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AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

September 2017

www.enterprise-africa.net

G4S DEPOSITA:

When Cash

is King

ALSO IN THIS ISSUE:

Van Schaik Bookstore / Zoona / IPSS / Safire Insurance


EDITOR’S LETTER EDITOR Joe Forshaw joe@enterprise-africa.co.za SALES MANAGER Hal Hutchison hal@enterprise-africa.co.za SALES ADMINISTRATOR Emma Neethling sales@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks sam@enterprise-africa.co.za PROJECT MANAGER Shaun Cousins shaun@enterprise-africa.co.za PROJECT MANAGER Shannon James shannon@enterprise-africa.co.za PROJECT MANAGER Aarron Chapman aarron@enterprise-africa.co.za PROJECT MANAGER Nathan Phillips nathan@enterprise-africa.co.za FINANCE MANAGER Emma Smith finance@enterprise-africa.co.za SENIOR DESIGNER Harvey Tarlton harvey@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Colin Chinery CONTRIBUTOR Djamil Benmehidi CONTRIBUTOR Jukka Lethinien

Published by

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September sees President Zuma head out to China to lead South Africa’s delegation at the 9th BRICS Summit in Xiamen City. The President will hope to build on the already strong ties that South Africa has developed with Brazil, Russia, India and China. The theme of ‘stronger partnership for a brighter future’ will see delegates from each country discuss how to strengthen relationships with each other, in the hunt for economic development. But how will Zuma and his team project an image of confidence when the economy is in such a weak position? While so many businesses are struggling and beginning to feel the pinch, how can Zuma encourage investment? Interestingly, there are many companies that are thriving right now, despite the doom and gloom predicted as a result of the slow economy. Our lead feature, from G4S Deposita, talks of 25% year-on-year growth; we hear from mining engineering experts Bafotech who talk of a very strong 12 months; we talk to Van Schaik Bookstore who are investing heavily in new technology and diversification. So, while the numbers in the economy make for grim reading, it’s not all bad, and Zuma will be given confidence that SA businesses remain resolute and attractive. But with the ongoing talk of corruption, questionable decisions regarding government positions, ineffective business management, and the head of Business Leadership South Africa calling for your head, things might be about to get more difficult for President Zuma. Hopefully, he’ll be able to persuade some of his BRICS partners to look to SA before any further tremors in the economy. Get in touch and let us know if you’re ready for international expansion, or if you could do with some foreign investment to solidify your position. We’re online: @EnterpriseAfri1

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Joe Forshaw EDITOR

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

www.enterprise-africa.net / 3


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

102/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/G4S DEPOSITA: When Cash is King Where trade is in notes and coin, G4S Deposita, South Africa’s largest provider of device technology in the retail cash market, is poised to increase efficiencies and transparencies and cut costs. “Our value proposition is solid: complete, secure and reliable ‘End-to-End’ cash management solutions,” says Deposita President, Christo Terblanche.

8/ 4 / www.enterprise-africa.net


CONTENTS

38/

70/

64/

INDUSTRY FOCUS: SECURITY

INDUSTRY FOCUS: MINING

16/IPSS: IPSS Expanding Beyond Security

64/DE BEERS: Multiple Projects Strengthening De Beers Sparkling Position in Diamond Industry

INDUSTRY FOCUS: FINANCE 20/SAFIRE INSURANCE: Three Decades Strong For Safire Insurance 26/NFB: Converting Invaluable Knowledge to Great Wealth 32/REMGRO: Superior Investments for Long Term Growth 38/ZOONA: Driving An African Financial Revolution

INDUSTRY FOCUS: ENGINEERING 44/TRANSVAAL GALVANISERS: Zinc-Coating Your Steel For The Best Corrosion Protection Since 1984 50/HI-ALLOY CASTINGS: Reshaping and Rejuvenating a Foundry Mainstay 54/YNF ENGINEERING: YNF Engineering’s Young Team and Big Growth 58/BAFOTECH: To A Good Year

INDUSTRY FOCUS: AUTOMOTIVE 70/ENGEN: Deeply Rooted In, And Highly Committed To, Africa

INDUSTRY FOCUS: CONSTRUCTION 76/TN MOLEFE: Construction In Engineering At Its Best

INDUSTRY FOCUS: EDUCATION 80/VAN SCHAIK: Diversification to Unlock Expansion for Van Shaik

INDUSTRY FOCUS: IT & PRINT 88/INTROSTAT: The One-Stop Shop for IT Provisions

INDUSTRY FOCUS: INVESTMENT 92/TIBIYO TAKA NGWANE: Investing in the Swazi People

INDUSTRY FOCUS: OUTSOURCING 96/BIDVEST PRESTIGE: People Are The Power Of Bidvest Prestige www.enterprise-africa.net / 5


Africa a continent of great opportunity

Africa is the current frontier for growth and prosperity and the opportunities from an investment perspective are limitless, says President Jacob Zuma. The President was addressing the Brazil, Russia, India, China and South Africa (BRICS) Business Council Special Session for South Africa held on the margins of the 9th BRICS Summit, Xiamen, China. President Zuma reiterated that Africa remains a continent of great opportunity with lots of potential. “Despite the recent challenges, Africa’s household consumption and business spending are both growing strongly, offering companies a 5.6 trillion US dollars opportunity by 2025 according to the latest Mckinsey Report. “Africa’s manufacturing sector today does not compare favourably with those of other emerging economies. “However, Mckinsey predicts that output could expand to nearly one trillion US dollars in 2025 if Africa’s manufacturers were to produce more to meet domestic demand from consumers and businesses, and work with governments to address factors hindering their ability to produce and export goods,” said President Zuma, adding that these statistics cannot be ignored. The President further called upon the BRICS partners to collaborate with South Africa in a few areas including investing in supply and development programmes in Africa; skills development and technology transfer and also engaging in projects that would support inclusive development and equal partnerships. According to President Zuma, within the BRICS context, South Africa has four primary goals which are to see development and inclusive economic growth; promote value-added trade among BRICS countries and to promote investment into productive sectors.

Jubilation for new BP boss

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Energy Minister Mmamoloko Kubayi has congratulated Priscillah Mabelane on her appointment as the new CEO of BP Southern Africa. Mabelane’s appointment is with effect from 1 September, six years after joining the organisation in 2011 as CFO, and then Operations Director, United Kingdom. “The appointment of Ms Mabelane comes at an opportune time when, as the department, we are focusing on the issues of transformation of the energy sector, as demonstrated by the recent Women in Energy dialogue, complemented by the launch of the Women in Energy Awards,” said Minister Kubayi. Mabelane is the first black woman in the history of the country’s multi-national oil companies. “As she joins the ranks of South African women breaking barriers in all areas of society, Ms Priscillah Mabelane’s accomplishment as the first black woman CEO of one of the multi-national oil majors is a significant achievement to be acknowledged. “I look forward to her interaction and contribution to the programmes that promote radical socio-economic transformation within the energy sector,” said Minister Kubayi on Wednesday.


NEWS SNAPSHOT

Unemployment rate unchanged at 27.7%

Chinese company making footprints in KZN

South Africa’s unemployment rate has remained unchanged between quarter one and two of 2017 at 27.7%, Statistics South Africa (Stats SA) said in August. “Unemployment has stayed steady at 27.7% in the second quarter of the year,” Statistician General Pali Lehohla told a media briefing. On a year-on-year basis, the unemployment rate increased by 1.1% “We don’t know what the next quarter will be [bring]… It’s very difficult to say that there will be more jobs,”said Lehohla. Stats SA released the Quarterly Labour Force Survey (QLFS), which showed that in the second quarter, South Africa had 37.2 million people of working age — up by 157,000 people quarter-on-quarter. According to the survey, employment declined by 113,000 to approximately 16.1 million, while the number of those seeking work also declined by 37,000 to approximately 6.2 million. The survey found that the number of employed people decreased in five of the country’s nine provinces between the first and second quarter. Gauteng saw the largest employment losses at 143,000, followed by the Eastern Cape at 26,000 while Limpopo and KwaZulu-Natal recorded employment gains of 32,000 and 29,000 respectively. While the report showed that young people aged 15 to 24 remain vulnerable in the labour market, 32.2% of those aged 15 to 24 were in the ‘Not in Employment, Education or Training (NEET)’. This was approximately 3.3 million young people.

KwaZulu-Natal Premier Willies Mchunu says the province is excited that Chinese company Jingmen Hubei will open two more factories in Durban. “The people of this province are excited that Jingmen Hubei, a company from Hubei Province will be opening two more factories in Izimbokodweni and Umgababa, South of Durban. This in addition to a project in Cato Ridge where Jingmen Hubei has acquired a 60% stake in Shu Powders, cobalt powder manufacturer,” he said. The factories will feature a large recycling park and are expected to create up to 1000 jobs which specialise in recycling end-of-life vehicles, electronic scrap, rechargeable batteries and many more. “These are indeed good news that will help strengthen socio-economic relations between the two provinces,” said Premier Mchunu. “We wish to work with Jingmen Hubei to identify opportunities for local SMMEs and black industrialists in particular to become major role-players in the two new factories either as suppliers or in the entire value chain of recycling.” The scrap metal industry alone in South Africa is worth between R15 billion and R20 billion a year and has a potential to create more employment.

Trade and Industry to launch R50m black industrialists firm

Deputy Trade and Industry Minister Bulelani Mangwanishe recently launched a R50 million Black Industrialists firm in Gauteng. Maneli Pets food was approved for grant funding of R12.5 million from the Department of Trade and Industry’s Black Industrialist Scheme (BIS). The company, which is located in Edenvale, obtained funding of R26.6 million from the Industrial Development Corporation, and the owners have made an equity contribution of R8 million to the project. Maneli Pets is a new company that started operating in June 2017. The company is a specialist manufacturer of premium quality foods and treats for the global pet market. The company has so far created 42 job opportunities since commencing production with the intention of creating 80 direct jobs during the next five years. “The dti has approved funding for 25 Black Industrialists projects in Gauteng, projecting to inject R2.2 billion in the province’s economy with over 2600 direct jobs to be created. These investments cut across the productive sectors of the economy, such as metals and pharmaceuticals,” said Deputy Minister Magwanishe. The company aims to become one of the best pet food makers globally.

www.enterprise-africa.net / 7


G4S DEPOSITA

When Cash

is King PRODUCTION: Colin Chinery

Where trade is in notes and coin, G4S Deposita, South Africa’s largest provider of device technology in the retail cash market, is poised to increase efficiencies and transparencies and cut costs. “Our value proposition is solid: complete, secure and reliable ‘Endto-End’ cash management solutions,” says Deposita President, Christo Terblanche.

8 / www.enterprise-africa.net


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Gimme the Money! Contactless cards, mobile phones and digital currencies roll on, but demand for cash continues to grow across the globe. In South Africa cash still accounts for more than 50% of the total value of consumer transactions, making it a dynamic market for G4S Deposita, the country’s largest provider of device technology in the retail cash market. “Cash is quite a strange thing,” says Deposita President, Christo Terblanche. “It continues to play an integral role in the economy as a payment method, especially when things get tough. And of course this

helps us to position our products.” Deploying an ABM automatic banking machine, G4S Deposita’s complete cash solutions takes over the process of securing, counting and storing cash notes on premises, transporting them to cash centres, and ensuring same-day settlement of funds into bank accounts. BIG LABEL CLIENT BASE Its client base includes leading retail stores and chains, fast food outlets, banks, restaurants and all major fuel retailers throughout South Africa. “We provide the customer with a One Stop Shop integrated solution,

reducing costs and increasing efficiencies.” Until this year Managing Director of G4S Cash Solutions South Africa, Terblanche was appointed President Deposita International in June to lead a team to support the sale of Deposita devices to sectors including financial institutions, retailers and the 5.6m Small, Medium and Micro-sized Enterprises (SMMEs) - seen by the Government as the key to economic growth. “One of the biggest reasons for Deposita’s success so far is our ability to give the customer what they want and not what we have. This put the

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The unique Smartlock cash management solution, developed in conjunction with one of the leading banks in South Africa, has since been adopted and deployed on a national basis and been in operation for the past 18 months. The unique capabilities and enhanced security, supported by this solution, not only provide complete management of this high-risk environment, but also support efficiency improvements and business process optimisation, through an integrated solution approach.

The company is a proud supplier of key components to leading brands and its continued business expansion is supported by such initiatives and strategic alliances. Smartlock has also embarked on a globalisation strategy and deployed applications as far afield as Boston USA and Singapore. It is currently involved in strategic business development in the Middle East, UK and Europe and set to enter these markets in co-operation with global entities.

Smartlock may be contacted via www.smartlock.net.

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INDUSTRY FOCUS: SECURITY

G4S DEPOSITA ASSEMBLY

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G4S DEPOSITA

emphasis on the right place. “And of course G4S Deposita is a powerful brand globally, which makes it easier to access customers with our solid value proposition – complete, secure and reliable ‘End-toEnd’ cash management solutions.” Headquartered in Midrand, Gauteng, Deposita was founded in 2004 following comprehensive market research into the handling and settlement of cash in the South African economy. Convinced it would revolutionise the way cash is secured, collected and processed, it rapidly expanded its nation-wide operations. Success did not go unnoticed. In 2013 Deposita was acquired by London-headquartered G4S, the world’s leading global, integrated security company, specialising in the delivery of security and related services to customers across six continents. Ongoing innovative processes and procedures, enhanced products and business partnerships, powered further success. “We started the company because we saw that the South African market was ready for this type of technology in the processing and automation of cash field, and the G4S acquisition has opened a lot of new doors for us.

partner for various banks globally, with here in South Africa very strong relationships with all the big commercial banks including Barclays, Nedbank, and First National Bank.” G4S Deposita operates in 23 markets across Africa, each relying heavily on cash for transactions, said G4S Africa Regional President Mel Brooks, “The efficiency of transactions is an often unacknowledged but vital aspect of economic productivity we are working hard to help improve through our Deposita technology. Although the security industry in South Africa is highly competitive, we are all fighting for the same cause – a safer and more secure South Africa.” G4S Deposita now has over 6,000 devices deployed, a total cash

management easy-to-use solution that combines hardware, software, and services to assist financial institutions, retail and wholesale customers reduce both costs and cash managing risks. System benefits are extensive, with users having real time visibility of their cash while ensuring the integrity of all transactions. Deposits are identified per cashier and shift, and the efficient processing of bank notes has one of the highest acceptance rates in the industry. The client is empowered with a full audit trail of all deposits, note count and validation at point of tender – reducing the risk of accepting counterfeit currency - and in-store cash losses and incidents of employee theft are cut. The G4S Deposita package also carries a potential reduction in insurance costs.

NEW OPPORTUNITIES “Pre-2013 we were focused on back office solutions, more specifically in the retail space, but as we started to analyse that whole cash flow trade, we realised that there were other opportunities for us. “We evaluated how we could provide solutions that automated cash takings and banknotes in front office situations, in self-service applications, third party payment applications and the like. “And - very exciting for us - it also took us into the bank branch automation side where we have become the trusted

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INDUSTRY FOCUS: SECURITY

MINI-PAY – SMME TAILORED The latest - and smallest - product in the G4S Deposita range is Mini-Pay, a smart safe system tailored for the SMMEs, acknowledged not only as key drivers of wealth creation and employment, but also powerful agents of change in supporting innovation and social mobility. G4S has long worked with SMMEs in South Africa, historically in securing and transporting cash, and more recently through providing in-store cash management systems that count, secure and reconcile cash before crediting a customer’s bank account via on-site technology. However, the financial cost and personal risks in securing cash in small businesses are often dwarfed by the hidden handling costs. Whether it’s time spent counting and reconciling, or the cost of

non-availability of cash as working capital, the efficiencies open to small business to focus on what matters, are considerable. Mini-Pay now makes this possible, incorporating the best of Deposita at a size to suit the small business owner. Holding up to 1,200 banknotes, reconciling multiple deposits and providing clients with management information, the software can run via a USB on a laptop or PC, with cash reports or print receipts open to view. Mini-Pay offers the unrivalled benefits of larger devices at an entry point attractive to smaller service sector businesses that deal with more infrequent cash transactions. “We saw a gap in the market for people who generate small amounts of cash through their system. MiniPay enables the client to have the

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ability to know his cash position at any given point in time and the capability of automating his whole process. NO GRUDGE PAYMENT “In the past security and security products have tended to be viewed as grudge purchases, but the G4S Deposita value proposition is one of cost reduction and the speeding up of processes. “We get a lot of franchise stores, where the owner’s have multiple outlets but without the commercial justification to justify every day collection. Even so they still want to see what their cash position is and how much cash is going through the system. Mini-Pay is positioned exactly in this market place.” G4S Deposita is continually looking for strategic alliances for the

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development of new products and markets. “The success of a business such as us is due to staying abreast of whatever technology becomes available globally. “And with the whole digitalisation discussion currently going on across the banking sector we need to be in a position where we can capitalise on our opportunities that come our way,” said the tactically-alert Terblanche, Manager for the Free State Rugby Union back in 1995. “So securing strategic partners is very important. We currently have a very strong relationship with Glory Global Solutions and MIE, and we are looking at strengthening our relationship with other suppliers like ScanPoint. “Our ability to provide the customer with a One Stop Shop integrated solution is a very strong value proposition, and I think more and more of the traditional OEM suppliers as well as the finished product suppliers, are increasingly viewing G4S Deposita in strategic terms.” GEO EXPANSION Meantime, geographical expansion is an on-going strategic ambition, with

“quite significant opportunities” under review in Asia, the Middle East – with an office opening in Dubai - as well as South Africa and other African countries. Europe too is in target, most specifically, Great Britain. “We are very lucky in having a solid pipeline and a lot of opportunities to deliver our proposition.” With South Africa’s growth on a five-year downward trend, unemployment at 27% a 13 year high, private investment heavily contracted, and Absa bank’s purchasing mangers’ index, a measure of the state of manufacturing, slipping to its worst level since the 2009 recession, G4S Deposita’s 2014-2016 25-26% year on growth is vastly impressive. So how has it succeeded in driving contra-flow to the negative national tracking? “I think it is a combination of things. The first is having an asset that addresses the market by having the right solution at the right time. The second – and a critical one - is understanding the market requirements, current and emerging, and positioning ourselves in terms of solutions and what we are offering.

“Thirdly, the market needs to have a clear understanding as to what it can expect from you. Finally, you must have the ability to deliver on your promise, and have the quality aftersales support that’s so critical in the world we are living in. “Taken all in all, this is the main reason why we have grown exponentially in the last couple of years, and we see that trend continuing at least for the next three.” Driving on and forward that remarkable 25%-plus annual growth rate? “Absolutely and without a doubt.”

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IPSS

IPSS Expanding

Beyond Security PRODUCTION: Karl Pietersen

Dylan Meyrick of IPSS tells Enterprise Africa that his company is moving beyond the traditional ‘armed guarding’ security model and is now offering medical rescue and soon, firefighting services. The security company is also investing in a new set of vehicles to ensure its people are at the very forefront of the industry.

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The private security industry in South Africa is worth an estimated R45 billion. It is responsible for around 490,000 jobs, and it employs around double that of the SANDF and SAPS. There is a vast landscape to play in and it has attracted some of the world’s biggest names. But that doesn’t stop security firms looking to break the boundaries and test new services that could be added to their portfolios with ease. Take iSithebe-based IPSS – the company was started in the late 80s, but since Dylan Meyrick took the reins in 2001, he has continuously been looking to add services and technology to the company’s offering. “We are currently able to provide our industrial clients with security, medical, and health and safety services,” says Meyrick. “This is proving a game-changer as currently this is a unique service and more and more clients, new and old, are making use of this. We are in the process of preparing to add firefighting to the services provided as we have had numerous requests to do so.” Alongside its regular security activities, IPSS also oversees an antipoaching unit, protective services, strike teams, specialised guarding operations,

16 / www.enterprise-africa.net

alarm response services, occupational risk management, CCTV, alarms and electronics. Adding new but related services to the fold has allowed IPSS to become of greater value to clients without major incremental costs increases. “Technology is changing almost daily,” he says. “Our medical services provide pre-hospital care and transport, mainly resulting from trauma. Our response vehicles are equipped with the latest equipment available and we are about to equip our paramedics with ultrasound scanners to improve diagnosis on the road. This will be a first in South Africa for paramedics.” In the traditional security sphere, tech is also disrupting the industry and Meyrick is finding it all too common that jobs are being lost to tech. “Drones have become an invaluable tool. We currently use drones for search and rescue, security patrols looking for suspects, monitoring crowds during civil unrest, and rhino anti-poaching operations. Unfortunately, as drones are imported, the really useful ones are far too expensive due to current exchange rates. “Physical security is being replaced by technology which is more reliable and

cheaper in the medium-term. I believe this trend will gain momentum and the number of security officers employed will be reduced significantly,” he says. Nevertheless, IPSS will look to grow its footprint across South Africa and subSaharan Africa and Meyrick, a man who thrives on the personal connections that he makes, has just invested into 45 new vehicles so that his people are given the best tools possible. “Security vehicles operate 24/7 often in harsh conditions and use multiple drivers. The result is that vehicles deteriorate very quickly and we replace them as soon as it becomes apparent that maintenance costs approach the remuneration received for that vehicle. We are currently moving our fleet onto a ‘full maintenance lease’ option from Avis. This gives us a fixed cost for the life of the vehicle making budgeting much easier,” he says. “Currently, our main operation is in KZN, but we have offices in Johannesburg, Nelspruit and Cape Town. We will increase this countrywide footprint significantly in the near future. “We currently operate separate businesses in Zimbabwe, DRC and Liberia. Due to local requirements, these


C


INDUSTRY FOCUS: SECURITY

businesses have local partners. We, together with our partners, constantly explore new opportunities throughout Africa. I believe that these are endless,” Meyrick adds. Right now, there are around 7500 registered security firms in South Africa but few can offer the breadth of services that make up the IPSS stable. And although IPSS is now a large organisation, Meyrick remains on first names terms with all of his clients. It is this ability to offer a range of services but to be able to do it without the feel of a corporate monster that drives IPSS. AHEAD OF THE REST? “We are currently without doubt the industry leader in providing multi-linked services,” says Meyrick. “This has been tried by numerous companies but always unsuccessfully. No one else is equipped to provide the full spectrum of security services, medical services (pre-hospital and site clinic facilities) and health and safety services. As mentioned, we will soon add firefighting services to the package. The financial benefit for large industry of using a ‘one stop shop’ is enormous.” The time is right for further expansion. With the company operating successfully around KZN, and affiliates working successfully in Africa, IPSS

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is feeling that very rare of things – success in a dull market. The security business has an unusual connection with the typical peaks and troughs in the economy and often works in reverse to the traditional models. When times are tough, during a recessionary period, jobs are lost and people turn to crime. This in turn forces people who can afford it to beef up their security offerings, bringing a wave of new and increased business through to security companies like IPSS. “We are in an industry that thrives in difficult times,” admits Meyrick. “This is unfortunate but a reality. As unemployment rises, so does crime and businesses have to invest more in security.” He says that, even though the official cost of security is rising, many organisations out there simply do not follow industry norms and are allowed to get away with bad practice. “The rising cost of security has opened the door for cheap ‘fly by night’ service providers that offer substandard security at vastly reduced rates. They do this by not being legally compliant and not paying security officers the correct rate. Although regulations are in place to prevent this, the body tasked to police the industry fails dismally.” However, one area where regular

cost considerations to fall in line is with variable costs, like fuel and technology. Whereas a global player maybe able to afford these luxuries as soon as they become available, IPSS isn’t always able to supply first-class tech to customers because of costings. “The exchange rate hurts,” says Meyrick. “One of our biggest expenses, fuel, is affected by this and increases on average 20% per annum. We are often prevented from buying and supplying the latest technology because of the prohibitive costs in SA.” But despite these woes, the industry remains in a strong place, and looks set to get even stronger if the proposed rules surrounding foreign ownership are brought into play. “The SA security industry is very strong,” enthuses Meyrick. “The threats of government to prevent foreign ownership of security companies will change the playing field if it is implemented. We believe that many clients are unhappy with the service level provided by the very large security companies, and are now exploring alternatives. We are a provider of multilinked services and we are uniquely positioned to take advantage of this.” HISTORIC IN SECURITY IPSS has a long and diverse history in the security business. Originally, the business was founded by Rob Howard and was developed to provide security services to the then KwaZulu Finance Corporation (now Ithala) industrial hubs at iSithebe and Ezakheni. At that time, the business was called IPSS (Industrial Park Security Specialists). “In July 2001, I purchased the iSithebe branch and in 2012 the Ezakheni branch. I changed the name to IPSS Security Operations,” says Meyrick. “The main change made was that the business became owner managed and I was available 24/7 to address clients’ needs and concerns. This made a huge difference to the service level as our staff believed that management was there to support them and not just


IPSS

to send them to earn money for the company.” When Meyrick took over, the company was home to 70 people with a handful of small clients. Today, IPSS employs 2000 and the ethos remains the same. “I know each and every client personally and they can contact me 24/7 if they need to. We now service clients, including blue chip companies and parastatals, throughout the country. “IPSS has now become a threat to the major players in the industry and they see us as fair competition. We will grow that threat as our target market is now national contracts which we have proved that we can service at a much higher level than the big guys where clients are just a number on the bottom line,” he says. SKILLED PEOPLE Growth from 70 to around 2000 employees in 16 years is remarkable, and Meyrick is planning to keep the doors open for new staff. He says that, for some time, the size of the business meant that finding employees with suitable skills was a challenge. Those that were highly skilled were too expensive and would often choose big-name international organisations ahead of IPSS. Today, IPSS a recognised industry leader and Meyrick says that recruitment has become easier. “Up until a few years ago, it was extremely difficult to attract competent, qualified staff. The outcome was that we had to train our existing staff. The result has been amazing. The members have seized the new challenges with both hands. The loyalty generated will benefit the company in the long-term and we will continue with this policy where ever possible,” he says. “That being said, as we have grown and become a player in the industry, we now would have no problem sourcing competent staff as we are a desirable employer. “As mentioned above, we spend a large amount of money training and upskilling our current staff. The skills gap is noticeable and technical persons

are especially in short supply. As a result, the cost of these skills is not in proportion to the work provided.” And, on the 1st of September, South Africa’s private security industry payment terms will change and individuals in Grade A and B in Area A will gain a 6.4% increase in their pay packets. But the remuneration that security officers claim is not the primary concern for Meyrick. He is about whether people can deliver a service that clients demand. Whether it’s from an armed security patrol, emergency medical rescue service, CCTV services, or soon, firefighting capabilities, this is the one company that can encompass all services with a uniquely South African view on the industry. Importantly, demand remains. Companies will only supply into a certain market if there is demand to fuel

the provision of services. Today, as South Africa sits in technical recession and its international credit rating lays in pieces, the demand for a high-quality security provider is greater than ever. The demand for medical rescue is massive, and the demand for a provider that can deliver firefighting is also significant. It seems IPSS has positioned itself perfectly for the future, using its 30+ years’ experience in the industry, and making the most of opportunities that crop up, this is one company that will have its share and will not be going away anytime soon.

IPSS 0860 32 4777 enquiries@ipss.co.za www.ipss.co.za

YOUR BUSINESS

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IPSS

33 Mahathma Ghandi Street Stanger - 4450 Tel: +27 32 551 1664 Fax: +27 32 552 3844 email: platesigns@telkomsa.net Whatsapp: + 27 82 786 3245 + 27 81 708 7688 www.scpsonline.co.za

www.enterprise-africa.net / 19


SAFIRE INSURANCE

Three Decades Strong For

Safire Insurance PRODUCTION: Manelesi Dumasi

Fair and fast, no call centres, access to decision makers, a proven track record, and expert advice– these are the promises made in its branding by Safire Insurance and, over the past 30 years, staying true to these values has helped the company position itself as one of the leading specialist insurance providers in South Africa.


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SAFIRE INSURANCE CEO PIERRE BEKKER


INDUSTRY FOCUS: FINANCE

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Pietermaritzburg-based Safire Insurance is celebrating its 30th anniversary. It was 1987 when this innovative insurance co-op started life, aimed solely at members who needed to act to limit the spiralling costs of insuring their timber. Back then, the business was known as the Central Timber Fire Protection Co-operative Limited (CTFP) and members’claims were settled from a central pool of reserves contributed by the members. “This was 30 years ago and our founding fathers embarked on this journey for one reason, and one reason only: To ensure cost effective insurance for timber growers’ plantations,”states CEO Pierre Bekker. “In 1987 premiums were about to double and cover was in limited supply. Claims by the corporates and insured plantations in South America and Australia in the preceding years had caused this untenable situation. My father, Bailey Bekker, saw the unfairness in the fact that the lower-

risk private timber growers in South Africa were going to pay for the losses of the higherrisk timber growers both locally and abroad. “His idea was to approach the reinsurance market, at what must be said was a very difficult time, to convince them of the difference between the two types of timber growers. After meeting with many underwriting syndicates in the Lloyds market and feeling quite rejected, he eventually came across Jerome Nice. He was the head of a large syndicate that had been exposed to the global catastrophic timber losses and saw the increased premiums, as did all the other markets, as his way of recouping some of those losses. Jerome Nice liked Bailey’s very unorthodox and frank way of putting things and very unexpectedly decided to back the proposal,”he says. With the reinsurance backing, the co-op was formed and three of the significant members at the time - NCT, TWK and LK -put up limited guarantees to back the

co-operative pool. A group of Directors was elected (Bailey Bekker, Doug Crowe, Peter Lorenz, Stuart McMurray, Dave Dobson, David Earl, Reg Niebuhr, and Michael Daly as GM) and with just three employees serving 296 timber growers, CTFP received certificates of participation in a pool insurance scheme contemplated in terms of section 51 of the Co-operatives Act. Over the ensuing years, the market place changed dramatically and the company adapted well to new methods of doing business and new entrants to the market. Realising the need for expansion and diversification, Safire Insurance began running general lines of short-term insurance for domestic, commercial, agricultural and other clients and this has been hugely successful, dwarfing the timber plantation business which now represents just 10% of the company’s total revenue. “Not only have all the milestones and the growth we have achieved contributed


SAFIRE INSURANCE

to broadening our objectives and seen us playing a far larger role in the wider economy and society, we have also expanded our responsibilities towards many more stakeholders. We are proud to have met and in fact far exceeded the original expectations and objectives of our founding fathers, which was to provide cost effective insurance for timber-growers’plantations,”says Bekker. “Our diversification has made Safire a more meaningful player for our reinsurers– we can offer them much more business. The decision to expand beyond forestry insurance was a strategic move and largely done to sustain our forestry insurance – we did it for the benefit of our timber clients. We had no idea that the short-term side of our business would grow to the levels of today,”he admits. While 2017 might have been a year for reflection and realisation of just how far this pioneering organisation has come, Bekker has his eyes on the future and is hoping to move forward with little resistance.“We’ve

completed our celebrations - we invited our founding members to an awards event at Safire House in Pietermaritzburg – and we are now looking forward and focusing on the next thirty years!” EXPANSION & IMPROVEMENT One of the first steps for Bekker and Safire at the start of the next 30-year journey is international growth and product development. This of course means looking to other geographies and further widening the product portfolio, but Safire will not be reckless. “In terms of the forestry side of the business, over the past thirty years in South Africa there has been a shift from numerous smaller farming concerns to larger and fewer farms, a change that has put us under increased pressure,”says CEO Bekker.“There is a limited amount of growth. To expand in this environment we have to look elsewhere and we have an eye on widening our operations

INSURANCE “SELF-SERVICE” SOLUTIONS

into these other areas. We need to grow but not at any cost, so we are being careful. “There is a lot of opportunity to expand existing offerings by improving and expanding our products to cover new risks – as the risks change for our clients so we adapt our products; for example, cybercrime. Cybercrime is one of the fastest-growing crime trends and costs billions globally, and is changing from being committed by individuals or small groups to highly developed cyber-criminal networks. Stolen data, ransomware that stops businesses, hacking – these are risks that now need to be covered.” Safire’s growth will come through three main strategies: new products and expansion and enhancement of existing products; new operational areas globally; and removing process waste and redundancies so as to offer better levels of service for clients (brokers). However, the key focus for the business while pursuing growth will be sustainability

• Secure registra�on process with One Time Pin sent to the policyholder’s phone with integrated database lookup to ensure the process is seamless. • An integrated online web portal compa�ble on tablets, laptops and PC’s.

Contact us for a tailored solu�on that will suit your business and your pocket.

Listed below are key func�ons that will enhance your overall product offering and your client’s experience with your brand. You can pre-select which op�ons to include in your branded Apple and/ or Android Mobile App. • You will be able to access important informa�on about your customers through intelligent data gathering on the app. • Your policyholders will be able to view their insurance policies live to ensure they have a “real-�me” view of their cover and premium. • Addi�onal cover can be requested via the app and your client can include photographs / scanning of license disks to capture relevant data about the vehicle for assessment. • A built-in panic bu�on to push in case of an emergency. The panic bu�on will send an alert into the call centre to “call back” the client and arrange immediate assistance. • The ability to lodge a claim with step-by-step assistance on the app. The motor claim form includes the ability to scan the barcode of the regular driver and third par�es’ vehicle license disk as well as driver’s license disk. The data within the barcode is seamlessly decrypted and pre-populated within the app to simplify the data capture process. Policyholders will also be prompted to take the required photo evidence at the scene and these photos will be date and �me stamped so as to keep a proper audit trail and enable you to expedite the processing of the claim. • Your policyholders will be able to recommend and refer friends and new leads to you. • You will be able to promote new product offerings and news to your policyholders via the push no�fica�on func�on. • Vehicle and Motorbike Pre-inspec�on – your client will be able to take photos of the front, side and back of the vehicle/bike, scan the vehicle/bike license disk to capture the details of the vehicle/bike e.g. make, model and deriva�ve as well as scanning the driver’s license disk to decrypt the driver’s details. The full pre-inspec�on detail will be sent through to your offices via email to assess. • Home Pre-inspec�on- your client will be able to take photos of the household items, and capture item values. The full pre-inspec�on detail will be sent through to your offices via email to assess.

Office: +27 11 291 7300 Anthony Ko�on: +27 82 784 4271 (anthony@oneloyalty.co.za) Ryan Grill: +27 82 552 8216 (ryan@oneloyalty.co.za) www.oneloyaltyrewards.co.za

Select from the below benefits to customise your policyholder app Why Use A Broker | Emergency Roadside Assistance (Standard, LDV & HCV) | Motorcycle Roadside Assist | Emergency Bicycle Roadside Assistance | Map & Direc�on Assist | Home And Convenience Drive | Staymobile | Panic SOS System | Medical Assist Access | Emergency Medical Services | Assault, Trauma & HIV Protec�on | Smart Locate & Response | PSARU - People Search & Rescue Unit | Home/Office Assistance | On The House | Handyman Assist | ApplianceServ | Crime & Security Assist | Hi-jacking Assist | Bail Protect | Pothole Expert | Licence Expert | Fines Expert | Accident Expert | Road Runner Protect | Discounted Funeral Arrangements | Funeral Assist | Repatria�on Of Mortal Remains | Tombstone Assist | Estate Plan | Legal Assist, Advice And Access | Document Assist | Tax And Financial Assist | Access To Debt Counselling | Data Protect | Tutor Line | Teacher On Line & many more! Roadside Assistance now available in Australia, US and UK.

One Loyalty is proud to be associated with Safire Insurance Company as their value-added service provider partner.

www.enterprise-africa.net / 23


INDUSTRY FOCUS: FINANCE

and longevity.“We are not willing to grow at the expense of sustainability – that’s not an option for us,”says Bekker.“We have seen a number of players come and go in recent years especially in the forestry sector where no insurer other than Safire has managed to survive long-term. Today, we have three years’ guaranteed reinsurance cover from our lead reinsurers at fixed terms – unheard of in the forestry market.” Economic growth in South Africa was almost non-existent in 2016 and it was a tough year for the short-term insurance industry. This is why Bekker and Safire are keen to not get into price wars and not to overstretch.“Growth is not all-important for us,”he says.“We have a more conservative mindset – this is a very difficult workingenvironment and an extremely soft insurance market;it’s not the time to grow too fast. We will however continue to expand through the innovation of our product offerings and by being better than other companies in terms

of service levels and products, not through undercutting on price alone.” ECONOMIC INSTABILITY When the SA economy moved into ‘technical recession’in June, following a downgrade from the big International Credit Ratings agencies to‘Junk status’, the trading environment quickly became volatile for the majority of industry sectors. Insurance, one of South Africa’s strongest and most resilient industries, was not immune to the trouble and many companies are finding themselves in a precarious position. “It is a very difficult environment in which to work,”admits Bekker.“It affects us because it affects our clients. It is very difficult to plan because of general uncertainty.It is a soft cycle so it is hard to plan ahead, but we are prepared for when the harder cycle begins.” The lack of confidence and the reluctance of the market to make firm

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commitments to spending have also caused a rocky environment with currency pricing. “Lots of claims are affected by the weaker Rand – many assets, such as vehicles, are imported and costs are driven up for us as an insurer. Also, we pay our re-insurers who are mostly international companies, and our relevance to them in terms of our value is affected if the Rand depreciates,”explains Bekker. But the economic situation appears to be slowly turning itself around. The National Treasury lists continuing global growth, stabilising commodity prices, improved reliability of electricity supplies, and less volatile labour relations as potential‘green shoots’for South Africa and is hoping for a swift return to growth. SAFIRE ADVANTAGE Key in Safire’s navigation of these challenging times is the company’s focus on relationship development and understanding of client requirements. The company’s logo is designed to replicate a‘warm handshake’ made up of five fingers each signifying a core strength of the business – fair and fast, no call centres, access to decision makers, proven track record, and expert advice. “The human side of our insurance offering is a major plus of working with Safire,” says Bekker.“We are opposed to the global move towards call centres and using artificial intelligence (AI) to process claims, especially in the East. Using AI is fine for processing paperwork but when there’s a problem, people want to talk to a person and not wait for ages in a telephonic queue. “We operate through a network of trained brokers who are able to sit with their clients and go through the ins-and-outs of their insurance needs and the paperwork. Our levels of service exceed the expectations and experiences of our brokers and consumers, and we sincerely believe that this is a major part of our market advantage,” he adds. The‘human side of the business’extends beyond customers and clients and also incorporates the methods in which Safire deals with suppliers and staff. In the insurance industry, onboarding the right people, developing them, and retaining them can be


SAFIRE INSURANCE

the difference between a good and a great company and Safire recognises this, endlessly pursuing the upskill of people. “People are the most important part of what we do in terms of our business and service levels so we prioritise our in-house training of staff,”says Bekker.“People can no longer rely on a formal education, and neither do we. We tend to focus not on degrees and certificates but look at an individual’s potential to work well within our environment. “Our offering and culture is very different to other insurers so we have a strong training programme and have developed bespoke training facilities at head office to work with the raw talent of new people – often fresh from school and educational programmes. We keep taking people out of their comfort zones in their current positions at Safire and challenging them to grow.” He cites education and skills development as one of the country’s

biggest challenges and points out that Safire recognises the need for investment in these areas. This is why the company is active with education in social upliftment programmes. “We sponsor libraries and bursaries. I also believe that people need to be guided and encouraged to self-educate, via the internet for example. Self-discipline is required but there is so much potential for people to learn through enhanced access to technology, as long as they are prepared to work hard and sacrifice some of their free time. Balance is important and this should include a commitment to achieving your desired goals,” says Bekker. The company’s 200 people know that they will be challenged but they know that they are valued.“We enhance their skills continually and we have a great working environment: young, dynamic, exciting, challenging. There is a great sense of teamwork,”says Bekker. So what can we expect from Safire

in the future? Certainly a continued focus on the core strengths captured in its logo; certainly a focus on expansion and efficiency; and certainly an emphasis on people development, ensuring employees are at the cutting edge of the industry. While 30 years may sound like a long time, this is a business that is really only starting out on its journey, and the principles on which it is built remain solid today. “We are naturally very proud of the legacy that has been developed over the past three decades and look forward to the ongoing development and expansion of the company,”Bekker concludes.

SAFIRE INSURANCE 033 264 8500 admin@safireinsurance.com www.safireinsurance.com

Hugo’s Panel Shop PANELBEATING - SPRAYPAINTING - CHASSIS STRAIGHTENING

WHO ARE HUGOS?

Hugo’s Panel Shop has been in existence since 1996.

TOOLS & EQUIPMENT

CEO, Craig Frankson has 25 years experience in the industry. 10 Years ago, he broke away from the family business, and established Hugo’s Panel Shop, which is a panel beating, chassis straightening, spray painting and auto trimming business.

The equipment itself is and meets the approval and the requirements of all the insurance companies together with the motor dealerships with whom the business transacts. Tools and equipment are kept in the best possible condition by regular servicing and upgrading. I believe that when considering this application the need to view the tools will be readily available.

Tel: 033 394 0294 / 033 345 3398 Fax: 033 342 1560 Cell: 083 786 4821 / 083 786 5098 / 082 086 0154

Email: hugospanelshop@iafrica.com 220 Victoria Road Pietermaritzburg 3201 P.O.Box 8257 Cumberwood 3235

GUARANTEE & WARRANTY

We hold a 12 month guarantee on our workmanship and a 3 year paint warranty. This ensures customers as well as insurance companies peace of mind knowing the highest standard of repairs are being conducted.

Copyright © 2013 Hugo's Panel Shop. All Rights Reserved. A.P.S. Panel Beaters c.c t/a HUGO’S PANEL SHOP CK 96/54798/23

www.enterprise-africa.net / 25


NFB FINANCIAL SERVICES

Converting Invaluable Knowledge to

Great Wealth PRODUCTION:

Timothy Reeder

NFB Financial Services Group is a part of the AltX listed NVest Financial Holdings (NVE) group of companies, which currently manages in excess of R25 billion, and boasts a 32-year track record in providing clients with independent financial advice, and a broad suite of products.

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Since 1985, NFB has set about establishing itself as one of the country’s leading broad-spectrum financial services businesses, specifically in the provision of independent financial advice, products and services to high worth individuals, trusts, businesses and institutions. The Group has dealings with all major registered South African, as well as a select number of preferred international, financial institutions within the banking, insurance, listed equity,

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government and quasi-government sectors. The NFB Group as a whole prides itself on the direct and personal relationships its clients enjoy with its network of advisors and support staff, something which underpins its entire investment philosophy. According to NFB: “We embrace knowledge as a mechanism for sustainable wealth. Our knowledge is your key to a future of financial peace of mind.” It comes as no surprise then that NFB is committed to knowing every facet of

each client’s wealth plan and how it has evolved over time, enabling it to plot its continuing evolution. Perhaps even more importantly, this is backed by complete after-sales service as soon as an investment plan has been put in motion. Part of what has led to NFB’s consolidating such a secure foothold in the South African financial services sector has been this recognition that without fully satisfied clients, who in turn then commit themselves and their assets to the Group, a long-term


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INDUSTRY FOCUS: FINANCE

sustainable business is not going to result. This business ethic informs every aspect of what NFB does, enabling it to gear itself entirely towards client satisfaction and ensuring that as a result, these people wish to stay for the long haul. Rather than selling products and policies, NFB chooses to devise and implement long-term wealth plans using the knowledge it has accrued over its 30 years of successfully doing business. Naturally, among a client’s biggest concerns when choosing a financial service provider is minimising costs, a concern NFB shares and works tirelessly to ensure. Considerable time is spent ensuring that the cost-tovalue relationship across the entirety of its business is appropriate and as economical as possible. Belief in this principle is deeply ingrained in the Group’s operations, as it states. “Clients should not overpay or

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underpay for exceptional performance. Our fee basis is carefully considered and regularly reviewed together with our clients to ensure the value we bring is quantifiable.” It goes on to underline just how unique a proposition it offers. “We use the scale of the NFB Group and the quality of our business relationships to ensure that our clients get an outcome that they might otherwise not have. Our clients benefit from access to alternative products and investment opportunities not broadly available.” NFB’s business concerns are divided into three distinct arms. Under the umbrella of Institutional Wealth, NFB provides institutional clients which can include rehabilitation funds, NGOs, charitable organisations, university endowment funds, listed companies and private corporations with a sophisticated suite of financial strategies and solutions. Characteristically, these

solutions can be tailored to meet institutions’ current and future needs. As an institution grows, it of course becomes increasingly important to correctly position a portfolio, due to the potential of concentrated single asset positions generated as a result of stock grants, stock option plans, restricted stock holdings or employee stock ownership plans. NFB can facilitate, in partnership with top local and foreign equity structuring teams, a process to hedge or monetise a concentrated position. By matching assets to future liabilities, NFB is positioned to help institutions manage risk exposure for identified future capital outlays, and has sourced from its institutional and banking network yield enhancing solutions to assist in liquidity and treasury management requirements. The Group sums up what sets its


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For nearly a quarter of a century, Coronation has maintained one of the best records for long-term outperformance, putting South Africa’s retirement money to work.

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INDUSTRY FOCUS: FINANCE

institutional expertise apart as such: “By providing expert advice on protected growth strategies, NFB has consistently enabled institutions to gain market exposure whilst eliminating downside risk. This is achieved through tailored structured solutions using prime South African and global institutions as the counterparties.” Another major, yet possibly understated, element of the NFB service offering is its Advisor Collaborations, through which build it seeks to construct partnerships with existing independent financial advisers and other professional practices. Though this work NFB has partnered with several accounting firms and fellow IFA businesses, and offers potential partners the opportunity to benefit from the Group’s skillset of knowledge,

innovative strategies, scale and operational efficiency. These extend to collaborative marketing efforts, asset management capabilities, leveraged pricing, IT proficiencies, fiduciary services, as well as access to the asset management business. The final element in the NFB makeup is the Group’s Asset Management provision. Of this trio, it is this latter which has proven most fruitful to date, as CEO and founding partner Mike Estment explains. “NFB’s client base or assets under management is approximately R25 billion. Of that, probably 23 would be individuals and their family trusts and less than 10% is what we would call institutional - such as pension funds and universities.” Launched in 2001, NFB Asset Management is among South Africa’s leading independent providers of

Get the best of both worlds. Glacier offers a range of local and international investment solutions that meets a diverse set of client needs.

Our solution set now encompasses both platform (LISP) as well as traditional life solutions (guaranteed-type products), allowing us to meet the needs of investors seeking certainty amid the current market volatility while still growing their wealth.

Visit www.glacier.co.za or speak to your financial adviser about Glacier’s wide range of solutions.

Glacier Financial Solutions (Pty) Ltd and Sanlam Life Insurance Ltd are licensed financial services providers.

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both local and offshore single- and multi-manager funds. Perhaps most lucrative to investors when selecting NFB Asset Management is the knowledge that they will benefit from the extensive resources, expertise and experience which are at the disposal of the wider NFB Group no matter the level of investment. Unlike many others, NFB Asset Management does not believe in forecasting, back testing or optimisation. Rather, these investment decisions are based purely on the current market environment, which allows its industry insights and rigorous risk management process to come into play, in identifying both opportunities and threats within the prevailing financial market conditions of the time, and thus help investors to meet their strategic objectives over time. With NFB Asset Management, investors benefit from dynamic asset allocation, considered fund selection, optimal portfolio construction and transparent reporting expertise. At the core of the service are long-term investors who believe in making active decisions at the asset allocation level, which are the implemented using passive instruments in single manager portfolios. It is a rigorous, considered approach to asset management and one which has brought the NFB Group some notable success. Recognition of the NFB Ci Cautious Fund of Funds was shown in its receipt of two accolades at the prestigious 2017 Raging Bull Awards, widely known as the Oscars of the investment management industry. The Awards were originally established to honour funds and fund managers that consistently earn outstanding returns for South African retail investors, and for the five-year period to the end of December 2016, NFB took home some significant awards. Among these were a Certificate for Top Performance on the Basis of Risk-adjusted Returns by a Domestic Collective Investment Scheme, in


NFB FINANCIAL SERVICES

the sub-category of South African Multi-Asset Low-Equity, which was joined by a Raging Bull Award for Top Performance by a Domestic Collective Investment Scheme on a Risk-adjusted Basis, this time in the category of Best South African Multi-Asset Equity Fund. Of all the funds in the South African multi-asset high-equity, mediumequity and low-equity sub-categories, the NFB Ci Cautious Fund of Funds scored the highest PlexCrown rating and rank on a risk-adjusted basis. It is a remarkable performance given that it is in the multi-asset lowequity sub-category and is therefore restricted to investing no more than 40% in equities, both locally and globally, and has an offshore limit of 25%. Fund manager Paul Marais says NFB Asset Managers’ investment philosophy is based on their key beliefs: “First, that asset allocation

drives a significant portion of overall investment returns. We also believe that markets are inefficient and that they swing between periods of overand under-valuation. “We also believe we are able to exploit these circumstances to the benefit of investors invested in the portfolios we manage. We do not believe in optimisation, back-testing or forecasting, as these are all materially flawed processes in one way or another.” These prizes neatly underline the long-term philosophy and robust investment processes which NFB has developed over the last ten years, and highlights the importance of the investment management team responsible for guiding these. In an economic climate which remains ever unclear, Paul Jennings, Private Wealth Manager of the NFB

Group, chooses to pick out the scope for progress during such uncertain times in South Africa, with NFB itself perfectly placed to spark the required change. “There is a need and opportunity, both locally and internationally, for radical, economic transformation,” he says. “South Africa can be at the forefront of change. We are a young nation, at the tip of this vast continent with enormous potential both here and the rest of Africa, and we all have a role to play in influencing a better South Africa and a better world.”

NFB FINANCIAL SERVICES +27 11 895 8000 www.nfb.co.za

LB 114441L/10

I’M INVESTING FOR YOUR FAMILY’S FUTURE. AND MY OWN. Siboniso Nxumalo

Joint Boutique Head Old Mutual Global Emerging Markets

We believe that when you are personally invested in something, you are even more driven to make it succeed. That’s why Siboniso Nxumalo invests his own money alongside yours. Siboniso is a fund manager of the Old Mutual Global Emerging Market Fund and is joint boutique head of the Old Mutual Global Emerging Markets boutique. Emerging markets are fast becoming a driver of global growth and we offer exposure to quality listed companies across a diverse range of global emerging markets. This, coupled with the team’s focus on sound corporate governance and on-the-ground analysis of potential investments, contributes to their success. But this is more than just Siboniso’s success, it’s yours too. Invest where the fund managers invest by contacting an Old Mutual Financial Adviser or your Broker, call 0860 INVEST (468378) or visit www.oldmutualinvest.com/asinvested

Old Mutual Investment Group (Pty) Ltd is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. Old Mutual Unit Trust Managers (RF) (Pty) Ltd is a registered manager in terms of the Collective Investment Schemes Control Act 45 of 2002. The fund fees and costs that we charge for managing your investment are accessible on the relevant fund’s minimum disclosure document (MDD) or table of fees and charges, both available on our public website, or from our contact centre. Old Mutual is a member of the Association of Savings & Investment South Africa (ASISA).

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REMGRO

Superior Investments for

Long Term Growth PRODUCTION:

Timothy Reeder

Established in the 1940s by the late Dr Anton Rupert as a manufacturer of tobacco, Remgro’s investment portfolio has since evolved substantially and currently comprises more than 30 investee companies across a variety of important South African industries, including banking, healthcare and insurance.

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INDUSTRY FOCUS: FINANCE

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Remgro’s history dates back almost a century, to its conception in Johannesburg by founder of the Group Dr Anton Rupert, under its initial guise as tobacco company Voorbrand. This entity was the first of what was to become the Rembrandt Group, incorporated in 1948 and first listed on the JSE in 1956. In the fifties came Rembrandt’s important initial expansion abroad, via the establishment of various international partnerships to bolster its South African operations. As part of what would become an intricate and multi-faceted history, during the 1970s Rembrandt set its sights further afield than the nascent interests in tobacco, wine and spirits which had dominated to that point, taking on various other economic sectors in South Africa. These included banking and financial services, mining, printing and packaging extending through to medical services, engineering and even food-based concerns. Today, Remgro’s primary concerns are somewhat more diverse: a restructuring in 2000 saw the young company represent Rembrandt’s established tobacco, financial services, mining and industrial interests, while further unbundling in 2008 means that the Group’s primary investments also now span such areas as motor components, glass products and various other trade mark products, to give it the array of investment areas it currently enjoys. Under these various headings Remgro holds equity in some of the most ubiquitous household names in South Africa - such monoliths as Unilever, Total RMI Holdings, among many others. Its policy is to invest exclusively in businesses which it feels will deliver superior earnings and dividend growth over the long-term, centred around the acquisition of meaningful interests in companies in order to have significant influence.

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When considering a potential investment, sound management is a crucial factor in the decision and provides Remgro with the confidence to join forces with such a variety of companies and industries. Across the totality of its investment categories, there are several standout contributors to Remgro’s continued growth. Its banking concerns delivered a colossal R2989 million to its headline earnings as of June 2016, with RMB Holdings (RMBH) responsible for around three quarters of this figure. RMBH is a focused investment company, holding a 34.1% interest in FirstRand, Southern Africa’s pre-eminent banking group, and its performance is therefore heavily linked to that of FirstRand Limited. In July 2016, RMBH also concluded its first acquisition, a 27.5% interest in Atterbury Property Holdings, and is in the process of finalising the acquisition of a 34% interest in Propertuity, an urban renewal business. Under the food, liquor and home care bracket, meanwhile, a combination of Unilever, Distell and RCL Foods helped to raise some R1618 million in the same period. Mediclinic alone saw Remgro’s healthcare portfolio stand at R1566 million, consisting of the provision of comprehensive, highquality hospital services on a costeffective basis in Southern Africa, the United Arab Emirates, Switzerland and the United Kingdom. Remgro has transformed from a small cigarette company into the R113 billion investment vehicle we see today, controlled by the Rupert family and with Chairman J.P Rupert, who has been a part of the Rembrandt team since 1985 and in his present position for some 17 years. The Rupert family is listed among the 10 most affluent in South Africa, and considered to be among the wealthiest and most influential the world over. As well as ownership of luxury brands such as Cartier, Mont Blanc, and Dunhill under the company’s Richemont banner, the family also boasts real influence within the beverage industry,

controlling nearly a fifth of South Africa’s wine market as well as up to 80% of all sales of brandy in the territory. Remgro has deployed its considered and effective strategies to see it enjoy high profit retention over the past 20 years of operations, with its shareholding in Mediclinic, FirstRand, Rand Merchant Bank and Rand Merchant Investment Holdings proving particularly profitable for the group. Such is the value of Remgro’s highly diversified interests, held over a long period, that it was placed at the very top of all South African conglomerate groups by the Centre for Competition, Regulation and Economic Development (Ccred) in August this year. The Ccred asserted that the aggregation of Remgro’s principal investments as at December 31, 2015, gave it influence over firms with its total market capitalisation of R1.3 trillion. According to the awarding body this represented 12% of the total market capitalisation of the JSE, which, as it stated, “increases to approximately 27% when including the total capitalisation of British American Tobacco (BAT) in which the company, through Reinet Investments, holds shares.” According to Ccred, Remgro’s major interests in its portfolio include a 25.8% stake in Unilever South Africa, a 31% holding in Distell, a 77.5% share in RCL Foods, a 42% stake in Mediclinic and a 28.2% holding in RMB Holdings - all considerable propositions. As a result of this meant that Remgro had direct interests and influence in nine firms in the JSE Top 100 firms by the end of 2015. “Over the period under review, Remgro’s revenue increased 116%, similarly earnings before interest and tax also grew 202%. Overall, key contributors to Remgro’s net profits are Mediclinic, RMB, RMI and FirstRand,” Ccred concluded. For Remgro, its overall purpose is to ensure superior returns to shareholders by way of sustainable dividend and capital growth, through exactly this type of major investment.


INDUSTRY FOCUS: FINANCE

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REMGRO

REMGRO JOHAN RUPERT IN 2004 - SZEKSTER

Although the company focuses in large part on the Southern African market, it is always willing to consider international opportunities with the right reputable partners. As part of its investment philosophy Remgro forges strategic alliances on a partnership basis and seeks to add value where possible. Remgro manages its investments on a decentralised basis, with its involvement centred around the provision of support, rather than being involved in the day-to-day management of the various business units. The support provided to the investee companies can come in the form of strategic, financial and managerial support, or indeed in the creation of an environment for corporate transactions. It is a strict management philosophy that governs Remgro’s involvement, and is applied to all investee companies, irrespective of the level of influence that can be exercised. As a shareholder of the investee companies, Remgro uses these shareholder rights to ensure, as far as possible, that the entities with which it deals and over whom it may exert some influence adhere to the requirements ranging from matters such as governance, internal controls, financial management and risk management, to safety, health and environmental management, internal audit, ethics management, information management and sustainability. As part of its quest to streamline its interests as effectively as possible, Remgro is currently considering some key changes to its investment holdings. Exemplifying this is its possible sale of broadband provider Dark Fibre Africa, to a company owned by Nippon Telegraph and Telephone Corp. of Japan, which could raise in the region of R10 billion, or $723 million. Remgro owns 51.9% of the business alongside investment partner New GX Capital,

with this valuable cash injection earmarked to be used to repay debt and fund future acquisitions. While this remains a potentially lucrative option, the proposal unveiled by liquor giant Distell in June of this year looks set to be even more lucrative for Remgro. Distell owns best-selling brands such as Savanna, Hunters, Nederburg and Klipdrift, and the proposal will significantly strengthen the position of Remgro, its biggest shareholder, with a 26.4% direct stake in Distell as well as a 19% stake in Capevin - an investment holding company that holds as its sole asset an indirect investment in Distell Group Limited. After the dismantling of the old Capevin structure, Remgro will remain the biggest shareholder in Distell with a 31.4% stake. What serves to make the transaction yet more interesting for Remgro is that it will be issued with unlisted B shares. These shares have no economic rights, but will provide Remgro with the same voting rights in Distell as it held before to the transaction via Remgro-Capevin Investments, and means that Remgro’s 31.4% stake will in fact translate to 52.8% of the new Distell. Distell CEO Richard Rushton explained that shareholders had been asking for the dismantling of the Capevin structure for a number of years, and commented that the transaction would boost the general marketability of Distell stock to local and international investors. “It should also improve our ability to raise additional capital in the future, if required, to fund our growth ambitions,” he concluded.

REMGRO +27 21 888 3000 info@remgro.com www.remgro.com

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ZOONA

Driving An African

Financial Revolution

PRODUCTION: Timothy Reeder

Zoona is a mobile payment company which exists to make communities thrive, providing essential financial services and earning the trust of over one and a half million consumers who have transacted over $1 billion through its agents.


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Zambia-based Zoona was founded in 2009 by the Magrath brothers, Brad and Brett, and unlike most other similar companies, Zoona is neither owned by a bank nor by a telecommunications company; rather, the company competes with bigger firms in the space by making its services available in key places and retaining customers due to its reliability. “People can send and receive money using an agent network - essentially kiosks all across the country - without the need of an account; they can just walk up with cash which the receiver can then just withdraw from another kiosk,” explains CEO Mike Quinn, before giving us a potted history of Zoona and its subsequent rapid rise and expansion. “Brad and Brett [Magrath] are the two founders, so they were behind the creation of the business at the outset. I joined in 2009 along with Keith Davies, who followed perhaps a year later, so this comprised the original management team of four. We then raised a Series A equity round in 2012, which resulted in our bringing in the Omidyar Network, a Silicon Valley-based investor capitalised by the private wealth of Pierre Omidyar - the eBay founder. “The other of these equity investors was a group called Quona Capital,

ZOONA CEO MIKE QUINN


ZOONA

which is a Washington DC-based Fintech investor. We also converted a loan from the Mennonite Economic Development Association (MEDA), who still owns some shares, and then took in Angel Investments from the former Chief Financial Officer of Google, Patrick Pichette. “This all formed our Series A round, which provided us with $4 million, and more recently we also closed our Series B round - just last year. This enabled us to raise another $15 million of equity, in which our existing shareholders all participated and were also joined by several others. We brought on board: The International Finance Corporation (IFC), which is the private investment arm of the World Bank, for one, and also the Lundeen Foundation, which makes both for-profit and non-profit investments on behalf of the Lundeen family and its $13 billion oil and gas and mining empire.” This gives the company its present

structure, as Quinn details. “This means that the original band of four of us are still centrally involved, with somewhere in the region of a 26% combined stake, and we have also set up a 14% stock option pool to allow each of our employees to also have some ownership of the business. All of the investors then make up the remainder.” Quinn’s own path to Zoona is punctuated with a number of landmark events, and has included extensive work across the continent. “I joined a Canadian start-up NGO at the time called Engineers Without Borders, and was sent to Ghana to work for a year on a small-scale agriculture project. I had never been to Africa, but then signed up for a second placement with them in Zambia where I spent a further year and a half again primarily in agriculture. “I have always been interested in how economies develop, and how to

bridge the gap between the rich and the poor, and I knew I wanted to be an entrepreneur. The third of my criteria was to do something that would have a major impact in Africa - that was not simply profit-driven. I convinced an investment fund to buy me a plane ticket to Zambia to source deals and entrepreneurs in whom they could invest - people who were changing their communities, and on the first day of this consulting contract I met Brad and Brett. They were just starting Zoona at that point, with a vision of building a payments company that could achieve the dream of a cashless Africa through digitising and driving electronic payments.” Since the trials of Zoona’s early days “we ran out of cash for three years all the time; we just bootstrapped it for three years,” laughs Quinn - the growth of the company has been remarkable. “We now have operations in Zambia, Malawi and

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INDUSTRY FOCUS: FINANCE

Mozambique. This is backed by a planned pilot for the DRC with a partner we are approaching there. We have around 1.7 million active customers right now and process over $50 million per month in payment value, and are growing at a rate of nearly 40% year-on-year and trying to accelerate that growth. “We feel that we are capable of achieving 100% growth year-on-year,” Quinn states, “as this is the current growth rate of our transactions. If we can get moving in some of these new countries and the new products pick up then we think we can accelerate it quite a lot further to hit a real growth phase. “We currently have around 2200 agents, and this figure is growing at somewhere near 150 per month. We have concentrated on agent quality instead of the sheer number, and have found it more important to ensure that the agents are in the right places with the correct personnel and behaviours to suit what we do. We have controlled the growth of agents to assure a good quality of supply of them,

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and we are now accelerating on this base. We are up to 1600 in Zambia, 500 in Malawi and 100 in Mozambique with it still in its pilot phase. We are aiming to hit 3000 by the end of this year and this looks fully attainable.” As part of this growth, Zoona drives what it calls ‘The Girl Effect,’ specifically targeting young women with no formal business experience and supporting their transformation from job-seekers to thriving business owners. There has never been a better time to come on board with the company, as Quinn takes us through how its business continues to burgeon. “We are diversifying in two ways in what we do; on the market side we already have Zambia and Malawi as our core markets, but what is changing is that these are now bolstered newly by the presence in Mozambique and the DRC. “On the product side, we are moving from what was for many years primarily simply a money transfer product designed to help people move money within the country. Now, we have a savings product,

our agents do Airtime and bill payments, while we too are launching a mobile wallet and even starting to explore a credit offering. We pay out international remittances from South Africa, and soon to be globally, so the product side is diversifying significantly too.” This new addition to the Zoona line is going to be vital to attaining the goals the company’s four key players set themselves. “Right now, we are paying out the equivalent of $300,000 over day in remittances from South Africa into Malawi, and we will be expanding this to include remittances into Zambia very shortly as well to increase value. A lot of transactions, and therefore a lot of money, are moving around at this time; people are paying their bills, buying Airtime, receiving salaries; farmers are receiving payments for their crops and subsidy vouchers. We see a lot of opportunity to further grow both the number and value of transactions.” Zoona is in a prime position to profit from what Quinn sees as a field rife with scope for its further


ZOONA

domination. “We are very much needdriven in our service offering. The population of Africa is young, unbanked and underserved, and we think that there is a huge market opportunity for financial services and products and the ability to use agents to provide access to them. This will create employment and entrepreneurship that can make a huge and long-lasting impact in a lot of these places, and really build a new type of financial institution for the future. “The banks have had their shot for the last 100 plus years,” he continues, “and the majority of the population remains unbanked, so in that sense they have failed to penetrate the mass markets and small businesses as we are positioned to do. Those that have achieved this penetration are the likes of MTN with their Mobile Money product, but the core products of companies like it also revolves around Airtime and, increasingly, data, and they are huge multinationals that do not have a focus on financial inclusion

or innovating with their services quickly as we can. “We are trying to show that an independent start-up can fill a badly needed gap in between those two major entities of banks and TelCos, with a core business that helps communities thrive through providing financial services and products, and equally enable entrepreneurs to build these agent networks that can create jobs and deliver services to their communities.” Mike Quinn finishes by laying out for us the three aspects of Zoona’s business that are most pivotal to keeping it ahead of the rest. “Firstly, our culture and ethos is centred around entrepreneurship, not prioritising profit over purpose or the reverse; it is a combination of the two, which allows us to attract the very best people to work for us and gives Zoona an overarching reason to be chosen over others. “Culture trumps strategy and so

we invest a lot of time into it. “We also believe that our agent network and our model is very unique. We ask ourselves how we can turn an 18-year old young woman in Africa, for example, with a high school diploma, into a thriving entrepreneur. In our product development, lastly, we seek to truly understand the informal economy and customer segments in Africa better than our competitors, and be close to the ground in order to develop these products that meet customer’s real needs. Combining these three things will give us the requisite space which we need to grow for a long time to come.”

ZOONA +27 21 421 3618 info@ilovezoona.com www.ilovezoona.com

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TRANSVAAL GALVANISERS

Zinc-Coating Your Steel For The Best Corrosion Protection

Since 1984 PRODUCTION: David Napier

Transvaal Galvanisers has completed the installation and commissioning of the largest zinc galvanising kettle in Africa. This new R250 million facility solidifies the company’s position at the top of the industry. CEO Francesco Indiveri tells Enterprise Africa more‌

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Repeat business is the key to success according to Transvaal Galvanisers CEO, Francesco Indiveri. He says that forging relationships with customers who respect his business has been vital to the company’s growth and success over the years. Founded in 1984 by Francesco’s father, Gennaro, Transvaal Galvanisers is South Africa’s leading galvanising business and now boasts Africa’s largest galvanising kettle. The new facility was completed in February and came online in April. Steel manufacturers from all over the country can now utilise the

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company’s offering with ease. “It’s a R250 million investment and it’s the biggest kettle in Africa at 15.5m long, 2m wide and 3.2m deep. We can galvanise very large items that not many others can. It has a big throughput capacity of 6000 tons per month and it’s a design based on European spec, incorporating world-class environmental standards,” says Indiveri. Understandably proud of the company’s achievement, the CEO says that the completion of the investment brings the Transvaal Galvanisers facilities to pole position in the industry. “There’s a complete enclosure

for the pre-treatment area where we undertake all the acid pickling, degreasing and fluxing,” explains Indiveri. “Everything is built into the room including wet scrubber extraction, effluent plant and we catch all harmful fumes. It’s completely sustainable from an environmental perspective. With the zinc kettle itself, we have a fume cabin to capture zinc fumes, and they are extracted into a filter to create by-products such as zinc sulphate monohydrate which is used for fertiliser in the agricultural industry. “We have the biggest crane capacity at 16 tons, we have eight


TRANSVAAL GALVANISERS

tandem cranes, we have 12 eight tonne hoists for pre-treatment and dipping and this facility covers 8500 m2.” The management team at Transvaal Galvanisers decided that upgrades and improvements were needed after reviewing existing capabilities and identifying potential improvements that could be made relating to the company’s carbon footprint. “We had five existing galvanising plants and we discontinued two lines, completely dismantling one plant and installing the new structure,” details Indiveri. “Environmental legislations are very strict and so the older plants, which

were older designs, would have been very expensive to upgrade and become compliant. So, we thought it would be best to completely remove and reinstall so that we would have a newer, more efficient facility. “The new facility is much bigger but has a much smaller carbon footprint. It utilises less input and gives off less waste so we’re very happy.” 33 YEARS AND GROWING The basic process of galvanising involves applying a zinc coating to steel or iron to prevent rusting and corroding. This process is highly popular among industrial, mining,

agricultural, construction and engineering customers. Transvaal Galvanisers has been loyally serving clients since its establishment 33 years ago, but it was initially founded to service Gennaro Indiveri’s other business, IMAB Engineering, a Nigel-based steelwork specialist. “We’re a family owned business with one shareholder, my father Gennaro Indiveri. He started a company called IMAB Engineering in 1974 which supplies the transmission and power distribution industries with lattice structure towers. In 1984, he realised that all of his structures needed galvanising and at that stage, there weren’t many galvanisers in the country.

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INDUSTRY FOCUS: ENGINEERING

He opened his own galvanising plant and Transvaal Galvanisers was founded,”the CEO explains.“In the beginning, it mainly served our inhouse companies. As the galvanising business grew, we began galvanising for external customers and we had to adapt to meet their requirements. We saw the need for an open dipping line and that is when we started to really invest into the galvanising business. “We’ve ensured we created a business to be the market leader in South Africa. 40-50% of our throughput does come from inhouse work but we also have 50% external customers too. In the last five or six years, we’ve quadrupled our capacity. “Our big customers include top names from the mining, agriculture, water, construction and energy industries. We are receiving a lot of work right now from IMAB Solar Steel, a company under IMAB Engineering which we started around five years ago. We do the fabrication work for

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big IPP solar projects in South Africa and we undertake all of the galvanising work,” he adds. Today, metals galvanised by the Transvaal team are present in countries around the world including Canada, Australia, Italy, Sweden, France, Japan, Denmark, Kenya and Namibia, to name just a few. The company’s work is SANS 121 (ISO 1461) and ISO 9001 certified, and Transvaal Galvanisers is an active member of the Hot Dip Galvanizing Association of South Africa and the International Zinc Association. Using multiple methods including hot dip, dragline, spin and thermal spray, Transvaal Galvanisers provides the highest quality corrosion protection faster than anyone else. “Initially, it was only transmission lattice communication towers and structures but right now we do

galvanising for any industry that requires it. “Upon completion of the new galvanising plant, we picked up a big new solar contact in collaboration with a Spanish company. With the fabrication of that solar park, and all the galvanising, we had to take on an extra 200 people. “The other plants were refurbished prior to construction of the new plant so all of our plants are upgraded and at the forefront of the industry. Our next challenge will be to look at increasing our footprint in South Africa by building another facility in another location. We’re at the early stages with this but we are looking at either acquiring a company that is already in the industry or building a completely new plant,” enthuses Indiveri. WHAT ECONOMIC SLOWDOWN? Where many businesses are finding the current trading environment very tough, thanks to a bleak economic outlook in South Africa, those that have positioned themselves strongly are managing to thrive. The local steel industry was described at the end of 2016 by South Africa’s Mail & Guardian as being on the brink of collapse. In August, ArcelorMittal SA announced retrenchments as the company struggles to deal with cheaper Chinese steel imports and increasing costs. This all came after Trade and Industry Minister, Rob Davies, had announced ‘safeguards’ for the industry in May. But Indiveri is innovative and continuously on the hunt for improvements and, as such, he has not allowed Transvaal Galvanisers to become embroiled in any sort of slowdown. “We are so diverse in the products that we do that we haven’t seen the effects of the slow economy,” he says. “We are very efficient and we offer a very good price, service and product to the customer and that keeps us busy. Because of the tie-in with the manufacturing business, we are always looking at new projects to keep our galvanising plant busy. It’s all about ensuring we have the volumes.


TRANSVAAL GALVANISERS

“Yes, the economy isn’t great but galvanising is a need and any infrastructure project requires galvanising; it will always take preference over painting. Sometimes it’s best to invest during the quieter periods so when the tide turns, you’re ready for the boom. The economy has been in a lull but when we get out of it, we will be ready for further growth.” A focus on investment ensures that Transvaal Galvanisers isn’t allowed to loosen its grip on the industry’s leading position – something that so often happens with large cumbersome heavyindustry related organisations. “We are very excited about the future and we know as long as we work hard and keep our customers happy, we will thrive. It has taken us many years to get to where we are and we now understand the market and we continually invest – that is why we grow. We don’t just withdraw the dividends; we’re always innovating and

finding ways to make things better,” says Indiveri. “We are a family business. I’m part of the third generation. My grandfather came out from Italy and he encouraged my father to get involved. We want to keep the business with the family but we’re always looking for good people to come and help us succeed. As you grow, you need good people – we see every employee as a family member. We know that if we treat people right, they will treat us right and the business will succeed.” With much negativity in the market, it is refreshing to hear that a company can succeed without changing its daily operations drastically, rather by focussing on its core strengths and sticking to them. Both Transvaal Galvanisers and IMAB Engineering are enjoying a fruitful and productive period and, following wise investments and commitments to

sound business, it looks like the future is only bright for these South African industry specialists. “There is work out there so as long as you offer a fair price, a quality product and a fair service, you’re going to get repeat business. We are still working with the same customers today that we were 20 years ago; and we want to work with them in 20 years’ time. We are still growing and still striving for more,” concludes Indiveri.

TRANSVAAL GALVANISERS +27-11-814-1113/4 transgalv@transgalv.co.za www.transgalv.co.za

ELECTRICAL WHOLESALERS PROUDLY THE PREFERRED ELECTRICAL SUPPLIER TO

TRANSVAAL GALVANISERS

WISHING THE TRANSVAAL GALVANISERS FAMILY SUCCESS IN THE YEARS AHEAD WITH THEIR BRAND NEW GALVANISING PLANT

TEL (011)815-4630 FAX (011)815-3020 EMAIL: EWEN@BEEGEE.CO.ZA www.enterprise-africa.net / 49


HI-ALLOY CASTINGS

Reshaping and Rejuvenating a

Foundry Mainstay

PRODUCTION: Timothy Reeder

Since 1979, East Rand-based Hi-Alloy Castings has been manufacturing castings for a range of industries, serving clients across the minerals processing, milling, crushing and heavy-clay brick manufacturing industries. Today, a change in ownership and significant re-investment in equipment and people is helping restore former glories and propel Hi-Alloy to new heights.

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Hi-Alloy operates from a 10,000 m2 plant on Balfour avenue in Benoni, east of Johannesburg, where it is equipped with four melting furnaces, providing approximately 12 tons per day casting capacity, focusing primarily on Hi-chrome iron to nickel and ironmolybdenum-based alloys. It also has its own in-house pattern shop, three continuous resin-moulding lines, its own heat treatment department with several top-hat furnaces and, a 14bay fettling department, and its own core making facility. From a design perspective, Hi-Alloy has an in-house design department, working with the latest Magma simulation software. Hi-Alloy has grown to now employ a staff compliment of 137 people. “We are a ferrous foundry, and one which focuses primarily on high chrome and alloyed steel castings,”

Hi-Alloy Castings Managing Director Daryl Meyer tells us. “Most of our products then enter into the mining industry as components into the minerals processing industry as slurry pumps, mill liners, dense medium cyclones etc. “We supply products exclusively into the original equipment manufacturer (OEM) market, so our main customers are big industry players, focused in the mining sector. We will provide parts to them, which they then assemble and distribute across the world through their global sourcing centres.” This effectively gives Hi-Alloy its global footprint, as Meyer explains. “Our customer base is primarily in South Africa, although we do also have one or two customers in Australia. Our products, however, are distributed throughout the mining

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INDUSTRY FOCUS: ENGINEERING

sector globally. This means that we see it used a huge amount in Africa and Australia; even into the Far East and Russia. Our parts find their way all across the world through our customers’ brands which are themselves situated far and wide.” Hi-Alloy is undergoing something of a transformational period in its relatively long lifetime, which, as Meyer explains, is attributable to a number of important developments. “The business has been an operational foundry since the mid-80s,” he says, “but my partner, Frans Smit and I came in and took up shareholding two years ago, so despite its long operational lifetime, it is currently under fairly new management. “Since that time, we have put two new one tonne induction furnaces into the business, but as well as this there is a lot of other investment being committed to Hi-Alloy Castings. “We have earmarked this primarily to enable us to install a

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whole new sand reclamation plant as well as a brand-new compressor system. As we speak, there is a lot of investment going into this business and this will continue over the coming months.” Recent IDC funding has allowed the business to fast track its investment programme in equipment upgrades, which will increase efficiencies, focus on EHS compliance and grow and secure jobs into the future. “The new sand reclamation plant has been specced, and is on order as we speak. New compressors and increased overhead craneage capacity will be installed within in the next few weeks. The plant as a whole really is an ‘old lady’ - it has been here for many years and simply needed a little TLC and some investment to sort out, which we are now wellpositioned to be able to do.” It is not only the investment itself that will allow Hi-Alloy to achieve the growth that it desires, but the

confirmation too that what it is doing is in line with even the most demanding expectations. “The IDC process is a very rigorous one to go through, but at the end of the day, we believe that it is about South African business owners creating jobs through sustainable, well run businesses. The saving and creation of jobs is what the IDC really centres its mandate around, so we are very pleased to have received their support.” Also crucial to garnering the IDC’s support is a demonstration of a business’s commitment to Broadbased Black Economic Empowerment (BBBEE). This is another area in which Meyer feels Hi-Alloy is ahead of the game. “We came into the business and realised that one of the reasons that a lot of foundries have floundered in the last ten years has been a failure to take their BEE responsibility seriously; if you want to do business successfully in South Africa then this is not an option, but an imperative. We are Level Three on the new legislation, and so from a BEE-rating perspective we know believe that we are one of the best rated foundries in South Africa. “We have also assembled a new management team, which is a combination of some exceptional foundry experience and experienced management from outside of this industry. The combination of these people is changing the way that we manage our business and changing the way that we present ourselves to our customers, new and existing.” The acquisition of Hi-Alloy came about following a very careful strategic consideration, Meyer explains. “Both Frans and I came out of very strong corporate backgrounds in South Africa business, and considered this investment very strategically before deciding to invest in this industry. We chose this for a number of very strategic reasons; for starters, we felt that the mining


HI-ALLOY CASTINGS

industry had probably gone through the worst slump that it had suffered in recent memory and were confident that it could emerge, and we are seeing exactly this happen now. “Additionally, the South African foundry industry had been through a particularly tough time, with a lot of consolidation and closures during this period. This meant that those which were left standing were left to operate in a market which was significantly less competitive than had been the case previously. There were opportunities there, as a result for a foundry that was run well to really flourish. “The government had also started shifting a lot of its own focus toward support for the metals industry, in large part from a job preservation and creation perspective. The volatility of the Rand as an emerging markets currency has also made it economically far less attractive for local customers to consistently import castings from the far east. These various factors came together for us to conclude that this industry would be the good place for us to invest, and so two years ago we took up 40% ownership of Hi-Alloy with management control. “Hi-Alloy has always had a reputation for being a well-run, technical foundry,” he continues. “We have staff possessing hugely impressive competences, who have been in the industry for many years, who from a technical perspective are among the best in their field. Neither Frans nor I are metallurgists by trade, but alongside us we have one of the most highly respected foundry metallurgists in Anton Britz on our executive team, which serves to exemplify this focus. “From this perspective therefore Hi-Alloy was a very alluring proposition for us, but it just needed to have its strategy to be redefined and the business to be re-configured in terms of its management structure,

cost base and operational focus and value proposition.” This is exactly what Meyer and the new management have set about doing, and to already good effect, as he concludes. “In these last two years we have gone through a lot of restructuring, adding much more capacity on the manufacturing side and embarked on a campaign specifically designed to attract larger blue-chip companies back into our customer portfolio, whilst not losing focus on our loyal existing customers who have supported the business through thick and thin. “We wanted to focus on the big multinationals, because that is what we understand. As a consequence, our top line has grown by approximately 35% over the last two years. This growth in itself has put pressure on the business, but

through the loyal support of our wonderful customers, Hi-Alloy is well on track to achieve its budgeted targets for this year. It has been a massive learning curve for us entering this Industry, but with a superb team of experience and passion around us, and a customer base that is always willing to work with us to find solutions, we have no doubt that Hi-Alloy Castings is once again a major force in the South African foundry industry.”

HI-ALLOY CASTINGS +27 11 421 5874 www.hialloycastings.co.za

INSTALLATIONS, REPAIRS, SALES SERVICES & AIR AUDITS

It is important for us to carry out all repairs and services in the least possible time. We maintain high standard work with the best equipment and parts to ensure a high quality end product. All repairs and services will be carried out efficiently and accurately. A wide range of oem and imported spares are at our disposal to ensure speedy repair of the air compressor with minimum delay, which will minimise costly down time. Before completion of the work all repaired and serviced air compressor are test run for final inspection. After completion of repairs the unit is stamped with one year warrantee, depending on the nature of repairs done.

+27 60 997 5262 JOHAN@MASTERCOMPRESSEDAIR.CO.ZA WWW.MASTERCOMPRESSEDAIR.CO.ZA

www.enterprise-africa.net / 53


YNF ENGINEERING

YNF Engineering’s Young Team and

Big Growth

//

Completely bucking the current recessionary trend in South Africa, YNF Engineering has seen a remarkable growth trajectory from a turnover of about R10 million a year in 2011, to over R100 million today. It was in 2011 that Jade Orren – at the tender age of 24 – took over the reigns of the operation as the youngest CEO in the country in the sector following his father’s passing, and instituted a new direction for the company. Fritz and Natasha Orren had started YNF (which stands for Yolanda, Natasha and Fritz) in 1995 as an electrical engineering company. Fritz had an engineering background and had previously worked for company’s servicing and repairing equipment for various mining sectors. He started manufacturing and reconditioning

a range of subcomponents, first for the mining and then for the railway industries. Subsequently, the operation expanded into the full repair of components such as traction motors, alternators, transformers, and low voltage machines. Today the company manufactures and repairs a wider range of components and sub-components for the railway, mining, and power utility industries. Jade Orren refers to YNF as a “one-stopshop”, offering the complete package in component supply and repairs, particularly for the railway and mining industry. It’s a unique offering as no other company delivers such a comprehensive range of products and services, and it manufactures 80% of the sub-components in its range. Orren had been on a sales call to Transnet and recognised the potential for growth if

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INDUSTRY FOCUS: ENGINEERING

YNF undertook to provide all the services that Transnet provides, apart from building the complete train. That move boosted the growth of the company and has resulted in rail transport representing about 80% of the company’s business. Orren mentions that most popular in their product range are rotating machines and wheels, and low voltage motors, which can be used in many applications – from massive gear boxes and winches, down to small motors like swimming pool pumps. The company’s strengths also include quick turnaround times and guaranteed quality because of in-house manufacturing, which means they’re not dependent on external suppliers for their product quality. Orren says his father’s motivation for starting the company was to become financially independent and to establish an ongoing empire for his family. The Orren family are continuing to build the legacy and succession plans are in place to ensure the company’s longevity. Natasha Orren, an original founder and Fritz’s wife, is owner and chairperson of the company, making it the only 100%

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black-woman-owned company in the country in the sector. She also heads up Human Resources, leaving her sons Jade and Ricardo as CEO and Financial Director respectively, to manage the day-to-day operations. Her daughter Melissa also works in HR, and her youngest son, Fritz Jnr is running a sister company to YNF. The family has expansion plans for YNF. Orren admits that his aim for the company has evolved from his father’s original objective. “We’re different men with different visions. My aim is for the company to become a preferred transport solution in Africa. We’re heading in that direction.” At this stage, the company can boast being the industry leader in the railway industry and one of the leaders in the other sectors it operates in. Orren himself joined the company straight out of high school. He had had a mind to become a rapper, but his father “laughed at me” he says, and gently steered him into the family business. He has “no regrets.” He started sweeping floors and worked his way steadily and conscientiously through every department in the company, learning the business inside out as he went, and

gaining excellent insight into all the jobs. He says the next step for YNF will be to build a national footprint in South African and further into Africa. “The opportunity and economic circumstances are in our favour. Transnet recently bought 1064 locomotives, and Prasa’s procurement of Alstoms of 600 X’Ttrapolis Mega commuter trains – is the biggest contract ever given to the company. The railway industry is booming and there is a lot of opportunity for a company such as ours to thrive.” New YNF workshops will be duplicates of the existing operation, servicing regions within the railway industry with rotating machine repairs and wheel repairs. In this sector certainly, Orren is convinced that South Africa is the gateway to Africa. “South Africa has sound infrastructure to service the rest of the continent.” At this stage, YNF Engineering is already active in countries to the north, servicing mines and railways in countries that include Mozambique, Namibia and Botswana. Looking further into the future, he says the future of electric motors is in AC motors as opposed to DC, and AC traction


YNF ENGINEERING

motors in railways specifically. “It is much cheaper to maintain AC, it is easier to prevent an AC motor being damaged, or burning its windings through the installation of new technology – the options are greater. DC motors present problems with current overloads, with voltage surges, and needs a lot more maintenance and man power.” But the bottom line is that the DC motor market in South Africa will continue for another decade, in his opinion. “Because of the population and the infrastructure in this country, the DC motor is still very popular choice. We will eventually follow Europe and the rest of the world where the AC motors are being used.” While Orren is concerned about political stability in South Africa, which is a problem area for just about everyone in the country, he concedes that government has shown its commitment to railway infrastructure through massive

investment. “This means that for a company like YNF that has such a large proportion of its turnover from the railway market, we can rest assured that we will have a lot of maintenance work coming our way over many years.” This also means that the economic downturn is not directly affecting the business and that it continues to invest and grow. Even the fluctuating Rand is not impacting YNF as it doesn’t buy imported products, and most are sourced locally. “As far as we are concerned, South African industries are in a relatively strong position. The mines are cutting jobs, but they are still operational. It certainly helps being a diverse company that is not dependent on one single market,” he says. YNF employs 150 full-time people. Jade is proud of his staff. “Staff turnover is low and those with skills have been with us for a long time. Because we are really one-of-a-kind in our industry, all

the in-house staff development, training and upskilling programmes that we run continuously are adding value and skills to our industry as a whole. It’s a good place to be.” Orren’s criteria for new staff members, apart from the essential skills for the job, include enthusiasm, an eagerness to learn, and a determination not to give up because engineering is a highly challenging industry. “We also look for vibrant young people – after all this company is run by young people.”

YNF ENGINEERING (011) 477 2170 sales@ynf.co.za www.ynf.co.za

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www.enterprise-africa.net / 57


BAFOTECH

To A Good

Year

PRODUCTION: Manelesi Dumasi

In a time when South Africa’s economic outlook is uncertain and negativity seems to be creeping into the thoughts around many businesses who operate in the challenging mining industry, leading engineering firm Bafotech is pleased to announce its position is one of strength. Marketing Director Chris Boone tells Enterprise Africa that the company is having a great 2017, coming off the back of a good 2016.

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INDUSTRY FOCUS: ENGINEERING

//

Back in November 2015, Enterprise Africa spoke to Welkom-based Bafotech and found that the manufacturer and repairer of winch units for the mining industry was caught amongst a wave of negative feeling stemming from a weak economy. At the time, Marketing Director Chris Boone said that the industry was “very tough” and company sat in a “reasonable position”, hoping for commodity prices to pick up. Fastforward 20 months and the landscape is very different. The economy now sits in technical recession, worse than 2015; the mining industry is facing further

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retrenchments as mining houses look to cut costs, and a new mining charter is in the pipeline and causing a lot of uncertainty. But for Bafotech, work remains good. Despite the bleak economic outlook and the troubles faced by the mining industry, Bafotech’s work is not slowing and has picked up over the past financial year. “Financially, we had a relatively good year ending in February 2017. This financial year has started very well and I think we might even topple last year’s figures,” enthuses Boone. So what is different for

Bafotech? How do you go from ‘reasonable’ to a good year’ in just 20 months, all in an economy not conducive to growth? “We thought outside the box and instead of trying to cut costs, we’ve invested more money,” explains Boone. “We’ve grabbed the bull by the horns and it seems to be working. We do keep a very close eye on costs and we’ve purchased a couple of new machines that are helping to keep our manufacturing costs down so we’re well-priced for our market. “The new products that we’ve


BAFOTECH

added are also helping. These are mainly underground rolling stock. We’ve also secured a contract with an OEM for repairs of underground hoppers and, thanks to our location, that relationship is flourishing,” he adds. INNOVATION Ongoing R&D will be a theme for Bafotech in the future as Boone suggests that further expansion of the product range will contribute to the company’s growth. In association with clients, Bafotech is currently busy developing all-new

solutions that will assist in all-new ways. “We are looking at new sealing arrangements for the winches. We’re also looking at new improved signalling devices and remote controls. This surrounds safety around the scraper winch,” says Boone. “We try to be ahead of the industry. We’re looking at computerised, electronic monitoring systems on the winches, with the help of our partner. This will help trace when the unit is and isn’t working underground and that sort of information is useful for

mine managers.” And, where 2015 saw more repair work rather than new contracts being awarded, 2017 has seen the opposite, resulting in Bafotech setting out a vision for 50% growth in the next three years. “We’ve secured some nice contracts and we’re hopeful of achieving our goal,” says Boone. This positivity is breeding further confidence throughout the business, and Boone says that every time an opportunity arises, Bafotech will explore. “Our whole workforce feels

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INDUSTRY FOCUS: ENGINEERING

positive. Everyone knows that it’s tough, but you have to get out there and do it. Our people are happy, they enjoy working and they’re giving their all. We never know when an opportunity will come our way but when it does, it’s our policy to grab it with both hands.” SA TO S.AMERICA When an opportunity to sell Bafotech units in South America came up, the company certainly took its chance. Supplying the same global mining organisations that it serves in South Africa, Bafotech’s progress in South America started quickly. Being able to supply units of the highest quality but at a cheaper rate than was available locally, or from north America, Bafotech picked up business in

Peru, Bolivia and Brazil. “We have sold some products there but it has quietened down recently,” admits Boone. “We sent some units to Brazil and Columbia and we’re receiving a number of enquiries.” But the Marketing Director is clear that his focus for markets outside of SA lays in Chile and the Philippines – markets which will be attacked as soon as possible. “As soon as we have the South African market settled, I want to concentrate on Chile and the Philippines. There’s two major mines in each of these countries that use the same type of product that we sell,” he says. “We’ve developed well in South Africa. We’ve added new products lines and we’re doing well – we’re quite happy with the situation at the moment. We’ve

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been concentrating on the gold and platinum mines and that is looking like our efforts will now start to come to fruition. Next year, I will try and make arrangements to head out to Chile and then the Philippines.” The price of gold and platinum in international markets has been stable, and even improved, in recent months – good news for SA’s miners who produce some of largest volumes of gold and platinum from anywhere in the world. Some have credited President Trump for scaring investors away from the US dollar and into safe havens such as precious metals, but whatever the reason, stable prices are good for the mining industry. Plummeting commodity prices in 2015 saw an increasing trend of miners looking to mechanise larger parts of their operations to bring costs under control, but it’s easier said than done. For Bafotech, this trend was a cause for concern as the company’s products are largely developed for conventional mining operations. Recent stability in the market, along with further research of deep deposits, has resulted in many companies ruling out complete mechanisation for the time being. “Maybe in 50 years mechanisation will take over but right now, there’s still so many mines that use our products. It’s not going to affect us in the short-term,” says Boone. “There’s a number of new mines that want to go fully mechanised but when they research the reef, they see they can’t go fully mechanised as there’s too much rock to come out so they end up going conventional for mining and mechanised for cleaning and that suits us.” As Bafotech’s success has grown and its ambitions have been achieved, the company has also looked to benefit the communities in which it operates. This


BAFOTECH

FROM L TO R: PAT BOONE (MANAGING DIRECTOR), LESEDI RAKGOKONG (CHAIRMAN), CHRIS BOONE (SALES AND MARKETING DIRECTOR), DANIE JOUBERT (FINANCIAL DIRECTOR)

longstanding approach to effective business practice has seen Bafotech investing in smaller black-owned companies in engineering and related fields. “We’re actively involved with helping black entrepreneurs develop their companies,” says Boone. “We benefit hugely from these relationships and enjoy developing our communities. Right now, we’re working on projects to develop a catering business, a laundry business and an engineering company. It’s all part of our BEE initiatives and we’re very proud of what is happening at the moment.” CHARTING ITS OWN COURSE The proposition of a new mining charter - which will involve sweeping new rules on ownership, employment and redistribution of revenues - has caused concern in the industry, mainly for the Chamber of Mines which quickly moved to say it would launch a legal challenge to block the charter. Chamber President Mxolisi Mgojo said that the new charter contained a string of ‘red

flashing lights’ that would have ‘unintended consequences that go far beyond the mining sector’. Of course, Bafotech is monitoring the situation, and quickly after the new charter was released and shares in the big mining businesses dropped, it became clear that the future remains unclear. But Boone remains optimistic. “The mining charter is a problem for everyone and the mines are fighting it,” he admits. “Many of the other companies that we hear about who deal with mines are all saying that they’re not doing too well but we’re obviously doing something right. “Our units are still underground and still need to be used so even if the big names were to disinvest, there will be new investment and mining will continue. The mining charter will be a big blow for the economy but we’ll always have work and that’s the most important thing.” He concludes with a message to any company out there who is feeling overwhelmed by the current market plight: “If you can sort your costs out, you will make a profit.

There are many companies who have operated in this sector for many years, through all the ups and downs, and cost control is the key.” It looks like the future will be exciting for Bafotech. The small engineering company that started in a dining room with nothing but some borrowed furniture and a computer that had been won as a raffle prize is now realising its most prolific potential. And with further international expansion to come in the future, Bafotech is one SA that refuses to be dampened by the economic outlook.

BAFOTECH (+27) 057 396 2848 sales@bafotech.co.za www.bafotech.co.za

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DE BEERS SOUTHERN AFRICA

Multiple Projects Strengthening De Beers Sparkling Position

in Diamond Industry PRODUCTION:

David Napier

Expansion and upgrades of mines, launching of new vessels, creation of new partnerships; all while producing ‘pleasing results’; it’s all happening at De Beers, with Southern Africa remaining a key focal point for this world-leading diamond producer.


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©DE BEERS - VESSEL DEPARTING NORWAY


INDUSTRY FOCUS: MINING

//

For more than 100 years, De Beers has been the name associated with diamond production in South Africa, and around the world. Exploring for new reserves, opening new mines, building infrastructure, creating employment, driving value, boosting global markets, developing innovative technology, and helping to build nations; De Beers has seen it all and done it all. But that doesn’t mean that this wily old business is immune to modern day threats in the market. In order to manoeuvre in this complex environment framed by credit agency downgrades, technical recessions and new mining charters, De Beers has taken calculated steps to ensure ongoing success. Like so many businesses that we’ve spoken to over the years, De Beers fits into a key trend: those that invest and continue to market and spend when times are tough, are those that come through on the other side in a stronger position. In Southern Africa, De Beers recent investments and projects include the upgrade and expansion of the flagship Venetia mine in South Africa, the Cut-8 project at the Jwaneng Mine in Botswana, the launch of the mv SS Nujoma in Namibia, and, in Canada, the start of the Gahcho Kué mine. All of these projects are multimillion Dollar investments, at a time when the global economy is particularly unpredictable, and when the mining environment in Southern Africa is equally volatile. However, it seems that De Beers (a company that has been through many recessionary and slow economic periods) has planned its strategy extremely well. Its interim results released in July show what Group CEO Bruce Cleaver sees as pleasing reading. STRONG 2017 “I’m very pleased that we’ve been able to announce good interim results for the half-year to June. The highlights for us are that underlying earnings

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are up despite sales being slightly down, production discipline has been maintained so we are well inline to meet our production guidance, and the reason underlying earnings are up is because there has a been a strong focus on costs, cost containment and profitability being driven, so I think we’ve had a very good start to the year,” he said in the company’s results presentation. Figures of note from the results include EBITDA increasing by 3% to $786 million and rough diamond production increasing by 21% to 16.1 million carats. “In the first six months of the year, we sold 18.6 million carats, up 6% over the same period last year. Our production forecast for this year was between 31 and 33 million carats. Through the first half, we’ve produced just over 16 million carats compared to 13.3 million carats in the same period last year, so a substantive increase but absolutely in line with expectations,” said De Beers Group CFO, Nimesh Patel in his own results presentation. After highlighting the successes of the results, the company’s top brass looked to the future and both Cleaver and Patel used the phrase ‘cautiously optimistic’ to describe the De Beers outlook. “We expect the full year’s sales targets to be broadly consistent with where we anticipated,” said Patel. “There should continue to be cautiously optimistic growth in the second half of the year. In the midstream, I think we will remain cautiously optimistic; we had a good first half of the year and it’s likely that we will continue to have a good second half of the year but there’s no reason for people to get carried away and we all need to be very very focussed, as we always are, on costs and productivity as those are the things that we have real control over,” said Cleaver. Reflecting personally on the positive start to the year, both Cleaver and Patel were keen to highlight

the impact of Gahcho Kué, Cut-8 at Jwaneng and launch of mv SS Nujoma. It is the last of these three ambitious projects which has seen much attention from international industry peers, press and public. MV SS NUJOMA The mv SS Nujoma is a diamondhunting vessel, named after the Founding President of Namibia Dr Sam Shafiishuna Nujoma. Its task is to scour the seabed off the coast of Namibia for important diamond resources. Owned by De Beers subsidiary, Debmarine Namibia, mv SS Nujoma is a triumph of technological development. The $157 million vessel, launched in June, is a 12,000 tonne, 113m long home to 80 people, built in Norway and kitted out in Cape Town. Debmarine Namibia is currently the only company in the world to mine diamonds offshore and has done so for the past 15 years. In 2016, the company produced around 1.2 million carats. The mv SS Nujoma will look for diamonds 120 to 140 metres below sea level. It will form part of a fleet of sampling vessels utilised by De Beers but is by far the most advanced. Washed out to the Atlantic seabed by Namibia’s Oranje River, offshore diamond resources are apparently vast. At the inauguration ceremony for the magnificent vessel, Namibia’s Minister of Mines and Energy, Obeth Kandjoze said: “Today marks an important milestone for offshore diamond mining in Namibia. The mv SS Nujoma represents the largest ever capital investment in underwater diamond mining and will ensure a long-term, sustainable future for offshore diamond mining in Namibia, as well as creating important new jobs for Namibians.” Otto Shikongo, CEO, Debmarine Namibia, said: “We are delighted to officially welcome the mv SS Nujoma to our fleet. The important collaboration between all parties involved, and the exceptional efforts of those who worked on the vessel’s construction, fitting


DE BEERS SOUTHERN AFRICA

//Flagship project for WorleyParsons RSA WorleyParsons is a leading global provider of professional services to the hydrocarbons, power, infrastructure, minerals & metals, and chemicals sectors. The engineering consultancy helps its customers meet the world’s changing resources and energy needs through project delivery, providing expertise in engineering, procurement and construction, and offering a wide range of consulting and advisory services that cover the full asset spectrum, both in size and lifecycle, from the creation of new assets, to services that sustain and improve operating assets. The WorleyParsons Group is headquartered in Australia and listed on the Australian Stock Exchange. WorleyParsons’ Mining Centre of Excellence in Johannesburg has niche expertise in underground mining, particularly in hard rock and precious minerals and metals. WorleyParsons RSA has been the EPCM contractor on the majority of the shaft projects – most of them now complete – undertaken in southern Africa. WorleyParsons RSA has been involved continuously with the De Beers Venetia Underground Project since the pre-feasibility stage and was commissioned to execute the detailed engineering design for both the surface and underground infrastructure for the new underground mine. Among the innovations WorleyParsons RSA introduced after starting the engineering design was the creation of a 3D model of the vertical shaft complex infrastructure that incorporates technical information of every component. The model shortened and de-risked the design process, and will provide management a powerful tool that can be used for maintenance planning and control once the underground mine is in production. In October 2016, the scope of WorleyParsons RSA’s involvement was widened when it was awarded the EPCM contract for the Venetia Underground Project. WorleyParsons’ responsibilities include project management, project accounting and project administration, project controls and document controls, engineering and design, procurement and materials management, construction management and quality management, as well as commissioning and operational readiness support. The contract covers all surface and underground infrastructure including shaft equipping (excluding shaft-sinking). The EPCM contract for the Venetia Underground Project is the largest ever project award received by WorleyParsons RSA.

Realising possibilities from mine to market.

Resource Evaluation

Mine Planning

Mining & Mine Development

Materials Handling

Environment & Approvals

Mineral Processing

Tailings & Waste Management

Smelting & Refining

Transport to Market

Non-Process Infrastructure

WorleyParsons adds value through our full scope of services from pit to port including studies, mine planning, impact assessments, permitting and approvals, project management, construction management and global procurement. Our Mining Centre of Excellence in Johannesburg has niche expertise in underground and open cast mining and provides quality project development and engineering solutions for small to large projects across all areas of base metals, the coal supply chain, chemicals, ferrous metals, alumina, aluminium and iron ore. Supported by the WorleyParsons global group, we pride ourselves on customising solutions for local environments and committing to our customers’ goals.

www.worleyparsons.com

WorleyParsons is proud to be providing EPCM services to De Beers for the Venetia Underground Mine project.

www.worleyparsons.com wprsainfo@worleyparsons.com

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INDUSTRY FOCUS: MINING

and sea trials, has seen this impressive vessel delivered three months ahead of schedule and on budget.” Cleaver reiterated this sentiment, saying: “Offshore diamond mining is becoming increasingly important in meeting global demand for diamonds as many of the major onshore deposits have now been discovered. The mv SS Nujoma will allow even more of Namibia’s high quality offshore diamonds to be discovered and mined, ensuring a strong future for Namibia’s diamond industry, as well as the global diamond market.” He was also keen to highlight the collaborative nature of this project, stating that all parties should be proud of the launch. “This is the largest and most sophisticated exploration and sampling vessel ever built and it’s a wonderful illustration of collaboration between a number of players. Firstly,

Debmarine Namibia, the owner of the vessel; secondly, De Beers Marine in Cape Town, the technology provider; and thirdly our government partner, the Government of the republic of Namibia.” Diamond mining is the single biggest contributor to Namibia’s economy. The partnership between De Beers Group and the Namibian Government delivers more than N$10 billion in revenue annually. CUT-8 & VENETIA UNDERGROUND The Cut-8 project at Jwaneng in Botswana is being undertaken by Debswana, the mining company jointly owned by De Beers and the government of Botswana. It involves the eighth expansion of the mine and will help propel Jwaneng into super pit status, becoming one of the largest open pit mines in the world. Jwaneng is an important resource for De Beers

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and is already known as one of the world’s richest diamond mines. Cut-8 will extend the life of the mine until at least 2035, creating thousands of jobs in the process. It will increase the depth of the mine from 400 metres to 650 metres, making the pit 2.7 km long and 1.8 km wide. “Cut-8 continues to do very well,” said Cleaver. “We’ve already had some ore from Cut-8 and we’re still well on track for the main ore to come by 2018.” Patel highlighted the scale of the Cut-8 project: “To date, we’ve spent around $2 billion in Botswana to sustain the future production from Jwaneng. “We’ve already started to turn our attention to the future at Jwaneng after Cut-8, which involves initial work around Cut-9 and beyond Cut-8,” he added. The Venetia Underground expansion project in South Africa’s Limpopo Province involves moving from an open pit to an underground mining operation. It is described by De Beers as ‘the biggest single investment in the country’s diamond industry in decades’. The project is expected to deliver around 96 million carats to De Beers and work to secure the underground infrastructure is currently underway. “Venetia, our flagship expansion project in South Africa, continues to go well. We’re likely to get underground by 2023 and that will extend the life of the mine to the mid-2040s. We’ve also made considerable progress at Venetia with the open pit. We started the year with the mine slightly out of kilter and a lot of work has been done to get the mine back in kilter so operations have gone very well in the first half of 2017,” said Cleaver. “We will see an increase in Capex as Venetia Underground, now our principal investment project across the group, starts to ramp up in terms of expenditure,” said Patel. The underground operation expected to become the mine’s principal source of ore from 2023.


DE BEERS SOUTHERN AFRICA

INVESTING IN PEOPLE De Beers employs more than 20,000 people around the world, and so investment into people and their development is equally important as investment into major projects. This thought was materialised in August when De Beers announced a significant new $3 million partnership with Stanford Graduate School of Business that will help to empower young, aspiring entrepreneurs and established business owners in Botswana, Namibia and South Africa. In 2018, De Beers and Stanford GSB will launch two programmes; the Seed Transformation Program and Stanford Go-To-Market. The Seed Transformation Program is a 12-month leadership programme, led by Stanford GSB faculty and provides management training, leadership team workshops and networking support to assist southern African leaders to grow their businesses, create jobs and help lead their regions to greater economic diversity and prosperity. Stanford Go-To-Market is a weeklong high-intensity entrepreneurship scheme, designed to help budding entrepreneurs gain the confidence and skills to commercialise their business ideas and accelerate their route to market. Taught by Stanford GSB faculty, the programme is made up of lectures, case studies, and smallgroup discussions and will start out in Botswana. Dr Alfred Madigele, Minister of Tertiary Education for the Government of the Republic of Botswana, said: “We welcome the private sector’s support of developing programmes that will enhance diversity and have a socio-economic impact for the youth. The Botswana Innovation Hub will be the government’s contribution providing a facility, infrastructure, operational and technical support. The impact that this initiative will have on the expansion and transformation of the economies, primarily focussing

on mining, to technology, innovation, and the entrepreneurial economy is immeasurable.” Jesper Sørensen, Professor of Organisational Behaviour at Stanford GSB and Faculty Director of Stanford Seed, said: “We are excited to work with the young and established entrepreneurs in the Southern African region through this collaboration. As with our experiences in East and West Africa, we are coming to learn as much as we are to teach. If the business and job growth that follows matches what we are seeing in our other locations, I anticipate this will be a very impactful initiative.” Bruce Cleaver was confident that the programmes would succeed: “Economic diversification and youth employment opportunities are priorities for our government partners and are priorities for De Beers Group as well. We all believe these two programmes, in partnership with a world-renowned educational institution, have excellent potential to help accelerate diversification and stimulate more opportunities for young and ambitious southern Africans.” Provision of opportunity is a cornerstone of the De Beers business model and is something that will continue. In 2016, the company invested huge amounts of money across its southern African operations, creating opportunities across the supply chain and with joint venture partners. De Beers spent P4.3 billion in Botswana, N$2.8 billion in Namibia, and R6.1 billion in South Africa. In South Africa, this spend on local goods and services represented a 27% increase on the previous year. Initiatives such as the Zimele enterprise development programme have proved particularly popular. Running since 2009, the Zimele enterprise development programme has supported more than 3,000 jobs and 260 enterprises in SA. Cleaver said: “We made significant progress in putting the South African

supply chain to work in 2016 through our continued focus on procuring goods and services locally. “Through the range of our community development initiatives we are fostering the growth of many small businesses, as well as the De Beers supply chain, which delivers significant long-term benefits for both the people and our South African business. “There is always more we can do and we are focused on further extending these efforts in 2017 to ensure we continue to convert the precious asset below ground into enduring opportunity above ground.” It is strategies like this, along with continuous investment into its important infrastructure, that keeps De Beers at the forefront of the industry, and ensures that De Beers is remains the name on everyone’s lips when diamonds enter the conversation. Focussing on sustainability has also helped the company maintain its position as the world’s biggest diamond producer by value. The market for diamonds is changing; new marketing methods are needed to reach differing demographics and different cultures in different geographic locations. Fortunately, De Beers is prepared for the longer term; after more than a lifetime in the industry, this is a business that knows how to achieve its goals. As we move through 2017, it is likely that we will see De Beers, especially in Southern Africa, become more efficient, more effective and more exciting, and that is a good thing for all involved in this so important industry.

DE BEERS SOUTHERN AFRICA +27 (0) 11 374 7000 www.debeersgroup.com

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ENGEN SOUTH AFRICA

Deeply Rooted In,

And Highly Committed To,

Africa PRODUCTION:

David Napier

Perhaps one of the most recognised brands in sub-Saharan Africa, Engen is bolstering its reach with new products and continuing to invest in human capital. After more than 130 years, this is a company that is here to stay, and one from which many lessons can be learnt.

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INDUSTRY FOCUS: AUTOMOTIVE

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Engen’s 136-year history in South Africa has helped position the company, country and continent at the forefront of the petroleum industry – a $1.7 trillion p/a global sector. Starting out as a simple importer of oil products for the blackening of horse-drawn cab harnesses, Vacuum Oil as it was then known, grew fast and in a big way, becoming involved with Standard Oil Company and Mobil among other big-name partners. Through the twentieth century, the business became recognised for innovation in manufacturing, and excellence in product quality. In 1954, South Africa’s first refinery was commissioned – a major milestone in the history of Engen – and the brand (then known as Standard-Vacuum Oil Company) continued to grow from strength to strength. After being

completely rebranded to Mobil in the early 60s, the company faced another identity change in the 90s. Mobil International divested from South Africa due to the political and social situation in the country and its SA assets were sold to Gencor. In 1993, the rebrand of Mobil to Engen was completed and hailed by the company as ‘the most successful re-branding exercise ever undertaken in South Africa’. Post 2000 saw the company intensify its focus on expansion in Africa and complete purchases of assets from rivals in a number of African territories. Today, Engen is the oil company of choice in sub-Saharan Africa and the Indian Ocean Islands and is respected for its superior product, service, choice and convenience. Its reach now extends across South Africa, Botswana, Namibia, Zimbabwe, Mozambique,

Kenya, Ghana, Gabon, Tanzania, Rwanda, Burundi, Zambia, Malawi, Lesotho, Swaziland, Mauritius, Réunion and The DRC. Key in Engen’s ascent to the top of the industry was a buy in by Malaysian state oil company, Petronas in 1996. Initially, Petronas acquired a 30% stake for around $440 million (at the time the largest single investment in post-apartheid South Africa) but today the Malaysian giant owns 74% with the balance held by the Phembani Group. Engen now operates its own fleet of approximately 180 bulk fuel tankers, its refinery now produces around 135,000 barrels per day, and it has around 1500 service stations throughout sub-Saharan Africa and Indian Ocean Islands – to put it into perspective, one of its leading rivals, Shell, has just 620 service stations in SA.

//SIMPLE CASH HANDLING TIPS FOR SMART BUSINESS CHOICES Since cash remains the most preferred payment method in Africa, we are seeing a growing shift from manual cash handling to the adoption of automated cash management solutions in the retail sector. This shift in moving from traditional methods of counting, re-counting and reconciling of cash to using technology to secure cash, is an important decision, particularly in the face of high levels of violent crime. Cash Connect, SA’s leader in automated cash management and payment solutions share a few tips to ensure that your cash management solution adds value to your business: Reduce cash shrinkage and shortages The average for cash shrinkage is 0.15% of your cash turnover, which means that you could lose a substantial amount of cash with a manual cash handling process – money that could be used as an investment in other areas of your business. Cash shrinkage remains obscured by the many hands through which it passes from till to bank and the extent of the shortfall is often under estimated and overlooked. Avoid double counting Having an employee to receive takings from the cashiers, count and verify them and then recount to prepare for bank

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deposits is an unnecessary overhead. Save up to 50% of your business day, and no longer count the cash, spend hours on recons and prepare bank deposits. Improved cash flow and cost of funds savings Manual banking generally provides value on the second or even third day from the deposit. Reputable automated cash management services offer value in the client’s bank account on the same day. Immediate risk transfer Imagine from the moment you drop your cash into the cash vault and until the value reflects in your bank account, your cash management service provider takes the risk. Opt for an automated cash management solution that takes the cash risk. It’s like the bank has been moved to your store. Cash on Delivery – redefined Efficiency is paying your suppliers straight from your cash vault with no need to keep large amounts of cash unsecured on your premises for COD deliveries.

www.cash-connect.com


ENGEN SOUTH AFRICA

But after achieving industry leading status, Engen is not happy to rest on laurels and toast to a job well done. It’s aggressive in its approach to further expansion, all the while focussing on product quality and customer satisfaction.

class and technically advanced fuels and lubricants. We are extremely proud to introduce our motorists to Petronas Syntium with CoolTech™ which has been formulated to fight excessive heat, thus enabling drivers like you and I to enjoy a trouble-free drive,” he said.

PRODUCT INNOVATION Earlier this year, in May, Engen announced that the Petronas Syntium lubricants range would be made available across all of its forecourts. This high-quality product uses the same technology that powers the Mercedes AMG Formula One world champion team. “This is a testament to Petronas’ technical capability and expertise, which is a necessary requirement in a constantly evolving and challenging sport, like Formula One,” said Engen Lubricants Business Manager, John Kennedy. “Taking innovation a step further we are also currently phasing in the PETRONAS Syntium with CoolTech™ brand into Africa which has been expertly engineered to fight excessive engine heat to maintain optimum engine performance. “Excessive engine heat is a common problem that is widely underestimated by drivers. The excessive heat inside the engine, which is not visible on the dashboard gauge, is aggravated by modern-day driving conditions such as traffic congestion, driving up steep inclines and continuous acceleration on highways. Consequently, over time, it can damage critical components of the engine and affect driving performance,” added Kennedy. Commenting on the EngenPetronas partnership, Kennedy says that Africa will benefit in a big way from the introduction of these new products. “As a leading producer and manufacturer of a wide range of fuels, lubricants and oil based products we pride ourselves on delivering world

INDUSTRY LEADING RANGE Adding further to its quality range, Engen announced in April that its Parprol brand – home to Engen’s virgin process oils business – would step-up supply for industrial customers. “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,” said Kennedy. “Our extensive footprint ensures that process oil is readily available to our customers when they need it and where they need it,” he added.

Engen’s National Sales Manager for Industrial Lubricants, Herman van der Westhuizen was equally positive, and emphasised the focus on product availability saying: “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. 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.” Parprol is available at distribution centres in major cities all over South Africa. Displaying its ability to develop international relationships that benefit customers at home in South Africa, Engen held a contract signing

CASH MANAGEMENT MADE EASY We supply retailers with automated cash management solutions that give an instant guarantee of value, removes the cash risk and ensures fast cash payments, and more importantly, creates a safer and more efficient trading space for retailers, their staff and customers. Our brand promise is ‘We take the risk’, from the moment you deposit the cash in our retail cash vaults, whilst in transit and until it reflects in your bank account.

www.cashconnect.co.za

we take the risk

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ENGEN SOUTH AFRICA

ceremony in June when it announced the sole rights for the distribution of Thai-developed X-PURGE, an FDA approved purging material formulated specifically to clean all primary plastic machines when changing colour, resin or simply removing black spots or contaminants. “As the leading producer and marketer of a wide range of fuels, lubricants and oil-based products in South Africa, we are very proud to add X-PURGE to our portfolio. In addition to our polymer resin, X-PURGE is now added to our portfolio,” said Engen’s Manager for Chemicals and Special Products, Dr Emma Mokoena. Aimed at commercial and industrial customers, X-PURGE is designed to clean injection moulding, blow moulding, sheet casting, and profile extrusion machines, as well as single screw and twin extruders. This innovative product was developed by PTT, the National Oil Company of Thailand. “This is the first offering of this type of product by Engen. Other traditional methods of purging and similar products are costly in terms of time, the amount of defects and downtime period,” said Mokoena. “In a nutshell, it saves time by helping to reduce machine downtime and maximise productivity. It is evident from the many benefits listed that this new product will be of significant value to our customers.” A BRIGHT FUTURE Driving into a bright future, Engen has positioned itself on a robust platform for further growth and expansion. The most recent step in building this platform came in May when Engen’s most recent graduate induction gathered in Cape Town to begin their orientation into the business. This is the largest group of graduates ever taken on by Engen and sees young people with expertise in maths, science and engineering trained by the company to bring their creativity to life.

“This year we have absorbed 20 employment equity graduates, with 19 feeding from our Bursary pipeline. A further six of the 19 have been with Engen since high school, through the EMSS Programme. This is truly a reflection of focused collaboration within the business,” said Engen Bursary Coordinator and Graduate Recruitment Specialist, Nokulunga Mjwara. Together, Engen’s Maths and Science School (EMSS), its National Bursary and the Engen Graduate Development programmes help the company to develop talent from within, helping to build a positive culture across the business. “By continuing to grow the minds and talents of the future, and to shape the careers of gifted graduates, Engen’s three-pronged partnership strategy is changing our world. Helping young gifted South Africans to explore new horizons and gain new experiences is proof once again that as a company, Engen is committed to building future leaders,” the company stated. Proving that all of these developments are not just for show, Engen was highlighted in the Petronas 2016 financial report as a star of the group. “Engen Limited, our retail arm in South Africa recorded its highest replacement Profit After Tax since 1999, R3.1 billion,” the report said. Although the future is uncertain, with economic slowdown both local and global effecting the oil markets, Engen will undoubtedly continue to cement its position as a key driver of Africa’s growth and its people’s success.

ENGEN SOUTH AFRICA +27 86 003 6436 www.engen.co.za

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TN MOLEFE CONSTRUCTION

Construction in Engineering At Its Best PRODUCTION:

Djamil Benmehidi

In a marketplace so competitive and starved of capital as South Africa’s construction sector, it is telling that TN Molefe Construction is not only surviving but thriving. Through its hard-earned and thoroughly deserved reputation for excellence, the company is recognised as one of the country’s most highly-regarded civil engineering and construction specialists. Having watched the company grow from a plucky start-up into the first-choice government contractor it is today, Managing Director, Anne Ndaba reveals the keys to its success.

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As any seasoned business leader worth their salt will attest, if a year is a long time in business, then a decade is an entire lifetime. When Negi Molefe, founder of TN Molefe Construction and its parent company, TN Molefe Holdings first opened the company’s doors for business, the South African construction sector was still riding the crest of a powerful economic boom. Cranes could seemingly be seen clustered on the skyline of every major city, as cityscapes changed and

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modernised before the eyes of South Africans. Today, however, with an economy that is in the doldrums, the country’s construction sector is an unforgiving and competitive place, low on confidence, and characterised by razor thin margins and low returns. And yet while industry heavyweights like Group Five and Aveng have seen their order books shrink by 18% and 13% respectively when compared to the same stage last year, TN

Molefe Construction has remained largely unscathed. In fact, one might even go one step further and say contrary to the country’s economic difficulties, the outlook with regards to the present and future is positive. “The construction industry is definitely facing challenges, and we can feel the pinch. However, I think we see the infrastructure challenges that South Africa has – there are a number of roads where there have been serious accidents, which have required major work,


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INDUSTRY FOCUS: CONSTRUCTION

rehabilitation, and expansion – we are positive that because of the pressure on the government to spend on infrastructure that there remains great opportunity within this area on these projects,” explains Anne Ndaba. She continues: “Though we are in the process of expanding into the private sector, so as to ensure we tap more of this market, civil engineering and construction contracts remains our specialist field.” Having celebrated its 10th anniversary just last month, there is much for Anne and the company to be proud of in terms of what the company has achieved since 2007. Be it the construction or rehabilitation of roads and pavements, water and sewerage facilities and pipework, storm water infrastructure, or earthworks, TN Molefe Construction

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has excelled in going above and beyond in terms of meeting client expectations, ensuring that projects are completed on-time and often under budget. This is thanks to the astute leadership of Negi Molefe, a man with over 18-years industry experience, and Anne, who since joining the group in 2004 has risen through the ranks from assistant to division leader. Additionally, TN Molefe Construction also boasts a professional team made up of 100 permanent and part-time staff, among whom can be found some of the best technical and leadership talent in the sector, and a turnkey business model that covers all design-build aspects of a client’s construction project from start to finish. Anne elaborates on this, saying: “The engineers and designers work

together in-house over the course of the construction project, which means clients don’t need to first advertise separately for a designer and then separately for a company to do the construction side of things – through doing everything here at TN Molefe Construction we kill two birds with one stone.” The award of a contract by Limpopo Roads Agency for the rehabilitation of road D2244 close to Phalaborwa Town is the perfect example of this. Having very recently had its designs approved by the municipality, work is now underway on establishing the site – the prep work which will allow the company to move in and get started. So too is the successful near completion of one of TN Molefe Construction’s biggest projects yet, an ongoing three-year rehabilitation contract which saw the company provide invaluable services to the Department of Sanitation. On this, Anne tells Enterprise Africa: “The project we have with the Department of Water and Sanitation is a three-year appointment for the provision of emergency services. Under this umbrella we were appointed 11 for projects valued at R178 million.” She continues: “If you break it down, eight out of eleven of those projects are complete while work is ongoing on the remaining ones. It was the rehabilitation and refurbishment of different waste water treatment plants, with an example being the big challenge of rehabilitating treatment plants polluting the Vaal River. It’s all part of the civil engineering scope. We’ve done many projects on the pipework of sewer lines – such projects are part and parcel of what we do. “This appointment and its many projects have been a great success, but there is still work to do. We have completed many of the projects, but there are still projects outstanding.


TN MOLEFE CONSTRUCTION

As a measure of our success, we’ve found that some projects have been extended – they’ve reappointed us, and each time there is emergency work to be done the Department of Water and Sanitation they issue us a purchase order. So far, we’ve received two purchase orders for the work as an extension to the works that we’ve been appointed for, and we’ve delivered significant improvements to the quality of grey water.” Thanks to its standing as the go-to contractor for a number of government ministries and municipalities, the company’s present is in safe hands. And following its entry into a mentorship and technical partnership scheme with construction industry giant, Stefanutti Stocks, under the Voluntary Rebuild Program (VRP), so

too is its future. As part of this very advanced mentorship, Stefanutti Stocks will work with TN Molefe Construction at close range, so as to help it grow and develop to the extent that the company is able to compete with them after a period of around seven-years. So, the question is what next for the company. It would appear consolidation and organic growth are top of the agenda. In the past year, TN Molefe Construction has invested R10 million in the acquisition of stock and equipment that is used during the execution of civil engineering projects. She concludes by saying: “For now, most of our projects are from the state but we’re trying to expand, and the coming years will see us move more into the private market as well. We’ve not yet won private

sector contracts from this campaign but we will penetrate this market. And then there’s our plans for expansion further into Africa, which will see us greatly increase our footprint.” Over the past decade, Anne has seen the company change beyond all recognition into the upwardly mobile and exciting company it is today. And going by what’s in the pipeline, it would be unwise to bet against it taking similarly great strides over the decade to come.

TN MOLEFE CONSTRUCTION (011) 794 7823 info@molefe.co.za www.molefe.co.za

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VAN SCHAIK BOOKSTORE

Diversification to Unlock Expansion for

Van Schaik

PRODUCTION: Karl Pietersen

Van Schaik Bookstore will take its Rewards members to new places through its exciting and innovative new app that allows students to subsidise their learning by viewing targeted advertising material. A first for South Africa, the Van Schaik Rewards App is already being lauded by SA students. MD Stephan Erasmus explains more…

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Van Schaik Bookstores have been servicing the SA market for 103 years. After opening up in Pretoria in 1914, the company quickly expanded into what is today its core speciality, educational material. Van Schaik brings content from the world’s leading publishers – the likes of Cengage Learning, Pearson, Oxford University Press, Macmillan Publishers, Wiley and many more. Its presence now covers almost all of the country’s educational centres; it is multi-award winning (claiming the Sefika Academic Bookseller of the Year award for the past six years); it offers a large product range beyond just books; it also sells an extensive collection of e-textbooks tablets, computers, stationery, etc., but this ambitious organisation is hungry for further growth and wants to improve its offering to Africa’s growing student population. Managing Director,

Stephan Erasmus explains that Van Schaik has taken an innovative approach to expansion, and is looking at diversification strategies to continue on the growth path. Earlier this year, Van Schaik positioned itself as a mobile virtual network operator (MVNO) in South Africa. Aimed at students, the MVNO sells data and airtime at competitive rates and encourages involvement in Van Schaik’s rewards scheme. The Van Schaik rewards scheme was started in 2015 and helps users to generate extra income for themselves, get access to free Wi-Fi and WhatsApp, and stay informed and entertained. “The motivation behind the move to start an MVNO is that we have a loyalty database of customers who requires data for education purposes. We started the database in 2015 and the Mobile offering is a great way to reward our members,” explains Erasmus. “We

tried various methods of marketing to the database and saw some success and spending. The mobile offer is another way of rewarding our members and monetising our rewards database. “When we started the MVNO we had around 100,000 people signed up to rewards and today we have around 140,000. We launched the MVNO in February 2017 and in the past six months, we’ve signed up just over 31,000 students with RICA’d sim cards. They become rewards members, and subsidise data and airtime costs using our MVNO.” This unique approach to communication with customers is facilitated by the Van Schaik Rewards App. Developed for Android, the Van Schaik Rewards App is a lock screen replacement app that has been integrated with the Van Schaik Rewards loyalty programme. As one of the first

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INDUSTRY FOCUS: EDUCATION

South African companies to rollout such an offering, big things are expected. Essentially, Van Schaik requires a user to download and register on the Van Schaik Rewards App. During in-App registration the user is asked for their details and interests and a profile of the customer is created so that the company can tailor advertising based on their interests and location. Apart from special offers communicated with lock screen adverts, customers also earn real money in a virtual wallet, just for seeing the advert. This wallet can then be used to buy at any Van Schaik store or to spend on airtime and data. “This business stands on two legs,” details Erasmus. “Firstly, the MVNO cell phone operation and secondly, it’s a media business. We advertise to our rewards members who earn income based on adverts viewed. “We can now pinpoint a student in a specific town, see what they are studying and set up targeted marketing. We liaise with other companies who pay for the advertising and we display ads to the students through a lock-screen application. That means, every time you unlock your phone, you will see an advert. You can then

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take advantage of the offers in the adverts, download vouchers, go into the stores and get discounts or make savings. This means the stores can also monitor the success of the advertising campaigns.” VAN SCHAIK REWARDS With the prospect of saving money, claiming discounts, earning cash that can be spent on airtime and data or in any Van Schaik store; all in an environment where student financing is under intense scrutiny, the app is being welcomed. “People love the application,” admits Erasmus. “It’s challenging to explain it properly and that is why we are marketing heavily in South Africa but when it’s understood, people realise it’s win-win-win. It’s challenging to demonstrate in a store to a student who is in-between classes, but it’s a brilliant idea and we believe in it. “Each time you watch an advert, you earn income which is added to your wallet within the app. You can monitor your income, and how much you’ve earned over the past 12 months in the wallet. From the wallet, you can also buy airtime, data, or items from the Van Schaik shop. If you buy data or airtime for R99 in a 30-day period, you can also earn further rewards in the form of benefits like free WhatsApp and Wi-Fi or vouchers for KFC or something similar.

“When you register as a rewards member in the App, you select various fields of interest; including things like sports and fitness, health and beauty, motivation, food and drink, and many other areas. You enter your details; including the university you attend, what campus you’re on, and what subject you study. Based on this information, we can push relevant ads.” But are advertisers in South Africa ready to adopt this new approach to commercial promotion? Are companies in a position to investigate marketing like this? And is the country’s infrastructure solid enough to support such an application? “The amount of times people unlock their phones is increasing every year. The latest comprehensive research from Deloitte in 2015 shows results across 50 countries which finds that people unlock their phones 44 times per day. This was an increase from 33 in the previous year. They also found that people between 18-24, exactly our student market, unlocks 76 times per day on average. This gives us 76 advertising opportunities,” says Erasmus. “According to the IAB (International Advertising Board), the spending on advertising is going mobile. So many people are now interacting with the internet through phones and that is where digital advertising spend is going so we believe that this is strategically


VAN SCHAIK BOOKSTORE

a huge opportunity to expand as we have a direct way of marketing to our consumers,” he adds. The GSMA has released reports that state ‘3G connectivity in South Africa is almost universal while 4G networks now reach 75% of the South African population’. The same reports also suggest that mobile subscriptions and infrastructure development will speed up over the coming years. “It’s a new direction for the business, it’s a diversification, and we see it is a helpful tool for students. Many campuses have free WIFI these days but it’s not universal and students require data to interact with the university, to download their assignments or submit work while they’re at home,” says Erasmus. “Long-term we want to drive behaviour,” he states. “Ultimately, if we can influence a student to buy more books, attend more classes, and subsidise his/her education costs, we believe we could positively impact the success rate of students.” Of course, the content of the app can be tailored to suit the individual user and traditional adverts are not always displayed; often, it can be content of interest such as articles and news posts. There’s also a call centre to help troubleshoot issues and help users run the app smoothly. It’s about providing a fast and useful service for students and diversifying the business strategy of this long-standing bookseller, and so far it seems to be working. “Looking at my own wallet on the app right now, I can see that I’ve earned, on average, R47 per month which I spent on airtime or data. It’s part of our wider reward scheme so just by unlocking your phone you can subsidise your airtime, data and education costs by purchasing in our stores. The more ads you see, the more money you make,” enthuses Erasmus.

for the Van Schaik business and this is important considering the state of text book sales globally. Educational print book revenue, across international markets, is set to fall between 2013 and 2018 by US $1.6 billion to US $33 billion according to PwC. The global professional services firm states that e-book revenue is set to increase and somewhat plug the gap, but Erasmus says Van Schaik is yet to see significant uptake of e-books. “The one thing that concerns us is that each year we sell slightly less books. It’s a worldwide phenomenon that people are buying less textbooks. People now expect things to be free; they assume they can ask Google and get the answers. A book packages information and gives a methodology and framework that can educate in a logical, disseminated, sequential manner. Students don’t see this value

and often don’t buy the books. “The result is Van Schaik going in and working very hard on campuses and with publishers to help students and academics understand the value and the role of a text book so they can place an emphasis on the funding, spending and usage of textbooks. “Books are the ideal tool for a lecturer to base a class around and that will not change. They are peer-reviewed, written by the world’s top scholars and academics, and they ensure quality standards,” says Erasmus. GEOGRAPHIC EXPANSION? In a drive to bolster its core business, Van Schaik will continue to look across South Africa’s borders for physical expansion opportunities. Opening stores in other African nations has long been a target for the company but has materialised only very slowly. Van Schaik looks for three

CLOSING BOOKS? This innovative new offering looks set to open up a whole new avenue

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INDUSTRY FOCUS: EDUCATION

important indicators of market potential – funding (from government), size of market (number of universities and campuses), and market dynamics (do people buy textbooks?). “There must be a market and there must be funding. We’ve built relationships with academic institutions and they will know who to contact when an opportunity arises. Most of the time, academics see the value of textbooks but they are not the policy makers. They would love funding to be allocated but it doesn’t always go that way. In countries where government is involved and stands behind funding and textbook usage, you get a

better standard of education.” In the future, whether growth in Africa is achieved or not, it is clear that Van Schaik is preparing for change. The business is doing all it can to adapt to a new way of learning, new ways of communicating, and new methods of marketing, and again, Erasmus remains confident. “Any business environment is challenging. You must be proactive. You have to find the opportunities and you have to develop them. We’re trying new things but we’re focussed on books as we honestly believe that our mission is to educate people. Books in electronic and print format is the ideal

tool to achieve this. We are mindful that students need more than just books and we continuously investigate new products,” says Erasmus. “The world changes and we will adapt and change with it,” he concludes.

VAN SCHAIK BOOKSTORE (021) 951-4049 vsb@vanschaik.com www.vanschaik.com

//CENGAGE LEARNING - CREATED WITH EDUCATORS. BUILT FOR LEARNERS “Education is what will make this country succeed,” says South African Sales Manager for Cengage Learning, Teresa Fuchs. “Education is not going away - the model might change but that excites us and we are positive about the future.” Cengage is an international developer and publisher of educational materials, and distributes peer reviewed content in South Africa through the Van Schaik network. Cengage publishes textbooks across a wide variety of academic disciplines, from Accounting through to Zoology, and operates with the belief that every student has the potential to be unstoppable. This belief is shared with Van Schaik and the pair continue to deliver educational resources to thousands of students every year, proving that successful business relationships result in the betterment of the country. “We’ve been dealing with Van Schaik for many years and we regard them as our key customer,” says Fuchs. “They are our biggest customer thanks to their extensive footprint around the campuses of Southern Africa. Our Cengage representatives are constantly in touch with our partners at Van Schaik and when a new title is prescribed, we can ensure the branch managers are the first to be able to place orders.” As Van Schaik continues to help broaden the appeal of eBooks among SA’s students and academic institutions, Cengage will continue to support learning of all types so that students can achieve their goals. “We have worked with Van Schaik extensively to offer a comprehensive eBook listing of all of our key adopted titles – every single adopted textbook has the equivalent eBook in SA, and we want to get the message out there that eBooks are very convenient so we recently undertook a promotion

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to reduce prices of all eBooks to ensure affordability for students. “We feel that students don’t have a problem with eBooks. We are trying hard to get through to lecturers so that they are aware of how easy they are to use. Our representatives are on campus every day, listening to customer needs; so if it’s and eBook or a print book, we can make it available to them” says Fuchs. And it’s not just product range where Cengage is at the industry’s forefront – the company also has a wide geographic spread. Cengage sells in more than 120 countries throughout Europe, the Middle East and Africa, covering a diverse cultural range, each with its own particular and varied curriculum needs for educational solutions. This is good news for Van Schaik which is looking at East Africa for its own expansion. “We would love to work with Van Schaik wherever they go in Africa. We’re already active in Botswana, Swaziland and Namibia and as they move on and up, we’ll certainly work with them, without doubt,” says Fuchs. Cengage is the education and technology company built for learners. As the emphasis on effective education in SA grows, Cengage will be first in line, delivering its high-quality materials without delay. “We offer consistency,” sums up Fuchs. “Our customers know that if there’s ever an issue, they can contact any one of us directly and get an instant answer whereas our competition has high levels of staff turnover. We’ve been in the market for a long time and we are well-known, and that helps us stand out.” www.cengage.com / emea.info@cengage.com / +44 (0)1264 332424 / +27 (0)21 852 5116


Y L T L O A D C E O L L I V E G R N I K R O W

G N I N R A LE

Cengage works with local companies such as Van Schaik to produce and deliver learning solutions to South African institutions.

cengage.co.uk/education


2

1

DOWNLOAD

Download the Van Schaik Rewards App from the Play Store.

1

CUSTOMISE YOUR PROFILE

Edit personal information and choose lifestyle topics to get relevant content on your lockscreens.

App Guide.

1

SIGN IN / REGISTER

Once the app has downloaded, you can sign-in if you are an existing user or register if you are new.

3

ACCESS YOUR WALLET

4

View available balances, remaining airtime & data bundles or Top-Up your Wallet.


5

ACCESS YOUR SHOP

Use points earned in your Wallet on offers like discount vouchers for food, beverages, clothing and much more. Earn points by unlocking your phone and engaging with content. In Shop, you can also make use of VSB Mobile features that allow you to buy or send* airtime/data* (*only to friends on the Van Schaik network).

6

6. SETTINGS

Go to Settings to view a digital version of your Van Schaik Rewards card. You can access your Inbox to view messages regarding your account history, transactions & balances.

App Guide.

7

7. CONTACT SUPPORT/HELP

Contact Support directly from Settings if you need help.


INTROSTAT

The One-Stop Shop for

IT Provisions PRODUCTION: Timothy Reeder

With its national distribution network and a dedicated and highly qualified sales force, Introstat has been a leader in the technology industry for the past 25 years with specialisms in printing and IT solutions. Marketing Manager Jessica Blackburn told us of the company’s plans to further broaden its service offering to capture an even greater share of this lucrative South African market.

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//

The life of an IT solutions provider has become rather more complex over the last 30 or so years, Introstat Marketing Manager Jessica Blackburn tells us, as she describes the evolution of the company over its nearly 30 years of operations. “We have been around for quite a while now, and when we started out, we were fairly unique in our field. We were one of the only IT supplier companies around and we were able to use this effectively to our advantage in order to expand in the early days. “Back then, it was a little easier as there were far fewer competitors for the same business. This has been an obvious change in the ensuing years but we plan on keeping ahead of the rest for the foreseeable future.” One obvious way to ensure this is through the constant expansion of what it can offer, both physically and in the services at its disposal. “Originally, we were a supplier solely of HP goods to our clients in South Africa, but now we offer an all-round service and have expanded to have a presence in the likes of Cape Town and Durban. This allows us to accommodate our clients much more easily.” The Introstat offering combines solutions that fulfil the complete ‘IT Lifecycle’ requirement, and does so within a business environment which was founded in 1989, seeing it able to offer the best all-round printing and IT solution for any business. “We had to expand what we could offer, realising that clients no longer want just one thing from one supplier,” Blackburn further explains. “They want to get as much as possible from one place in order to make their lives easier and streamline operations. This has seen our product range grow in line with our footprint and ensured that we are certified to carry on providing our clients with what they are looking for, and keep us ahead of the chasing pack.” Blackburn goes on to detail how Introstat is looking to draw positives from what is a challenging economic environment, seeing it as a chance to supplement its already 250-strong team


//SOMETIMES, EVEN CLIENTS THAT HAVE BEEN WITH US FOR YEARS ARE UNAWARE OF THE BROAD SPECTRUM OF WARES THAT WE HAVE AT OUR DISPOSAL// with additional expert personnel. “We have a dynamic team of people that are really just go-getters, and always looking for the next opportunity,” Blackburn explains of the characteristic Introstat employee. “The number of opportunities continues to grow for us, however, and even in a climate sometimes conducive to much financial negativity, we try to see the positives at all times. There is a great recruitment opportunity for us, to acquire staff who have already been trained or have the requisite skillset if one company does not remain viable.” She goes into some detail of how the company’s diversification translates to its everyday work. “We are possibly most well-known still for being a platinum HP supplier, which translates to ink and toner cartridges and similar. We are currently trying to broaden our

horizons somewhat, and the value side of our company is doing very well at present. “This encompasses in part our managed print services (MPS), where we provide clients with a complete solution, for example a printer which is tailored to their environment, and then we work with them to help them to get the very most out of their printing. Every month we will give them their supplies, help them to ensure that they are not printing too much in one area of the company and not enough in another and provide maintenance and repairs as required.” This will be backed increasingly by employing the advancements at Introstat’s disposal, including e-commerce. “In South Africa, we have been taken in by the allure of online stores to an extent, but we still find in

the IT industry that clients still want to be able to see a laptop in the flesh, see how it feels in their hands and ensure that it is a good fit for them. I do think that the online stores are going to start to become the main source of Introstat’s income, given the steady growth we see in comparison with our other departments. “What sets Introstat apart from our many big competitors is that we offer the whole package in one spot, while a lot of the other players can possibly only provide to the home user or businesses, not both. We have a broader prospect list that we can work with, which even stretches to government services.” Among the biggest challenges for Introstat is communicating to clients, both current and potential, exactly how much it can offer them to help facilitate their operations. “Particularly of late, we have always offered a wide variety of products and services, but increasingly we are trying to make it known that we do offer such a comprehensive range,” Blackburn continues. “Sometimes, even clients that have been with us for years are unaware of the broad spectrum

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INDUSTRY FOCUS: IT & PRINT

of wares that we have at our disposal. One of our biggest accomplishments in recent times, for example, was becoming one of South Africa’s first A3 retail suppliers, placing us among the first companies able to provide for the HP A3 printers. We have dedicated staff trained in this specific competence to find the best possible solution and then fully install it, and we will look to add to such achievements further and further. “We are constantly working to discover how best to help the clients and make it easier for them, and equally how we can make it easiest for ourselves at the same time.” At the same time, the arrival of such a wealth of information technology has, perhaps surprisingly, been something of a double-edged sword for Introstat. “At the outset, it was much simpler; we were mainly supplying only HP products, and so it was simply a case of applying the appropriate mark-up and things ticked along,” states Blackburn. “The advancements since and the presence of an ever-greater number of competitors means that clients are able to research as

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much as they wish to find the best price, and can make an informed choice as to who they wish to use. “This means that we have had to look at offering a much greater variety as our margins are relatively much smaller today. In order to ensure that we are keeping our clients happy we may have to shave off some of our profit, which certainly makes it more difficult but equally it is so easy to shop around and find the best deal that it is something that we have to do. “We are at a stage now where we are having to change the way that we have done things previously and reassess what works - try to make sure that we are doing it effectively, in order to stay on top of the market. If we do not adjust to the way the economy is, or the way that clients shop nowadays, then we are asking for trouble.” Rather than setting foot across the border, a move fraught with potential difficulties and obstacles, Introstat is set to take on a much greater share of the market in which it currently operates. “To focus on HP, we are informed that on the supply side we only reach something in

the region of 7% of the country’s supply sales, and this is from our standpoint as a platinum partner of theirs. The question we therefore pose ourselves is: where is the other 93%? This is our philosophy for the whole business - if we take the hardware side, again we are told that we only supply 3% of Lenovo’s hardware, and so logically we have to ask who is fulfilling the remaining percentage, and, by extension, how do we penetrate and profit from this huge potential. “While the thought of expanding into Africa is clearly an idealistic goal, our main target is targeting those massive market percentages which are currently eluding us. South Africa still has plenty of room for us to expand, and we are making this a primary focus for now. We wish to supply to the majority, in all areas of our business,” she concludes.

INTROSTAT 011 723 7500 info@introstat.co.za www.introstat.co.za


www.rotatrim.co.za

OUR COMMITMENT TO THE ENVIROMENT DOESN’T ONLY LOOK GOOD ON PAPER. Sustainability is an integral part of the way our company works. We recognise our responsibility to ensure that our forestry practices provide future resources for our business needs in a sustainable manner. Our pulp comes from trees that have been grown in plantations certified by the Forestry Stewardship Council (FSC™) - the world authority on environmental best practice in forestry. Mondi Rotatrim is part of the Mondi Green Range, which consists entirely of FSC certified paper from sustainable forests, Totally Chlorine Free (TCF) paper and/or 100% recycled paper. So, when you choose a Green Range product you are not only looking after the environment but are getting greater quality as well.


TIBIYO TAKA NGWANE

Investing in the

Swazi People PRODUCTION: Timothy Reeder

Going about its operations with a certain air of mystery, Tibiyo Taka Ngwane, meaning wealth of the nation, is a company owned by the royal family of Swaziland since its creation in August 1968 and currently led by King Mswati III.

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INDUSTRY FOCUS: INVESTMENT

//

Tibiyo Taka Ngwane is among the players in Swaziland, itself one of Africa’s most stable countries, and holds a significant influence within the country. It was the brainchild of former King, His Majesty Sobhuza II, and serves to complement and work alongside the national development efforts of the Swaziland Government. The aim behind its original formation was to promote and encourage peace and stability, to preserve culture and tradition and to promote a high standard of living for the Swazi Nation through the provision of employment. Perhaps most impressive about how it has conducted its business is its very anonymity; it is fair to say that the majority of the population remain largely ignorant of either what Tibiyo is, what it stands for, or what it does. This has resulted in part from Tibiyo’s refusal to adequately promote its own achievements, to ‘blow its own trumpet’, and as such the public has not been kept abreast of the extent to which it impacts upon their day-to-day lives. This influence is significant, and may be demonstrated not more clearly in how successful it has been in its aim of

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providing jobs for the Swazi people. Tibiyo employs both directly and indirectly, or has created employment for, more than 20,000 people over its near-50-year history, primarily through its extensive investments in the economy. Of course, the knock-on effect these investments also have in the form of corporate taxes goes without saying, and these all add up to help run the government machinery, while the importance of the income taxes of its many employees, the buying power of those employees in the economy and the spillover effect to dependents of those employees all cannot be understated. Additionally, Tibiyo has set up and still runs a Corporate Social Investment Programme, through which it endeavours to play an effective role in the maintenance of cultural values and the bettering of the quality of life in general of the Swazi people. This programme comprises three components: the support of tradition and culture, the support of education and training and providing donations. It has stakes in agriculture, property, a printing company and is the

sole owner of the Swazi Observer. Tibiyo is a shareholder in many companies, which include the Royal Swaziland Sugar Corporation (RSSC), Maloma Colliery Limited, Lubombo Sugar, Parmalat Swaziland, Simunye Plaza, Bhuna Mall, Swazi Spar Holdings, Swaziland Beverages, Alexander Forbes, Fincorp, Tibiyo Leisure Resorts trading as Royal Villas as well as many further subsidiaries across the country. Tibiyo tends to make its investments through joint venture participation, in either new or expansion projects. Financial participation in any single project typically ranges between 2050% in equity funding, although Tibiyo will usually avoid becoming involved in the day to day management of a project other than holding a representation at Board level. As a result, Tibiyo expects the joint venture partner in question to provide the requisite leadership in technical project implementation, as well as professional management. Projects which are most likely to attract investment from Tibiyo Taka Ngwane are those which are liable to aid the government in fostering economic independence and self-sufficiency. As


TIBIYO TAKA NGWANE

outlined in its original mission objective, potential investments must also seek to increase formal sector employment, whilst proving beneficial to the population’s income and even provide opportunities for foreign exchange. Desirable characteristics of such a project might range from being globally competitive, to providing permanent employment opportunities and employing local skills or raw materials. Tibiyo’s investment strategy is based around acquiring interest in businesses which will generate exceptional returns in the long term and achieve a diverse portfolio. At present, it is heavily invested in the sugar industry, and as such is focussing hard on diversifying to encompass other sectors within the economy, such as mining, energy (e.g. electricity generation), information technology and financial services. Swazi Spa Holdings Limited represents just one of these efforts to diversify and spread its influence to alternative markets. It is a public company listed on the Swaziland Stock Exchange whose shareholders include All Saints (Pty) Ltd (50.6%), Tibiyo Taka Ngwane (39.7%) and minority shareholders making up the remaining 9.7%. The group owns and operates the Sun International hotel and casino resorts in Swaziland and is a subsidiary of Sun International Limited, a company incorporated in South Africa. The group operates three hotels, a casino and entertainment facilities situated in the Ezulwini Valley. Similarly, Tibiyo’s investments in property are embodied in part by the Bhunu Mall in Manzini, jointly owned by Swaziland National Provident Fund (36.85%), Public Service Pension Fund (22.37%) and Tibiyo Taka Ngwane (40.79%). The mall has a gross lettable area of 15,962 m2 and can accommodate both shops and offices, while added revenue is generated by from overnight usage of its numerous parking bays. Thanks to its central location in the hub of the country, the mall enjoys very high occupancy rates. Under its agriculture umbrella, Dalcrue Agriculcural Holdings was incorporated in April 1999 and commenced trading on 1

May 2000. The company was established to take over the agricultural operations of Tibiyo Taka Ngwane, with operations consisting of mill, crop production, commercial and royal herd livestock rearing, dairy farming and sugar cane growing. The company also owns forestry plantations in the Shiselweni region, which are managed by Shiselweni Forestry Company Limited. While Dalcrue continues to explore opportunities to increase profitability and cashflow, it also has a key role to play in helping meet the needs of the country in terms of food production, evidenced by the revival, on a much larger scale, of crop production in both white and yellow maize. Previously unused land has been cultivated, and maize of high quality is now being produced. Also within the agriculture bracket are Tibiyo’s involvement in sugar, spread across a number of important concerns.

Ubombo Sugar Limited and its subsidiaries, for example, is owned by Illovo (60%) and Tibiyo Taka Ngwane (40%), and is the oldest miller-cum-grower in the Kingdom following its establishment in the late 1950’s. The principal activity of the company is growing and milling of sugar cane from which it produces some 200,000 tonnes of raw and refined sugar, helping to make it one of the major players in the sugar industry in all of Swaziland. Another impressive feat, for a company so intent on playing down all that it achieves.

TIBIYO TAKA NGWANE +268-2510 1978 info@tibiyo.com www.tibiyo.com

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BIDVEST PRESTIGE

People Are The Power

Of Bidvest Prestige PRODUCTION: Manelesi Dumasi

Bidvest Prestige CEO, Jegie Padmanathan says that his 40,000-strong workforce is growing by 6-7% each year; more people are gaining training, development and upskilling; and the company continues to look for expansion opportunities to bring about further opportunities for people to grow. “Our biggest asset as a company is our people; it’s what makes us different,” he says, while talking to Enterprise Africa about the success of this first-class South African services operation.

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C


INDUSTRY FOCUS: OUTSOURCING

//

Founded in 1969, Bidvest Prestige has achieved phenomenal grown over the past 48 years, becoming an important contributor to both the wider-Bidvest Group and also the South African economy. The company is the largest leading specialist of world class outsourcing solutions in South Africa, Southern Africa and Mauritius. Its focus includes the supply of contract cleaning, event staffing, caregivers, specialised cleaning services, mobile toilet hire, training and landscaping. Falling under the umbrella of the Bidvest Services

division, Bidvest Prestige employs around 40,000 people and it is this provision of such widespread opportunity that delights CEO Jegie Padmanathan. “We’re proud of being able to provide employment to a part of the labour base of South Africa that may not have been given opportunities elsewhere,” he enthuses. “We’re very proud that we are able to give people a choice. The bulk of our labour force comes with limited education and we have put in place technical and operational processes to undertake a lot of training and give people the tools

to earn income. Most importantly, we have the opportunity to change people’s lives and our biggest asset as a company is our people; it’s what makes us different. We can give people skills that they may not have ever known they could have and we’re hugely proud of that. It’s very complex; we operate across a vast landscape and all employees have to be skilled differently but that is why we have developed the necessary processes to focus on upskilling to ensure growth. We’re very lucky that people put up their hand and say, ‘consider me’ and very happy that people take our

//CLEANING GREEN – THE SUSTAINABILITY CHALLENGE FOR A MASSIVE INDUSTRY The cleaning industry is one of the most pervasive in the world. Every home, office, factory and vehicle is cleaned in some way, the majority of them every day. In the USA alone, the industry is worth more than $50bn per annum with an estimated 3.5 million employees. In spite of its scale, local industry leaders believe there is nowhere near enough understanding in South Africa of the significant role the cleaning industry should play in sustainability, pointing to a weight of environmental legislation directed at land and wildlife but not enough aimed at the environmentally-friendly maintenance of urban spaces. There are three commonly accepted pillars to sustainability in cleaning;

genuinely eco-friendly cleaning products

reducing wastage of water, electricity and disposables

longer lasting and recyclable machinery.

Industry watchdogs caution about widespread green product claims. According to Stephen Ashkin of The Green Cleaning Network, particular scepticism should be reserved for ‘chemical-free’ labels as he believes few products truly warrant that description: “Chemical-free cleaning is (often) a marketing term versus a technical term”.

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However, there are now many options available in SA that meet the standard US Occupation Health & Safety Administration (OHSA) definition of green cleaning products as “safe to use and less harmful to your health and environment than conventional alternatives such as bleach and ammonia”. As one example, there are over 2,200 products officially certified by the OHSA as ‘bio-based’. Gavin Herold, General Manager of Africa and the Middle East for Nilfisk, one of the world’s leading suppliers of cleaning equipment, believes that recent supply crises in South Africa in both electricity and water have helped to seriously focus managers on sustainable cleaning issues especially the urgent need to reduce wastage in cleaning. Herold says that there’s really only one way to maintain essential cleaning standards while cutting the consumable bills, and that is through the latest stateof-the-art machinery; “technology is your friend in this space as our new generation ranges are made to far higher sustainability standards in terms of the products they use, optimal efficiencies in cleaning times, longer shelf life and their recyclability”. He adds that Nilfisk’s global focus is on sustainable cleaning with the real goal of improving the quality of life all round. www.nilfisk.com


Global Print (16/08/NEA) - info@globalprint.co.za

Professional cleaning solutions for a safer, cleaner, more productive environment

Every day, throughout the world, people need clean environments: workplaces, institutions, factories, hospitals, schools, airports and homes all need clean surroundings to ensure our safety, our health, our comfort and, not least of all, our productivity. At Nilfisk, we have a clear mission that drives our dedication in what we do: we enable sustainable cleaning worldwide to improve quality of life. We’ve been doing it for over 100 years. See how we can help your business today.

www.nilfisk.co.za


INDUSTRY FOCUS: OUTSOURCING

challenges on board.” In June, South Africa’s official unemployment figures increased to 27.7%, the highest level since September 2003. In the first quarter of 2017, approximately 6.2 million people were classed as unemployed. Negativity stemming from a bleak economic outlook has been blamed in some part for the rise, but Padmanathan insists that pessimism is doing no one any favours and tries to inspire confidence throughout the workforce. “We are one of the largest workforces in South Africa outside of the resource industry,” he says. “We service in excess of 5500 contracts across a diaspora of industries and therefore it is critical that positivity is instilled across the employee base as it helps and inspires people and gives alternatives to negativity in the media.” This negativity stems from the country’s recent dip into technical recession and downgrade by international credit agencies, both of which have dampened confidence and installed a feeling of uncertainty. However, already a player across a number of industry sectors including commercial, retail, healthcare, education, hospitality, mining, food and beverage, and more, the lacklustre economy has inspired Bidvest Prestige to increase its aggression when it comes to widening exposure and spreading its risk. “We’re very cognisant of the fact that we are in tough times economically in SA and it’s critical that we have a diversified business model in order to protect ourselves. Playing in such a widespread number of industries protects us from slowdowns and that continues to be a key focus for us – to be sure that we are consistently strong role players across all markets to protect

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the bedrock of our business,” says Padmanathan. “Ultimately, we continue to be a very stable country, we continue to have a mature economy, our stock exchange continues to trade a near record highs, and our currency has remained reasonably resilient. One would think that times are a lot worse considering the noise you hear out there but I prefer to look at the glass half-full and control our own destiny,” he adds. CLEAR GROWTH Despite the country’s economic plight, Bidvest Prestige continues to grow. Where many companies are choosing to consolidate and hold back on investment until certainty returns to the market, Bidvest Prestige, and the wider Bidvest Group, continues to aggressively pursue growth. For the half-year ended 31 December 2016, Bidvest CFO Peter Meijer reported Group revenue was up 4.1% to R36 billion and trading profit was up 3.2% to R2.8 billion. Bidvest Services CEO Alan Fainman said that ‘Prestige showed pleasing growth in new business and noncontractual revenue’ with Services having a ‘positive outlook’ – all of this while South Africa’s economy contracted by 0.7% in the first quarter. Padmanathan mirrors the positivity voiced by his colleagues: “In tough economic times, we always see opportunities. It’s about how we can get those opportunities to work for us. We continue to aggressively go out and try and gain new market share and grow the contract portfolio base, and those opportunities are there, it’s just about how we structure the business to accommodate the peaks and troughs in the economic cycle. “In terms of growth outside of the South African landscape in the services field, there’s a strong

view within the company that there are opportunities which could comfortably bolt-on to the Bidvest Services division. Services is a growing industry in several parts of the world and can give reasonable returns in terms of shareholder value. Depending on where you are, it seems to be consistently growing consistently at around 4% annually through a difficult global economic climate.” Proving its positive mindset, and backing its sentiment with action, Bidvest Prestige recently completed the acquisition of a complementary African business to bolster its service portfolio. “In August 2016, we bought a business in Mauritius – a cleaning services business and a trading company business that sold equipment into that market – and for Bidvest Prestige it was a major transaction,” explains Padmanathan. “It was a good bolt-on for us as we have an existing landscaping business in Mauritius and we wanted to grow into the cleaning services space. In our business model, cleaning, landscaping and cleaning equipment sales all work together - the synergies are there, and we felt that would create opportunities for us to grow into the Indian Ocean space. Over the past 11 months, we’ve been bedding in that acquisition and we continue to look for acquisition opportunities within the South African landscape as well as outside of South Africa. “We are looking for organic and inorganic growth and part of our strategy is to ensure that, within our existing portfolio of contracts, we ensure efficiency and growth in tough economic times. At the same time, we’ll look for opportunities to acquire at fair value, at a decent multiple, where we can seamlessly integrate and grow the business. It’s certainly something we’ll continue


BIDVEST PRESTIGE

with throughout 2017 and in years to come,” he adds. LEADING THE INDUSTRY Across the industry sectors in which Bidvest Prestige plies its trade, competition is rife and growing all the time. Although Prestige is undoubtedly the industry leader, there remains a need to deliver service of the highest quality, at a competitive price, in a timely manner. Fortunately, the company’s reputation is immense and is backed by almost five decades of successful operations. “We are the dominant player because we have been in the industry for more than 40 years, we have a strong track record, and we are Bidvest – a top-ten listed company in SA. All of this gives us traction and reputational value in the market,” says Padmanathan. “However, it’s a highly competitive space with a lot of players. The reality is that there are a number of smaller players that have the opportunity to gain work as there are companies that do not think cleaning is an important part of business and they just look for the cheapest option. “Cleaning is not capitally intensive and the barriers to entry are almost non-existent. We must remain focussed on what we do best and what we have done best for the past 30-40 years. We can’t rest on our laurels, we must be humble, and we must customise where necessary to ensure service for the client. Competition is good as it creates innovation and out-ofthe-box thinking,” he adds. But even with the documented successes of the company and the sector, does Bidvest Prestige, and the entire the industry, face a threat from an idea that outsourcing is a threat to job creation? Not so according to Padmanathan: “Sometimes people talk of

insourcing versus outsourcing and its impact on job creation but the significant number of corporates realise that to remain competitive, they must focus on their core business and outsource their noncore business. There’s a strong view that outsourcing is positive for the country; we’re growing our labour force on average by 6-7% per annum and that shows the opportunities that are out there.” This view is supported by Deloitte which said in its 2015 report on outsourcing in South Africa that: “To say a country that allows companies to outsource in order to obtain efficiencies and cost reduction causes job losses is naïve and uninformed. Statistically, there are more employees that get retrenched annually because of company failures (mainly where the revenues cannot cover the overheads of that company), than job losses caused by efficiencies through outsourcing. South Africa has identified outsourcing as an enabler for economic and social growth.” Another area where job retention has been highlighted is with the rise of technology in the industry and advances that could see human jobs replaced with machines. But Padmanathan is confident that at Prestige people will not be sacrificed to mechanisation, although it will be used to enhance service delivery where possible. “The nature of cleaning equipment is changing. Largescale machinery is commonplace and you can now get the same level of work done with a lot less inconvenience, and invariably it’s a lot more healthy and hygienic,” he says. “A cleaner will always have to clean but we can give the tools to improve from a speed and efficiency perspective. Technology is becoming a bigger component

in the industry as our clients demand it, and there is sometimes no choice due to the nature of the industry. It also opens up new contractual opportunities with new clients. Mechanisation is becoming a significant part of the business but we will never not need a large labour force.” The CEO’s attitude surrounding people is admirable. During these tough economic times, where global markets are so uncertain, management are so often forgiven for focussing attention on survival rather than growth and profit rather than people but Padmanathan, a self-confessed optimist who has only been with Prestige for 11-months, is resolute in his drive for improving people and, as a result, improving service delivery. Under his stewardship, it is clear that Bidvest Prestige faces an exciting and positive future, one where people are at the core of the business. “I believe that as a company, we continue to punch above our weight,” says Padmanathan. “Where there’s opportunity, we’re taking advantage, despite the economic circumstances that we’re faced with – there is work out there. This means we can grow the company, grow the labour force, change people’s lives, give opportunities to people who wouldn’t have had them, bring fair returns for shareholders and overall, in the cleaning space in SA, there’s enormous opportunities to grow further,” he concludes.

BIDVEST PRESTIGE +27 (11) 796 0000 info@presclean.co.za www.bidvestprestige.co.za

www.enterprise-africa.net / 101


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.

SA MOTORING EXPERIENCE Kyalami Exhibition & Conference Centre SEPT 01 - 03 ELECTRA MINING AFRICA Gaborone Fair Grounds SEPT 12 - 14 KENYA TRADE SHOW The Sarit Centre, Nairobi SEPT 15 - 17 AFRICA AEROSPACE AND DEFENCE Waterkloof Air Force Base SEPT 19 - 23 WINE & SPIRIT EXPO Federal Palace Hotel, Lagos SEPT 21 – 24 MEDIC EAST AFRICA Visa Oshwal Convention Center, Nairobi SEPT 26 - 28

ELECTRA MINING AFRICA SEPT 12 | GABORONE The world-renowned Electra Mining Africa 2018 is the place to be to source suppliers, manufacturers and distributors for all your mining, industrial, construction, power generation and machine tools needs. You will have the opportunity to see the latest and greatest innovations and technologies in machinery, equipment, products, consumables, services and solutions. You can expect to see: • Cutting-edge mining technology, equipment and supplies • The latest in industrial, engineering and manufacturing • All aspects of power generation and electronics • A showcase of trucking, transport and logistics • Everything from abrasives to blading to machine tools and more

102 / www.enterprise-africa.net

AFRICA AEROSPACE AND DEFENCE SEPT 19 | PRETORIA The Africa Aerospace and Defence (AAD) is Africa’s only aerospace and defence expo that combines both a trade exhibition and an air show. Held biennially in the City of Tshwane – South Africa’s administrative capital, the AAD Expo is one of South Africa’s largest contributors to the country’s GDP in show years, and is regarded as a national asset. MEDIC EAST AFRICA SEPT 26 | NAIROBI Medic East Africa is the largest business platform for the healthcare industry in East Africa and is a leading event to meet, learn and do business. The exhibition takes place from 3-5 October 2017 at the Visa Oshwal Centre, Nairobi, and will attract more than 3,500 healthcare professionals and host 250 leading international and regional healthcare suppliers, manufacturers and service providers.

AUTOMECHANIKA JOHANNESBURG Nasrec Expo Centre SEPT 27 - 30


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Mixing and Blending Machine Operator. Butler. Librarian. Mining Machine Operator. Mail Clerk. Lawyer. Corporate Social Investment Specialist. Independent Manufactured Building Installer. Motorcycle Mechanic. Biological Technician. Umpire. Garment Cutter. Civil Engineering Technician. Referee. Laundry Worker. General Practitioner. Millwright. Fire Investigator. Administrative Law Judge. Entertainer and Performer. Financial Adviser. Travel Agent. Irradiated Fuel Handler. Radio Mechanic. Typesetter. Motor Vehicle Operator. English Language Teacher. Gas Distribution Plant Operator. Furniture Finisher. Audio and Video Equipment Manager. Account Collector. Blogger.

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Profile for Enterprise Africa

Enterprise Africa September 2017  

September's Enterprise Africa magazine - for industry leaders

Enterprise Africa September 2017  

September's Enterprise Africa magazine - for industry leaders