.
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SANJI SECURITY SYSTEMS
Caught In A
PRODUCTION: Colin Chinery
Sanji Security Systems is one of the leading vehicle security manufacturers in South Africa, renowned for its ability to design leading-edge security products. And with vehicle crimes continuing to soar in South Africa, its innovative solutions are seen as the sector benchmark. â€œWe look at these issues from the point of view of the consumer, and how can we make life simpler,â€? says Managing Director Steve Easton.
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INDUSTRY FOCUS: AUTOMOTIVE
According to AA figures, one in every 350 South Africans has had their vehicles stolen or hijacked, while one in every 230 has had items stolen from their cars. As crime becomes increasingly sophisticated, so must the means of countering it. “Anyone who has invested heavily in a vehicle needs to protect their investment. And this means protecting it far further than the range of choices and devices available to the criminal,” says Steve Easton, Managing Director of leading vehicle security specialists, Sanji Security Systems. Sanji manufactures and distributes five core automotive lines including vehicle security alarms and immobilisers, keyless entry systems and factory upgrade systems. Mitsubishi Kenya, Hyundai, General Motors, Mazda and KIA are South African OEM customers, and products – some customised - from the Johannesburgbased company are sold worldwide and through 400 local dealerships.
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UNIQUE SOLUTION And with jamming the new car crime fashion, Sanji’s ZX JamAlert is arming the motorist with unrivalled protection. Connected to the car battery, it activates a siren whenever a third party attempts to jam the signal on the car owner’s remote. Its capabilities are unique and its deployment on the anticrime scene timely. Over 143,000 cases of remote jamming and theft from vehicles reported in South Africa per annum. “Remote jamming is now a big issue in South Africa. Go into a shopping mall, push the remote to lock your car and a thief can possibly jam that signal with a remote so it doesn’t get through to your car. Unaware, you walk off, and it’s likely the gang will have all the time in the world to ransack your vehicle.” Common locations include petrol stations and shopping malls says Mr Easton, a board member
of the non-profit Motor Vehicle Security Association of South Africa. “But you can get jammed anywhere. The criminals are opportunists, they work fast and need no more than a few seconds to open your car door or boot and grab your valuables.” It’s a low entry crime, thieves acquiring illegal jamming devices ranging in size and power from small hand-held devices to briefcase-sized units. And they are available not just from a specialist supplier “but anywhere – ironically, often bought in the malls where the thieves are operating. It’s a criminal activity that’s been around for some time, but has now got much worse.” Sanji Security Systems was the first to come out with a vehiclerelated product in South Africa. “I don’t believe it’s available anywhere outside either. And as with all our products, a chirp sound tells you when your alarm is set. If you don’t get the chirp you know something is wrong.
SANJI SECURITY SYSTEMS
“With probably 95% of factoryfitted vehicle security systems not giving an audible indication that your alarm has been set, this aspect of our product comes in very handy.” Launched in 1986, its founder members were initially in the video tape business. “Electronics had been a bit of a hobby, and the business then developed into the monster that I’m sitting on now,” said Mr Easton, who joined the business in 1989. “Back then there was a huge market for vehicle security in South Africa, and there were perhaps a dozen players. Today, we are down to two major players here, each manufacturing locally in South Africa.” With a staff of 60 and privately owned by its management and the Gerber Goldschmidt Group, Sanji, he says, “runs as a family business with family morals, if I can put it that way.” In a flat economy, South Africa’s new vehicle market continues to decline, with sales in one midsummer month of only 43,000 – a 10.3% fall. – while over the same period demand for used cars grew 9.5%. It’s a shift to which unsurprisingly, Sanji has adjusted successfully.
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USED CAR PRIORITIES “Obviously when manufacturers are unable to sell cars it affects us. However, the big upturn in used cars points up the fact that a lot of cars in South Africa do not have for example, lock and start, where the doors automatically lock when you start the motor. We provide a solution to this as well as almost every type of vehicle security-related problem.” Problem identification and solution response is a key focus for this ISO 9001:2008 accredited and B-BBEE Level 6 Contributor. “We look at these issues from the point of view of the consumer, and how can we
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INDUSTRY FOCUS: AUTOMOTIVE
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SANJI SECURITY SYSTEMS
make his life simpler.” Another major product release which has Easton excited is the selective unlock. “If you and your vehicle are alone, you press your remote once to unlock it, and only the driver’s door will open. But when you are with your family you press twice and all the other doors will open. We are highly focused on the security of the individual, and it’s a side of our business that’s very much growing.” Other security products in the Sanji portfolio include the ZX WheelAlert, a patented device that triggers a vehicle’s existing alarm system the moment the spare wheel is tampered with, the ZX70 MK2 keyless entry remote to a full alarm system with anti hi-jack, and the ZX40KPW Circuit Cut Keypad Immobiliser.
TOP AWARD Renowned for its ability to design leading-edge security products, Sanji has been granted numerous patents in the electronic field and is the recipient of the prestigious SABS Design Institute Award. It’s success is due to quality, innovative products, market insights, a close relationship with its customers, and providing niche problem solutions for manufacturers and road users. But in a troubled economy and cashstrapped consumers, is Mr Easton still confident that Sanji can secure its 15% year on year growth plans? “Yes I believe we can. When we started in ‘86 vehicles had no security whatever. So the cake was huge, and all that’s happened since is that the cake has got smaller and you have to work harder for your
slice. While conventional alarm immobilizer products are selling less, our accessories are selling a lot more. “The business model has changed slightly, but the sales opportunities are still there. We will continue to enhance the existing factory-fitted security and give you what we term ‘Proper Security’.”
SANJI SECURITY SYSTEMS +27 11 875 0000 Sales@sanji.co.za www.sanji.co.za
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PRODUCTION: Colin Chinery
For over six decades, through economic cycles, political transition and social transformation, the underlying theme of the Imperial Group’s development has been leadership in mobility. But by the time Mark James Lamberti took over as CEO, mobility had become stuck in the slow lane. What followed was massive shift towards focus, asset growth, and personal development. “Along with strategy I regard the whole re-invigoration and re-invention of the leadership of Imperial as my priority,” he says.
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INDUSTRY FOCUS: MOBILITY
Arriving at the Bedfordview East Rand HQ of Imperial Holdings in March 2014, the desk view of new CEO Mark James Lamberti was challenging and unambiguous; a JSElisted corporate ‘Leader in Mobility’ stuck in a gridlock of sluggish performance. “The market value of the Group was not much different to what it was in 2006 and my objective was very clear; to unlock the Group’s value and realise the potential of some very interesting and substantial assets,” he tells Enterprise Africa. Since its founding as a single car dealership in downtown Johannesburg in 1948, Imperial had extended proven capabilities and resources into new products, markets and businesses. Its chief operational areas were consumer and industrial logistics and vehicle import, distribution, dealerships, retail and related services, but 65-year-old Lamberti,
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former head of Transaction Capital and Massmart, soon identified the need to sharpen the strategic focus of the portfolio. “A number of businesses were non-core with no strategic relevance whatsoever and many were producing very low returns on the capital or effort employed. In pursuit of greater strategic clarity, by early 2016, we had disposed of R5.5 billion of businesses and properties and acquired R2.8 billion of businesses and it was increasingly obvious that far from being a conglomerate, Imperial comprised two distinctly different major businesses: logistics and vehicles, with little real synergy between them aside from the Imperial Group’s balance sheet.” SYNERGY AND STREAMLINING What followed was a major operational streamlining bringing the two divisions
into sharp governance and managerial focus within a single leadership team and eliminating sub divisions. The motor import, retail, rental, aftermarket parts and financial services businesses were combined into what is now MOTUS, while Logistics South Africa, Logistics Rest of Africa and Logistics International (mainly Europe) were likewise combined under one leadership team as Imperial Logistics. “This is how the logistics business has been functioning since July 1st 2016 and how our motor business will be functioning from January 1st 2017; increasing the focus on customers and employees, eliminating duplicated activities, complexity and costs, and unlocking the value of the underlying assets.” 71% of Imperial’s Logistics operating profit is generated outside South Africa, much of it in Europe. European motor
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INDUSTRY FOCUS: MOBILITY
manufacturers are major clients and Imperial is the biggest inland shipper on the Rhine. But while impressive, many of the European activities are highly capital intensive. “It costs us money to get into those businesses and we have to continue to invest in order to grow them,” the CEO explains. So, as recent acquisitions demonstrate, Lamberti has steered the Group towards investing in capital-light businesses that generate enough cash flow for self-sustaining growth. The £163 million (R3.2 billion) acquisition in July 2016 of UK’s Palletways, of which Imperial owns 95% and paid R3 billion, is a striking example. The Staffordshire-based company had grown from British-only player to an integrated pan-European presence across 20 countries, delivering eight million pallets annually across Europe. “Palletways ticked all the boxes, a very interesting, capital-light business model trading very much on the expertise we have around palletisation, trucking and warehousing. “We will certainly be doing more of this going forward. We have a very active
M&A pipeline, and you can expect to see acquisition activity over the next few years very similar to that of the past few years.” With Imperial’s European operation already very substantial - a R21 billion business making over R1 billion in profits in the twelve months up to June 2016 - further expansion there is an imperative and building a presence outside South Africa in the motor business is equally important, says Mr Lamberti. “Both in our logistics business and our motor vehicle business we have relatively high market shares and would struggle to grow our businesses through acquisitions within South Africa, limited either by the Competition Commission, or in the motor industry by what the OEMs would allow us to do. So as the major player in South Africa both in logistics and in motor, we will continue to look outside South Africa for growth.” Today a R119 billion business – 42% outside South Africa, an increase of 23% - and returning a R6.4 billion operating profit - up 3% – a Group staff of over 51,000 is serving customers from more than 1,200 locations in over 30 countries across five continents. Lamberti’s response
to these figures is cautious. “Our own growth has not been spectacular, but in the current environment it has been difficult to hold even these numbers for two reasons. The biggest impact on us has been the weakness of the Rand, decreasing by 27% in the last financial year. As an importer of motor vehicles this means that the same vehicle is theoretically 27% more when it lands in our dealership showrooms, and that makes us uncompetitive. NO CRYING “Second is the weakness in the economy, with consumer and business confidence weak and motor vehicle sales in decline, though nothing like we saw coming out of the global financial crisis. And because of the economic situation, logistics activity is slightly lower. However, we have been quick to respond, and I am not one of those who come to work every morning crying about the economy.” One of the problems with South Africans says Lamberti, is a tendency to think that their country’s problems are unique. “But many of the global growth factors are under pressure right
CEO MARK JAMES LAMBERTI
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now; Europe is not growing as fast as one would have expected, and the only economy that seems to be doing well, apart from China and India, is America. “Most of the emerging markets and even some of the developed are under pretty serious pressure now. And while some of South Africa’s problems are of our own making and have a political root, I don’t believe them to be as serious as some suggest. I don’t think there’s a direct correlation between political activities here, which are noisy because we are a young democracy, and the economy.” Together with a number of other large-group CEOs, Lamberti was closely involved working with the Finance Minister and rating agencies in the discussions that led to South Africa recently avoiding credit downgrading. “Any analysis of what happens to a country after a downgrade suggests that most go into a recession thereafter and it takes a long time to pull out of it. For us as a Group, the questions would have been the impact on an already weak currency and whether consumer confidence would be further depressed. “What I know is that we have to work - collectively as Government, business and labour - in this country to do those things that stimulate growth and
employment, and enable the Government to retain fiscal rectitude. Despite our noisy politics I believe we have very responsible government of our Treasury and our Reserve Bank and I think these things stand us in good stead.” If leadership by personal example is a mark of an inspirational CEO, Mark James Lamberti is of the front rank. An executive committee member and director of Business Leadership South Africa and a trustee and executive committee member of the National Education Collaboration Trust, on taking over as Imperial’s head he stamped a mark on executive pay by forfeiting the annual fixed component of his salary, making it available for the university education of direct descendants of employees who earned less than R600,000 and had been working for the Group for more than five years. TREES DIE FROM THE TOP “In a way, the fact that I was appointed as an outsider is an indictment of an organisation of this size. A tree dies from the top, and there should have been a depth of succession that could have taken this job but there wasn’t.” The result has been an emphasis and major investment in succession development and leadership excellence, and a
simultaneous training across the front line, with Imperial training around 1,000 mechanical and technician apprentices a year. “When I arrived here many of my peers at the highest level in the organisation were three or five years away from retirement, so bringing through the next generation who will be leading Imperial in five or ten years’ time was an imperative, and we have invested a huge amount of money and time in doing that. “As a result the most senior 26 people today have different responsibilities or titles than what they had just a year ago. Along with strategy I regard the whole re-invigoration and reinvention of the leadership of Imperial as my priority. If I as the CEO of this Group can get the strategy right and the people right, then the rest will almost look after itself.”
IMPERIAL HOLDINGS +27 11 372 6500 firstname.lastname@example.org www.imperial.co.za
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BAW SOUTH AFRICA
PRODUCTION: Colin Chinery
Early next year Gauteng-based Beijing Automotive Works SA starts construction of its full CKD manufacturing plant of its Sasuka minicab taxi, with a 25% market share goal and expansion into subSaharan Africa. “This is a vehicle specifically designed for African conditions,” says BAW SA’s Chief Financial Officer, Samson Mojalefa.
INDUSTRY FOCUS: AUTOMOTIVE
Sasuka - the Zulu word meaning ‘we are departing’ – is the 16-seater minibus taxi poised to make renewed inroads into this burgeoning public transport sector with a package of innovation and passenger orientation and value. Minibus taxis are a vital part of South Africa’s public transport system with more than 16 million commuters’ dependent each day. Clocking 1.6 billion passenger trips a year, they are the most affordable, and the servant for the majority of urban poor. The main player in this R40
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billion annual revenue sector is the ubiquitous Toyota Ses’fikile, but Sasuka’s manufacturer, East Randbased BAW SA, is targeting new and major inroads into its market share. “This is a market with brand loyalty, and Toyota has been around for ever and a day. Our challenge as a company is to try and break the mentality of the consumer who has only ever known Toyota,” says BAW SA’s Chief Financial Officer, Samson Mojalefa. FLAGSHIP VENTURE BAW SA is the flagship joint venture
between Beijing Automotive Works China (owned by Beijing Automobile Industry Holding Company (BAIC)) and South Africa’s state-owned Industrial Development Corporation. Opened in 2012, its plant and headquarters outside Springs in Johannesburg’s East Rand is currently producing up to 160 Sasukas’ a month on a semi knocked-down (SKD) basis. But March 2018 will see a major gear shift - an operational move to full CKD manufacturing at far higher capacity levels and set to bring 100 to 150 new jobs, a 30% increase on the current level. “We will have our own body and
BAW SOUTH AFRICA
//OUR CHALLENGE AS A COMPANY IS TO TRY AND BREAK THE MENTALITY OF THE CONSUMER WHO HAS ONLY EVER KNOWN TOYOTA//
paint shops and assembly line, and we will cease to bring in the fully trimmed body in its current SKD format,” says Mr Mojalefa. “It’s a complete manufacturing facility where we will be importing everything in knock-down form and achieving economies of scale with increased efficiencies and profitability.” Similar in shape and style to the Toyota Ses’fikile, the Sasuka offers significant extras which Mr Mojalefa is confident will give it market edge. “The way we are approaching this is to make our products on a spec-by-spec basis and so achieve superiority. “For example, we have satellite navigation, better seats than the Toyota, better head lining, full air conditioning throughout the vehicle, and DVD. So we are going forward spec-by-spec, achieving a product that is a lot better than the Toyota.” A two-year/200,000 km service plan that also covers maintenance of the entire braking system is another feature which BAW SA believes will win big sales in this competitive and accident-plagued market. “It’s a unique and affordable all-in-one financial package on a rental basis. “We are aware of the competitiveness in the market and trying to be unique in terms of our offering. Other companies give a warranty up to say 200,000 km, but no other manufacturer is offering a service plan. We are the first to do so and this sets us apart.” If the generality of Chinese autos have a reputation for being unequal to the challenges of our roads, Mojalefa is clear about Sasuka’s African credentials. “This is a vehicle specifically designed for African conditions. “People joke about it, but the fact is
that in Africa you can’t compare with a people carrier in China. The Chinese are typically smaller than us for example, and that’s the kind of detail that we spend a lot of time on. “Like any auto manufacture we have had some challenges, but we have never had any complaints from any customer or any of our dealers regarding the vehicle’s durability in respect of engine, gearbox or diff. The breaking system for example, has been developed especially for African roads, and many vehicles have gone over the 400,000 km mark. “To date we have not had a single
failure on our transmissions, and the gear boxes work fantastically. All together I believe this is a testament to the scale of development that has been put into the product.” With China South Africa’s largest single trading partner and an increasingly significant investor, BAW SA’s BAIC / South Africa’s Industrial Development Corporation paternity has been lauded by Economic Development Minister Ebrahim Patel as a role model of the Government’s New Growth Path of increased industrialisation and shifting reliance away from imports of manufactured goods. SA MANAGEMENT TOP TEAM Asked about the relative influence of the two owner-participants, Mojalefa emphasises the decision-making status of the South African management. “As a major shareholder, China has a major
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INDUSTRY FOCUS: AUTOMOTIVE
Systems Driven Solutions is an IT Support company focussed on providing IT, Consulting and Value Added services into the business community in Africa. Through experience, strong partnerships and a diverse range of skills we are able to deliver business enabling solutions to our customers throughout Africa.
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voice in the company’s direction, but we sit as a management team - many with an ex-BMW or Nissan background - and we set our targets. Obviously we need to make a return and enhance shareholder value, and we know where we want to be in terms of sales.” The managerial composition and backdrop has also been a factor in shaping the Springs plant’s training and career advancement policy. “From the beginning we made sure the mandate was to employ from the local area. A lot of the guys didn’t have any skills, but in the four years since there’s been a massive skills transfer.” The biggest challenge said Mojalefa is the currency value impact. “With 75%
BAW SOUTH AFRICA
of our manufacturing costs exposed to Dollars, adverse news coming out of our country together with the political situation is impacting heavily on the Rand-Dollar. Without doubt this has been the biggest effect on the business. “But while the economy is sluggish and slow, I think our industry is unique because most Africans don’t have an alternative means of transportation to minibus taxis. So while the RandDollar issue has had an effect on our production costs, from a demand point of view I think the economic slowdown has had little or zero effect.” AFRICAN AMBITIONS After settling in the full
manufacturing programme, BAW SA will start looking at the rest of the African market. “We are currently exporting to Namibia and Mozambique, but those markets are very small in terms of what we are selling. Then once we have established our CKD, the plan is to move in to the rest of Africa. “We will be looking primarily at those countries with a right-hand side drive - we have not as yet addressed the left-hand side - such as Zambia, Zimbabwe, Kenya and Uganda.” Currently producing 150 vehicles a month - 7.5 to 10% in a market that’s close to 1,200 – the potential is massive,
and the Springs company has set a goal of a 25% market share. “I believe we will achieve this, with the final Sasuka extras package compelling enough to give us that scale of share in the market.” For new era Sasuka - ‘We are Departing’ - another Zulu word is taking its message to the minibus taxi market: thina ifika – ‘We are Arriving.’
BAW SOUTH AFRICA 011 817 8000 www.bawsouthafrica.co.za
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Making Multimillion Rand Manufacturing
PRODUCTION: Manelesi Dumasi
Expert SA paper manufacturing business, Twinsaver, is making big investments that will see it grow to better service its local market, enter sub-Saharan Africa, and create many much-needed new jobs.
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INDUSTRY FOCUS: MANUFACTURING
News of much needed investment into South Africa’s manufacturing sector came in November from Bryanston-based paper product producer, Twinsaver. Operating in South Africa for more than 60 years, Twinsaver is recognised as an industry leader when it comes to the provision of branded tissue products including toilet tissue, facial tissue, paper towels, paper serviettes, paper plates and cups and many others. A total of R580 million will be invested into state-of-the-art production facilities at Twinsaver plants in Belville and Kliprivier. R80 million has already been committed to facilities at Belville where the installation of a two-ply converting line will double production capacity and create additional employment across the tissue value chain. R500 million investment at Kliprivier will see the construction of new facilities and the installation of a new tissue-manufacturing machine over the next 15 months. This will increase the annual output of 59,000 tonnes by 27,000 tonnes. Twinsaver Director, Mario Fernandez tells Enterprise Africa that the goal of this investment is to strengthen the company’s Twin Play product lines. “We’re investing R80 million in Belville and R500 million at Kliprivier. The main focus for these investments surrounds our Twin Ply brand where we see huge potential relative to our competitors as we haven’t really played in this market,” he says. “Previously, our main brand was a single ply and we’re now entering the Twin Ply brand. The investment is to allow for increased capacity and flexibility. “Our Twin Ply brand has been around for some time but it has been limited to small pockets around the country whereas our competitors have had country-wide coverage and used it as their mainstay. We hope to grow the brand and remain relevant to our customers and relative to our competition.” Increasing production at the
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Kliprivier plant will also serve as a catalyst for Twinsaver’s growth in African markets. “The strategy is to invest so that we can grow from Gauteng into Africa,” says Fernandez. “The production will serve the domestic market and export to neighbouring countries: Namibia, Botswana, Zimbabwe, Swaziland, Lesotho, Zambia, Mozambique, Tanzania, Malawi, Angola, and DRC – thus extending its footprint in sub-Saharan Africa and entrenching its position as the leading tissue producer,” said Twinsaver CEO, Gary Towell. The investment was welcomed by Minister of Trade and Industry, Dr Rob Davies, and Ekurhuleni Executive Mayor, Mzwandile Masina. “This investment expansion is indeed commendable and resonates well with our industrial policy of building local production capacity and gearing up for export markets,” said Davies. IDENTITY CHANGES Twinsaver as a company is relatively new to the SA market. Although the brand is well-recognised, Twinsaver products were previously manufactured and distributed as part of Nampak. In 2014, Nampak disposed of the tissue business (known at the time as TwinCare), and in 2015 TwinCare changed its name to trade as the Twinsaver Group. “Twinsaver, already a recognised brand within our portfolio, is the ideal name for the group to transition to. Not only does it carry a heritage of quality and trust, but the strategic decision to trade as Twinsaver is core to us continuing to add value to the market, our consumers, customers, employees and shareholders,” Towell said at the time. Fernandez explains: “Nampak owned the Twinsaver brand and the investment company, Ethos Group, came and looked at the business. Nampak was looking to spin off noncore assets and paper fell into that category. Ethos bought the Twinsaver
brand and eventually renamed the company Twinsaver Group. The discussions started in the latter part of 2014 and the official takeover date was 1st April 2015. “After the buyout from the Nampak group, the discussions began immediately about what was required to grow the business. “The brand had become slightly stale over the years and so we had to work hard to revitalise it. In 2015, we spent a significant amount of money on relaunching the brand and revitalising it with new packaging, innovative products and new marketing campaigns. In the first 12 months after the takeover, we spent around R50 million on capacity building, capability building and brand building. “We’ve most definitely seen results in the short-term and its given us a platform for our long-term strategy,” he says. Obviously, the success that the company has seen since 2014 is just the beginning. When the recently announced investments are completed and the manufacturing capabilities reach their full potential, full expansion into Africa will become a real possibility. Twinsaver will look to further its relationships with retail partners so this expansion can be realised. “Our expansion into Africa will be organic,” says Fernandez. “Right now, we don’t export directly into Africa but we do have customers in Namibia and Botswana who are national retailers such as Pick n Pay. “People are now looking at Africa as the next step in global expansion and we are certainly doing the same. From a demand side, there is definitely opportunity. When we started looking at Africa, we realised that there are still many imports coming in so we will probably look at exporting from South Africa and, in the long-term, look at setting up partnerships. We’re still investigating but if possibilities and opportunities arise, we think it’s worth moving ahead. It’s tough to
//PAPER CONVERTING MACHINE COMPANY Paper Converting Machine Company has been specializing for over 97 years in the design and manufacture of converting machinery for the tissue, nonwovens and flexographic printing industries. Founded in Green Bay, Wisconsin, PCMC has manufacturing operations in Italy, England, and USA, representative offices in Germany, Japan, China and Mexico employing more than 1,000 people worldwide. PCMC’s operations for Europe, Asia, Africa and Latin America are represented by PCMC Italia SpA, Lucca. PCMC is part of Barry-Wehmiller Companies, Inc., (St. Louis, Missouri), a world-leading supplier of packaging, corrugating, and paper converting technology, as well as engineering consulting services. PCMC’s presence in South Africa in the past 5 years has reflected our global increase in market share with 7 projects installed and successfully running during this time including multiple rewinder lines. PCMC has had a big impact on the type of machinery being purchased with both our FORTE and Amica MATRIX platforms producing the highest quality of products at the highest speeds for bathroom tissue and kitchen towel products. With units installed from the Johannesburg area to the Cape Town area, we even have Industrial Band Saws for the biggest and densest products in production as well as TDS Core machines for the most efficient production of cores. This is proof that PCMC is selling both individual units and complete lines to meet the demands of the South African market. With repeat business we are showing that we can fully support our customers using our customer service team at our European headquarters in Italy and our UK team. In addition PCMC is also represented by K Brough & Sons in South Africa giving local assistance to our customers. PCMC is there for all the market needs and with the continuous development program we are always creating the best new solutions for converters today such as ARCO. www.pcmcitalia.com
Complete converting lines for rolled and folded products A PCMC line has the right features for converters looking for leading-edge solutions: Total reliability Strong performance High production capacity Improvement in the quality of the ﬁnished products Customers from all over the world trust in our machines to make them winners on the market. Amica Matrix, Amica Unica and Forte “The best comes as standard with PCMC”
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INDUSTRY FOCUS: MANUFACTURING
get a foothold in Africa. Starting up is difficult; there’s different politics in every nation, different economic situations and there’s many barriers to entry but we believe all of that can be overcome.” Twinsaver is also looking at growing its B2B business. Currently, B2C is the larger of the two sides of the business but Fernandez says that B2B presents big opportunities. “Working with cleaning companies, hotels, restaurants etc is where we see huge potential on the B2B side in the next two to three years. In B2C, we work extensively with national retailers and wholesalers and we enjoy strong partnerships,” he says. When it comes to expanding the product range, Twinsaver is working on a range of different ideas but is keeping its cards close to its chest until ideas have been confirmed. “All I can say right now is that the product portfolio will definitely be expanding. We have an innovation pipeline and we’re working on a few exciting projects at the moment. Our product range will increase by 5% at least in the coming months and this is also a driver of our investments,” says Fernandez. ECONOMIC PLIGHT? The R580 million investments announced by Twinsaver come at a time when many businesses are feeling the pinch from a slow economic
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environment. So how is it that Twinsaver can invest in times as tough as this? Fernandez says the company’s expansion is calculated, and investing during tough times only strengthens your position when the tide turns. “We’ve seen a downturn in the last six to 12 months in the economy and it has effected not only our industry but many other industries. We firmly believe that by having enough capacity and a strong brand we will continue to realise opportunities in South Africa and those opportunities alone justify our investments. Everyone is battling with the economy but if we stick to our strategy and weather the storm, when the upturn begins we will have the capacity and the brand to keep us in a favourable position relative to those who are not investing right now.” Investing in the growth of the company is not just about new facilities or tangible assets; it’s also about growing capabilities and developing efficiency. “When you start looking at expansion, firstly you have to maintain and improve your efficiencies and productivity. With the expansion that we’re looking at, our staff count will definitely grow,” explains Fernandez. “It’s extremely difficult to recruit on the operational side. In sales and marketing, the skills are easier to transfer but operationally, with paper making technology, skills are limited and we do
see a gap.” To address this issue, Twinsaver has partnered with Durban University of Technology which offers a paper and pulp making Diploma and technical degree. “We also have internal programmes to develop people but the industry is niche and the pool of skilled people is small,” he adds. “We are fortunate that we have many long serving employees and most of the training we do is for new recruits.” As we move into 2017, through its people, the company will look for continued growth across all areas – especially its twin ply products – with the end goal being delighted customers. “We will be focussing on our investments and accelerating our twin ply products. Our market share and our margins will also be a key focus. We’ve also invested in training to improve our efficiencies and we hope that will result in improved offerings to our consumers,” Fernandez concludes.
TWINSAVER 0860 777 111 www.twinsaver.co.za
//THE TISSUE PACKAGING COMPANY For 20 years TMC has been offering the most innovative solutions to handle and solve the complexities related to the packaging and management of Tissue products. Our focus on innovation, as well as our ability to be first, define every company choice and behavior: our commitment on Research and Development is steady because it allows us to offer more and more advanced solutions to not only point of view but T hthe e T imarket, ss u e Pac k ag i n gfrom Com a patechnological ny also in terms of service quality, optimization of the production process, simple use and/or maintenance. The advantage of possessing a vast specific experience in the field of packaging for Tissue describes us properly, this was achieved during almost 20 years of activity, besides the worthy individual know-how already owned by its founders and now by all the people who are working in TMC. The quest for latest generation and cutting edge solutions able to solve the most varied complexities typical of Tissue, now enables TMC to be the point of reference at the international level to satisfy even the most difficult requirements. We have distinguished ourselves being always one step ahead, as shown by more than 50 patents registered to this day. We were the first company to produce multi-roll machines completely servo-powered, triple-layer machines, machines with 5 lanes and many other specific solutions, developed and launched onto the market by TMC before any other.
FOCUS ON TISSUE
T h e T i ss u e Pac k ag i n g Com pa n y
FOCUS ON TISSUE More than 1800 machines installed worldwide show our strong commitment in being always a step ahead. Since its foundation TMC has been offering the most innovative solutions to handle and solve the complexities related to the packaging management of Tissue products. To be a step ahead also in taking care of our customers, we created AMS, a company exclusively dedicated to customer service before, during and after the sale, available 24 hours a day and active worldwide.
Ass e t M a n ag e me n t S e rv i c e
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Growing East London Company Addressing SA Water
Security Challenges PRODUCTION: David Napier
Eco Tanks is a leading national manufacturer of standard size and custom rotationally moulded water tanks and many other items and this unique and innovative organisation is continuing to achieve growth across the nation, always focusing on quality.
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INDUSTRY FOCUS: MANUFACTURING
It’s no secret that South Africa continues to face many challenges with water supply. Demand far outstrips supply, infrastructure is old and inefficient, not enough money is spent on upgrades, the climate is semi-arid, and recent droughts have heaped further pressure on a system that is described as teetering in a ‘critical state’. While many much-studied government plans have long been deliberated, and some progress has been made, the situation with the country’s water supply remains a muchdebated topic because of its extreme importance. So what can individual consumers do to make the most of a bad state of affairs? Darren Hanner, Managing Director of East London-based Eco Tanks says his product could help. Eco Tanks manufactures standard and custom size rotationally moulded water tanks. With sizes from 260 litres up to 15,000, long guarantees, and a whole host of accessories and specialty products, Eco Tanks extensive range has helped the company grow to become
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one of the most important, quality driven suppliers in the country. “We set our aim to be the first national manufacturer of water tanks to gain ISO certification and we achieved that. It was a difficult process to gain ISO certification but it shows the perseverance within our organisation. We’re privileged to have a lot of can-do people,” says Hanner. With the water supply facing trials now and in the future, water tanks can provide water conservation solutions and also cost reductions. Capturing rain water is free, easy and efficient. Using that water for many different purposes takes a lot of pressure away from the national system. You can store a tank almost anywhere, it’s a one-off purchase, they’re made from high-quality raw materials and they are relatively inexpensive. Eco Tanks has been in the industry for 12 years and is now regarded as an industry leader, with products available from retailers all over South Africa. MANUFACTURING SINCE 2004 Hanner, an experienced entrepreneur,
started the company in 2004 with two partners and has witnessed sustained growth over the years. “There were three founding members who are all still active today; myself, Nick Horne and Pieter Oosthuizen,” he says. “I started a sales business, East Coast Agencies, in 1995 and that was the inroad into the hardware market in the Eastern Cape. Nick started working with me and later became a partner, and Pieter was originally a franchisee in the King Pie business before he exited and joined with us. “I originally started making plastic roofing and that was an introduction to plastics manufacturing. From that, we had a discussion on a Sunday morning after church and we realised that there was an opportunity.” The company has remained nimble in order to respond to changes in the market. Of course, this agility has brought positives for customers and allows Eco Tanks to offer new and exciting solutions to the industry. “We have good management control over the company but we’ve
always wanted to maintain the ability to make quick decisions and achieve quick turnarounds. That has been a challenge as we’ve grown but it differentiates us from big corporates that take a long time to make decisions,” explains Hanner. “We can adapt to market changes quickly and we’re careful to ensure our management procedures and protocols are in place. At management level, we have our finger on the pulse of the business and we make sure we’re not onerous and we keep the heart and culture of the business so that our ability to meet customer expectations remains intact.” The quality of Eco Tanks products quickly became apparent and demand increased. As customers from outside of the Eastern Cape began to take notice, the need for strategically positioned new facilities grew. “After we started up, we produced the first tanks in East London in 2005. The second plant was opened in Pretoria in 2014 and six months later we opened a plant in Pietermaritzburg. We had been shipping products to these areas from East London but it’s not an easy product to transport so we needed to get closer to our customers. “Our current capacity is around 20,000 units a month and we’re expanding nicely,” says Hanner. AFRICAN EXPANSION Currently enjoying a buoyant market and manufacturing successfully across three plants, Eco Tanks reach is long and strong. Hanner has already started planning for the company’s next growth phase and it involves attacking more geographic markets. “We’ve been looking at different options,” he says. “We’ve established a presence in the Western Cape but we’re not manufacturing there yet. We’re also looking at joint ventures in neighbouring African countries with a view to establishing manufacturing concerns. We’re aware of the opportunities and the challenges with expansion in Africa so we’re taking one
step at a time.” Obviously, in lesser-developed African markets, there’s big opportunity for Eco Tanks as water is a scarce resource and effective, long-term water management remains an aim. Fortunately, through targeted marketing, fantastic CSR campaigns and a reputation for quality, the Eco Tanks brand is well-established and recognised by consumers, installers and retailers. “It’s natural progression; as a company goes from strength to strength you get better at what you’re doing and there’s always a need to grow the brand so that is what we’re doing,” says Hanner. “It’s down to our uncompromising commitment to manufacturing good quality products and I’d like to think the market takes notice of our growth.” Brand recognition is extremely important for Eco Tanks as competition
is fierce. There are other established players in the industry and so Eco Tanks has placed a strong emphasis on bolstering relations with the country’s hardware retailers to bring its products to market. “Our market has been mainly builders’ merchants; that has been our focus from day one and that is what we’re good at. We don’t target home owners directly, we have strong ties with builders’ merchants and retailers and that is how we get our product to market. Formal industry, agriculture, mining and other sectors are all avenues of growth for us,” says Hanner. At home in South Africa, Eco Tanks expansion into new regional markets is not straight-forward. Each province is unique and faces different challenges. Because of this, Hanner says that developing an offering to meet specific needs is key in strategy planning.
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“There’s different market dynamics in each of the provinces with urban, rural and agricultural splits so you have to approach different markets with caution and make sure that you position yourself with the correct offering.” GROWING SHARE Eco Tanks is a manufacturer – taking raw materials and turning them into useable products – and in recent years, there has been much concern that manufacturing in South Africa has been neglected. Using some of the most modern and advanced plant and machinery in the industry, Eco Tanks is a manufacturer that achieves international quality standards and, considering the lack of investment in the industry, the company has had to ensure it distinguishes itself from all others. “Manufacturing hasn’t been prioritised at national level” admits Hanner, “what’s been done is much
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less than what’s been talked about. There have been good investments, but there’s also been an increase in competition. Many start-up companies have entered the market and that is why we’ve differentiated ourselves with our commitment to quality and our ISO certification.” Further compounding the challenges for local manufacturers is a slow economy. With some projections showing no real increase in GDP growth until 2020, it looks like all companies will have to navigate the bleak economic outlook for some time. For Eco Tanks, Hanner explains that attack has been the best form of defence in these tough conditions. “We certainly have seen an effect from the slow economy but we’ve countered that with our continual expansion and market share growth,” he says. “We use local and imported
material to manufacture our products. Our primary concern is the quality of raw materials. We have to make sure materials meet our quality standards. Price is also a concern. The currency fluctuations have impacted on everyone so we have to make the best of our situation.” ECO PEOPLE The growth that Eco Tanks has experienced over the past 12 years is largely down to the drive and determination of its people. With approximately 150 dedicated employees, Hanner is unequivocal when he says that creating a positive environment for employees and catering for their development is a primary focus. “We firmly believe in building a culture and that surrounds our belief in looking after customers. “We regard our people as one of the company’s greatest assets. We make a big
//WE FIRMLY BELIEVE IN BUILDING A CULTURE AND THAT SURROUNDS OUR BELIEF IN LOOKING AFTER CUSTOMERS// effort to maintain an open-door policy and encourage communication to aid continual improvement and customer satisfaction. Recruiting skilled people is a real challenge and very seldom happens. We rely on training people and fortunately that is a strength of ours. Our level of staff turnover is low by market standards. We’re thankful that the people of this country have a good work ethic. We’ve found a lot of good people and they have made the company what it is today.” Of course, the company’s emphasis on people development is not just to ensure the growth of a talented industry, it’s also about creating a philosophy where customer requirements are always met and exceeded. Eco Tanks is already
recognised as having quality products so quality service is the perfect compliment. As the geographic spread of Eco Tanks continues, Hanner expects the staff count to grow quickly. In the future, growth remains the main target for Eco Tanks. “We’ve recently doubled the capacity at our Pretoria plant and we’re busy maximising that expansion. We are three quarters of the way through expansion at our Pietermaritzburg plant and that is our immediate focus - we’re hoping that will come online in January. We will also be continuing our commitment to ISO certification as that is a continual commitment to growth and improvement,” says Hanner. With water and related sectors
remaining a chief concern for the government and the private sector, products like those served up by Eco Tanks can provide viable solutions to shortages, stress on the ageing system and projects that need bespoke results. “Water security is not a given. Municipal water supply can and does break down. We believe that people must be forward thinking and proactive about water security and that is why we formed the company – to give people quality, durable options to be water secure at home and at work,” Hanner concludes.
ECO TANKS 043 745 0413 email@example.com www.ecotanks.co.za
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Â© PIERRE CRONJE
High Quality Craftsmanship
and Design Excellence PRODUCTION: Karl Pietersen
Creating some of the finest wooden furniture in the land, Pierre Cronje is a truly unique business. The focus for this original, artistic and imaginative company is delivering the wow factor for customers. Founder and owner, Pierre Cronje, tells Enterprise Africa moreâ€Ś
INDUSTRY FOCUS: MANUFACTURING
MD PIERRE CRONJE
It’s not often that we hear the owner of a company admit to ‘consciously deciding not to grow’ and that money is a ‘secondary concern’ within the business. It’s also rare to hear an entrepreneur say that they actively look to the most expensive regions in the world for importing raw materials, and that risky projects that have no clear path to completion are sometimes the most attractive. But this is the message coming from Cape Town-based fine furniture manufacturer, Pierre Cronje – a man and a company that
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truly embraces a challenge. Established more than three decades ago by master craftsman Pierre Cronje, his name and that of his company has become synonymous with hand-crafted, unique, innovative quality. Perfection is the aim of the game for this woodworking expert and perhaps this goes some way towards explaining his unusual business strategy that involves no plans for growth. The sole focus of the business is on delivering quality for customers. Often, products become works of art
as well as functional goods and the unrelenting desire to achieve selfimposed quality standards means that further growth would hamper Pierre’s ability to maintain creative and quality control. “We’ve consciously made the decision not to grow any further right now otherwise we would lose control over quality and uniqueness,” he says. “I don’t want to mass produce. What we’re doing works for us. We’re doing what our clientele wants. “It’s been hard; we’ve always faced cashflow challenges and I
//I TRY TO BE ORIGINAL, I THINK I’VE CREATED A FEW PIECES THAT HAVE NEVER BEEN SEEN BEFORE, BUT THERE IS SO MUCH COPYING OUT THERE// think that’s largely because I’m more artist driven than finance driven. I take on jobs that I really want to do and I think secondly about making money on them. “I will take on jobs that I don’t know how to complete. Even the architect will be surprised when we accept jobs. Often, the brief is to give people ‘Wow’ and I enjoy that. It can be hard to be original because almost nothing is truly original. I try to be original, I think I’ve created a few pieces that have never been seen before, but there is so much copying out there.” Over the years, Pierre Cronje has created chairs, tables, cabinets, floors, fittings, beds, bookcases, desks and many more pieces - all bespoke, all handcrafted, and all reflecting individual style and showcasing the singular character of timber. Each piece is adorned with Pierre’s signature and does not leave the factory until the creator and the customer are entirely satisfied. Of course, this keeps the 180-strong workforce busy – another reason why growth is ruled out. “We can only cope with the amount of work we’ve got. We don’t need to try and steal other people’s business. We do have a lot of competitors but many of them are accountant driven, using furniture to make money. We are furniture driven and we offer fantastic quality,” says Pierre. FROM A SMALL SEED… Today, Pierre Cronje has a factory in Cape Town and showrooms in Johannesburg and Cape Town. The company exports products all over
the world and has a loyal following across southern Africa. However, it hasn’t always been straight forward and there have been many challenges that Pierre Cronje has had to overcome, both personally and as a business. “Even though it’s been long and hard, I’ve loved it and I wouldn’t change it for anything. “I moved from Pretoria and went to primary school in Cape Town. I had a double lesson of woodwork once a week and I lived my whole week for that lesson. I’d
never been exposed to woodwork and that exposed me and I loved it. Throughout school, I did woodwork as an extramural and I loved it. I went to UCT and studied Computer Science before starting work for an insurance company where I didn’t even last one month. I bounced around for a while, fixing up old houses, as I liked working with my hands but initially I didn’t realise I liked working with my hands. “My father told me that I needed a career. I was 24 and I was on the verge of starting an architectural degree at UCT but that would’ve been another six years. My father convinced me to study engineering as it would only take three years. I worked as a structural engineer for about four years and one day I decided that I couldn’t do it anymore. I would come home to
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INDUSTRY FOCUS: MANUFACTURING
my wife and talk about how boring work had been,” Pierre explains. “I funded a lot of my studies by fixing up and selling antique Cape furniture - I was passionate about it. “When I decided I couldn’t continue with engineering, I knew that I wanted to continue with restoring furniture. I didn’t see it as a proper profession but I knew that’s what I wanted to do. I restored for about two years; I had two assistants and the three of us started in the snooker room of my house in Kenilworth. Soon, we got too big and my wife told us that we needed to go and get premises for our work. “Restoring quickly turned into manufacturing. People would come to me with three chairs and say ‘fix them up but make me another five’. People would come with bits of a table, like the legs, and say ‘make me a complete table’. Slowly, I started doing more and more contracting and that was the era of mahogany – everyone wanted mahogany.” In the following years, the company grew organically, with new staff members only joining as the work load became too heavy. Slowly, a marketing and sales team was added and, as the reputation of the company developed, the need to extend the reach to Gauteng became obvious. As fashion has changed, and demands of the customer have become more specific and unique, Pierre Cronje has had to adapt. This is where being a master craftsman helps – Pierre loves working with all types of wood and is happy to continually change to remain at the forefront of the industry. “After mahogany, the fashion changed to dark oak, then to beech, then maple. Right now, it’s light oak; very rustic but I’m sure it will quickly change again. Originally, I loved English Regency Victorian furniture but my heart was set on Cape and Country furniture with European
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influences. “Contemporary styling is extremely popular right now and I’ve developed contemporary country which is country dimension that looks half modern, but could be 200 years old,” details Pierre. NATURALLY WOOD An important factor that separates Pierre Cronje from competitors is the focus on quality, and that is something which extends down the value chain, right through to growers, sawmills and wood exporters. Pierre will only work with FSC certified suppliers – those that meet strict global standards when it comes to well-managed forests. “I try to open my mind to almost anything,” he says. “There’s no chipboard or veneer anywhere in our furniture. We use all French oak, no American. The French send us big boules which are pre-dried and perfect to work with. We import a lot of French oak, French ash, French cherry and French beech. “We do have some fantastic indigenous wood here in South Africa, such as Yellowwood or Stinkwood, but it’s not in fashion. Right now, people only want grey French Oak. “The latest trend that we’re getting into is using bendy-ply to form backs of chairs and other articles in contemporary shapes, using a vacuum press to apply a Zebrano or Macassar ebony veneer. That’s brand new for us and that’s being requested more and more.” ROTTING INDUSTRY? Manufacturing of all kinds has declined in South Africa, mainly thanks to the devastatingly low prices offered by Asian/Far Eastern businesses. Almost everything a consumer could desire is now produced in the East at basement prices – take clothing, electronics, vehicles, plastics or packaging as
examples. In the furniture business, this is a problem that has faced the industry for many years and requires local manufacturers to offer something that international competitors cannot. For a long time, Pierre Cronje offered quality that was unmatched by Asia but the gap is starting to close with exporters from the East beginning to offer improved quality and other associated products that also provide huge benefits to the industry. “Locally, quality is not great. The Chinese can produce good quality – they have improved unbelievably in recent years. You can buy good quality furniture from Asia and it does worry me as it’s only going to get better,” Pierre admits. “When I started 30 years ago, I only bought very old Wadkin
© PIERRE CRONJE
//THE CHINESE CAN AND DO MAKE QUALITY PRODUCTS AND MACHINERY AND THEY DO IT FOR CHEAPER THAN ELSEWHERE AND THAT’S WHAT WE HAVE TO WATCH OUT FOR// machinery which had been made in England which was the best in the world. I still have a lot of it as it lasts forever. I still have a planer that was made in 1937 and you can’t stop it. We recently bought three Chinese machines which aren’t the cheapest and they have been fantastic. The Chinese can and do make quality products and machinery and they do it for cheaper than elsewhere and that’s what we have to watch out for.” Pierre Cronje offers lifetime guarantees on all products.
“Problems can occur from time to time but we are happy to go and collect products and fix them up for free,” says Pierre. “Although our products can be more expensive, people know they’re getting something for life.” This creates word-of-mouth marketing which, according to Pierre, is hugely important. This, combined with the uniqueness of the product, makes for an offering that cannot be created by international competitors. “We have a loyal clientele who
do talk to each other. We will make anything for a customer and it will be unique. If someone goes to an importer and buys a table, there will be at least 30 others out there. I recently had a customer that loved the chair we made and he asked that we never make the same design again as he wanted to be unique. No one else will do that,” he says. FUTURE FOCUS Now aged 65, Pierre has started crafting a plan for the future of the business which does not involve his retirement anytime soon. Strengthening partnerships, ensuring quality, and enduring with his quest for innovation and perfection will take up his time. “I announced to everyone recently that I intended to continue for another 10 years at least,” he laughs.
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Â© PIERRE CRONJE
completed some herringbone looking for quality, South Africanand random width plank floors. inspired furniture that is unique, you We’ve also recently built some roof go to Pierre Cronje. With the vision trusses on an entrance hall ceiling of the master craftsman engrained in Pretoria which will incorporate throughout the business, an some beautiful exposed beams of uncompromising focus on quality, weathered, rough sawn French oak. and an offering that customers seem Obviously, this type of product is to love, Pierre Cronje is a rare find: A “I’m not a business man. I’ve more expensive than locally sourced business that has achieved its goal. been fortunate as I’ve been able to SA pine but when it’s complete, it’s a Maybe it’s now understandable why get my son to join the company. totally different result!” Pierre doesn’t want to grow. He is more of a business man than Away from product “Perfection and art are mutually me. I’ve handed all of that side of development, the company will exclusive. Perfection excludes art, art the business to him and I spend maintain a focus on education excludes perfection. A lot of what we Date d’envoi most of my time on the floor. I don’t and developing skills to grow the is art,” he concludes. Par mailmake : email@example.com Réf. client : à nousindustry. retourner“We sous 5 in jours work much with my own hands but take between 10 I spend most of my time looking and 15 apprentices every year. It’s a over people’s shoulders and offering two-year apprenticeship and we’ve PIERRE CRONJE advice. done it for a long time. We really “I also spend a lot of time in enjoy teaching people and they do +27 11 262 4544 achieve and learn excellent skills” the drawing office where we are firstname.lastname@example.org says Pierre. always trying to create new designs. www.pierrecronje.co.za One thing is for sure; if you’re We work in conjunction with decorators as we have a very loyal client base and they nearly always use decorators so between us, the decorators and the clients, we try to • On site of 17 Hectares do new and different things.” Since the company started • 4 Hectares of running tracking software on its undercover storage products 18 years ago, 35,000 pieces of Pierre Cronje furniture have been Sawmill OAK AND HARDWOODS registered. Add that to the number that was produced before the software was introduced, and the number that is made today, and you have a great number of individual pieces. Today, Pierre says that there is approximately 100 jobs underway in the factory and some of these will be flagship projects for the company. “We’ve just done a fabulous one-of-a-kind bar next to Kruger Park. The clients came with four • Boules - Square Edged - Bearns photos of ideas that they liked • Permanent Stock - Air Dried - Kiln Dried so we took elements from each and adapted them to become an idea that was unique. We’ve also Tel +33 (0)3 25 40 44 23 worked for many of the wineries Fax +33 (0)3 25 40 61 31 in the Western Cape and game reserves in the Eastern Cape. We email@example.com have started to manufacture solid www.tarteret.com wood flooring and have recently
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PRODUCTION: Colin Chinery
For Pabar, tool maker and manufacturer of high quality metal pressings and roll formed components, sector diversity has been an outstanding driver of success. An established player in the auto sector, it made a big entry in the soccer World Cup stadia market and is now one of the biggest names in South African commercial lighting. “These insights into trends and other market opportunities and our response to them have made us strong,” says Managing Director Mike Barbaglia.
The 2010 FIFA World Cup fired the biggest single concerted construction boom in South Africa’s history, the Government alone investing estimated three billionsplus rand in infrastructure projects including new and upgraded roads,
airports and the Gautrain high-speed rail link between Johannesburg and Pretoria. But arguably the most symbolic expressions of those heady days are the seven new or completely upgraded stadiums that hosted over
three million spectators. In five of these, more than 270,000 seats were manufactured by Krugersdorp-based Pabar, including those in two new-build arenas; the R3.4-billion Moses Mabhida Stadium ‘sporting cathedral’ in Durban, and the
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INDUSTRY FOCUS: MANUFACTURING
Peter Mokaba Stadium in Limpopo Province. The totally re-furbished Loftus Versfeld Stadium in Pretoria, and the VIP seating at the Royal Bafokeng, Rustenburg and the Mbombela Stadium in Nelspruit, were also commissioned to this family business whose beginnings go back to a 200-metre tool making workshop in the centre of Johannesburg. MAJOR SUPPLIER Managing Director Enzo Barbaglia established Pabar with a brother in 1965 after emigrating from Italy in the late ‘fifties, and today the business is a major supplier to the motor industry and other non-automotive markets. Manufacturing high quality metal pressings and roll formed components, Pabar is largely self-sufficient, with its own tool room, coil slitting and cut-tolength facilities. Post World Cup, the company has also acquired the rights to manufacture stadium seating under license to Stechert, the German worldwide leading supplier of stadium seats, and international class seating is an outstanding example of the powerful and highly successful manufacturing
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strategy pursued by Pabar – diversification. Well-established in the auto industry early on in its development - Ford, Nissan, BMW, and Toyota are among their direct and secondtier clients – Pabar responded to subsequent roller coaster market fluctuations by moving into non-auto products such as gas cylinders, kitchen sinks and wheelbarrows. “I think the success of the company over the years has been the fact that with diversification we have always had something to fall back on,” says Managing Director and second generation family executive, Mike Barbaglia. “These insights into trends and other market opportunities and our response to them have made us strong and enabled us to go from strength to strength. “No other company has this diversity; a lighting company, a tool making company or a press company – 100 presses ranging from 150 tons all the way to 1,000 tonners - nor so many diverse products under one roof.” Pabar’s most successful initiative has been lighting, in particular products manufactured for the industrial and office sectors. “We are one of the biggest
players in this area of the South African market, from a T5 all the way to LED. And in terms of new buildings going up, we are doing all the lighting.” With up to 80% of the market outside the domestic niche, the office block sector is a major client source, with Pabar typically fitting 1200 x 600 group ceiling lighting panels into which down lighters or recess fittings are installed. And with lighting efficiency becoming increasingly important and with it a movement to LED - offering a 37.5% energy savings compared to traditional bulbs – buildings are being re-fitted on a mass scale. Pabar’s response is impressive. “We have three big CNC benders pushing out some 4,000 recess fittings a day - 80% of the South African market.” Mike Barbaglia enters a cautionary note for anyone considering installing Far East fittings. “If the product is imported from China you are not going to get quality – that’s point number one. And with perhaps 250 to 300 fittings in a container, the costs of getting them in from China are high, especially with the impact of Rand devaluation. This of course opens up the local market, which is good for us.”
Might Pabar’s ‘local market’ expand into sub-Saharan Africa? “These countries have the same problem; they can import from China or from South Africa, and of course it’s a lot easier from here. We currently export some 10% of our output to Mozambique, Zambia and Angola, but in the wider context the issue with some African countries we find is the difficult in securing payments. You have to make sure the payments are done up front.”
over the past 10 years in training heads down. That’s the one way of people and now we are feeling the going forward.” crunch.” And for Pabar going forward But despite a troubled economy includes the Barbaglia name and the and cash-strapped consumers, continuation of a 51-year tradition. Pabar’s performance continues to be “Enzo, my father, now 84, still comes Apex A4 Magazine_ Ad V3-Print Ready.pdf 1 2015/09/16 1:17 PM outstanding, with increasing press to work every day. I am now 56, with shop orders from the auto sector, a four-year-old son, so hopefully, I will including a partnership with Munichbe around to see him come into the headquartered global leader Benteler, business.” and end-user top brands such as Ford, Toyota and Mercedes.
SKILLS AND ATTITUDES Within South Africa, skills shortages, Government attitudes towards manufacturing, and within manufacturing itself, unreasonable demands from auto industry leaders are the main challenges, says Mike Barbaglia. “Manufacturing is a hard market to play in because it receives no Government support and too little protection. And what makes it more difficult is that the motor companies themselves put a lot of pressure on the local industry by comparing us with the world market - for example, Turkey, Brazil and Mexico. “But they are not comparing apples with apples - the landed cost of a component to what you are able to make locally. They compare with what the product costs in Mexico or Turkey and tell us we have got to better that price. And I feel that’s unfair. The big players have to localise of course, but the trouble is outside the export area they are not receiving much Government incentive. “And as with almost anywhere you look, training is one of our biggest problems. Three robots do much of the wiring, but we have 170 assemblers on the lighting and wiring area of the business and the same number on the pressing side and allied products. “So there’s a lot of training to be done, and training is a big issue. The Government doesn’t do much in this area; there’s been a lot of negligence
GO FOR IT “We have just had our best year ever. There is work out there, and you have to go out and choose the right work and the right partners and just get on with it. “Find something you can do - it’s no good worrying about what you can’t do. Everybody has got to stop pointless complaining and get their
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Lack of Foreign Currency
Slows African Growth PRODUCTION: Colin Chinery
Technology Based Performance Materials Company Ferro SA saw 2016 export targets remain flat due to key African markets which were hard hit by massive dollar shortages. But this innovative and progressive business looks to 2017 with optimism. “We are anticipating exciting gains in Africa for 2017,” says Group Export Manager Robin Legg.
In 2015 Ferro South Africa was named as Durban Chamber of Commerce and Industry’s Large Manufacturing Exporter of the Year. Exports then around 11-12% were targeted to reach 25% of turnover in 2016, and for the Gauteng and KwaZulu-Natalbased Ferro businesses, the New Year looked export-bullish. Prospects were particularly bright in African regions with significant investments in manufacturing, mining and
construction, sectors where Ferro products are widely utilised. But the anticipated growth was somewhat stalled, notably in Nigeria, a prime Ferro SA market. The plunge in oil prices has hurt Nigeria, Africa’s biggest economy – ($490b nominal GDP as against third-placed South Africa’s $313b) - particularly hard. Oil makes up some 90% of Nigeria’s exports and 80% of national revenue, providing the bulk of foreign exchange for the economy. And as Nigeria grapples
with the foreign exchange crisis, for Ferro SA, “our West African market drive where we had major growth last year has slowed down as a result,” says Group Export Manager Robin Legg. FOREIGN CURRENCY LEAKAGE “Nigeria exports crude but imports petroleum, so the bulk of foreign currency has been channelled this way and the lack of forex has been adversely affecting the manufacturing and construction sectors. Continues on page 134 www.enterprise-africa.net / 131
//PARPROL PROCESS OIL RANGE AVAILABLE THROUGH ENGEN INDUSTRIAL LUBRICANTS
Engen Petroleum, a leading producer and marketer of a wide range of fuels, lubricants and oil-based products in South Africa are the proud suppliers of a range of high quality, virgin process oils under the Parprol name. These new generation process oils utilise Group I base oils. The Engen Industrial Lubricants team, who have taken over the management of the Parprol range, have a significant footprint throughout the country. These special process oils can be used in various industries as either raw materials or as a processing aid. “Engen recognises that the quality of process oils is fundamental to the outcome of a customer’s final product which is why we strive to supply highly consistent quality process oils,” says Herman van der Westhuizen, Engen’s National Sales Manager for Industrial Lubricants. Industries which enjoy the benefits of Engen’s Parprol process oils include manufacturers of adhesives, cable compounds, ink oil, plasticizers, rope dressings, rubber, leather softener, textile batching oil, pesticides, furniture polish and wood preservers. “Our process oils are available in a variety of convenient packs including true bulk, 210L drums and mini-bulk (IBCs). Engen is also able to assist with dispensing solutions to aid in inventory management, contamination control and disposal,” says van der Westhuizen. John Kennedy, Engen’s Lubricants Business Manager says: “We recognise that security of supply is integral to any business which is why Engen provides a high level of supply assurance across our strong and reliable network.” In South Africa, primary distribution centres are present in all major cities as well as a number of secondary depots which are situated in outlying areas. “Our extensive footprint ensures that process oil is readily available to our customers when they need it and where they need it” added Kennedy.
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INDUSTRY FOCUS: CHEMICALS
Continues from page 131 “Sales in the East African Region have been generally flat with only certain sectors experiencing good growth (Ferro SA has an agency agreement with Time Chemicals Ltd to cover East Africa). “In Zambia and Zimbabwe, our clients have also experienced currency shortages in 2016.” Ferro SA has a wide range of technology and a vision centred on product innovation and customer focus. Marketed across 23 countries - 17 in Africa - and uniquely developed for each application
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by a highly trained and dedicated Ferro technical team. The Ferro SA business has been complimented through the acquisition of Spectrum Ceramics in 2007, NCS Resins in 2012, and two years later by Arkema South Africa - renamed Ferro Coating Resins; this was the first stage of the strategy to enter the South African surface coatings market, supported by a technical assistance and distribution agreement with Arkema in France. More recently other acquisitions and agreements have strengthened the brand with
the ‘Technology Based Performance Materials Company’ credo. TECHNOLOGY OF CHOICE Since the company was bought out by Managing Director Ian Forbes in 2004, strategic acquisitions, good management and strong leadership have seen it grow more than tenfold. “In the last twelve years Ferro SA has spent well over R905 million on capex and acquisitions with the objective of broadening and diversifying the product and market base of the group,”
//WE’RE WELL POSITIONED NOW AND WE’RE MARKET LEADERS IN MOST MARKET SEGMENTS IN WHICH WE OPERATE// says Legg, “the major part of the capex spends focused on quality enhancements and total cost savings.” Importantly, along with all the acquisitions, Ferro SA has retained the important technology licenses to most products and has territorial agreements allowing sales operations in Indian Ocean islands, Australia and sub-Saharan Africa. This year’s acquisitions of Synthomer, Revertex SA and Arkem allow Ferro entry into the South African water-based dispersions and emulsions markets and other niche sectors in which Synthomer and Arkem operate. PERFECT FIT Synthomer South Africa has a long history and an excellent reputation as a dispersions company with an exemplary record of delivering high-quality products to the local market, and is seen as a perfect fit both with the Ferro credo and Ferro’s business philosophy. Leaders in their respective fields, Revertex Chemicals and Arkema Resins are the first companies to produce and market both dispersions and solvent-based alkyds in South Africa. “We’re well positioned now and we’re market leaders in most market segments in which we operate. We have signed technology agreements that ensure we are abreast of the latest developments available internationally – these include Ferro Corporate, Esmalglass, Reichhold, Tiger Coatings, Arkema, Smaltochemica, Durst, Akzonobel and Owens Corning - all global
players. We have access to all of their innovation and development so we’re in a good position to stay at the cutting edge of supply for our clients,” says Robin Legg. “The target potential export growth into Africa is definitely more lucrative than our South African market. Our domestic market growth year-on-year is around 0.4%, while the export markets offer an opportunity of 4-5%.” Looking to the New Year, Legg says all Ferro SA divisions have potential. “But the ones that are really exciting are Ferro Coating Resins, Ferro Dispersions, Arkem and NCS Resins, all of which are offering new scope for 2017. Powder coating continues to grow with Kenya and Nigeria the biggest drivers - and Plastic Master batch overall remains steady.”
QUALITY PLUS SPEED In Africa, Ferro SA competes with countries from the Middle East and Asia and the markets are highly competitive. “In a lot of cases it’s a price-driven market, but being in South Africa has advantages in being far more efficient in terms of turn around, and the product quality coming out of our plants is being preferred by end users. “With our new and enlarged package coming together, there’s a lot of potential for 2017 given this larger product range available to the exports markets. We are planning gains in Africa for 2017.” And might there be further acquisitions to grow this pioneering and expansionist South African company? “We continue to look for new opportunities, that’s for sure.”
FERRO SA +27 (0) 11 746 4000 www.ferro-sa.co.za
Morgan Kristen – Sales and Marketing Director email@example.com
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ABB SOUTHERN AFRICA
PRODUCTION: Timothy Reeder
A global leader in power and automation technologies, ABB in Africa provides solutions to improve the efficiency, productivity and quality of its customersâ€™ operations, constantly providing world-changing innovations while retaining a focus on diminishing environmental impact.
INDUSTRY FOCUS: POWER + AUTOMATION
ABB has been growing the African arm of its operations since the establishment, in 1926, of its first office in Cairo, Egypt. Now, some 80 years later, it has spread its influence to possess major offic-es in some of the region’s key countries: in Algeria, Morocco, Tunisia, Libya, Côte d’Ivoire, Cameroon, Nigeria, Mali, Ghana, Senegal, South Africa and Kenya, to name but a few. A world leader in power and automation engineering, the company provides solutions for secure, energy-efficient transmission and
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distribution of electricity, seeking to increase productivity across a broad range of industrial, commercial and utility operations. In South Africa, ABB’s three manufacturing sites in Gauteng help to maintain a leading local manufacturing presence, with all its various elements coming together to comprise the group’s staff compliment of 1200 people. Its South African head office, logistics and manufacturing centre are all found in Longmeadow, Johannesburg, where ABB is able to perform several manufacturing
operations, while at its Alrode, Johannesburg premises ABB has an AC machines factory, that specialises in the manufacture of medium voltage electric motors for both local and export markets. ABB’s dealings can be divided into two distinct, broad categories. On the one hand, it offers complete solutions to utilities, among which are electrical power infrastructure for transmission and distribution networks and associated products and systems these can include anything from substations, reactive power compensation and utilities
ABB SOUTHERN AFRICA
//MICROGRID SOLUTIONS PROVIDE STABLE AND COST EFFECTIVE CONTINUITY OF POWER SUPPLY WITH MINIMAL ENVIRONMENTAL IMPACT// automation to water EPC contracts and power plant automation. On the industries side of business, meanwhile, is the provision of systems, products and services in the areas of pulp and paper, mining, metals and minerals, cement, chemicals and petrochemicals. These are bolstered by further expertise in manufacturing and customer industries. At the forefront of ABB’s operations remains, steadfastly, the concept of innovation, and has seen it pioneer many of the technologies that drive society today. To date, these have included robots capable of printing cars, light switches and huge electrical transformers right through to control systems that manage entire power networks and factories. Perhaps the most recent beneficiary of this policy of continuous development was ABB’s Longmeadow facility in Johannesburg, which was in June of 2016 the target of notable investment from ABB. The company commissioned a new 750kW integrated solar photovoltaicdiesel microgrid at the 96,000 m2 site. Such innovative solar-diesel solutions serve to provide continuity of power supply to this premises, while in turn helping to fulfil a major target of ABB’s, namely reducing carbon emissions. With South Africa holding the dubious title as the biggest consumer of electricity in the sub-Saharan region and with demand continuing to outstrip the available supply, an ever increasing focus is being placed on renewable energy sources like wind
and solar. Factors such as power shortages, fossil fuel price volatility and environmental concerns, meanwhile, entail a ramping up of this search for sustainable solutions. This is where microgrid systems prove their worth so fully. They are pre-designed modular containers, and with only 26% of sub-Saharan Africa connected to the grid network, it is a unique system designed to be easily deployable to rural areas that have poor infrastructure, thus increasing the rate of access to their inhabitants.
Given the numerous short to medium term challenges currently faced, microgrids are a viable solution to address some of these, and ABB Southern Africa Managing Director, Leon Viljoen, was keen to espouse their many virtues. “Microgrids is one of the areas that ABB internationally is focusing on,” he stated. “It’s one of four growth projects in the 2020 strategy for ABB and very applicable to the African continent. With microgrids, we take solar, wind and other renewable types of generation, and also diesel, and we make sure that it works effectively. It’s easy to install renewables but it is extremely important to control the mix and within ABB we have excellent products for this.” ABB has already shown this final point to be true, having performed more
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INDUSTRY FOCUS: POWER + AUTOMATION
than 30 global installations across a diverse range of applications which have successfully served remote communities, islanded grids, utility grid support and industrial campuses, and continue to do so. ABB’s microgrid installation in Johannesburg is made up of its compact and versatile PowerStore TM batterybased grid stabilising system, which has been developed to address frequency and voltage fluctuations. Also included is a Microgrid Plus distributed control system, or DCS, which both manages the supply of power and balances the fossil-fuel and renewable energy sources in accordance with loads. By doing so in a coordinated manner, greater access to utility grade power is enabled. “This innovative microgrid solution helps address a real-world challenge by providing stable and cost-effective continuity of power supply while minimising environmental impact,” reinforced Claudio Facchin, President of ABB’s
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Power Grids division. “Penetration of growth markets like Africa and leveraging innovative technologies like microgrids to improve power reliability are key elements of ABB’s Next Level strategy,” he said, further underlining the importance of this aspect to ABB’s forward planning. South Africa is far from alone when it comes to power shortages and outages and as such several other emerging economies in Africa, Asia, South America and other parts of the world face similar challenges. Implementation of such technologies could be pivotal here, given the existence of thousands of similar facilities that could leverage a microgrid solution to address the matter in the same way. Forming part of a multi-million Rand order to City Power’s new Sebenza intake substation, ABB delivered its largest high voltage
gas insulated switchgear (GIS) board earlier this year, with the plant set to strengthen City Power’s distribution network growth. “ABB is a leading innovator in GIS technology especially in the areas of ratings, operations, switching technology, smart control and supervision, and compactness,” explained Confidence Mabulwana, Product Group Manager High Voltage Products, ABB South Africa. “As a result, ABB’s GIS offers outstanding reliability, operational safety and environmental compatibility.” The 132kV GIS board is formed of 38 bays, making it the largest such high voltage board ABB has supplied to date in Africa. GIS is used where space is limited, for example, extensions, in city buildings, on roofs, on offshore platforms, industrial plants and hydro power plants.
ABB SOUTHERN AFRICA
“The project has been successful because of the partnership involving different stakeholders including the consultant, enduser and contractor working together on the technical issues,” says Faith Magobolo, Project Manager at High Voltage products for ABB South Africa. “The sheer size of the project we have been able to execute places us in a good position for similar projects.” Slightly further afield, ABB has also taken on the management of power at the Grand Egyptian Museum (GEM), the largest archaeological museum in the world. The renowned architectural masterpiece is equipped with ABB’s reliable power and automation technologies, with the project requiring the company to furnish the complete electrical package; this included an Extended Automation System to manage
the power, as well as transformers, medium-voltage switchgear, lowvoltage panels and retractable supply post panels, installed for the first time in Egypt. “We are very proud that ABB has been given the opportunity to supply power and automation technology and expertise to one of the most prestigious tourist attractions in Egypt,” summed up Naji Jreijiri, Manager for ABB in Egypt and Central Africa. ABB continues to benefit hugely from its solid African foundations, having recorded sustained margin growth even in tough recent markets. “We delivered the eighth consecutive quarter of margin accretion through our continued focus on execution,” said CEO Ulrich Spiesshofer. “With our en-hanced cash culture, we have delivered more than 30 percent higher cash flow so far this year with a much steadier
cash generation profile.” With net income of $568 million, basic earnings per share rose by 2%, as ABB’s policy of holistic delivery looks set to remain for the foreseeable future. “We continue to run the company with discipline, realising growth opportunities where possible whilst driving earnings and cash growth. We are committed to unlocking value for all shareholders as a more focused, agile company building on our industry-leading digital offering.”
ABB SOUTHERN AFRICA +27 10 202 6995 www.abb.co.za
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Designed for Success
PRODUCTION: Manelesi Dumasi
SAOTA is one of South Africaâ€™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.
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INDUSTRY FOCUS: ARCHITECTURE
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
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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 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
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INDUSTRY FOCUS: ARCHITECTURE
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
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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 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 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.
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 firstname.lastname@example.org www.saota.com
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
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Growing Markets for
Apples and Pears
PRODUCTION: Timothy Reeder
The Two-a-Day Group is among the leading fruit growing, packing and marketing companies on the African continent. The group’s total area under fruit exceeds 2,900 hectares while its total production, including processing, equates to 200,000 tonnes per year.
Nestled at the foot of Africa lies the Elgin Valley, a region of South Africa renowned for its spectacular scenery and home to the Two-a-Day Group. Among the natural features making this such an attractive location are its rich fertile soil, bracing winters and golden summers tempered by cool sea breezes. These combine to provide the ideal conditions for the growing of a large proportion of the southern hemisphere’s deciduous fruit crop, one which remains of such
consistent quality that every year over seven million cartons of Two-a-Day fruit are consumed across five continents. Two-a-Day Group’s previous incarnation was under the guise of Elgin Fruit Packers Co-operative Limited, a primary agricultural co-operative in the Elgin district in South Africa’s Western Cape. Having been incorporated on 19 June 1948 with 18 shareholders, it stands as the oldest and longest established local co-operative. Elgin Fruit Packers hit upon a rich seam of
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INDUSTRY FOCUS: AGRICULTURE
produce during the 1950s when crop sizes swelled by some 150%, which resulted in the packing of more than 550,000 cartons of fruit. This rapid growth was merely the start, however, of an upward curve which continued throughout the ensuing decades. It reached something of a peak in 1976, a year in which more than 1.5 million cartons were packed and of which two thirds were exported, suddenly giving Elgin Fruit Packers an 8% share in the South African apple export crop. With this came a branching into more diversified activities, resulting in the formation of various companies involved in activities flowing from the core business of the co-operative. The group restructured itself in December 1993 and as such converted itself to an unlisted private company, what has come to be renowned as Two-a-Day
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//THIS PARTNERSHIP BUILDS ON THE FOUNDATION WE ALREADY HAVE WITH CHINA// Group (Pty) Ltd. The group’s current exports total 5,200,000 cartons of apples and pears each year, which runs alongside its supplying the local market with a yearly total of 2,000,000 cartons of apples and pears. While the company, over the course of its lifetime, has experimented with variants on its core produce, it has always returned to its traditional twin focuses, as Managing Director Attie Van Zyl explains: “The business has always surrounded the production of apples and pears,” he states. “At one stage, there were also plums and nectarines, in relatively small volumes, but we have always focused on our primary product and that is apples and pears. 70% of our
product is exported,” he continues, “and today we are selling in 65 countries.” The technology underpinning Two-a-Day Group’s various services has come a long way since those early days, developing at the rate required to support the ever-increasing scope of its operations. A methodical and technical process which spans from the dumping of the bulk product to its labelling takes place when fruit arrives at its packhouse, following which Two-a-Day Group’s packing facility performs arguably the most important aspect of the whole affair. It is flexible enough to pack both apples and pears with little or no change over, and can fulfil everything from supermarket standards to specific
customer requirements, in a variety of bags and different sizes of cartons simultaneously. Midway through last year this final and most crucial part of the process was subject to significant infrastructure investment, which included a Flow Wrap machine to, according to van Zyl, allow Twoa-Day to continue supplying fruit pre-packed in South Africa to UK supermarket Tesco. “Fruit friendly Flow Wrap is the latest trend for fruit and vegetable packing for the discerning UK consumer,” he said. “Flow Wrap allows us to pack fruit in such a way that the consumer can easily examine each piece of fruit without damaging it.” Similar revamps of its packhouse technology paved the way for sorting by weight, diameter, colour and defect, to give the company greater sorting efficiency and accuracy in packing. The system takes 70 high-definition photos of each piece of fruit, and possesses artificial intelligence that learns to mimic human sensitivity in differentiating between blemishes from wind or bruising. “Advances in Dynamic Controlled Atmosphere (DCA) storage means we now have the technology to very accurately measure the levels of ethanol, fruit respiration and chlorophyll fluorescence,” said van Zyl. “This means that we can maintain fruit with a combination of our DCA and CA technology in its optimum state for longer periods of time, stretching the window in which we deliver fruit to our customers.” South African farmers and cooperatives will henceforth export even more of their fruit harvest, following the signing of a memorandum of understanding (MOU) between the South African government and the People’s Republic of China earlier this month. Importantly for Two-a-Day Group, negotiations are underway to increase market access for South African pears, while avocados and other fruit will
be considered in the next round of discussions. Fruit SA said during 2015, China imported 3.8 million tons of fruit with a value of $5 billion, of which only around 110,000 tonnes was exported by South Africa during the given period, a remarkably small proportion of South Africa’s total annual global fruit exports. According to Fruit SA, the objective is to address the challenges currently faced in expanding and broadening market access, which takes much longer than desired. The fruit industry aims to increase its exports to China to about 350,000 tonnes in the next five years via the resulting acceleration of market access. Dr Konanani Liphadzi, Chief Executive Officer of Fruit SA, spoke of how the agreement will ensure that the two organisations support their governments by providing the
required technical information and guidance to speed up the negotiations process. “The main initiative is broadening market access, and we will also be able to share technical information like quarantine issues and also assist them with information needed. It goes both ways. This partnership builds on the foundation we already have with China. Lastly, there will be a lot of job creation, from hand pickers in South Africa to people doing packaging that will be hired, because of increased demand.”
TWO-A-DAY GROUP +27 21 859 7500 email@example.com www.tad.co.za
IDS | customized cold storage Phone: +27(0)21 9053405 Email: firstname.lastname@example.org Website: http://www.idsinsulation.com Address: 9 Rand Road, Blackheath, Western Cape, South Africa
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Making Multimillion Rand Manufacturing
PRODUCTION: Manelesi Dumasi
“By laying a foundation of trust, our employees stay longer, our clients stay longer, our suppliers and business partners remain partners longer – and our investors hold their investments longer.” This is the message from Digital Generation (DG) as the innovative IT company looks to continue creating successful partnerships based on trust.
INDUSTRY FOCUS: TECHNOLOGY
South Africa’s IT industry is the largest and most sophisticated on the African continent. Our companies export world-leading ideas and technology all over the world and are known as leaders in their fields. In an industry that changes so drastically, in such short spaces of time, it pays to partner with organisations that are up to date,
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cutting edge and have proven experience. With branches in Johannesburg and Cape Town, DG Store is one of the country’s most experienced providers of IT solutions, services and products. As a privately owned and managed AAA Black Woman Owned Level 2 B-BBEE company, DG was founded in 1999 and specialises in IT product lifecycle
management for medium and large companies and the public sector. With approximately 180 employees, the company’s product range includes peripherals, laptops, desktops, servers, storage, networks and associated software. Services include design, installation and customisation and Managing Director, Trevor Naidoo says that the company can offer a turnkey IT
//WE MANAGE TECHNOLOGY FROM FACTORY TO DESKTOP AND EVERYTHING IN-BETWEEN TO ENSURE FUNCTIONALITY – IT’S A FULL END-TOEND SERVICE// service to clients. “We manage client’s information from an IT perspective,” he says. “We manage technology from factory to desktop and everything in-between to ensure functionality – it’s a full end-toend service. We also fully manage services that we provide. We also provide technology platform services and this is a key area for our business. Our market place is Africa and South Africa. We work across all industries but we are often working in the financial sector.”
In the public sector, enhanced service delivery is becoming more and more important and organisations are looking to better utilise the vast amount of information at their disposal. With many organisations using different storage tiers, including disk, Flash and cloud systems, integration is key to make sure all of the different platforms are optimised and working together. THE CLOUD According to global technology market research firm, Vanson
Bourne “over a third of organisations have achieved a competitive advantage as a result of Big Data analytics,” and “in South Africa, Big Data is giving rise to markedly improved decision making and is having a significant impact on companies’ competitive differentiation and ability to avert risk.” Effective pairing with cloud technology can help you harness the power of big data more quickly while reducing costs and enabling a security-rich environment. This is why DG has identified cloud solutions as a key area of focus as it grows. “We are busy building around the cloud platform - we’re making major investments there,” says Naidoo. “We provide the platform as a service and we get our clients
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INDUSTRY FOCUS: TECHNOLOGY
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to utilise. “We have a product which we call DG Vault and it’s a cloud-based platform which is a software and service platform and it focusses around data back up and data recovery.” The DG Vault protects, manages and maintains all data – and keeps it online for fast recovery. DG deploys onsite infrastructure for short-term storage that replicates to Vault for longer-term storage. Vault optimises and compresses stored data using leading deduplication technology. DG’s Vault service protects desktops, laptops, servers, applications and databases with one solution. Data that is typically stored on this services includes files, directories, databases, and applications. ORGANIC GROWTH South Africa’s GDP grew by just 0.2% in the third quarter of 2016. “The main contributors to the GDP growth rate were the mining and quarrying industry, finance, real estate and business services, and
general government services,” said Joe De Beer, Deputy DirectorGeneral of Economic Statistics at Stats SA. In an environment like this, it becomes difficult for businesses to grow in meaningful ways but at DG, growth has remained steady and the company will look to continue growing logically in the future. “It has been challenging” says Naidoo “but with our service offering, we’re finding ourselves coming through that. “A lot of companies look at growing through acquisition but we prefer to grow organically and build the company internally. We’ve done that successfully over the years but it doesn’t give you the level of growth that you would have with other strategies however it is firmer. “Each company develops differently,” he adds. “We import, we handle things directly, and we work directly with our clients. There’s no middle men involved and that results in cost efficiencies. There’s a lot of value propositions that we’ve developed alongside our clients and that we now offer to our wider client space. I wouldn’t say we are the leaders in the sector but there has been a good uptake form our clients and they see value from their engagement with us and that is what drives our business.” There is also scope for growing the business within the existing client base. “We have a large client base that is growing,” says Naidoo. “Within our client base, we may serve a customer in one area but not another, so we can expand our services within our client base. We market our technology throughout the year – we showcase at various events – and that mechanism has been successful for us. We are also finding that, especially with our services, we have more to offer the general market.” As with any growing industry, technology and IT has a growing number of businesses looking for their
slice and competition is something that Naidoo and DG must face. “We started our model way back and a lot of the models have consistently stayed but what we see is a lot of industry players consolidating and becoming competitors for us. For example, distributors started buying off other companies and offering what we started with in that space. It’s a natural process – even the biggest companies still buy up other companies in this way,” he says. Supplying products from world renowned IT names including Dell, HP, McAfee, Microsoft, Samsung and SanDisk to name but a few keeps DG in touch with the most modern developments that the industry has to offer and this is, of course, hugely beneficial for customers. Going forward, the target for this knowledgeable and experienced business is to take advantage of technology developments in order to continue serving clients in the most effective way possible. “There’s always been a goal for us to become a recognised market player and so we are moving forward with our service offerings,” says Naidoo. “Big data is becoming a priority for us and we’re moving in that direction, managing large data centres and that’s the environment in which we see ourselves in the future. We will also be a big player in the cloud space and these are the developments that we are gearing our company toward,” he concludes.
DG STORES 0(086) 175 9266 www.dgstore.co.za
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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: ASLM Cape Town International Convention Centre Dec 03 – 08 ELECTRICX & LIGHTEX 2016 CAIRO INTERNATIONAL Convention & Exhibition Centre Dec 04 - 06 KENYA TRADEX 2016 Kenyatta International Conference Center Dec 08 – 10 AL ANSAAR SOUK AND TRADE FAIR Durban International Convention Centre Dec 23 – Jan 02
SCIENCE FORUM SOUTH AFRICA DEC 08 | PRETORIA Key characteristics of Science Forum South Africa 2016 (SFSA2016) will include: • A provocative and stimulating forum programme comprising several parallel sessions, addressing a diverse range of science and science policy orientated themes; • A rich diversity in the background of participants, comprising scientists, students, public and private sector representatives as well as civil society constituents; • A forum programme not only compiled “top-down” by the organisers but also enabling public input through a competitive call for proposals for the organisation of sessions; and • A strong international dimension to the event, reflected by the participation of speakers and attendees from a diverse range of countries, especially from Africa. KENYA TRADEX 2016 DEC 08 | NAIROBI The 14th Kenya Tradex 2016, International Trade Exhibition to be held from 08 - 10 Dec 2016 at
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Kenyatta International Convention Centre, Kenya. The event attracts visitors from all over East & Central Africa while exhibitors participate from over 25 countries. Visitors from the African countries would include Sudan, Ethiopia, Mozambique & Zaire, Nigeria, Tanzania, Egypt & South Africa. A vast range of products would be displayed from the following sectors: Automotive & Industrial, Building/Construction & Interiors, Consumer & Household, IT & Electronics, Food Hotel & Kitchen, Security, Printing & Packaging, and Beauty Cosmetic Medical Health. ASLM DEC 03 | CAPE TOWN ASLM2016 is the third biennial international conference of the African Society for Laboratory Medicine (ASLM). ASLM2016 aims to serve as a platform for the international laboratory medicine community to share best practices, acquire knowledge and debate innovative approaches for combatting global health threats.
SCIENCE FORUM SOUTH AFRICA CSIR International Convention Centre Dec 08 – 09
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