2013 ISSUE 7
Hyprop Rosebank to be completed by 2014
Arrowhead Properties R10 billion portfolio by 2016
La Motte A culture of excellence
Ross Jack Believe the hype
ABB: Electrifying SA with solar power IndustrySA takes a look at the work of ABB SA, the countryâ€™s leading power and automation organisation, as they begin important work in the Limpopo Province.
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EDITORIAL EDITOR Joe Forshaw SUB EDITOR Lauren Grey WRITERS Colin Renton Tim Hands Roland Douglas Christian Jordan RESEARCH DIRECTOR Chris Bolderstone PROJECT MANAGERS Tonnie Geddes Hal Hutchison Leslie Kemp Ben Martell ADVERTISING SALES SALES DIRECTOR Andy Williams SALES MANAGER Daniel Marshall SALES EXECUTIVE Holly Graham SALES EXECUTIVE Mark Leonard STUDIO STUDIO DIRECTOR Martyn Oakley LEAD DESIGNER Dom Thorby OFFICE MANAGER Tricia Plane ACCOUNTS Mike Molloy, Jane Reeder ECP LTD MANAGING DIRECTOR David Hodgson OPERATIONS DIRECTOR Chris Bolderstone FINANCE DIRECTOR Scott Warman Ferndale Business Centre, 1 Exeter Street, Norwich, NR2 4QB If you would like more information about ways in which IndustrySA can promote your business please call +44 1603 618000 or email email@example.com East Coast Promotions Ltd does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher.
Welcome to the seventh issue... A huge part of business these days is corporate social responsibility (CSR). 20 years ago CSR did not play a part in business planning or business strategy but today, if you don’t have a CSR scheme then you will be left behind by competitors. For some, CSR projects are jumped up marketing campaigns that bring attention to the business for a lower cost than, say, a national TV advertising campaign. If this is the case it is important to ensure that the project actually succeeds and benefits a community, the environment, charities or whatever the specific cause may be, otherwise stakeholders will see right through you. If the CSR project fails and was only ever in place to save face then this will be more harmful than not having one at all. South African businesses have some superb CSR projects underway and the majority provide real benefits to external groups while boosting the reputation and moral standing of the company involved. Take ABB for example. The global power giant has a dedicated CSR department in place with the goal reflecting the company’s and behaviours to its stakeholders. In South Africa, the company supports schools, helps orphans of HIV/Aids victims, encourages community engagement and supports human rights. When a company of this size contributes so heavily to the upliftment and wellbeing of others it is hard to see anything but a positive outcome. Get in touch and tell us about your CSR policies and experiences at facebook.com/ECPindustrysa or @industry_sa.
© East Coast Promotions Ltd 2012
MAR 13 PAGE 3
18 3 EDITOR’S PAGE How are you helping with CSR?
6 NEWS All that’s happening in South Africa 10 EnTREPRENEUR From local computer sales to the Virgin Spaceflight
12 Innovation A Waterless bath? 14 destination director The world’s finest wine regions 18 ross jack Beleive the hype 20 PRASA Getting SA back on track
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920 million investments in the Rosebank Mall
Building improved telecoms in rural Zimbabwe
76 geeley sa
Gold & Platinum come easy with Sandvik
Chinese quality and safety is on the up
40 ABB SA
80 La Motte
Electrifying SA with renewable powers
A culture of excellence
44 SHEETECH S.A Providing cutting edge quality
84 Arrowhead Properties Billions under management in only two short years
90 sa shipyards
A credit bureau for Afghanistan?
New navel contracts keeping the shipyard afloat
62 Nu Metro The entertainment experience of a lifetime
94 Patensie Citrus
98 Industry Recommended
Now part of Southern Africaâ€™s largest marine repair company
This monthâ€™s showcased organisations
The not so sour citrus business
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NEWS All that’s happening in South Africa - By
Lauren Grey / For more news stories visit industrysa.com
Home improvements set for poorest communities An innovative approach to upgrading living conditions and solving South Africa’s housing backlog has been developed by researchers from Stellenbosch University’s (SU) Sustainability Institute. The iShack, or improved shack concept, aims to improve the conditions of those living in slums; for which 62% of the urban population in sub-Saharan Africa are living, according to the UN Habitat State of the World’s Cities 2012/2013 report. Poor living conditions and inadequate access to infrastructure such as basic energy, sanitation and water services will be addressed, and those not living in a brick or mortar house will be able to upgrade their existing shacks, or install new shacks. Solar power panels will be installed to meet basic energy needs and ecological design principles will be incorporated to make daily living more comfortable, for example, large windows will be positioned in such a way to achieve better air circulation and sunlight heat during the day. Sloped
roofs and overhang will shade the structure on hot days, but in the winter months residents will also be able to harvest rainwater. The improved shack concept first started in 2011 after the National Research Foundation awarded a grant to SU to find ways to upgrade informal settlements, focussing on priority areas such as water, sanitation, food security, waste management, energy and general structural upgrades to shelters. One of the most important aspects of the project according to Andreas Keller, an iShack designer, is training, education and maintenance of solar power systems, because without this, technological interventions in community upgrades often fail. To ensure the iShack concept is successful, local entrepreneurs will receive accredited training in business and engineering principles to help community members maintain the technology in their houses. Technicians will be paid from user fees.
Absa to acquire Barclays Africa Absa to acquire Barclays Africa South African bank, Absa is stepping up expansion plans following shareholder approval for an R18bn merger with Barclays Africa, enabling the company to serve 14.4 million customers across the continent. The deal will effectively transfer Barclay’s African assets to Absa, forming JSE listed company Barclays Africa Group Limited. Maria Ramos, Absa group CEO says the deal is an important milestone in the group’s journey towards ‘becoming the ‘go-to’ bank across Africa.’ “This is an exciting and transformational deal that will create a high quality franchise in Africa with a leading network of more than 1300 outlets across ten countries,” Ramos said in a statement. In order for the deal to go ahead it needed 50% of shareholder support, plus one vote from investors which was exceeded with more than 97% of shareholders, excluding Barclays, voting in favour. Absa chairman Garth Griffin told shareholders at a general meeting in Johannesburg that the approval marks ‘the birth of a pan-African banking giant’. The deal also got the green light from South Africa’s biggest institutional investor, the Public Investment
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Corporation (PIC), who said the deal worth R18.3bn, ‘provides Absa with an immediate exposure to a higher growth trajectory market’. As a result of the merger, Barclay’s stake in Absa will increase to 62.3%, from 55.5% the banks announced in a joint statement. “It is expected that Barclays Africa will hold, at the effective date of the proposed combination, all or a significant majority of the portfolio, comprising Barclays’ ownership interests in banking operations in Botswana (67.8%), Ghana (100%), Kenya (68.5%), Mauritius (100%), the Seychelles (99.8%), Tanzania (100%), Uganda (100%) and Zambia (100%), as well as the Barclays Africa regional office in Johannesburg (100%),” said the statement.
SA launches green car project In a bid to create a greener economy, Environmental Affairs Minister, Edna Molewa has launched a three year project to pilot and test the feasibility of electric vehicles and associated infrastructure in Pretoria. The initial stages of the project will see four Nissan Leaf test cars being dispatched to the Environmental Affairs Department for three years, allowing the department to evaluate the practicality of these vehicles and their charging stations in the South African market. The project highlights the need to move towards a more energy-efficient economy, as outlined in the National Development Plan, “The fundamental motivation for embarking on this project is the urgent need for South Africa to transition to a job creating, sustainable, lowcarbon and green economy” Molewa announced in a statement. It is a multi-stakeholder partnership between primary partners Nissan South Africa and the Environmental Affairs Department, with support from the Departments of Trade and Industry, Transport, Energy, Science and Technology, Eskom and the South African Revenue Services.
The automotive sector represents 20% of emissions and is the third-largest contributor to air pollution in the country, making it South Africa’s most carbon intensive industry; and as the 18th largest manufacturer of vehicles in the world, it is essential to address the carbon-intense issue. “This electric vehicle industry strategy prepares for the future transition into design and production of alternative propulsion systems in order to maintain or increase South Africa’s global market share in the automotive sector while still responding to its commitment to decrease its carbon footprint,” Molewa announced. The Nissan Leaf has been chosen for the project as it is the world’s first mass-produced electric vehicle, which is due to be launched in South Africa later this year. The cars are charged at dual-grid connection charging stations; assessing the viability of the charging stations and other necessary supporting infrastructure is also part of the green car project. “Charging the cars is done with a solar tracking device, and the department has just completed the installation of a 15-kilowatt device at its green building in Pretoria,” explained Molewa.
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NEWS All that’s happening in South Africa - By
Lauren Grey / For more news stories visit industrysa.com
Technology hub launches in Joburg Technology hub launches in Joburg Johannesburg’s first innovation and technology incubator has been released by mobile health technology firm Praekelt Foundation, aiming to promote technological development and entrepreneurship across the city. The incubator, JoziHub, will provide the training, support, facilities and networks required to enable entrepreneurs to turn their ideas into sustainable businesses. Founder of the Praekelt Foundation, Gustav Praekelt, says technology hubs can play a ‘pivotal role’ in the emergence of a ‘new generation of African entrepreneurs.’ “…incubators such as JoziHub can make an immediate and lasting impact on local innovation and development” said Praekelt in a statement. JoziHub will address the country’s most pressing social challenges through the development of internet, social media and mobile technology. Content streams which will cater for
markets such as health, arts, environment and sustainability and women in technology will also be used to help address these problems, as will the hosting of regular events to bring together experts and entrepreneurs. JoziHub will work alongside other hubs across Africa such as the iHub in Kenya, and plans to become part of the networking organisation Afrilabs, which supports the growth of communities around African technology hubs and encourages expansion of the network by providing tools and resources for new and emerging labs. “Johannesburg has a vibrant community of innovators and world-class thinkers whose ideas can transform the country and indeed the African continent,” Praekelt said in his statement, “At JoziHub we are seeking to harness this energy and allow its vast potential to be realised.” JoziHub will be free for entrepreneurs to join and use the services for the first three months in order to drive growth.
Amplats invest in fuel cell ‘Home Generator’ South Africa’s Anglo American Platinum (Amplats), has announced a US$4 million investment in Canadian company Ballard Power Systems, to support continued commercial advancement of the company’s fuel cell products. The Canadian company are global leaders in fuel cell technology, providing clean energy fuel cell products enabling optimized power systems for a range of applications, and offering smarter solutions for a clean energy future. Amplats and Ballard are currently involved in developing a prototype Home Generator with the potential to provide economical electric power to remote rural African households. In a statement released by Ballard, John Sheridan, President and CEO of Ballard Power Systems said the investment from Amplats is a ‘tremendous demonstration’ of their commitment to fuel cells, “Furthermore, the Home Generator power system that we are jointly developing has the potential for profound impacts in South Africa and elsewhere” he said. The Home Generator is intended to address the need of many households in rural communities, and will be built with Ballard fuel cells and run on readily available metha-
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nol fuel, utilizing an integrated fuel reformer. Work on the fuel reformer will also benefit Ballard’s ElectraGenTM methanol-fuelled systems, which provide power solutions to the telecommunications industry. Godfrey Oliphant, South Africa’s Deputy Minister of Mineral Resources, said that his department was pleased to see Amplats investment in Ballard and ‘their commitment to beneficiation of platinum in South Africa’. “Fuel cell-based product deployments will be a positive catalyst for growth in global platinum demand” announced Oliphant, “South Africa is the leading producer of platinum and innovations such as the Home Generator project move our country in a positive direction towards participating actively in the application of Platinum Group Metals in new technologies which will create important jobs for our economy.” Ballard announced that once they have completed the development of a prototype Home Generator system which meets commercial product requirements, the companies will ‘undertake further field trials, potentially leading to the manufacture, distribution and support of a commercial product for the African market.’
Van der Walt takes the Tshwane Open
Dawie can der Walt captured the biggest victory of his career so far recently, after he claimed the Tshwane Open at the Copperleaf Golf and Country Estate outside Pretoria. The final round began with a tie between four players, creating a tense environment. Van der Walt, Africa Open champion Darren Fichardt, Charl Coetzee and Mark Tullo all sat on 16-under-par 200. Van der Walt’s challengers all felt the strain and began to fall apart as the round closed out. Fichardt remained in the running, with a final round of three-under-par 69. Coetzee failed to mount a real challenge, posting a level-par 72, and Tullo’s game left him despairing as he closed with a five-over 77. Van der Walt, meanwhile, fired an eagle on the 626m fourth, added four birdies and dropped just an single shot on the 10th, to finish with a five-under-par 67. Van der Walt, who has only managed a previous victory on the satellite tours in the USA, was thrilled to finally make a breakthrough on home soil. He said: “You can only imagine what it’s like to win such a big one.
I don’t know what I’ll do yet. The purses are a lot bigger on the European Tour, so I’ll have to rethink some things. “My goal was to shoot 10-under for the weekend, and my focus was reaching five-under for the round today. I’m just really happy that I played well and won, because you can play well and not win.” He said that the victory gave him confidence and he had managed to prove to himself that he was good enough to play golf at the highest level. “You start doubting yourself and at 30 years old you start to wonder if you’re good enough, and this proves that I am. I would have liked to win before 30, but I’ll definitely take this. Golf is a game where you don’t get a lot of chances to win, and to do it is fantastic.” Van der Walt went home with a prize purse of R2.8 million and with four of the top six finishers hailing from South Africa, it looks as though golfing talent is something of which the country is not short in supply.
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Young, rich, successful and African
By Joe Forshaw
Ashish Thakkar is one of Africa’s most successful business men. The 29 year old has booked his place on Virgin Galactic’s space flight proving that, for this business man at least, the sky is not the limit.
Mr Thakkar has booked his place on Virgin Galactic’s space flight as a representative of East Africa
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ASHISH THAKKAR A lot of attention is placed on African entrepreneurs, especially by the international media, because of the perception that Africa is a difficult place to do business and the perception that there are fewer opportunities for successful businesses to thrive. It doesn’t take a genius to figure out that this is in fact, not the case. Consider the fact that Africa is the second most populated continent, consider the fact that Africa is a developing continent, with as yet untapped markets, and consider the fact that Africa is a treasure chest of natural resources (including renewable resources); this continent should be any entrepreneurs dream. One business man who has made more than a success through trading in Africa is Ashish J. Thakkar, founder of the Mara Group, a 16 year old pan-African multi-sector business conglomerate with extensive operating experience in domestic and international markets. With current operations covering IT, Business Process Outsourcing (BPO), real estate, asset management, renewable energy, tourism, infrastructure, hospitality, packaging, and media, the group has operations across 26 countries, 19 of which are African. Mr Thakkar considers himself a native son of Africa despite being born in the UK and having strong Indian roots. His ties to Africa are strong as he moved to Uganda and grew up there with his family after they survived the historic Rwandan genocide and generational exile of African families. He is now a resident of Dubai but his passion in business is to help build emerging African entrepreneurs. The story of Mr Thakkar’s growth as a business man is a novel one. Originally, Mr Thakkar got the entrepreneurial bug after selling a computer to a friend of his fathers, earning a profit of $100. He then attempted to sell computers to anyone and everyone. After not long, he was a 15 year old selling computers to his friends at high school in Uganda, he convinced his parents to let him start his own business on the premise that if anything went wrong he would return to school. He even sold a computer to the school and offered to maintain it as few others had the skills. The family opened a shop and began sourcing hardware from Dubai and eventually Singapore. In the beginning the agreement was that Mr Thakkar would go back to school after the holidays but with his business running so well he
never returned. After a short period of time, the company diversified from IT to packaging and then to property, and then to infrastructure and even agriculture. Over the years the Mara Group has grown at an incredible rate and now has reported revenues of over $100 million with 7000 employees worldwide. In his 29 years in this world, Mr Thakkar has received numerous accolades and titles. In 2010, the World Economic Forum (WEF) recognised the Mara Group as a dynamic high-growth company because of its potential to evolve into a future industry leader and a driving force for economic and social change. WEF has also named Mr Thakkar as a Young Global Leader as proof of his leadership, vision and business prowess. In the future a further sought after title will be placed on him – that of Astronaut. Mr Thakkar has booked his place on Virgin Galactic’s space flight as a representative of East Africa. This will make him Africa’s second man in space after South Africa’s Mark Shuttleworth. Mr Thakkar has a unique management style. He regularly visits his spiritual leader Morari Bapu in India, whose philosophy of truth, love and compassion form the basis of Thakkar’s own life as a social entrepreneur and business leader. He recently told GQ magazine: “I think rudeness, arrogance and pride are not necessary, but other people like that… Arrogance is something you should never have.” One of the key messages that Mr Thakkar likes to get across is business is easier with a mentor. To back this up he launched the Mara Foundation, a non-profit social enterprise which focuses on emerging African entrepreneurs. The Foundation works to create sustainable economic and business development opportunities for young business owners via its Mara Launchpad incubation centres and Mara Launch Fund. The mission is to provide comprehensive support services including mentorship, funding, incubation centre workspace and business training to African entrepreneurs. Mr Thakkar believes that these support services will transform entrepreneurs’ business ideas into profitable and thriving business entities that will employ other Africans and contribute to the local and national economies. The Foundation currently operates in four African countries and recently launched an online web portal intended to reach millions of entrepreneurs globally.
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A Water Saving Bath?
By Joe Forshaw
DryBath is the world’s first germicidal Bath-substituting skin lotion/gel which has the potential to save millions of litres of water and provide convenient cleanliness to millions who would otherwise be subject to waterborne diseases.
Ludwick Marishane is the founder and chief of Headboy Industries, a South African invention-development and commercialisation company, formed in 2008 and based in Cape Town. The company’s primary product and original invention has a hygiene focus and has been internationally lauded for its health benefits and water saving potential. DryBath is described by the company as: “The world’s first germicidal Bath-substituting skin lotion/gel. It is a proprietary blend of a biocide, bioflavonoids and moisturisers.” Similar to waterless hand sanitisers, DryBath is applied to the skin across the whole body and only a small amount of the lotion can clean the entire body, no matter what size that body is. The gel consistency and EasyPack sachets mean the product is easy to use with no mess or waste. A 20ml DryBath sachet replaces one bath or shower. The young South African entrepreneur, who is from Motetema on the border of Limpopo and Mpumalanga,
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developed the product after a winter sunbathing session with friends.In a video broadcast for TED. com, Mr Marishane said: “While we were sunbathing my best friend said to me ‘why doesn’t someone invent something that you can just put on your skin so that you don’t have to bath?’ I sat and thought to myself and realised, that would be something I would buy. “I did a little research and found some very shocking statistics. 2.5 billion people in the world do not have proper access to water. 450 million of those are in Africa and five million in South Africa. “Various diseases thrive in these conditions, the most drastic of which is Trachoma. This is an infection of the eye and after multiple infections of Trachoma you can be left permanently blind. The most shocking thing is, all you have to do to avoid Trachoma is to wash your face. No medicine, no pills, no injections. “I done research about lotions and creams, their melting points and toxicities and I wrote down a formula on a piece of paper and it looked like the KFC
“I did a little research and found some very shocking statistics. 2.5 billion people in the world do not have proper access to water. 450 million of those are in Africa and five million in South Africa”
During the early days of business, Mr Marishane was still in high school. With no access to the internet apart from through his cell phone, the inventive entrepreneur wrote up his business plan and research findings on the phone. After going on to the University of Cape Town and developing the idea, Mr Marishane had by now gained a patent, again through the cell phone, making him the country’s youngest patent holder. After four years of development the product was finally ready for the market and Mr Marishane was subsequently named as the Best Student Entrepreneur in the World (Global Champion of the Global Student Entrepreneurs Awards 2011), Google named him as one of the 12 Brightest Young Minds in the World and his product is now attracting interest from Oxfam, WaterAid, major hotel chains, major airlines, national armies and international retailers. It is reported that each time you use DryBath you can save 80 litres of water. In rural areas, the innovation can also save valuable time by reducing the need to walk to
wells for washing water, allowing children more time for education and recreation. The value proposition of the company is all about ‘cleanliness and convenience’, and this is exactly what the product provides. Without effective cleanliness, other diseases including cholera, dysentery, typhoid and schistosomiasis can become widespread and DryBath can help in the fight against these potential killers. “DryBath is a rich man’s convenience and a poor man’s life saver,” says Marishane. With one DryBath sachet going to a charity for every DryBath sachet sold commercially, this innovation has the potential to have major impacts on the daily lives of so many, and all because of a young Limpopo student and his phone.
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Tasty Tipple Trails By Christian Jordan South Africa produces some of the world’s finest wines but have you ever thought about taking a trip to some of the planets other expert wine making nations? IndustrySA has put together a list of some of the most tantalising regions, growing the best grapes, strictly for wine lovers in need of a break from the office.
With some of the finest wineries the world has to offer, South Africa is lucky with the bottles that are regularly produced and marketed. Considering that most people in the country do not have to go too far for a good glass, IndustrySA has put together a list of some of the world’s other great wine regions, to spark the imagination and perhaps create some ideas for an alternative getaway in this, the third edition, of our destination director series. The history of wine production is long, rich and complicated. Generally, countries that produce wine have been place in two sub-sectors, old world and new world. Old world wine is made primarily by European makers, from countries including France, Spain, Italy, Austria and Hungary. New world wine comes primarily from countries outside Europe. The most recognised producers include the USA, Australia, New Zealand, Chile and Argentina. We have selected four regions that contain super scenery, relaxed surroundings and vineyards that all host terrific tasting sessions.
CALIFORNIA NAPA VALLEY Wine from California has become the standard ‘go to’ for many consumers because of the easily drinkable, well priced, well designed and well marketed brands that exist on the West Coast of America. Rose is a big export that has been made famous by the E& J Gallo Winery Corporation and there are over 1200 wineries in California making it one of the largest wine producing regions in the world.
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The Napa Valley is located North Coast region of California, north of San Francisco and San Jose, just South West of Sacramento. The region itself is split into smaller areas and it is home to over 400 wineries. We would recommend a 30 mile drive from Downtown Napa to Calistoga along route 29 where you will find around 60 wineries, all with fantastic accommodation including restaurants, cellars, tasting rooms, farms, ranches, bars and hotels. The Cali climate allows for a vast range of grapes to be grown, reportedly over 100 varieties, including Cabernet Sauvignon, Chardonnay, Merlot and Zinfandel. Sunshine and heat for large periods of the year are balanced by cool winds and fog from the Pacific Ocean and large bays. You may think that wine here has an old world feel because of production techniques used but frequently, the wine has a simple flavour which is dominated by fruit – more of a new world characteristic. One of the select wineries in the Rutherford region of Napa Valley is the Hall Winery. The business has a few locations in Napa but the Rutherford vineyard has a wonderful hall (pictured) with exquisite decoration. The Cabernet Sauvignon is a stand out wine and one not to be missed as you travel this historic region.
FRANCE LOIRE VALLEY The Loire Valley is referred to as the ‘Garden of France’ because of the amount of vineyards, fruit orchards and vegetable fields contained within its 800skqm area. For the last 13 years, the central part of the Loire River Valley has been recognised as a UNESCO World Heritage Site.
Renowned for wine which is fresh, fruity, crisp and full of flavour, the Valley encompasses several regions from Muscadet in the west, with fresh ocean winds, to Sancerre in central France, where the climate is cooler. Starting in Muscadet, a wine lover could take an approximately 270 mile drive straight through the valley to Menetou-Salon, while taking in the beautiful architecture and scenery. The best route would be to follow the river although this is not the most direct track. While the lively, tangy wines in from Muscadet will provide a perfect start to this journey, one of the most important wines to try on this trail is a sparkling white, from just west and the Saumur Mousseux region and made from Chenin Blanc – one of the finest sparkling whites available and marketed by various vineyards. The Saumur region also has great red wines, made from Cabernet France – light, fruity and refreshing, and interestingly, the region has been quarried extensively over the past few centuries leaving caves that are perfect for cellaring and make great attractions for visitors. Further along the trail, Chinon and Bourgueil are famous for red wines that fetch high prices, traditionally made from Cabernet Franc. Next the region of Vouvray is popular for sweet wines thanks to early bottling and late harvesting. Montlouis, Sancerre, Pouilly-Fumé and Menetou-Salon are the final regions where white wines rule, in particular Sauvignon Blanc and Sancerre. The Sauvignon creates a racy, pungent, herbaceous bouquet, gooseberry flavoured wine, now famous around the world.
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Apart from the wines, the accommodation in this area is like none of the other areas in our list. Grand, imposing and majestic, we would recommend staying in one of the impressive Chateau or perhaps visiting the Château de Chambord (pictured) for a real flashback to French-Renaissance architecture.
ARGENTINA MENDOZA Argentina is continuing to build its reputation for producing magnificent wine and one of the most important regions to the country’s wine industry is Mendoza. This area accounts for over 65% of the country’s total wine production. A big part of wine production is the fact that many vineyards here are planted at high altitudes. The region lies in the eastern foothills of the Andes, close to Mount Aconcagua. The climate is dry and desert like but advanced technologic irrigation systems are used to aid the growth of grapes. A range of grapes are grown but Malbec is by far the most popular. In this location, a 150 mile drive from San Rafael to Mendoza will allow for an in-depth discovery of fantastic Argentinian wine, allowing for grape encounters in Lujan da Cuyo, Maipu, Uco Valley and the southern valleys. Notable stopping points would include the large scale Argento winery in Lujan da Cuyo. This winery produces fantastic Malbec and a brilliant Chardonnay Viognier although most of their wine is produced for the UK market. There is also, of course, the famous Catena Zapata vineyard with its replica of a Mayan Temple called La Pirámide. The vineyard is owned by Dr Nicolas Catena, the man who is often considered to be behind Argentinian wines introduction to the world. The vineyard produces some of South America’s most decorated wines including the Nicolas Catena Zapata, a blend of Malbec and Cabernet Sauvignon. This region is regarded by experts as one of the most important in the world for 2013 and one which will only grow in size and importance.
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NEW ZEALAND CENTRAL OTAGO In New Zealand, another new world producer, one of the best wine drives is between Arrowtown and Alexandra, in the Central Otago region. With ten primary wine regions spread all over the country, it makes sense to focus on one at a time (this also allows for ten separate visits for real drinkers). This route takes only one hour to drive but there are many vineyards, outlets and restaurants along the route. The pioneering vineyard in Central Otago is the Rippon Vineyard. Lying beside the Buchanan Mountain Range, on the edge of Lake Wanaka this vineyard makes one of the best Pinot Noir’s available, winning several gold medals. They also specialise in organic, Bio-Gro certified wines which are available with the rest of the selection from December to April in the tasting room. Although this vineyard is slightly off the route it is one of the most famous in the region, so well worth a visit. Central Otago is home to some of the world’s most southerly vineyards and the climate is continental thanks to the protection offered by the surrounding mountains - long, hot and dry summers and cold, snowy, icy winters. While sceptics say that these conditions will ultimately ruin the region, many have, in fact, found that the conditions help produce exceptional wines of great distinction and intensity, with the correct care and attention of course. While Pinot Noir is the main focus, accounting for around 60% of vines planted, an up and coming variety is Pinot Gris which recently over took Riesling as the third most planted white variety. Just off this trail is the region of Queenstown which was voted the world’s friendliest city by Condé Nast Traveller magazine so don’t think that this route is all about wine. Like all the others, there are fantastic opportunities to take part in a host of other activities and the brilliant hotels, many of which are located on vineyards, will leave you relaxed an invigorated, ready for more the next day.
INDUSTRYSA’S WINE EXPERT
Quaffin’ & Golfin’
in the shadows of Mount Kenya By Aiden Hughes
As a jet-setting alcoholic and part time Sales Director for one of South Africa’s finest wineries, I find myself sobering up in some amazing places. One such place is in Kenya, the pride of East Africa. Three hours out of Nairobi is the Mount Kenya Safari Club. William Holden, the late great Hollywood actor, built the club as a hideaway for himself and his famous friends. He also invested in and built a wild life orphanage. The club itself looks out toward the ever glorious Mount Kenya and still, decades on, it retains an element of prestige grandeur. Now, I have always been a glutton for punishment, so with an afternoon to kill, I decided to wash down a couple of bottles of SA’s finest whilst honing my skills on the nine hole golf course. My caddie, Anthony, very kindly opened a bottle of Franshhoek Cellar Sauvignon Blanc which was the perfect antidote to the rather muggy conditions. All around the perimeter of the course are private residences, many of which are owned by the crew who, back in the day, spent time at the club and after knocking back a racy, zesty glass, I teed up and managed to slice my shot straight into Stephanie Powers garden! As an avid fan of Hart to Hart during my own youth, I had fantasised about losing my balls in Stephanie’s bush on more than one occasion. Sadly, reality didn’t match up to the fantasy and after taking a penalty shot, I carried on, determined not to lose any more balls and to finish the Savvy before it got too warm.
Having finally bribed Anthony to drink with me, we sank the Sauvignon; a beautiful wine, bursting with lime and apple and a tease on the palate with its crunchy acidity and tropical fruity body. The golf course, however, was starting to look a tad more challenging (and a wee bit fuzzy) so I decided to bring out the big one, not my driver but a humdinger of a Shiraz from the Bellingham Estate. Elegant, poised and full of charm and character, this wine represents everything I was not on the golf course. I plodded on regardless and on the 6th, I teed off in the Northern Hemisphere and landed the ball inches away from the pin … in the Southern hemisphere! A bizarre experience that will stay with me for a long time to come. October is the season of the short rains in Kenya and with storm clouds fast approaching, I sank another glass of Shiraz. The deep fruit and subtle oak integration helped calm my nerves as I headed to the 9th. Teeing up, I heard a deep guttural growl emanate from the bush – double checking my trousers I looked to Anthony for an explanation. He smiled and pointed to the green, where I was confronted with a family of baboon’s getting up to all sorts and thoroughly enjoying themselves. Buoyed by this vision of jungle love, I let loose with my shot and broke up the romance as the ball landed smack bang in the middle of the green. As the first drops of rain started to fall, I finished off my round with a par. Despite the lovely wine, I cannot say this was my best round but heading back to the club with my whistle well and truly wet, I figured there were plenty of good ones to come.
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“I feel blessed to have had the adventure I’ve had. I know that I always draw from my personal experiences and from my friends when writing”
Ross Jack Highly rated, gifted and upcoming songwriter, performer and producer Ross Jack released his debut EP, Chandeliers, in October. The young sensation, who grew up in Benoni, brings a unique style of hip-hop and IndustrySA caught up with the star to see how he is enjoying life right now.
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Believe The Hype By Joe Forshaw
Q: How has your life been since the release of Chandeliers? Have you felt a big change since moving in front of the mic? Life has been good. Since the release of Chandeliers, the biggest change I’ve felt is that of the acknowledgment for my work. When you are just a producer, you don’t always get acknowledgement - it feels good to be given that credit. Q: In your career so far have you preferred producing or performing? Has being exposed to both sides of things in this manner helped you with development of your style? I like performing and producing, I would never want to be one over the other. I think having been a producer is a great advantage, it is an important tool in the process of making music. I also feel these days you need to be more than just a singer, rapper or producer. Q: There are a lot of demands placed on you right now. Recording great music, performing great shows, managing your image, building your fan base and still managing to be a 25 year old. Is your career a tedious challenge or do you enjoy every second? Wow, thanks for that. There’s a lot of pressure because in this climate it is not easy to blow up as big as I dream to. I’m loving every second of my journey, the ups and the downs, good times and the bad times. Q: Are there any other SA artists that you would love to work with right now? Whose tracks are currently pumping through your headphones?
I would Love to work with Goldfish and I am going to try get them to do a track with me on my album. Right now, I’m listening to a lot of myself as I’m obsessing over making the album as great as it can be. Otherwise I’m very into Frank Ocean’s Channel Orange, also I’m getting into Kendrick Lamar. Q: Your successful single, seven45, indicates a love for a party and a late night. Which South African would you party with if you could choose anyone? I Love a good party, but I love more the idea of people partying and having a good time to my music. I’ve had a good time with many South African’s already, but I reckon John Vlismas the comedian could be a good time. Q: Your background is intriguing and unusual. Being half British, growing up in Benoni and living in Spain for years. You must have had so many different experiences through which you can draw inspiration for your music? Absolutely! I feel blessed to have had the adventure I’ve had. I know that I always draw from my personal experiences and from my friends when writing, and having more of an insight into a couple different cultures and vibes is a great thing. Q: Where do you see yourself 20 years from now? Hopefully signing and producing artists under my own label.. Yeah, Long way to go. But we keep pushing. Q: What can we expect from your album and when can we expect to see it in stores? Expect Lyrics and beats of a top quality, I’m trying to make it a piece of history and the start has been amazing. I went to London and recorded with Pete Boxsta, and we got some amazing material. As well as what I’ve been recording locally lately, it’s major. Q: The music industry is a tough one to crack. What advice would you give to other young SA talent looking to get their beats on the radio? Quality over quantity, I see so many young guns aspiring that don’t remain focused on the prize. I would say focus on making one good song, that’s of a certain level of quality, and be realistic, people take years and years to grow. Don’t sell your soul overnight. Q: Finally, what is the ultimate goal for you? No.1 singles? No.1 albums? Sold out tours? Inspired fans? Ross Jack dolls?
All of the above. And my own label one day…Peace
MAR 13 PAGE 19
Travelling on the right tracks Editorial – Joe Forshaw Production – Chris Bolderstone
PRASA are upgrading and improving rail services across the whole country. The company, which is in charge of Metrorail and other premier bus and rail services, has some major projects underway and IndustrySA takes a look at big investments announced recently. Transport in South Africa is an industry which is of vital importance to the whole nation. Whether you rely on the transport infrastructure to get you to work or to facilitate your business, the movement of goods and people around the country is a flow which cannot afford to be interrupted. It is nearly 1250 miles from Cape Town to Kruger Park. In a car, this would represent nearly one whole day of travelling. With such a vast land mass for people and products to migrate across, the transportation network cannot allow anyone to be travelling down a blind alley. One of the organisations with major involvement is South African travel and transport is the Passenger Rail Association of South Africa (PRASA). PRASA in government enterprise responsible for most passenger rail services in the country. It is made up of four main branches: Metrorail, which operates commuter rail services in urban areas; Shosholoza Meyl, which operates
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regional and inter-city rail services; Autopax, which operates regional and inter-city coach services; and Intersite, which manages the property owned by PRASA. The various divisions of PRASA are responsible for transporting millions of people around urban areas, literally driving business and commerce in the country. PRASA was established because of the need for improvements in the performance of passenger rail services. The organisation’s key objective is to promote rail as the preferred mode of transport for the masses. In the past it has been suggested that the public transport system did not promote efficiency, innovation and accountability, therefore the establishment of PRASA, at the forefront of Government efforts to transform public transport in South Africa, with rail services forming the backbone of the network, has been welcomed by the wider population.
PASSENGER RAIL AGENCY OF SOUTH AFRICA
The essence of PRASA is to integrate inter-modal facilities and services into public transport solutions that optimise the performance of the whole transport system. The funding for PRASA comes mainly (70%) from the government. The rest of the funding comes from internally generated cash flow and this is something which PRASA will be looking to grow over the coming years. Increasing fares, exploiting its assets and increasing passenger numbers are all methods that the organisation views as possibilities to help boost internal cash flow. PRASA’s primary target over the coming years is to upgrade the existing passenger railway system in order to meet the challenges of an increasingly modern and developing society. This will include implementing plans for the modernisation of the signalling, telecommunications systems, rolling stock and train operating systems.
ROLLING STOCK UPGRADES Upgrades to the country’s rail infrastructure have been on-going for some time now with great progress being made. The upgrade of rolling stock is a major investment for PRASA. Rolling stock refers to all vehicles that move on a railway track and PRASA made the decision in December
that the Gibela Rail Transportation consortium, led by French company Alstom and SA engineering company Actom, would receive a multi-billion rand contract to design, manufacture and supply new trains and wagons as part of the on-going upgrades. “The ageing fleet combined with rapidly growing passenger need has led PRASA to focus on scaling the rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands,” says Lucky Montana, PRASA Group CEO. “The Prasa rolling stock fleet renewal programme is the catalyst for the transformation of Metrorail services and public transport as a whole. “The average age of the current coaches is 39 years, while the lifespan of railway rolling stock is of the order of an average 46 years,” says Mr Montana. “Prasa has in the past two years intensified its efforts to invest significantly in new rolling stock over the next 20 years, with the first trains expected to be delivered in 2015.” Metrorail passengers in the Western Cape, Eastern Cape, Durban and Gauteng are serviced by some 4700 coaches, 90% of which are from the late 1950s. In the 20 years between 2015 and 2035, PRASA’s investment in rolling stock will look to add over 7000 electrical carriages to its portfolio.
MAR 13 PAGE 21
This investment has been divided into three subcategories: 5256 vehicles to meet existing rail passenger demand on the current network until 2020; 456 vehicles to satisfy growth in rail passenger demand on the existing network until 2030; and a further 1512 vehicles to meet long-term rolling stock needs as part of future expansion.
ECONOMIC DEVELOPMENT Like any major investment, PRASA’s new rolling stock programme will bring more than just improved rail transportation to the economy. As Gibela Rail Transportation supply 3600 new vehicles, over the next ten years, they will create over 8000 jobs. The company will also be involved with maintenance and technical support for the next 18 years, also contributing to job creation. Gibela will also spend R797 million on skills development initiatives, R746 million on enterprise development in the rail sector and R273 million on socio-economic development contributions – all factors that helped the company become the preferred bidder on the project. Social responsibility is something to which PRASA remain dedicated. The company says: “CSI has become an integral part of PRASA’s business, we recognise
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our responsibility as a corporate citizen towards our stakeholders and the communities within which we operate. PRASA remains committed to sustainable development in aligning its corporate objectives to that of its performance as a corporate citizen.” As with other major investments in the country, the rolling stock upgrades have requirements in place to ensure sufficient amounts of local content and knowledge are used in production. A target of local content of 69% by the second year of the project was set, in addition to preferential procurement policies such as R32.8 billion to be spent on subcontracting to black empowered organisations, R5.3 billion on subcontracting to suitable small enterprises and some micro-enterprises and R1.6 billion on entities owned by black women. “While the urgent challenge to improve passenger services remains primary, the rolling stock fleet renewal programme has been designed to achieve a number of key government objectives,” says Mr Montana. “This will include the delivery of quality services to citizens, revitalisation of South Africa’s rail engineering industry through local manufacturing and ensuring local content as part of government’s Industrial Policy Action Plan, employment creation, skills development and broad-based black economic empowerment.”
PASSENGER RAIL AGENCY OF SOUTH AFRICA
MAR 13 PAGE 23
“The ageing fleet combined with rapidly growing passenger need has led PRASA to focus on scaling the rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands”
IMPROVEMENTS ON TRACK As well as the major upgrades of rolling stock, PRASA has been involved with improvements across the entire spectrum of rail services. In the last financial year, 98 station improvement projects were carried out to develop safety, cleanliness and signalling. Modernised speed gates, costing R1.9 billion, would also be set up at numerous stations across the country ahead of the introduction of a single transport card for bus and train commuters. Mr Montana says that PRASA would like to extend rail lines and a number of projects would be developed, including a Johannesburg-Durban High Speed Rail link, to reduce transport time between the two cities to three hours. South Africa has already missed many rail revolutions in its history, said Mr Montana, and the country cannot miss another one now. To ensure this does not happen,
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projects to not only improve services but create new ones have been proposed. Projects like the Moloto Rail Corridor and the Johannesburg-Queenstown-Mthatha Rail project, a project which has seen R450 million committed for the next three years. This will fund the construction of eight new stations – providing part of the revitalisation of the industry that Mr Montana is keen to see. Rail links to Cape Town International Airport and King Shaka International Airport have also been suggested, projects that will bring further investment and further job creation to the local areas. As PRASA looks to upgrade old trains as well as build new ones, along with the other major investments in the industry, the future looks bright for rail services. The only question now is whether or not the company will be able to drive the masses towards rail and justify the major spends that have been commissioned.
Compressor & Engine Engineering (Pty) ltd (C&E)
is a compressed air specialist company. C&E was founded in 1989 with our head office located in Boksburg East Gauteng.
We pride ourselves on offering bespoke tailor made air solutions to large and medium sized organizations in South Africa in the private and government sectors.
We Specialize inâ€Ś Refurbishment and Repair of Electric Locomotive Compressor & Vacuum Systems Refurbishment of Espressoâ€™s used in Diesel Locomotives Sales of Compressors Service & Maintenance of Compressors Turnkey Solutions for the Compressed air Industry
Find us and Contacts 6 Bain Street Boksburg East Gauteng PO Box 71 Boksburg East 1478
+27 11 914 1093 +27 11 914 1113 firstname.lastname@example.org Scan me with your Smartphone
Hyprop’s investment in Rosebank
Editorial – Joe Forshaw Production – Lauren Grey
Hyprop is the largest listed shopping centre fund in South Africa. The company manages 11 of the country’s largest, premium quality shopping centres and has a diverse tenant base across the nation. After taking control of the Attfund portfolio (discussed in our June 2012 edition) the company is now looking for further growth. With major investments underway, we speak to the CEO to find out what the future holds for Hyprop. Cape Gate Shopping Centre
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HYPROP In South Africa people love to shop. The shopping scene in the major cities in second to none on the continent and all over the country there are outlets, ranging from small to supersize, that sell everything a modern consumer could possibly desire. Even in the countryside, away from the hustle and bustle of the central business districts (CBD), shopping thrives with small outlets run by farmers, rural trade markets and singlestore boutiques contributing the country’s retail spend. The country’s large shopping malls (of which there are many) are now the go to places to shop, ironically because their overall offering is more than just stores. Shopping malls now host a range of events including: Celebrity appearances, exhibitions, trade shows, musical performances, theatre productions and art exhibitions. The popularity of major shopping centres is reflected in
the country’s on-going retail sales growth, even through the tough economic climate of the past few years. With over 800,000m² of lettable retail area, across 11 of the country’s premier shopping centres, one of South Africa’s leading property investment organisations is Hyprop. The expert property management company has seen the fruits from continued spending in the retail sector and tenants in the shopping centres have seen the fruits from booming online and in-store sales. Hyprop owns and manages 11 malls and splits them into four categories: Super regional (Canal Walk), Large regional (Clearwater Mall, CapeGate Retail Precinct, The Glen, Woodlands Boulevard), Regional (Hydepark Corner, Rosebank Mall) and Value/Lifestyle (Atterbury Value Mart, Willowbridge, Stoneridge, Somerset Value Mart).
Rosebank Mall Redevelopment Jan 2013
MAR 13 PAGE 27
ROSEBANK MALL When we looked at the business in 2012, the company was preparing for its acquisition of the Attfund Retail portfolio and it was clear that Hyprop planned to invest in improvements of its new and existing assets. Those plans came to fruition in August of that year as the company began major upgrades of the Rosebank Mall. R920 million will be spent on redeveloping the mall, giving shoppers a refreshed and modernised retail facility. The mall will increase in size to 62,000m², almost doubling the available floor space. In addition to adding substantial new retail space the centre will be completely refurbished with new lifts, escalators, ablutions, floor tiles, ceilings, lighting and shop fronts. When the development is complete, the mall will boast around 160 stores making it the shopping hub of the busy Rosebank node.
WBHO is proud to be associated with Hyprop on The Rosebank Mall Project
The success of Hyprop is partly down to the thriving retail environment in the country right now and developments at the Rosebank Mall will look to add to the prosperous market. “Supporting local brands is key to Hyprop’s tenantmix strategy for Rosebank Mall,” says Hyprop’s CEO Pieter Prinsloo. “The right blend of global brands and popular local retailers will ensure that the mall caters to a wide range of shoppers, increasing its reach and appeal.” He also notes that the development is in line with the company’s ambition to grow its current portfolio saying: “Rosebank is an integrated urban environment offering visitors a unique ‘live, work, play’ experience. We are confident that the new Rosebank Mall will leverage this to realise major benefits for tenants and shoppers, as well as Hyprop’s unit-holders, in line with our strategy of growing existing investments.”
A BIL IT Y
Wilson Bayly Holmes - Ovcon Limited 53 Andries street, Wynberg, Sandton P.O. Box 531 Bergvlei 2012. South Africa Tel: +27 11 321 7200
Fax: +27 11 887 4364
Proud to be associated with Hyprop Investments Limited
The project is set to reach completion in September 2014 and new tenants will include international brands such as Pringle, Ben Sherman, Kurt Geiger, Earthchild, Woolworths Platinum, Edgars, Dis-Chem, Mr Price Sports and Jet. The mall will remain open during construction allowing existing retailers including Stuttafords, Truworths, Mr Price, Queenspark and Foschini to operate without slowdowns or breaks in income. “Construction is being carried out in a phased process and is progressing well,” says Mr Prinsloo. “90% of the lettable area has already been taken up in committed leases.”
“The right blend of global brands and popular local retailers will ensure that the mall caters to a wide range of shoppers, increasing its reach and appeal,”
“There is upbeat demand for new and extra space at Canal Walk.”
Hydepark Shopping Centre CANAL WALK Another indication of the success at Hyprop is the fantastic level of customer retention. At the Canal Walk shopping centre, located in Century City, between Cape Town and Belville, CEO Gavin Wood says that tenant retention is a sign of business confidence in the continents leading super regional retail outlet. “There is upbeat demand for new and extra space at Canal Walk. While our positive trading performance drives retail demand, businesses choose offices at Canal Walk to be centrally located, secure and benefit from unparalleled access to retail, banking and parking.” The shopping centre is the now one of the most sought after business locations, for retail and office space, in the country. Described by the company as ‘the jewel in the crown of JSE listed property heavyweight Hyprop Investments Limited’s portfolio’, Canal Walk, much like Rosebank, is not finding it difficult to attract standout tenants. Its dominant presence attracts diverse shoppers from an extensive portion of the Western Cape, and further afield, with its comprehensive retail and leisure options of 400 shops, services and restaurants. Blue-chip
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companies occupy office space in the two eight-storey prime office directly above the mall, with spectacular views of Table Mountain and Robben Island and easy access from the N1. In the last year stores including; Superga, Steve Madden, Fielli, Typo, Entrepo, H.O.M, Hugo Boss, Boardriders and XOXO have all taken occupancy in Canal Walk – a testament to the vision of Hyprop, a vision which sees the company intending to be the frontrunner for investment in South Africa, offering the distinct opportunity to access income and capital growth through a specialist portfolio of high quality, high performance shopping centres in a simple, sustainable investment vehicle. With R20.6 billion in total assets, Hyprop remains positioned as the premier property investment organisation in South Africa. With shopping centres now categorised as one of the most defensive real estate asset classes and the nation proving its financial systems to be some of the strongest in the world, Hyprop is ideally placed to ensure continued growth in the value of all its assets from super regional shopping centres to office parks.
We are celebrating its our Intellepark celebrates 10th year in the South African its 10th industry this year. parking anniversary Intellepark celebrates its 10th year in the South African parking industry this year, following its success in winning one of the Circontrol Group’s Smart Cities awards in October last year for its Pavillion Parking Guidance Project.
Training offered at Intellepark’s new Johannesburg office. As there is an on-going need to train new operators and
was included so that training can take place in a less pressurised environment. A full demo facility is available on the ground level of the Existing customers, prospective customers and trainees are able to view and operate our products. Not only does this assist tremendously during training but allows existing and prospective customers the ability to experience new
Intellepark Managing Director, Sheldon James, founded the company in February 2003 with Theo Christodoulou; six month’s later Tim Reynolds, Director in Charge of Sales & Projects, joined Intellepark and since then the company has grown at an unprecedented rate, increasing its market footprint to become one of the most instantly recognisable parking brands in the country. Intellepark’s Johannesburg office moves to RivoniaFormerly located
Road, Rivonia. Intellepark started out 10 years ago with a small premises in Peter Place, Bryanston, which was only about 120m2 and Durban were subsequently opened 2005 and 2006 respectively. We outgrew Johannesburg premises in just two years and, after several years at Belgrave House, also in Bryanston, we are now settled in the new building and employ 80 people.”
Block C 57 Wessels Rd Rivonia South Africa 2128
Our product and business strategy is taking new complimentary technologies to our existing customer database as well as supplying existing technologies to new markets, like the African market.
Some of Intellepark’s projects completed in Africa include: • • • •
Pay On Exit System - Nigeia, Kenneth Kaunda International Airport Central Payment System - Ikeja City Mall in Lagos, Nigeria Two central cashier sites in Harare, Zimbabwe Pay On Foot Systems - Hilton Hotel, Windhoek,
tel: +27 11 463 9673 fax: +27 11 463 9675 mob: +0861 112 622 web: www.intellepark.co.za
The Glen PAGE 32 MAR 13
HYPROP DISTRIBUTION GROWTH Hyprop reported in February that distributions had risen by 6.8% at the end of 2012, to 409 cents per unit. Total return to unitholders was 44.8% supported by a 37% growth in market capitalisation to R17.7 billion. Investments in Africa and of course, the Rosebank project were catalysts for the rise. “Over the past 25 years Hyprop has consistently delivered sustainable income and capital growth, and in our quarter century anniversary year has again demonstrated solid growth,” says Mr Prinsloo. “Some progress was also made in reducing vacancies in the office portfolio, despite a far tougher commercial market. Total vacancies overall decreased to 2.5% from 3.9%,” says Mr Prinsloo. Effective cost control improved the overall cost to income ratio to 35.4% from 37.5% in December 2011, while total arrears reduced from R41.3 million in the previous year to R19.8 million. Taking into account the short-term dilution effect of the Rosebank Mall development, Hyprop expects distribution growth of 5% to 7% for the year ahead
Tekweni Centurion Ceilings celebrating 26 years of successful trading as a favourite subcontractor to all major building contractors throughout South Africa and Botswana.
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to December 2013, something which investors will be happy to hear. Investment in Africa, including the acquisition of a stake in Atterbury Africa has marked Hyprop’s entry into continental markets. “The emerging economies in Africa offer us promising opportunities to expand on quality existing centres and to develop our own in these fast-growing regions,” says Mr Prinsloo. Opportunities on the continent are now forming a more significant part of the Hyprop strategy. Mr Prinsloo says: “Our focus remains on investment in dominant shopping centres both locally and across Africa, while continuing to dispose of any remaining non-core assets if the opportunity arises.” One of the most encouraging figures released by the company recently showed that total arrears were down, reduced from R41.3 million in the previous year to R19.8 million at the end of 2012, demonstrating successful management, even during what is one of the most challenging periods in the economic climate in recent history.
Specialising in ceiling and partition requirements, internal and external. Most recent achievements and completed projects include: 1. Lynwood Bridge – Won St Gobain’s National ceiling award and represented South Africa in the 8th St Gobain’s International ceiling awards. 2. King Shaka international airport 3. OR Tambo airport 4. Lynwood Bridge shopping centre 5. Alexander forbes building 6. Various shopping centres and office blocks
Currently contracted to do mall ceilings in the refurbishment and additions to mall of Rosebank and 102 Rivonia Road Sandton.
Commitment and passion is our recipe for success.
Sandvik Mining: Growing with major new partners Editorial – Joe Forshaw Production – Tonnie Geddes Sandvik have been serving the mining industry in South Africa since 2005. Their skills, expertise and experience has seen them recently awarded with two major contracts which will help them become an even more important player in the sector. In February, it was proven that mining is still one of the foremost industries in South Africa and although the industry is constantly changing and evolving, it is still a driver of the economy and a vital part of day to day life for millions of South Africans. The proof of this came at the annual Investing in African Mining Indaba held in Cape Town last month the world’s largest mining investment conference and the largest mining event in Africa. Anglo American CEO-Designate, Mark Cutifani, gave a keynote address to delegates at the exhibition and said that the mining industry is the most important industry in the world and that change over the next few years is vital. “We have to make changes to transform the countries we work in.We have changed more in the past five years than in the past 50 years. The next five years will be critical. “Mining is integral to everything we do; it is the most
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important industrial activity on the planet. “It is critical to understand how to really engage with communities. We must listen to what communities want to be, not tell them who to be. We can change the lives of communities forever. We can go from being an extractive industry to a development industry. “The things we do [as the mining industry] are so important to global society, but the communities where we do business get the rough end of the stick.” Mr Cutifani will take over as CEO of one of the world’s largest mining company in April, succeeding Cynthia Carroll who was also present at the event and stated that the company was fully behind platinum mining in South Africa. The outgoing CEO said: “The critical starting point is that the boards of Anglo American and Anglo American Platinum are totally committed to ensuring a sustainable platinum business for the future - for the benefit of all stakeholders.”
SANDVIK MINING AND CONSTRUCTION
Mr Cutifani was also keen to show his confidence in South Africa as a mining industry centre saying: “I am a believer in South Africa. I am an optimist on South Africa - I never miss an opportunity to promote the country.” These positive messages coming from two of the industry’s commanding figures may have gone someway to assuring stakeholders that mining in South Africa is ready to transform and move forward, following a turbulent few years.
“The size and complexity of this system and the fact that Sandvik provides a complete integrated mining system of Sandvik surface and underground mining equipment, again demonstrates our capability to deliver wide-ranging high-tech solutions in the area of continuous mining and materials handling applications”, said Gary Hughes, President of the Sandvik Mining business area. The contract is reportedly worth just under R1 billion and will contribute to Sandvik Mining’s business during the years 2013 until 2015.
INDUSTRY LEADERS One of the companies exhibiting at the Investing in African Mining Indaba was Sandvik Mining. A division of the Sandvik Group (a global high-technology, engineering group with advanced products and worldleading positions), Sandvik Mining services the industry by offering the world’s widest range of equipment for rock drilling, rock excavation, processing, demolition and bulk-materials handling. In South Africa, Sandvik Mining has over 150 employees, turns over more than R200 million per annum and is based in Boksburg, Johannesburg. On a global scale, the company has around 13,200 employees in the mining division and sales in 2011 amounted to approximately R45 billion. These figures show that this is more than a retail outlet for industrial tools – this is one of South Africa’s, and the world’s, leading mining tool specialists. The company’s ability was recently entrusted by another big name in the industry – Sasol Mining (Pty) Ltd, when the two penned a contract that will see Sandvik supply materials handling systems, both underground and surface, for a new coal mine. The range of supply includes engineering design, procurement and construction for the Shondoni Mine Materials Handling system.
ROYAL BAFOKENG PLATINUM A second major contract was being celebrated by Sandvik Mining in South Africa at the start of the year, as the company announced in January that it had been selected by Royal Bafokeng Platinum to supply equipment including drill rigs, roof bolters and underground excavation vehicles to the flagship platinum project, Styldrift. Phase one of the project saw 83 machines ordered at the end of December 2012. The machines will be delivered in 2014 but various other projects like the related apprenticeship training programme, community ‘Up-skill’ programme and the current Sandvik sponsored community day care project in the Boshoek area will benefit much sooner. Preliminary work at the site is already underway and the contractors in place for the development process have been using the Sandvik DD210L drill rig. “Sandvik would like to acknowledge the early commitment shown by Royal Bafokeng Platinum which we know will reap rewards for all stakeholders, including the local communities,” the company said. “Both parties believe that this is the beginning of a valuable partnership and not just the supply of mining equipment.”
MAR 13 PAGE 35
SANDVIK MINING AND CONSTRUCTION
We do this in a collaborative approach to ensure knowledge transfer, sustainability and ownership, whilst focusing on the activities that will reduce or eliminate our customers’ operational bottlenecks,” adds Mr Allan. Critics of the industry have stated that miners in South Africa have often had to put up with ineffective equipment so this new service portfolio from Sandvik will be welcomed as it comes with safety as a foremost concern. The company says: “By standardizing the individual elements within the service portfolio, the customer is assured of a consistent delivery of services, regardless of their location. It also enables us to ensure that the appropriate skills are available for each job.” Another service provided by Sandvik to all its customers in South Africa is the e-Business initiative. Following the initial rollout in late 2011, the e-business initiative has received fantastic feedback and has encouraged Sandvik to look at implementing the initiative right across the continent. So what is the e-Business initiative? “e-Business is all the information, interaction and transactions that are conducted over the internet between Sandvik and our customers,” says Benedict Chaila, Sandvik Mining e-Business manager, Africa. “e-Business is a global Sandvik strategy already well-established in other parts of the world. It aims to enhance the overall value of our partnerships with customers through standardisation of commercial processes and the increased efficiencies gained by doing business together electronically.
In September last year, Sandvik were present at MINExpo International, another trade exhibition which sees mining companies from across the world meet and share ideas. At the event, Sandvik Mining introduced a new, comprehensive suite of mining service products designed to meet the needs of any customer, on any site, in any location. The service portfolio will look to help customers improve the safety situations surrounding their operations, improve competence and knowledge, and increase overall productivity, through all stages of the equipment’s lifecycle. “We believe that it is of great value to our customers to be able to know the exact range of services that are available to them from each Sandvik location around the world. As we continue to develop more services that take full advantage of the available technology, not only on the equipment itself, but also within the mining environment, we are moving closer to providing real-time information to our customers. Enabling them to take decisions not only on the condition of their equipment, but also on the performance of their operations”, says Dan Allan, President Customer Services at Sandvik Mining. “By combining Sandvik’s expert knowledge of mining application with detailed machine data and an in-depth understanding of our customers’ operations through continuous collaboration, we are able to deliver ‘decision level’ reports that will, in combination with our advisory services, improve our customers’ bottom line.
“By combining Sandvik’s expert knowledge of mining application with detailed machine data and an in-depth understanding of our customers’ operations through continuous collaboration, we are able to deliver ‘decision level’ reports that will, in combination with our advisory services, improve our customers’ bottom line.”
Bucket wheel excavator
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SEW Eurodrive partners with Sandvik for shorter delivery times and more flexibility SEW Eurodrive is in proud partnership with Sandvik to supply industrial gear power packs for various applications within the mining industry. The company supplies Sandvik with industrial gear power packs which are mostly used on travel drives and stacker reclaimers. The X Series, which is locally assembled and stocked are the preferred units used on these power packs. The power pack includes the motor, coupling and gearbox fitted to a baseplate for easy installation.
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Nearly any mounting position or shaft arrangement can be implemented on the driven machine. The X Series’ invertable housing makes it very flexible and suitable for many applications. The X series provides a reliable and cost efficient product with better thermal rating which leads to reduced maintenance requirements. The X series offers shorter delivery times and higher flexibility at a lower cost, with spare parts being readily available. The units are well stocked and assembled locally at the SEW Eurodrive Nelspruit facility.
SEW-EURODRIVE, a proud business partner of SANDVIK, offers innovative drive solutions for all applications in the mining industries. All SEW-EURODRIVE products and systems make the best use of the space available around the machine and ensure great flexibility and reliability. Minimum maintenance and simple operation ensure that you will operate machines and equipment efficiently from the very beginning. Thanks to the modular design and countless combination options, all drive engineering components can be replaced quickly, if the need arises. From gravel mining to the excavation of gold, platinum, coal and diamonds – we put the drive into all facets of the mining industry.
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COMPANY REPORT “The primary objective is to understand how our customers want to do business with us, so that we can adapt our applications and services accordingly. Our e-Business tools give customers a high level of control and visibility with their procurement processes, while enabling genuine cost savings.” The system works through two internet based platforms, @YourService and Direct Connect. “@YourService is effectively a one-stop-shop for mining and construction tools, spare parts and consumables. Its value-add goes both ways — customers’ transactions are fast, accurate and traceable, while from our side, our technical teams have more time to go out and interact more frequently with customers in person, to support their operations,” says Mr Chaila. Direct Connect is a tool for large scale purchases of a B2B nature. Sandvik’s ERP system can be connected with customers’ business systems. This means Sandvik
SANDVIK MINING AND CONSTRUCTION customers can now place orders directly from their own ordering systems. A powerful solution for automated and high volume ordering processes, Direct Connect is aimed at customers who have high transaction volumes. “This solution facilitates the exchange of transaction documents such as orders, order status, invoices and advanced shipping notices over the internet between Sandvik and our customers,” says Mr Chaila. With innovative services like these and a list of the world’s best products (not only for mining), it is easy to see why major international companies are looking to Sandvik to take on important contracts. The future will undoubtedly see growth for Sandvik in South Africa and with the power of the global brand constantly flexing its muscles; the tag of ‘industry leader’ will be one which will suit the company for many years to come.
“This solution facilitates the exchange of transaction documents such as orders, order status, invoices and advanced shipping notices over the internet between Sandvik and our customers.”
Sandvik automated dump truck
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A new CEO and new reasons for promise at ABB Editorial – Christian Jordan Production – Chris Bolderstone
Global power and automation company, ABB have been awarded major new contracts in South Africa. The South African arm of the business also has a new CEO and recently released fantastic 2012 year-end figures. It’s looking like 2013 will be another bumper year for the energy efficiency specialists. International power and automation technology giant, ABB, has a strong presence in South Africa. The company has major projects underway and in the pipeline and a strong local manufacturing capability with engineering sites around the country. ABB South Africa, which was established as a local arm of the multi-national corporation, has roots in Switzerland. Set up in South Africa in 1992, the company now employs over 1800 people and offers a wide range of power and automation technologies solutions from a comprehensive product and service portfolio. There has been much change at the company in South Africa recently as long serving CEO Carlos Pońe, who has been with ABB for 20 years, 14 of those as CEO, has been appointed CEO of ABB United Arab Emirates (UAE) and manager of Southern Gulf (UAE‚ Qatar‚ Oman) and Pakistan. He will be replaced by Leon Viljoen, a power and energy market expert, with over 25 years’ experience in South Africa. Mr Viljoen started his career at Brown Boveri
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Technologies in 1986 as a project manager before moving through the sales and marketing divisions. He became a general manager with Powertech Group in 2000 and after two years he became a managing director and chief executive of Powertech Transformers and eventually a director of Powertech in 2006. In 2012, he was appointed COO of Powertech before his selection as CEO of ABB South Africa, a role which will commenced on 1st March 2013. The 49 year old said: “I am confident that ABB is positioned to continue growing within Southern Africa. The demand for renewable power and energy efficiency products and service creates good opportunities for ABB. “Although the market will remain challenging, our focus on Africa and our product, systems and service portfolio, places us in a strong position to continue delivering to our customers. “With my past experience in the electrical engineering sector and 25 years of relations built, I look forward to continue working within this dynamic industry and I wish my predecessor Carlos Pońe, all the best in his new role at ABB in the UAE.”
ABB SOUTH AFRICA
Totana solar plant panels
The company was obviously impressed by Mr Viljoen’s vast experience and capabilities, especially when it comes to managing complex situations and large groups of people. Mr Viljoen holds a bachelor’s degree in Engineering (Electrical and Electronic) from the Rand Afrikaans University and an MBA from Henley Management College in the UK. The outgoing CEO called his time in South Africa “an amazing 20 years” and expressed confidence in Mr Viljoen. “I have thoroughly enjoyed my 20 years at ABB and have no doubt that our new CEO, Leon Viljoen, will continue to generate positive results for Southern Africa,” said Mr Pońe.
ABB AND SUNEDISON In 2010, the government released its IRP (Integrated Resource Plan) with the primary objective of determining the long term electricity demand and detail how this demand should be met in terms of generating capacity, type, timing and cost for the next 20 years. A major facet of electrical energy and the overall energy mix as the country moves forward is undoubtedly renewable projects. The government has stated its desire to see more and more renewable energy feeding into the grid and ABB is positioned perfectly to serve the renewable sector as the
country’s leader in power technology. Last year the company announced new contracts that will see the construction of two turnkey photovoltaic (PV) power plants in the northern province of Limpopo. The value of the contracts is reported to be worth over R2 billion. The projects will involve solar plant construction in Witkop and Soutpan, located close to the city of Polokwane. They will have a generating capacity of 33mw and 31mw respectively and will be among the first utility-scale PV power plants to be built in the first phase of the government’s long-term renewable energy program. The contracts were awarded by two special purpose entities, Core Energy and Erika Energy, whose primary stakeholders include SunEdison. ABB will work with SunEdison, a company who in 2011 interconnected approximately 300mw of solar power throughout the world. Under the terms of a financing agreement, power generated from the two facilities will be purchased by Eskom, through a 20-year power purchase agreement (PPA). The Soutpan Solar Park is expected to interconnect in January of 2014, while the Witkop Solar Park is forecast to interconnect in April of 2014. Construction of both projects began in January this year.
MAR 13 PAGE 41
Equipment for the wind industry
ABB say that the two facilities will have major impacts on the environment and local energy mix stating: “The large-scale photovoltaic plants will generate enough clean energy to power around 36,000 homes and displace around 130,000 tons of carbon dioxide emissions a year.” Prior to committing to the projects in South Africa, SunEdison performed extensive tests and models to determine the optimal design and projected output of the facilities. Once the projects are operational, they will be monitored continuously by SunEdison’s fleet-wide Renewable Operations Centre (ROC). The ROC will leverage the SunEdison Environmental and Energy Data System (SEEDS) to help maximize the efficiency of the facility by tracking its actual performance against its predicted output. “We have a strong relationship with ABB and are excited to be working with them on this project” said Pashupathy Gopalan, SunEdison Vice President and Managing Director of South East Asia and Sub Saharan Operations. “ABB brings extensive experience and expertise to the table and we are pleased to be working with them to bring renewable energy to South Africa.” At group level, ABB has delivered more than 50 turnkey PV power plants worldwide. In Limpopo, each turnkey solution will include design, engineering, installation and commissioning. ABB will also supply a range of products and technologies including inverters, protection equipment, switchgear, dry-type transformers, controllers and the supervisory control and data acquisition (SCADA) system. ABB will also construct a substation and provide the connection to the high-voltage power grid. “Our vast experience in supplying high-efficiency PV power plants, combined with our local capabilities and presence will enable us to deliver best-in-class solutions and support the country’s vision to integrate renewable energies,” says Brice Koch, head of ABB’s Power Systems division. “We are delighted to be part of these solar PV projects which will help promote the energy mix and contribute to the country’s international obligations on climate change,” said Carlos Pońe. “With ABB’s world-class technology and local presence, these projects will provide opportunities for the transfer of skills and the upliftment of local expertise.”
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It is reported that these projects will have a big impact on the local communities in Limpopo. Economic development is always highly scrutinised whenever a prominent national or international organisation opens up in a rural location. In this case, the projects will create 318 jobs during construction, and 55 jobs on an ongoing basis, with 44 of those designated for historically disadvantaged individuals.
SUPPORTING COMMUNITIES ABB operates with responsibility as the core element of its business. Responsibility to the stakeholder is placed at the top of the list of priorities. As part of its commitment to responsible business, ABB works with local communities, the environment, local business and the government to ensure that its activities have only is involved. The company says: “Our sustainability programme supports a range of social development projects to reach out and touch the lives of the needy and most vulnerable in communities. ABB’s corporate social investment (CSI) programme supports technical skills development, care for orphans of HIV/AIDS, as well as environmental awareness and energy efficiency.” Technical skills development is something which the company’s CSI programme has become expert in promoting. Operating in a highly technical environment, ABB, of course, need a technically skilled workforce and by helping young people, who might not have otherwise had the chance, to get involved with engineering allows for that important skill base to develop. The company says: “Recognising the skills shortages and its impact on economic growth, ABB has embarked on a programme with the Swiss South African Cooperation Initiative (SSACI) to support the development of technical skills at Further Education and Training (FET) colleges. The programme provides students with excellent working experience in a modern international engineering workplace, and gives lecturers support by enabling them to attend ABB’s leading technology courses to update industry relevant knowledge.” > continues on page.46
ABB SOUTH AFRICA
“With ABB’s world-class technology and local presence, these projects will provide opportunities for the transfer of skills and the upliftment of local expertise”
Totana solar plant panels
MAR 13 PAGE 43
Cutting edge quality By Joe Forshaw
Sheetech S.A is one of the country’s leading metal fabrication organisations. Contracts with major businesses, including ABB South Africa, have helped the company grow and proven the company’s ability to deliver nothing but quality. With massive infrastructure and energy projects taking shape around the country, the demand for expert services in sheetmetal fabrication has increased dramatically. One of the country’s leading precision sheetmetal fabricators is Sheetmetal S.A, a highly experienced, brilliantly equipped fabrication engineering company, based in Queensburgh, Durban. The company was formed in 1996 by current members Mr A. Alaraju and Mr D. Chetty. After exponential growth in the early years of business, the company had to relocate to accommodate the expansion. The team jumped from a staff of three to twelve and even today, assets and staff numbers continue to increase. Current Marketing Manager, Prean Alaraju, tells IndustrySA that the business is still growing and finding success, even in these tough economic times. “Currently Sheetech S.A has a total production area of 4971m² which is occupied by sixty-four staff members and sixty-nine machines. “We offer a wide range of metal fabrication and metal pressing solutions. Sheetech S.A is also contracted to a number of Powder Coating companies and Electro-plating companies so that the customer’s choice of finishes may be achieved. “In terms of growth we have purchased a MVD INAN 400T CNC Bending Machine from Turkey. Due to the expansion and growth there was a need to purchase a larger property, which is currently used for assembling of ABB panels and storage.”
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The company has strategically positioned itself as an important colleague of some of the country’s major organisations. This has resulted in little effect from the global economic slowdown. Many of the company’s clients have been affected but Sheetech S.A has worked on strengthening relationships and building new ones to supplement the healthy workload. One of the most important elements of the Sheetech S.A business is the workforce. “The quality of work that Sheetech S.A produces is owed to our experienced staff. The current experience of the staff adds up to approximately 250 years collectively,” states Mr Alaraju. The company has embarked on a project with Merseta to upskill people with disabilities as part of social investment in giving back to the community. This will obviously have positive effects on the workforce and local skills base and Mr Alaraju explains that a special division has been set up to help with training and education. “The Education and Training Division (ETD) is a Merseta accredited training centre. The ETD was initially developed for staff training but has branched out into doing learnerships and skills programs for the community and students from V.N. Naik School for the Deaf.” Even the recruitment and selection process is geared towards helping local students into the industry. “We also choose promising school students doing learnerships in the field of Engineering Fabrication. Students are given the opportunity to receive proper on the job training in the sheet metal industry.”
sheetech Mr Alaraju explains the work that Sheetech S.A has completed for ABB SA. “At Sheetech S.A all customers are treated with the same level of importance. The products do differ in size and type from customer to customer but the quality of manufacturing never changes. “The work Sheetech S.A has done for ABB includes fabricating of panels, bases, doors and any other product that needs to be fabricated using sheet metal. Some of the products that ABB require need to be either machined and laser cut, these products are outsourced for manufacturing. Sheetech S.A also manufactures parts for Eskom’s Kusile Power Station which ABB is sub-contracted to. Having worked in the past with large scale organisations such as SA Breweries, ABB SA, Omniflex, Daimler Chrysler and Honeywell to name but a few, Quality Assurance Supervisor, Saiendren Chetty explains that the company sees opportunities across a range of industries. “There are major opportunities for sheet metal fabrication in the various sectors of the automotive, locomotive, aviation and catering industry. Our current Quality and BBBEE ratings place us as an ideal partner for collaboration with larger entities.” The company prides itself on the quality of its work and says that efficiency and experience set them apart from the crowd. “We offer quality manufactured products. Being ISO 9001:2008 accredited we have a standard to uphold. Sheetech S.A ensures that the delivery of products to customers is on time. The reject rate on products has never reached 1 ppm,” says Chetty. The future holds much promise for Sheetech S.A, with the aforementioned industries burgeoning, the company will look to grow organically from with. “Currently many of the products that Sheetech S.A manufacture need to be outsourced for powder coating
“We find a way to do any job for any customer at a high standard of quality.” and laser cutting. The future plan is to invest in a laser cutting machine and open a powder coating plant. This will enable us to manufacture products from start to finish rather than outsourcing,” says Mr Alaraju. Considering the success that Sheetech S.A has seen over the last two decades and the experience and skill of the workforce, it is likely that the company will continue to position itself as the precision sheetmetal fabrication industry leader in the country, with customers returning time after time for fantastic product and service everytime.●
“We offer a wide range of metal fabrication and metal pressing solutions. Sheetech S.A is also contracted to a number of Powder Coating companies and Electro-plating companies so that the customer’s choice of finishes may be achieved” MAR 13 PAGE 45
Sheetech S.A offers a wide range of metal fabrication and metal pressing solutions offering you a one stop solution to your needs.
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ABB transformer workshop
At group level, the company is equally committed to research, skill development and education and this was proven in February when ABB selected 40 research projects for funding, after inviting academic and research institutes around the world to submit proposals for grants that will shape the future of power and automation. The ABB Research Grant program is intended to support promising graduate students and senior researchers who are researching projects with industrial applications in the power and automation area. The 40 projects were chosen from more than 500 proposals submitted by more than 250 universities in 46 countries. ABB Chief Technology Officer, Prith Banerjee, said of the program: “We were delighted with the level of interest and very impressed by the quality of proposals submitted. Our aim is to establish a truly collaborative innovation environment with leading research institutes around the world. We already have about 100 existing research collaborations with universities, and we expect to fund 40-50 new ones each year.”
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The chosen research projects will receive grants ranging from $50,000 to $80,000 per year. Although the program will only fund projects initially for one year, ABB fully expects to support the successful projects over a longer period of time. Universities that will receive grants this year are mainly from Europe and the USA. “We were looking in particular for projects that support our strategy, which is to develop power and automation technologies that save energy and improve people’s lives,” Mr Banerjee said.
BOOMING BUSINESS In South Africa, the business of power and energy has been booming since 2010 when the government released details of the IRP. There has been an explosion of investment into renewable projects from foreign and local companies. Wind farms are under construction the Eastern Cape; Chinese, American, Spanish and Irish companies have invested in solar farms in the Northern Cape and major hydro projects are nearing completion in the Free State and KwaZulu-Natal.
ABB SOUTH AFRICA
â€œThe order and revenue flow were driven mainly by our focus on renewable energy and energy efficiency projects. With the strong order book still to be executed of R4 billion, we are well placed for the year aheadâ€?
HVDC valve hall, converting electricity from AC to DC and vice versa
MAR 13 PAGE 49
ABB SOUTH AFRICA
ABB SA Longmeadow campus
ABB has already played a big part in South Africaâ€™s solar energy mix after it contributed to two solar PV power plants national power utility Eskom Holdings. ABB provided a fixed tilt solar PV power plant with a station capacity of 620kw and production potential of 11.4 million kWh per year. At the Lethabo site, the installation comprised a single axis tracking solar PV power plant with a peaking capacity of 575 kW and a production potential of 12.5 million kWh per year. Away from the projects in Limpopo, ABB has other valuable orders which the company is readying itself for; showing the boom in the renewable industry is still on-going.
PAGE 50 MAR 13
Other orders include a $13 million order to supply medium voltage induction motors ranging from 375kW to 10mw. The contract entails design, manufacturing, testing and delivery of state-of-the-art ABB equipment. The upgrade of the existing motors commenced in September 2012 and expected completion is scheduled for September 2013. In line with what we mentioned above, and as part of this new contract, ABB will train 24 apprentices to qualify as boiler makers, welders, fitters, armature winders, turners and quality controllers. These apprentices will be taught technical skills in a controlled environment at the local facility in Alberton, South Africa.
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ABB SOUTH AFRICA
Construction at the Raslaffan power plant, Qatar
ALL IN THE FIGURES IN PLACE While many statistics can be used to show success in business, ABB South Africa has seen a huge rise in the stats that actually count – orders. The company reported at the end of 2012, a 36% rise in orders, taking the financial value of orders to over R4.3 billion. The rise in order was seen mainly in the areas of solar, motors and generators and was felt mainly in the last six months of the years. Encouragingly, revenue figures were also up by 2%,
now sitting at around R3.5 billion with South Africa contributing 80% of revenue and Southern Africa (namely DRC, Mozambique, Kenya and Botswana) making up the balance. At the end of 2012, the order book (or order backlog) was 18% better off than a year previously, levelling at R4.1 billion. Long term contracts on utilities and mines, and the solar projects mentioned above helped push up this figure. “Energy efficiency continued to be a significant driver for customers to reduce costs, with old plant and systems being replaced, such as motors and generators,” the company said. In his final months in charge, year-end results like this were pleasing for Mr Pońe and stated his happiness with the stats and confidence of a prosperous 2013. “We are very pleased with the 36% increase in orders to R4.3 billion and the 2% increase in revenue,” he said. “The order and revenue flow were driven mainly by our focus on renewable energy and energy efficiency projects. With the strong order book still to be executed of R4 billion, we are well placed for the year ahead.” For more information on ABB’s work on solar projects in SA, go to www.abb.co.za
ABB Group headquarters, Zurich, Switzerland
PAGE 52MAR 13
has got everyone talking Editorial – Lauren Grey Production – Hal Hutchison
Established in 1999 by managing director Vivian Pather, Xpert Decision Systems (XDS) is the first and only 100% black-owned credit bureau in South Africa; now thriving in an industry once dominated by two powerful international corporations, IndustrySA finds out the key to their success. Since its inception in 1999, XDS has gone from strength to strength; starting as the underdog to two dominating international businesses, it is now ranked as one of the top 50 most talked about companies in the world, but not without hard work and innovative thinking by founder and managing director, Vivian Pather. “XDS began as a group of individuals wanting to make a difference in the credit bureau industry” explains Pather, “I started as the IT director at Experian, but we decided that we wanted to do something locally and particularly into the rest of Africa… It was very difficult coming into an industry that had two well-known and powerful
PAGE 54MAR 13
players with unlimited resources.” Pather’s determination and previous experience within the industry enabled the company to provide home-grown solutions which were relevant to the environment and organised around the customer, separating XDS from the competition and putting them in a league of their own. “We needed to create a brand that was a cut above the rest” explains Pather, “XDS and its offerings and services were tailored to give focus on the whole customer relationship and we become intrinsically involved in their business... One of our core beliefs is being responsive and listening to our clients. This value has been a critical aspect during our 13 years of successful business.”
“If I can create a business that makes life better for broader society, it will be a truly successful company.”
XDS now provides clients with specialist skills, worldwide credit bureau experience, data integrity and accuracy, innovation, new flexible technology and local customisation, and is the only 100% black owned credit bureau in South Africa. Their philosophy embraces the National Credit Act and maintains the highest standards of integrity relating to data privacy, legislative compliance, confidentiality and quality of information. As a registered Credit Bureau with the National Credit Regulator, XDS is committed to providing smart information solutions to credit grantors, commercial organisations and consumers.
BUSINESS OF THE YEAR AWARD In 2012, XDS was awarded First National Bank Business of the Year Award at the Roodepoort Chamber of Commerce and Industry. The company were judged on their business principles,
vision of their future in the industry, market place and leadership, for which Pather acknowledges the contribution of his staff and the importance of motivating the human capital, “No business can function without its staff. They are the lifeblood of any organisation making it imperative that they are constantly motivated to operate at their best at all times” he says. XDS currently employs 120 members of staff, 94% of who are empowered black employees, and with the company’s on-going mentoring and coaching programs it is ensured that every staff member is involved with at least two initiatives to help motivate and improve the workforce, whilst 52 members of staff receive one on one coaching. Pather explains that his staff compliment of 120 people is broken into different categories, “we have highly skilled resources in the analytical area, so out of 120 there are about 10-12 people who are primarily focused on the development of scorecards and models.”
MAR 13 PAGE 55
A role within the analytical side of the business would, according to Pather, require a ‘minimum of a master’s degree in maths, statistical science or related subjects’, and would involve ‘building models, developing
scorecards and customising generic models for customers and the bureau.’ “A further category would be data administration, which is very important because at the end of the day, we’re a data business, an information business” explains Pather, “it is very important to have skilled, qualified people that understand data.” The third and fourth categories involve technical administration, for the development of systems and products and a sales and admin team, “as you can see, it is a varied team that we have in the organisation to service all aspect of our clients.” Pather also says that Corporate Social Investment (CSI) is an important aspect of human capital and that XDS gives as much back to the community as possible, “It’s not just our employees who are key to a successful business. If I can create a business that makes life better for broader society, it will be a truly successful company. We have continuous programmes that fund charities in South Africa on a monthly basis. We believe in giving as much as we can when we can,” he explains.
XDS SUCCESS IN TOUGH TIMES As the success of the company grows, Pather says that expanding into the rest of Africa is definitely on the agenda, as is international growth; with this in mind he reflects on the effects of the economic slowdown, admitting that although XDS felt the pinch, they tried their hardest to make light of a tricky situation, and streamlined their business dealings with clients. “In some instances, the global economy will affect our clients who have been under tremendous pressure in terms of reducing costs, which has impacted on us in terms of making sure we are giving our clients value for money all the time … So, we have been working very closely with our clients, asking directly ‘how can we assist you in growing your business strategically and better?’”
INTERNATIONAL EXPANSION PLANS Initially, Pather had envisioned XDS in the African market, which resulted in them being the first credit bureau to be awarded licenses in Ghana, Nigeria and Zimbabwe, with further projects in Uganda, Kenya, Tanzania and Namibia. “We were already working in
Africa before it became popular to do so, hence our three branches. Although Africa is a difficult environment to break into due to the lack of infrastructure and policies that will support a successful credit bureau, our future vision for expansion includes a look into West Africa, Southern Africa and East Africa” says Pather. Pather says that the experience gained within the African market enabled XDS to successfully integrate into South Africa, “we’ve been very fortunate, we started off in 2005 and it’s been a very steady growth year on year…This experience has enabled XDS to successfully use its invaluable data matching experience gained in Africa in the South African market.” Pather says that the business hit ‘record levels’ of growth within South Africa last year, allowing XDS to enter a consolidation phase; positioning themselves to take advantage of the growth and put together a five year plan, looking at where they want to be and what they want to achieve. “The challenge is” admits Pather, “in the rest of Africa credit bureaus are a very new phenomena, so it is extremely difficult to get it up and running in these countries. The world banks are very focused on making sure that credit bureaus are started there, but the enabling legislation and environment are just not there.” Putting this hurdle into perspective, Pather explains that XDS started in Ghana in 2003, but only received licensing there in 2007, “At the moment the best returns are in South Africa, so we keep an eye on what’s happening in the rest of Africa, but unless the enabling legislation and the environment is right it’s a challenge. So, were not aggressively going into those markets, we have requests from various countries from time to time, but we look at it holistically and decide the best way to go forward.” One international request, filed to XDS last year was from Afghanistan, “In most of the developed countries credit bureaus are up and running, but last year we had a request to set up a credit bureau in Afghanistan, we sent our proposals in October, and we’re still waiting for a response from them as to whether they want to go ahead or not.” Pather admits that although international expansion is on the horizon, it is very time consuming and difficult because it’s ‘not a tangible type of product that you can sell’, “if the environment is not right, if the legislation is not right, you’re going to have difficulty convincing people that the credit bureau is needed” he explains. As XDS continues to grow, Pather says that his ultimate goal is to ensure that every level of the population understands the critical role of a credit bureau in keeping a successful economy going.
MAR 13 PAGE 57
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© 2013 Fortinet, Inc. All Rights Reserved. Fortinet and the Fortinet logo are trademarks
Bring Your Own Device (BYOD) is another battle in the war between security and usability. End users from the CEO down to line workers want the ability to use personal devices for work purposes. Organizations also look to capitalize on this trend by shifting maintenance costs to the employee, eliminating the standard-setting role of IT. Workers have discovered the power of constant connectivity and have come to expect secure access to their corporate network regardless of location. The promises of increased productivity and worker satisfaction have brought BYOD to the forefront of most IT discussions today. On the opposite side of this discussion is security. BYOD opens up numerous challenges around network, data, and device security along with blurring the lines of privacy and accessibility. BYOD provides a variety of advantages. However, a BYOD environment also lacks many of the traditional security controls. The most common pitfalls; bandwidth and productivity drains, data and device loss and attacks against mobile devices.
The Limitations of Mobile Device Management The risks associated with BYOD have fueled interest in Mobile Device Management (MDM) solutions. However, MDM is not a complete solution to BYOD challenges as most MDM clients are designed to address many challenges that are not security-related, such as: • Software Distribution • Policy Management • Inventory Management • Service Management MDM allows policy enforcement on the mobile device itself and many solutions offer remote location/lock/wiping capabilities to protect against loss or theft. However, MDM solutions enforce policies differently based on the mobile device they are supporting resulting in inconsistent security coverage.
Solving BYOD Challenges Using the Network Given the level of fragmentation that exists in the mobile device industry as illustrated above, it should be apparent that solving the mobile security challenge will be difficult by relying solely on agents. There are simply too many operating systems, devices and hardware platforms to expect agents to exist for every device and for every agent to act the same way on every device. Even today, one can take five smartphones from five different handset manufacturers all running Android, install the same security suite on them and still have different levels of policies and enforcement available. This is unacceptable from a security standpoint and puts compliance with regulatory requirements at risk. Security professionals cannot rely on agents alone to secure the complex range of actions inherent in mobile devices. There has to be another layer of security that acts as the final authority. Ultimately the network can answer three critical questions the endpoint cannot: • Who are you? • Where are you going? • What data do you need? The answers to these questions will vary according to who the end user is, how their role is defined and where they are logging in from and as a result, the network needs to have the final say to approve/ deny what a user is attempting to accomplish. IT professionals should include network security as they create their mobile device strategy.
How Fortinet Secures BYOD Fortinet understands that there is no silver bullet to address the security challenges posed by mobile devices. Solving them requires a technology-driven, multi-pronged approach. Fortinet has a wide portfolio of products that can address the new threat vectors provided by mobile devices and enforce policy compliance for users, wherever they may be. Specifically, Fortinet provides secure mobility by protecting the network, the data, and the end user.
The Power to Control the Network The network is the core component of any organization. Any disruption to the network is a disruption of services for users and the business. Fortinet was created to effectively defend the network from a wide variety of threats and every Fortinet appliance provides advanced functionality including an industry-leading firewall, intrusion prevention, application control, secure remote access, and antimalware. Fortinet also provides unmatched control over the network by providing unmatched visibility, granular control of users and applications, physical and virtual appliances, devices for any size network, single pane of glass management, device- and user-based policy enforcement and many other features.
The Power to Control Applications & Content Next to the availability of services, the data is the next critical component for organizations. A loss of data can mean a violation of compliance mandates, the loss of critical intellectual property, and most importantly, the loss of customer trust. Fortinet provides granular protection of an organization’s most sensitive data through a variety of controls around application security, data loss prevention, and web filtering.
The Power to Control User Behavior Finally, the mobile client itself is at risk from attack when off the corporate network. Fortinet secures mobile clients – laptops, smartphones, and tablets – and protects end users while they are outside the office. Fortinet has solutions aimed at the endpoint itself that allow for encrypted communications from any location, ensuring that users are communicating securely from wherever they are located. The potential for greater productivity and cost savings almost guarantees that the movement towards allowing employees to BYOD is not going away anytime soon. In order to secure their data and devices, organizations will need to look towards network-based solutions and not just wireless and agent-based solutions that claim to solve the BYOD challenge, as these address only part of the problem.Fortinet’s holistic, network-based approach to BYOD provides organization a cost-effective, unified solution. It is a straightforward approach and gives organizations the power to safely and securely BYOD.
Elite Entertainment. Editorial – Tim Hands Production – Lauren Grey With an ever expanding portfolio of theatres spread across South Africa, Nu Metro Cinemas prides itself on an unmatched ability to provide to the consumer a premium cinematic experience rivalled by no other, with backdrops and settings to match the luscious cinematography on offer.
Among the largest cinema operators in South Africa, NMC offers the ultimate in film and entertainment consumption, its theatres spread throughout the country showcasing the very latest offerings from the biggest players in Hollywood distribution. Committed to a non-formulaic approach to the ancient art of cinematic entertainment, and the holder of six of the 10 most desirable sites in the country, NMC broke new ground and opened in 2001 Africa’s first all-digital cinema complex at Emperors Palace in Johannesburg, which in turn plays host to one of Africa’s largest cinemas - the Pantheon - as well as dedicated 3D cinemas for the discerning viewer. One of NMC’s most recent projects has been the complete overhaul and upgrade of its Montecasino theatre, to bring this already state-of-the-art site yet further toward the forefront of this highly competitive
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field. It is a neat example of the way in which Nu Metro cinemas strives continuously to improve the experience of cinema-goers countrywide, and in turn grow its own brand to secure even higher proportions of the South African market. Considered by many to be the flagship site of the Nu Metro group, the 15-cinema complex in Gauteng has seen a complete renewal through its recent renovation; everything from the ever-impressive entrance foyer, right through to the cinema seats, has had full-scale refurbishment. As Mark Harris, Marketing Executive, says, “It was an entire facelift of the foyer area, as well as all the auditoriums, and we have expanded the selfservice confectionery area - it was mainly to keep up to date with the ageing of the cinema - as something that has been around for ten years it was in need of an upgrade.”
“People are very much complimentary towards the new layout and the new designs”
Such a commitment to pushing itself forward into the highest echelons of cinematic entertainment was never going to be possible without considerable cost, with NMC ploughing in “a couple of million rand” to the expensive facelift of its flagship cinema. It has, however, already won many plaudits from those keen enough to have visited since the completion of the work, according to Danie Van Der Merwe, General Manager; “feedback has been very positive, especially from an eventing point of view. People are very much complimentary towards the new layout and the new designs.” Moving swiftly from this overhaul of an existing site in its charge, Nu Metro cinemas has now switched its developmental focus to an all-singing new theatre, situated in the Key West mall, due to open on the first of April.
An eight screen complex, it will have “a similar look and feel to our other cinemas, as well as the introduction of a new self-service confectionery area into that complex as well,” says Mr Harris Nu Metro cinemas has always set out to differentiate itself, and set itself apart from the competition; “we see ourselves as the premium cinema operator in the territory,” explains Mr Harris, “in terms of level of comfort, the experience, and the added value that a patron can get at a Nu Metro cinema, versus the competitors in the market.” In terms of this ‘premium’ experience, Harris goes on to explain exactly what this means is on offer from the Nu Metro brand of entertainment; “I think South Africa has always had quite a low price perception, in terms of movie tickets, and hasn’t always moved with the rest of the world.
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“We see ourselves as the premium cinema operator in the territory”
We were very conscious of that, in terms of striving to keep the ticket prices at an affordable level.” This, as he explains, is a constant challenge due to external factors way beyond its control. “Obviously, the movie business is one where our partners are Hollywood studios overseas, and as its their content that we’re showing in our cinemas, we’re having to show not only returns to ourselves but also returns to our partners - those studios that provide us with the latest Hollywood content.”
25 YEARS IN BUSINESS It is exactly this ability to strike the balance between an affordable cinema experience with the capacity to offer the most mouth-watering of Hollywood blockbusters that sees Nu Metro cinemas celebrating its 25th birthday this year. It is a quarter-century that has been marked by great change the world over, and Nu Metro is no exception. Beginning life in 1985 as the Metro chain of theatres, the turning point came with the intervention of Israeli film producer Avi Lerner. Whilst in South Africa where filming of the epic King Solomon’s Mines was taking place, his interest was piqued by the potential of the Metro circuit, and purchased the chain in 1988, giving rise to the growth of Nu Metro as we see it today. From its beginnings as a 31-screen enterprise, with limited capacity dotted around the country in small standalone complexes, this growth now sees the business boasting an array of 20 multiplexes across South Africa, with over 200 screens in the territory. To the future then, and Van Der Merwe is confident that the cinema industry will, “always remain resistant
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to the threats against it - the emergence of TV, initially, and then VHS and DVD, but the business itself will continue.” A large factor in this continuing success is the unending developments to the technological side of the game. “What’s changed a lot recently is digital projection equipment, and how that’s allowing cinemas to adapt in terms of the sort of content we play, and the frequency with which we can do so.” The increasing emergence of new technology has not played entirely into the hands of the cinema chains, however, with the “worldwide industry issue” of piracy proving a constant threat to the business of Nu Metro and all the other companies in this field. “We’ve been a little bit lucky in this sense as our Broadband penetration is not as widespread as the rest of the world, but we are getting there and I think that will be an added threat, simply because of the speed at which a consumer can get access to the latest content through pirated means.” Nu Metro will be sustained, undoubtedly, on the strength of the experience which it is able to offer. “The customer service level you get at the cinema, our product presentation, and the level of satisfaction a consumer will gain from our cinema versus that of a competitor keeps Nu Metro cinemas as the industry leader in terms of consumer experience.” With further projects in the pipeline and due for development in the near future, the self-dubbed ‘premium’ experience offered by Nu Metro is becoming all too rare - the cutting edge of cinema broadcast with a level of consumer satisfaction matched by no other and in a retail setting hand-picked to enhance the theatre’s appeal yet further.
Helping to keep the maritime industry afloat Editorial – Roland Douglas Production – Tonnie Geddes EBH is the country’s oldest ship repair business. After being acquired recently, by DCD, the company is now part of the country’s largest marine repair organisation. We talk to EBH to find out about what the future holds for the industry and the company itself.
This country is surrounded by water. The coastline stretches nearly 3000km and the south, west and east edges of the nation meet the vast, powerful waters of the Atlantic and Indian oceans. For years, South Africa has taken advantage of its location by using the oceans for import and export and today the marine and aquaculture industries are thriving. To be able to take advantage of the seas effectively, the single most valuable asset for any country or business is boats. Today, we have some of the most advanced seafaring vessels in history and they play a major part in business, whether it is fishing, distribution, import, tourism, science or travel.
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A boat is not a cheap investment for any company and to operate and maintain a ship of size is a task that presents logistical and financial issues to even the most experienced sailors. There is however, one company in South Africa that is making ship repair an altogether easier process. That company is Elgin Brown and Hammer (EBH), established in 1878, it is the country’s oldest ship repair company. With busy ports and shipping lanes covering South African waters, EBH has strategically positioned itself in marine industry hubs around the coast. The company now has branches in Durban, East London, Cape Town and Walvis Bay.
ELGIN BROWN AND HAMER
“Walvis Bay is a major investment for us. The Panamax Floating Dock, of which we are awaiting delivery of what will be the third EBH Namibia floating dock available in the Port of Walvis Bay”
EBH General Manager, Rob Deane, took the time to tell Industry SA a little about the history of the company and future opportunities in South Africa. “We started out as James Brown Ship Repair in 1878. Then James Brown and Hamer Ship Repair and Elgin Engineering were purchased by Murray and Roberts (Pty) Ltd; more recently Elgin Brown and Hamer (Pty) Ltd when Elgin Engineering was merged with James Brown and Hamer. “Some years later, Elgin Brown and Hamer (Pty)
Ltd and Elgin Engineering were purchased as separate private entities from Murray and Roberts (Pty) Ltd. and now operate independently from each other. Recently EBH was acquired by DCD.” In the last 12 months, the company has seen many changes, some for the better and some that have created challenges. “One of the main achievements in the last year has been the acquisition of EBH by DCD. This has given us greater access to markets and finance,” says Mr Deane.
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INNOVATION Mr Deane says: “We are the only ship repair company in the region that owns and operates its own floating docks (a first in Southern Africa). Apart from the floating dock, we have established fully fledged ship repair centres around the regions, introduced a floating crane in the Port of Durban and expanded into West Africa by establishing a major ship repair facility in Namibia.” According to Mr Deane, EBH has recognised the growth potential in developing markets, specifically in West Africa, and in partnership with the Namibian Ports Authorities established EBH Namibia in 2006. Today EBH Namibia are operating two floating docks and servicing more than 74 vessels per year. Potential growth has been recognised and a third floating dock has been purchased to be commissioned in Sept 2013. The growth of EBH Namibia has also led to the establishment of Roll Royce Namibia. EBH has recognised need for servicing high tech propulsion equipment closer its facilities and to date a fully functional Rolls Royce Service Centre is in operation within the premises of EBH Namibia. This arrangement is regarded as a world first. “Walvis Bay is a key port for merchant shipping and vessels supporting the offshore industry,” says Martin Hall, Rolls-Royce Senior Vice President of Services for Europe and Africa. “It is also firmly established as a regional hub for ship repair, which makes it an ideal location to provide mission critical support, which will be available to our customers around the clock. I would like to thank EBH Namibia and the Port Authority – Namport, for their support in establishing this facility.” It is reported that the establishment of the centre will create 14 permanent jobs with skills available to repair
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and overhaul the full range of Rolls-Royce thrusters and propellers, diesel and gas engines, and steering gear. Skilled engineers from Walvis Bay will also carry out servicing and repairs on board vessels throughout Western Africa “In Sept EBH Namibia will be adding a third floating dock to its portfolio, increasing our capacity to dock vessels in Walvis Bay by approximately 60%,” says Hannes Uys, CEO EBH Namibia. “Rolls Royce Namibia is now an established company in the region, with a fully functional workshop and operating from EBH premises. ABB Turbochargers has followed and ABB Namibia is now servicing turbochargers also within our premises.” Since 2006, EBH Namibia has established strong relationships with various multinational organisations including Bourbon Offshore, Maersk Supply, Tide Water, Seacor, Subsea 7 and Royal Boskalis. EBH Namibia therefore believes that with the growing demand for offshore supply and support vessels in the West Coast of Africa, it can build on its successes of the past and with the additional floating dock, can facilitate much needed employment and skills development opportunities within the ship repair industry in Namibia. These initiatives and investments are not the last for EBH; more innovative projects are in the pipeline for the future as Mr Deane explains. “We are looking at investing in integrated propulsion systems, new pod thruster propulsion units for offshore vessels, cargo vessels and cruise vessels and duplex steel LPG carriers and chemical carriers. “We are also looking at new vessel management systems and integrated bridge management systems
THE FUTURE EBH currently holds a four star NOSA rated and ISO 9001:2000 accredited, highlighting the quality of the work that is undertaken. The company works closely with the National Ports Authority to enhance the industry and its standing with the local authority. This will become easier as EBH look to open up new markets. “Traditional markets are declining whilst newer markets, mainly oil and gas related markets, are expanding,” says Mr Deane. “We will look to provide facilities as new markets emerge.” “Markets such as West coast oil and gas exploration and drilling and production, and East coast oil and gas exploration and drilling all have vessels which require ship repair services.” The company will also look internally for expansion, investing in infrastructure in the Durban region. “We are looking at new port developments south of Durban, our own infrastructure expansion at the port of Durban and also product diversification,” says Mr Deane. While EBH is South Africa’s oldest ship repair company, it is not old fashioned in any way. The innovative capital investments have positioned the company perfectly to service the marine industry. The acquisition by DCD has made EBH part of the country’s largest marine repair organisation and the deal looks set to boost the business of both businesses and the economy and industry as a whole.
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Increasing mobile & data penetration in rural areas Editorial – Joe Forshaw Production – Chris Bolderstone
The telecoms industry provides us with phones, internet, wireless communication, data services and many more benefits. In Zimbabwe, POTRAZ looks after the whole industry. IndustrySA takes a closer look at recent projects that POTRAZ have been involved with. Being a developing continent has meant that Africa has seen vast changes in the way business is done over the last two decades. It is probably technology that has changed the most with internet access at all time high levels. In South Africa, the government has stated a demand for increased broadband connectivity and projects like the West African Cable System (WACS) have been put in place to ensure that high-speed internet is provided to everyone who wants it by 2020. The technology advances that have had the biggest effect on business have been communication based. Globally, the telecommunications industry is worth so much money it is not worth thinking about. Can you imagine doing business in an environment where communication is not instant? Instantaneous dialogue with customers, staff and stakeholders is now the norm and even in Africa, a continent still coming online with the speed of the
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developed world. Without this fast paced communication link, business becomes tedious. In Zimbabwe, POTRAZ (The Postal and Telecommunications Regulatory Authority of Zimbabwe) is responsible for the postal and telecommunications industry, effectively influencing everyone in the country; individuals and businesses. POTRAZ is tasked with ensuring that all people in Zimbabwe are adequately provided with postal and telecommunication services, a monumental task considering the population is estimated to be almost 13 million, spread over an area of nearly 400,000 km².
RURAL INVESTMENT One of the important targets that has been identified by POTRAZ is helping to build telecoms services in the more remote areas of the country. In 2012, the regulator announced that it would install 54 cellular base stations in underserved and remote areas across the country by 2014.
POTRAZ issued a tender for construction of the bases in August last year, a contract reported to be worth US$24 million. POTRAZ Director General, Alfred Marisa, told the Zimbabwe Herald that installations of the bases are already underway saying: “The first phase of the project had eight terminal sites and three repeater sites while the second phase is targeting a total of 43 sites. Our target is to reach all underserved areas in Zimbabwe. The areas targeted and prioritised are remote rural areas. “Operators are already sharing infrastructure. Sharing infrastructure has been hampered by old designs, especially towers, which were originally not designed to carry more than one operator and, in some cases, inadequate backhaul infrastructure.” This project will be funded by the Universal Services Fund (USF), a fund which sees generation from all telecoms operators paying in an amount equal to 2% of their revenues every year. The government put POTRAZ in control of the fund, a decision that Mr Marisa says is helpful to the regulator as without that control funds may have been rerouted to different areas, away from where they are needed – in the development of telecoms in rural regions. “The tender has not yet been approved,” Mr Marisa
told the Herald. “The tender was supposed to be closed in October but it was closed in November because bidders requested for more time. On our part, we did the financial and technical assessment and at the moment we are just waiting for the tender to be awarded then we can proceed.” Last year, the country’s biggest mobile services provider Econet Wireless, said it wanted the USF scrapped arguing that contributions were not being fully utilised. Mr Marisa is also keen to ensure businesses that paying into the fund is not a straight up loss on the accounting sheets; it will ultimately bring about opportunities and successes in the future. The fund allows for greater connectivity, with which comes the growth of business, nationally and regionally. Through this comes increased traffic and subsequently, increased operator revenues.
AFRICAN INDUSTRY In 2012, professional services firm KPMG published a report following the company’s Telecoms Professionals at Innovation Africa Digital Summit 2012. The report made it clear that Africa is one of the most attractive markets for telecoms organisations.
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COMPANY REPORT In Zimbabwe, it is estimated that just 16% of the population are internet users (2011 est.) and while this is a vast increase from a figure of just 0.4% in 2000, it is still a figure that POTRAZ would like to see increase. The functions and powers of POTRAZ are guided by Section Four of the Postal and Telecommunications Act [Chapter 12:05]. These functions include; ensuring that reasonable demands for postal and telecommunication services are satisfied, promoting and encouraging the expansion of postal and telecommunication services, furthering the advancement of technology relating to postal and telecommunication systems and services and representing Zimbabwe internationally in matters relating to postal and telecommunication services. Considering these functions are in place, why does the country still have a relatively low internet penetration rate? Could it be because POTRAZ still charges US$2-4 million dollars for ISPs to obtain a license? Considering the fact that in 2009 there were 28 official ISP’s in a country which is still developing its connectivity technology industry, it looks as though the price tag is not turning companies away. The KPMG report suggests that complexity of the market is often a challenge, especially for foreign investors. “Telecommunications firms are faced with accelerating complexity competing on brand leadership, operating models, growth strategies, network synergies and footprints. Consumers increasingly demand enhanced converged services and operators are under pressure to be ready for change. “Since Africa is made up of 55 individual countries, the regulatory environment is comparable to that of Europe. When combined with an industry in transition from voice to data, the mobile market in Africa is far more complex compared to other industries. “Only those organisations who have streamlined their operations, are well capitalised and have a sound strategy in place will be positioned to succeed in such a challenging and complex environment,” the report says. Considering the fact that Zimbabwe still has a long way to go to achieve penetration levels similar to leading African nations, it seems that mobile internet access and mobile telecommunication will be the markets for POTRAZ to monitor and encourage, as these hold key growth potential – especially for internet penetration figures. “Mobile data and broadband technologies are increasingly being used as a substitute for poor or nonexistent fixed-line infrastructure in Africa,” says the KMPG report.
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“Telecommunications firms are faced with accelerating complexity competing on brand leadership, operating models, growth strategies, network synergies and footprints.”
INDUSTRY PERFORMANCE While broadband internet penetration is low compared to international statistics, mobile penetration and teledensity grew again last year. A POTRAZ report suggested that the country’s tele-density rate was now over 100% and mobile penetration now at 97%. Tele-density measures the number of active mobile phone SIM cards and land-lines as a percentage of the country’s total population and these statistics (which are still under review) will be encouraging for POTRAZ. “A number of factors have contributed to the increase of tele-density over the years,” Mr Marisa told the Sunday Mail. “We expect it to continue increasing as more people pursue these new technologies. The rural populace that has previously been marginalised is also moving in to close the gap.”
Many people site the country’s change to a dual currency system in 2009, something which helped to stabilise the economy, as a driver behind the increases in statistics. NetOne, one of the country’s leading telecoms providers, has seen its mobile subscriber base grow significantly since 2009 and recently demonstrated how well the industry is performing by completing a US$45 million service improvement program. Completed in November, the project saw NetOne install over 300 base stations across the country, helping to improve services for its customers. NetOne Managing Director, Reward Kangai, told the Sunday Mail that the upgrades are beneficial for the country as well as the industry. “These new 350 base stations are going into new green field sites and also replacing old equipment that we had, particularly in Harare. We should see a tremendous improvement of quality of service. “There are a number of problems that were beginning to emanate from the use of this equipment, but I am happy that the replacement of the old equipment has been moving quite well. “In addition to that, we have extended our Internet 3G and also the new base stations will provide Internet access in the various areas that we have covered with this equipment , supplied by Chinese company Huawei Tech¬nologies. “This has seen an upsurge in the uptake of data services. We are also going right into rural areas “There has also been tremendous progress from POTRAZ in utilising the USF that operators have been contributing to. What POTRAZ has done is taken that money and put base station towers where operators can go and install their equipment. I think in every province so far they have identified two areas that would benefit from the USF.” Mr Kangai concluded by commenting on the importance of telecoms and the IT sector to the economy, saying: “ICT is the engine that drives the economy. I think Zimbabwe, because of its levels of education, is best placed to take advantage of the opportunities that the ICT sector can bring about. “The government needs to put much more investment in the ICT sector in terms of the infrastructure required. We should mobilise resources to make sure that ICT services are abundantly available in Zimbabwe because we can generate a lot of additional wealth. “ICT can also improve the effi¬ciency of other industries like in agriculture.”
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The World in One NetOne is the first cellular network operator in Zimbabwe based on Global System for Mobile Communications (GSM). The company was launched with 500 lines during the World Solar Summit in September 1996 in Harare. NetOne, a private company wholly owned by government, was formed as a subsidiary of the Posts and Telecommunications Corporation (PTC) in 1996. Its main focus and objective was to introduce and offer mobile cellular telecommunications to complement the fixed line telecommunication services offered by PTC. Since then, service has been extended to all cities, towns, tourist resorts, mining, farming and rural areas. NetOne boasts of the widest coverage in Zimbabwe. NetOne over the years has pioneered routes for coverage, building a strong footprint of coverage in all provinces, major
highways, towns, growth points, township centres and farming areas. The network has since expanded from five hundred to an aggregate customer base of more than a million subscribers. Apart from offering the basic telephone service, NetOne also offers supplementary and Value Added Services (VAS) e.g Vehicle Tracking System, Short Messaging Services (SMS), International Roaming, Mobile Fax, Broadband Services, Mobile Financial Services. The mobile network operator recently commissioned the Ascot Mobile Switching Centre based on Bulawayo, the second largest city in Zimbabwe situated in the Southern region of the capital Harare. This event was momentous in NetOneâ€™s history as it marked new growth paths in terms of service provision and capacity to handle more subscribers.
Quality comes as standard Editorial – Roland Douglas Production – Hal Hutchison
Geely is one of China’s top automotive brands. After failing to penetrate the South African market once before, the brand is back, with a new leader, looking to build its presence and make its name as a quality Chinese product. So far things are going very well…
South Africa’s automotive industry is one of the most important to the country’s economy. It is reported that automotive activities contribute at least 6% to the country’s GDP and account for almost 12% of South Africa’s manufacturing exports. All of the world’s major auto manufacturers have a presence in South Africa and some are growing their activities every year. For example, BMW, General Motors, Ford and Volkswagen all have major production facilities in the country and they all take advantage of the industrial development zones that have been set up in close proximity to ports to aid export and distribution. Because of South Africa’s and Africa’s reputation as a high growth, development region, auto-businesses are flocking to the continent. However, it is no secret that the ‘battle ground’ for the global auto industry is China. According to KPMG’s 12th annual Global Automotive Executive Survey, Chinese automotive brands are expected to enjoy the greatest growth in the global
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market over the next five years. The majority of the 200 senior executives from the world’s leading automotive companies who were interviewed (86%) believe China, the world’s biggest auto market, will continue to enjoy the greatest number of car sales and produce the most vehicles by 2015. China is also considered the biggest investment target. This positive outlook has encouraged one of China’s top ten auto manufacturers, Geely, to push its international business and this has been felt strongly in South Africa. Established as an independent firm in 1986, Geely launched its auto manufacturing business in 1997 in China and is today a fully integrated independent auto firm with a complete auto eco-system from design and research and development to production, distribution and servicing. Henri Meistre is the Managing Director of Geely SA and he recently spoke to IndustrySA about quality, sales, expansion and safety.
“We have been importing and distributing cars in South Africa since 2011. There was previously a Geely presence here, they were here from 2007. Unfortunately, they fell upon hard times following the global meltdown and they stopped trading in late 2009. “Geely are enormous in China and product from China is improving all the time. If you look at the early models from Geely, in 2007/2008, compare it to what we have now, the quality has improved vastly. “There’s been a very real change in Geely’s approach to the global automotive market and they’ve adapted their strategy accordingly. They’ve carefully examined who they are and where they are. They see themselves as a global and not just a Chinese company and they have a refreshing approach to global business. South Africa is an important market to them. They see us as the gateway to the rest of Africa.”
VOLVO AND DSI The advancement of quality that has been evident in Chinese cars over the last few years has been developed because of a demand in the market. European, and today Japanese and Korean, brands have often been perceived as those which produce cars of the highest quality but Mr Meistre insists that Geely are upping their standards, thanks mainly to two major acquisitions. “The Chinese realised they needed to be more
globally competitive and cater for differing international market tastes. Geely decided that they needed to improve quality, safety and efficiency so they approached Ford and bought Volvo. “There is a now a share of information and technology between the two companies and this has helped Geely to improve safety stats greatly,” says Mr Meistre. People are not always aware that as well as owning Volvo, Geely owns DSI (Drivetrain Systems International), the world’s second largest gearbox manufacturer, based in Australia. The acquisition was made in 2009 and reinforces the fact that Geely is actively seeking improvement. This will only help Geely’s global ambitions and will help with research and development too. “Chinese cars have had a bad reputation with safety but we now have cars that have a 4 or 5 star Euro NCAP rating, not Chinese but Euro rating. The Emgrand7 has phenomenal quality, a lot of spec and the 4 star Euro NCAP rating and will be launched here in early May. “The research department in China now has access to information which has helped them improve, information from Sweden and even from SA. We’re always feeding back the little bits that we can, to help tailor the product to our market,” says Mr Meistre.
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“There is a now a share of information and technology between the two companies and this has helped Geely to improve safety stats greatly”
BUILDING A PRESENCE The most popular model from Geely SA is the LC, a hatchback competing in one of Geely SA’s current primary markets – compact car. The car has been in production since 2009 and comes in three different models; the GS, GL and GT, all with varying amounts of spec. It can cost anything from R80,000 through to R110,000 depending on model and content and the company has a broad network to serve owners and potential customers. “We have over 40 dealerships across the country,” says Mr Meistre. “We offer 300,000km warranty, we are majority shareholders in an import parts business which has expertise in bringing parts in to our dealer network from China.” The company is currently well placed in the South African market but still sits way behind the established brands. However, Mr Meistre is confident saying: “My prediction is that Geely will be the most successful Chinese automotive brand in South Africa in the medium to long term.” While the brand is not there yet, they are most certainly building for the future. “We’ve got good momentum going at Geely South Africa,” says Mr Meistre.
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“We’re building up to a new product launch at almost six monthly intervals. This is good. We need to add product. Initially we didn’t have a lot of product for our dealers to sell and service and this was a challenge to their viability. But we have a future and the future looks good.” The company has stated its intention to open up different markets after initially entering South Africa in the small car sector. Opportunities have already been identified in the SUV (Sports Utility) and LCV (Light Commercial Vehicle) markets. When he started out in his current position Mr Meistre said: “I like to take time to look at things carefully and what I see at Geely - the product, the quality, the calibre and commitment of the people - impresses me.” Mr Meistre has vast experience working with Chinese and Korean brands in South Africa and his expertise will be needed to ensure that the Geely, the international brand from China, can become the local Chinese brand of choice for South African’s, all the time improving and all the time growing and with the opportunities already identified, it seems like there is no reason why the brand will not be the next big thing in the SA automotive industry.
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Truly, a culture of excellence. Editorial – Christian Jordan Production – Lauren Grey
La Motte is one of South Africa’s leading wine businesses. CEO, Hein Koegelenberg, tells IndustrySA that this is down to quality service, quality product and a focus on creating exceptional customer experiences. At La Motte, everything is about quality… At IndustrySA, we talk to business people from across Southern Africa on a daily basis. We hear stories of business excellence, innovation and inspiration from all over the region but once in a while we talk to a company that is surrounded by a real aura of excellence and quality. Our wine industry focus this month comes from a company which oozes class. Situated in the picturesque Franschhoek Valley in South Africa’s Cape winelands, La Motte is one of the country’s top wine producing businesses. Set in a charming historic environment, with
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traditional cuisine and many other unique offerings, the company says that its home is “an enchanting destination for those who appreciate the finer things in life”. With the global economic climate creating tough trading conditions for international export companies like La Motte and the wine industry in South Africa facing challenges including farming labour disputes, IndustrySA spoke to La Motte, CEO Hein Koegelenberg, to find out how the business is performing and what makes the company successful.We started by asking Mr Koegelenberg about the history of the business…
“This has seen the estate awarded by Great Wine Capitals of the World as the Best of South African Wine Tourism winner in 2012 and 2013”
“The farm was acquired in 1970 by Dr Anton Rupert, my father-in-law and an internationally respected industrialist. Today La Motte is owned by his daughter, Hanneli Rupert-Koegelenberg. She is also one of South Africa’s leading mezzo-sopranos. “After I married Hanneli in 1998, I asked Dr Rupert, ‘how do you establish an international wine brand in the modern era?’. “We started with the product, then with the facilities and finally we looked at marketing and PR strategies. Those are the three things we really had to work hard on. Product is the most difficult because of the time it takes to plant and grow the vines which grow the best grapes.” Today, La Motte exports wine to countries all over the world, winning awards for quality products and a quality tourism destination. It looks as though Mr Koegelenberg’s dream of a successful international wine brand has taken shape.
THE BRAND La Motte is not a traditionally South African name for a wine estate and the origins of the brand name date back to a French Huguenot, Pierre Joubert who bought the farm
from his neighbour, a German immigrant named Hans Hattingh in 1709. “We believe that Pierre Joubert named the land after the village of his birth in Provence. Viticulture on La Motte was established in 1752 with the planting of 4000 vines. “When Dr Rupert bought the farm in 1970, the farm underwent a major development, restoration and conservation program and that reinvented La Motte into a leading global wine producer and sought after tourist destination.“Vineyards have been progressively replanted with noble varieties, the latest viticultural practices have been introduced and a modern cellar has been built. We have developed a very specific La Motte style that we can repeat on a yearly basis. “Today, La Motte is not only a producer of internationally recognised wines but also a wine tourist destination with the award winning Pierneef à La Motte restaurant, a very special art museum and a host of unique experiences. “This has seen the estate awarded by the Great Wine Capitals of the World as South Africa’s Best of Wine Tourism winner in 2012 and 2013,” says Mr Koegelenberg.
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“I think the service we give to a wine tourist (in South Africa), from an experience perspective, is superior to any other country in the world”
QUALITY SERVICE MAKES THE DIFFERENCE What is it that separates La Motte from the crowd and reinforces that culture of excellence? Mr Koegelenberg says that quality service makes the difference. Improving services levels is something that the whole industry has worked hard on over the years. “In the past few years we have put huge effort into improving service,” says Mr Koegelenberg. “Not only La Motte but many of the other estates have worked on service. I think the service we give to a wine tourist (in South Africa), from an experience perspective, is superior to any other country in the world.” It is this attention to detail that is becoming more and more important as it is becoming increasingly difficult to compete with products on an international scale considering the difficulties that all industries have seen as a result of the global economic slowdown. “We have seen huge change in the behaviour of the consumer. People are buying cheaper and the retailers have become very powerful. Often there is not a lot of margin left in the system for the primary producer. That is mainly in Europe. “South Africa and Africa, economically, are doing ok. Around eight years ago we have focused our attention on distribution in China and the Asian countries. That market is still booming. This whole crisis forced me to look at building a far reaching platform for international distribution.” The international export of the wine from La Motte is a massively successful part of the business. You will now find La Motte in over 40 countries. “We try to get a good footprint on each continent and not just focus on one or two big clients,” says Mr Koegelenberg.
LEADING THE WAY The success of the La Motte business to date has seen the company grow into one of the industry leaders in South Africa. But it is not only the CEO that sees the
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benefit of successful business; the local economy and environment has thrived as well. “The unemployment rate in this country is way too high. Since 1999, with wine, we have probably created over 500 jobs. “Environmental management is high priority for La Motte. It is factored into the long term strategy and daily running of the estate. “In the restaurant we use water from the mountains, herbs from our gardens and our own organic vegetables. We protect the fynbos on the hills and farm organically grapes, oils and flowers. We have been farming organically since 2003. “La Motte is one of the first wine estates to be awarded the ISO 14001 environmental management certification. The estate also complies with ISO 9000:2000 certification and has been given champion status in biodiversity and wine initiatives,” says Mr Koegelenberg. With some many successes in different areas, it is hard to sum up how well the La Motte business has done since Dr Rupert started things in 1970. Impressively, the current CEO is not happy to sit still with the success that has come so far. Mr Koegelenberg tells us: “We don’t sell product, we sell an experience and we hope that visitors to the estate, will always remember the experience at La Motte, wherever they go.“La Motte strives to be one of the leading wine businesses in South Africa and to create a business that is unique in its offerings. “We are not at the finishing line yet. Our journey will last another ten years before we are at a stage where we feel we have covered everything we set out to.” The company is only too aware that consumers change, technologies change and markets change. Mr Koegelenberg makes it clear that as we move into the future and the company grows, the culture of excellence will grow, guarding La Motte’s position as one of the finest wineries and international export businesses in the country.
We deliver what you want, at the right time, at the right place and at the right price. Our Mission is through our expertise, innovative technology and absolute commitment to service we ensure that all our customers’ needs are met. We believe in collaborating with our clients, with the main aim to save on the cost of transport, but still provide them with a very convenient transport experience. We have more than adequate on site secure warehouse space available, together with smaller delivery vehicles, creating a perfect environment for the distribution of the client’s products. These facilities are available in Cape Town as well as Johannesburg. ARTS is a privately owned Transport Consulting business with the head office situated in Durbanville. Shareholders and management are active in the day to day running and managing of the business, and are centralized in our Durbanville office, ensuring the fast and efficient solution to any challenge. We have a branch in Elandsfontein which is responsible for all cross border transport, and is well equipped to handle all border documentation and needs. We pride ourselves in the fact that management has a combined period of 70 years’ experience. This ensures that all the available experience and skills get passed on to a client, to ensure the best price for every client’s customized needs. We cover all routes within the African continent, from pallets and loose mass, to machines and more.
Our target market: Fast Moving Consumer Goods (FMCG) Cross Border throughout Africa Express overnight deliveries
• We are extremely focused on building a sustainable competitive advantage. • We have access to the vehicle that will best address the needs of a specific client/load. • Every client has an account manager assigned to them, so all correspondence will be via one channel. • Our infrastructure is structured in such a way that we address every need from the production of the product, right through to the consumer acquiring the product.
Part loads (from 1 to 34 tons) Loose Mass
ARTS is proud to be associated with La Motte for 13 years.
• We have a fast turnaround from pick up to invoicing – ensuring a steady cash flow for the client. • Our product-specific approach will ensure that cost will be kept to the minimum on transport. • Through the 70 years combined management experience, you can be sure of the best tailor-made package to save you maximum cost.
CONTACTS DETAILS Telephone
086 101 ARTS (2787) Arts Park, Pastoral Road, Durbanville Industrial Park, Durbanville 7550
021 976 2558
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“Growing our portfolio to grow your revenue” Editorial – Roland Douglas Production – Hal Hutchison
Arrowhead Properties has seen immense growth since its inception in 2011. COO, Mark Kaplan tells IndustrySA that the company has managed to be successful because of a great team and a robust strategy. In August, IndustrySA spoke to JHI, one of South Africa’s leading property management organisations. We found that although property is one of the most valuable investment areas in these difficult times, everyday management of a large scale portfolio is no easy task. This month IndustrySA speaks to Arrowhead Properties, a JSE listed property loan stock company who take advantage of the fantastic service offered by JHI. Mark Kaplan is the Chief Operating Officer for Arrowhead and he spoke to IndustrySA allowing for a perfect follow-on, focussing on the property industry. He began by telling us a little bit about the history of Arrowhead. “It started when Gerald Leissner (CEO) and I were looking to list a residential fund towards the end of 2010. We couldn’t get enough residential properties together so we started looking at commercial properties
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to bulk up the fund. “We found that there were billions and billions of Rand in available stock at high yield that one could purchase. We thought that it was an opportune time to set up a high-yielding property fund, similar to ApexHi. “In April 2011, I resigned from my job, Gerald was retired at the time, and we spent 2011 putting the listing together. We only found out in October that the listing would actually happen and in that time we had identified a whole list of properties that Redefine Properties were looking to sell. “Redefine made a statement saying they were looking to sell and we ended up buying around 98 properties for R1.5 billion to start off the business. “Along the way, we met Imraan Suleman (CFO) from Java Capital and he joined us so it was really the three of us who put Arrowhead together.”
THE TEAM AND THE STRATEGY As mentioned above, the property business is not an easy one to navigate. Take into account financial, economic, political, legal and logistical considerations and the result is a complex web of issues to iron out. Fortunately, the team at Arrowhead has decades of experience behind them, in both the property and investment markets. CEO, Gerald Liessner has nearly 50 years’ experience in real estate. He is a Chartered Accountant and has worked in senior positions for some of the country’s major property organisations. COO, Mark Kaplan has worked on various entrepreneurial ventures and managed portfolios with assets worth in excess of R300 million for major property companies. CFO, Imraan Suleman, also a Chartered Accountant, worked for one of the big four audit firms and has advised clients on important transactions including listings, mergers and acquisitions, capital raisings and empowerment transactions.
The experienced, knowledgeable and talented team, make Arrowhead local experts and you feel that a learned, trustworthy approach to business is adopted. “We’ve been very fortunate but we’ve stuck to our strategy and the market likes our business case,” says Mr Kaplan. “We’ve got a different model. We have six people that manage and grow the portfolio and we outsource property management to JHI. We have a great partnership with them and they have a great footprint across the country.” He makes it clear that a simple but effective strategy has been in place since the beginnings of the business: Invest in high yield properties and provide superior income returns to investors. “Arrowhead differentiates itself as it only buys yield enhancing properties,” Mr Kaplan says. “When we look at a property, if it is not yield enhancing we will not consider it. I don’t think one other listed property company can say that. “We are generally buying properties with a yield of around 10.5% - 11%.”
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Mark Kaplan GLOBAL RECESSION? Starting a business in 2011, in the heart of what has been a terrible few years for businesses all over the world, may seem like an unusual thing to do, especially in the property market, one that is known for having cyclical shifts in demand. Mr Kaplan tells us that although the global economic downturn has caused some difficulties, overall the business has been successful because of the solid strategy. “We don’t want to get ahead of ourselves, we are aware of how quickly things can turn around but it has really been a great start. We’ve exceeded expectations on every level since listing. Our ‘B’ Share price listed at R3.38, today it is trading at R7.30 so excluding income it has gone up by 120% in a very short amount of time. “Our ‘A’ share price listed at R6 and is now trading at R7.50, so that has gone up by around 25% excluding income growth. As a business case, everything has been fantastic. “In terms of income targets and distribution targets, we’ve exceeded expectations in our first year, as well as
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put out targets to grow distributions in the second year by 10% which is well ahead of the sector average.” It is not just going well for the share price and investment potential; the company also managed to bolster its portfolio and is continuing to increase its assets. “We’ve grown in terms of assets. We started with R1.4 billion of assets under management and when we complete the transactions that we are busy with, we’ll probably be sitting on assets closer to R3.5 billion. “We listed with a market cap of just under R800 million and today it is R2.6 billion, so it’s more than trebled in 14 months.” Not all businesses in South Africa have felt the pinch since the economic bubble burst in the USA and Europe, the country’s strong financial industry has managed to remain relatively positive but there are companies that are being tested. “When you talk about demand for space, in terms of letting, it has had a dramatic effect. Anyone can see it’s not an easy environment to fill vacancies and get good rental renewal, especially in office space. “We have managed to reduce our vacancies but if the economic climate had been better we would have been able to get higher rental renewals and fill vacancies quicker. “Our bad debts are very low but it is clear that tenants are struggling in many cases,” says Mr Kaplan. In times like this, investors look to secure markets to protect their capital and Mr Kaplan suggests that because of this, business has in fact been boosted. “On the macro side, people have been searching for yield and listed property is one of the most secure places to get yield with capital values that grow. Because of this, listed property has outperformed bonds, cash and equity.”
> Corporate and Investment Banking
Our mOst VALuABLE prOpErty is Our CONNECtiONs with Our CLiENts We know the importance of relationships. Working together allows us to understand your needs so we can offer the best real estate solutions for you. This is how weâ€™re moving real estate forward. www.standardbank.co.za/cib
Authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA 139312-02/13 Moving Forward is a trademark of The Standard Bank of South Africa Limited
Standard Bank Real Estate Finance is proud of the strong relationship that has been established with Arrowhead Property Fund (Arrowhead). The Standard Bank Real Estate Finance team worked closely with Arrowhead management team in facilitating the financing structure for the property acquisitions that led to the listing of the Fund in December 2011. Standard Bank has enjoyed a long-standing relationship with Arrowhead’s CEO, Gerald Leissner, dating back to the listing of ApexHi Properties Ltd. Mr Leissner’s preeminent position in the real estate industry is underpinned by 48 years of accumulated property knowledge & experience. Arrowhead has enjoyed a successful first year since their listing on the JSE and management has proven their ability in meeting distribution targets and growing the asset base.Standard Bank is currently the sole debt provider to Arrowhead, having provided R800m of funding on lising against a portfolio of properties that were unbundled from Redefine Properties Ltd and more recently an additional R150m to finance new property acquisitions. 2013/02/28 12:28 PM
Standard Bank has also advised Arrowhead and successfully executed appropriate interest rate hedging strategies. “We are confident that our depth of property knowledge and experience, and the full range of products and services we can offer, will continue to enable us to partner with Arrowhead and help drive their business forward”, says Bevan Williams, Manager Real Estate Finance. Standard Bank South Africa is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank Group had total assets of over R1 497-billion (about US$185 billion) at 31 December 2011. Standard Bank’s market capitalisation at 31 December 2011 was R157 billion (approximately $19 billion). In South Africa, Standard Bank provides the full spectrum of financial services. It’s Corporate and Investment Banking division serves a wide range of requirements for banking, finance, trading, investment, risk management and advisory services. Corporate and Investment Banking division
THE FUTURE On the economic side of things, lower interest rates have helped the country and eased some financial pressures that may have been felt in the residential markets. Residential property is slowly growing again and all property management companies will look for the markets to return to similar levels seen in 2005/06. In September, the Property Sector Charter Company released a report which claimed the property market in South Africa is worth R4.9 trillion, with R780 billion of that being in commercial property. This means there is obviously huge scope for a company like Arrowhead in the future. “By 2016 we would like to have a R10 billion portfolio and I’m confident that we will be able to reach that,” says Mr Kaplan.
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“By 2016 we would like to have a R10 billion portfolio and I’m confident that we will be able to reach that” With that target in place, the company is already a few steps ahead, putting deals in the pipeline to increase its portfolio even further. While they will not look to the continent or to other international markets at this stage, they are confident there are enough prospects in South Africa to continue to boost assets. “The focus is on South Africa,” says Mr Kaplan. “We’ve been popular since listing because we have a simple investment strategy that we’ve stuck to. There are plenty of opportunities for Arrowhead in South Africa. Our deal flow is huge.”
“When we look at a property, if it is not yield enhancing we will not consider it. I don’t think one other listed property company can say that”
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Shipshape In Durban Editorial – Colin Renton Production – David Hodgson
Navy contract underlines South African Shipyards’ reputation as a world leader in the marine industry
Southern African Shipyards is putting the finishing touches to the state-of-the-art refurbishment of the South African Navy’s only surviving strike craft at its yard in the Port of Durban. The renovations are being carried out on the SAS Isaac Dyobha, the SAS Galashewe and the SAS Makhonda - and the job represents something of a homecoming for all three vessels. They were first built in the yard around 30 years ago and a number of senior staff at South African Shipyards have said they remember the ships taking shape back then. The strike craft were part of a fleet of nine such ships which were busy in South African waters during the years of sanctions and isolation, but are being converted into offshore patrol boats as the Navy
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moves to meet the needs of the country’s 21st Century requirements, which involves defence but increasingly also elements of environmentalism and fisheries protection. The vessels were transferred to South African Shipyards’ 100m x 30m floating dock and then secured on specially built cradles before being moved to the yard’s huge 320m x 42m maintenance hall. The ships have been worked on, one by one, since the Isaac Dyobha was the first to arrive in October. The refurbishments include new electrics and mechanics and fresh paint jobs for the hulls. The trio of ships will undergo full sea trials before being handed back to the Navy, with the handover due to take place in March.
“At the end of the programme the Navy will have three serviceable, reliable vessels that it will be able to use for its relevant missions,” a spokesman said. The contract underlines how South African Shipyards continues to be regarded as a world class operator in the marine industry. It’s a reputation garnered over decades of leadingedge commercial and naval shipbuilding and ship repairing to the worldwide marine industry from the bustling yard in Durban, South Africa’s busiest port. South African Shipyards is already recognised as one of the industry leaders when it comes to building world-class tug boats and one of the firm’s targets for the future is to create a niche market for the Voith Schneider-type tug – a harbour workhorse famed for its high manouverability - and so dominate the international market.
But the company is also hoping to attract more orders from the military and wants to work closely with the Navy again soon. A spokesman said: ‘The South African Navy has made known their intention to build naval vessels in the not too distant future for which we will definitely make a very serious bid.’ The experts at South African Shipyards have already designed a unique, low-cost 45m patrol vessel to help combat piracy in Africa and protect the continent’s marine resources. And the company sponsors and takes part in the annual Sea Power for Africa Symposium that brings together all Africa’s navy chiefs, with the objective to ensure a secure marine environment so that Africa can continue to do business with the rest of the world. But in shipbuilding there are no guarantees – and to protect the interests of the African industry as a whole South African Shipyards is a major player in the South African Shipbuildng Defence Industry. This is a forum involving some 16 companies and the aim is to encourage the industry in Africa to talk with one voice and to each other to try to ensure that future orders from the African military stay in Africa rather than going to Europe, or more likely these days, to China or India. The concerns are real – at the most recent Africa Aerospace and Defence Exhibition, representatives came from numerous yards in China, India and Europe, and even from Turkey. For now, at least in South Africa, the shipbuilding industry is enjoying a renaissance after a number of difficult years when new work was hard to come by and South African Shipyards is playing a leading role in the rejuvenation. Shipbuilding in the Durban yard dates back to 1961 when it was developed out of mangrove swamps. In 1964 the government released funds to promote the industry and several yards were soon busy in the area. The company was created in 1996 to build tugs. In the following years the company built superstructures and hulls for luxury motor yachts and in the late 1990s was hailed as the largest producer of such hulls. There followed a temporary two-year closure but the yard reopened in 2006 and an order for seven 70-tonne tugs gave the revitalised company a sound foundation for growth and it is now the largest shipbuilder in the country. Diversification is, these days, the key to success. For example, South African Shipyards has built pontoons and structures for a river mining project in Mozambique, and the company hopes to lend its expertise to oil and gas exploration projects.
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There is also the rest of Africa to consider as the continent continues its rapid industrial development. The company is confident that its successful blueprint can be replicated elsewhere. There are real possibilities for partnerships with other shipyards where the industry is less developed - South African Shipyards is expecting a major market in offshore vessels to emerge in West Africa and Angola because of the region’s growing energy sector. Closer to home, the success of the yard is crucial to the success of Durban and its people as it employs up to 500 mostly locally-based workers, including the highly-trained craftsmen that the company is famed for, and a new breed of shipbuilders.An innovative apprenticeship scheme has been introduced which will see dozens of new mechanical engineers introduced into the industry over the next few years, with a number of them being black females.The company’s managing director Louis Gontier has stressed that training is an enormous priority and fundamental to the future of the South African shipbuilding industry.
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And his firm is determined to make their prized apprenticeships the best in the business. There will be no short cuts - candidates will have to go through a five-to-seven year programme before they can be considered master shipbuilders. Such schemes make South African Shipyards a big part of the Durban community - a position the firm is proud of. It has worked with the Durban Children’s Home as its charity and, as well as giving donations and sponsorships, has offered to employ as many of the children from the home as possible when they finish their education. Back in the yard, the firm has a clinic that services not only employees from South African Shipyards but also from neighbouring companies. With national and international orders, a philosophy of building in South Africa for South Africa, and a strong foothold in its local community, all in all, it seems that South African Shipyards is a company on the crest of a wave.
age-old industry Editorial â€“ Lauren Grey Production â€“ Chris Bolderstone
Patensie Citrus is a well-established South African company with roots dating back to 1928, and with such a rich, interesting heritage, it may come as a surprise that modernising the citrus industry is at the forefront of the business. Since its humble beginnings in 1928, the vision of the Patensie Citrus Co-operative was finally achieved 15 years later when two leading Cooperatives merged, forming a company which led the way for bigger harvests and larger-scale exportation. Over the years, Patensie Citrus has snowballed its way through the citrus industry; extending premises, increasing the size of pack houses and establishing a ripe workforce. Situated in the Gamtoos Valley, Patensie Citrus benefits from one of its greatest natural assets, the ability to produce the full range of citrus fruits; from large, flavoursome fruits and some of the finest eating oranges
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of the world, to outstanding sweet soft citrus. Patensie currently produces oranges, grape fruit, lemons and a variety of soft citrus from their farms.
MODERNISED PACK HOUSES Citrus farming and agriculture may not strike you as the most modernised of industries, but Patensie is leading the way in technological advancements which are helping to improve the business day by day. Both pack houses are equipped with state of the art computerised systems, where fruit is automatically sorted according to diameter, mass, colour, shape and blemishes.
The new systems enable Patensie to deliver high quality products, at a total capacity of 60 tons per hour, allowing them pick and pack fruit at optimum ripeness. The company has also invested in modern de-greening rooms with a storage capacity of 1600 tons of fruit; these rooms are used during the early part of the season to ensure the best possible colour development of fruit. An added advantage of these rooms is that they can double as cold storage facilities, enabling us to manage logistics as well as the cold chain effectively. In addition to these modern facilities, Patensie Citrus actively ensures that the quality standards in their pack houses, as well as on the supplierâ€™s farms, are constantly monitored and audited. All producing farms are required to have the necessary GlobalGAP accreditation, and the implementation of these standards ensures that Patensie Citrus remains amongst the leaders in the citrus industry.
MARKET PENETRATION The Patensie Citrus brand is underpinned by the distinctive quality and taste of the citrus grown in the Gamtoos valley; the brand is well established as being proudly South African and can be found in both local and foreign markets. Market penetration is the cornerstone of the citrus industry, particularly gaining access to the more lucrative markets overseas, and Patensie Citrus currently exports to the UK, Canada, Russia, Northern and Southern Europe, China, South East Asia, Far East and the Middle East. To gain and maintain access to these valuable markets, the production of fruit of a high standard is essential, but Patensie also believes that being in direct contact with, and understanding their importers, helps to build the close relationships necessary to supply customers with the correct fruit specifications and quality they desire.
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“The biggest factor, however, is the distrust now placed in the government... How long before the next increase will be announced?”
RECENT CHALLENGES It’s no secret that the South African agriculture industry is facing one of its biggest challenges to date, as the steep increase in minimum wage holds dire implications for the farming and broader communities. Agriculture is the biggest job creator in the rural areas, and government have announced that the minimum wage for farm workers would be increased by 52% to R105 a day, for workers working nine hours a day, which many believe is unaffordable. Gerhard Uys, Managing Director of Patensie Citrus, recently told Farmersweekly.co.za that the wage increase would ultimately affect trust in government, “Mechanisation and automation will be considered on an
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economically realistic basis. The biggest factor, however, is the distrust now placed in the government. The previous wage increases were completely ignored and replaced with the current one. How long before the next increase will be announced?” he asked. Patensie Citrus is evidently one of the most technologically advanced citrus companies within South Africa, and their ability to trace fruit from the receiver all the way back to its origin gives the client the reassurance that the final product is of the highest standard. They currently produce approximately 1.8 million cartons for export annually, and those fruits not adhering to export standards is either sold locally or used for juicing purposes.
P E COLD STORAGE (LTD)
Thank you for all your support this past season. As most of you are probably aware this past season has resulted in many changes at P.E.Cold Storage. We have closed our premises in the P.E. Harbour and consolidated all our operations under one roof at Coega Harbour. We are in the process of adding additional coldrooms at Coega to make up for the loss of capacity due to the closure of the P.E. Harbour facility, and have added forced cooling/Steri facilities for 400 pallets. Maersk has recently opened their container terminal adjacent to our premises in Coega which will result in substantial savings to exporters/producers who ship through our facility to the Coega Harbour. We are also in discussions with MSC about utilising a depot much closer to Coega to ensure similar savings in Inland Haulage. Once again we would like to assure all our customers of our commitment to excellence and service in the forthcoming season.
Kind Regards George Efstratiou CA(SA) - Director PE Coldstorage cnr of Bridgewater Rd and Alycon St, Coega, Port Elizabeth,6000. Our phone number is 041-4050800 and our fax number is 041-4050821. MAR 13 PAGE 41
This is the latest installment of our Industry Recommended directory, a list of companies across a range of industry sectors over SA.
Your Industry, Their Future, Our South Africa Automotive Geely Headquartered in China, Geely launched its auto manufacturing business in 1997. Geely South Africa’s dealer network currently consists of over 40 active dealers throughout Southern Africa. www.geelysa.co.za Oficina The Oficina Dealer Management system offers a cost effective but comprehensive, professional solution for small, medium and large businesses in the motor industry. +27 86 111 2958 www.oficina.co.za Compressors Rand Air With 10 branches and agencies spread across Southern Africa and an extensive fleet of over 700 Atlas Copco compressors and generators, Rand-Air can truly claim to be the market leader in portable compressed air and power generation rental. www.randair.co.za Construction WBHO WBHO has always strived to be the best construction company in Southern Africa. “Rely on our ability” is the group’s motto.+27 11 321 7200 www.wbho.co.za
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Iguana Projects Iguana Projects specialise in Building Construction, Design and Construct, Project Management and Property Development. +27 11 787 0239 www.iguanaprojects.co.za
Entertainment Nu Metro A leading cinema chain with locations throughout South Africa offering the best in entertainment experiences. www.numetro.co.za
Engineering Sandvik Sandvik is an engineering group in tooling, materials technology, mining and construction www.sandvik.com
Financial Services XDS Xpert Decision Systems is the largest 100% independently black-owned credit bureau in South Africa. +27 11 645 9100 www.xds.co.za
SEW Eurodrive SEW Eurodrive offer a holistic approach to problem solving. Their trained sales engineers will provide you with a turnkey solution to your installation requirements. www.sew.co.za Hytec Hytec is the largest supplier of hydraulic components and systems in Southern Africa +27 21 551 4747 www.hytec.co.za Nuvend Engineering We are a Precision Engineering company who takes pride in offering versatility and precision as the main attributes of our service. +27 11 900 2303
Maxtec Maxtec is a South African IT service provider that specializes in the provision of storage and networking solutions. www.maxtec.co.za Standard Bank Standard Bank has a 150-year history in South Africa and started building a franchise in the rest of Africa in the early 1990s. www.standardbank.co.za
Food Nestle Nestlé is the world’s leading nutrition, health and wellness company. www.nestle.co.za
INDUSTRY RECOMMENDED Fruit PE Cold Storage Cold storage specialists, servicing the fruit industry, based at the Coega harbour +27 41 408 0800 Patensie Citrus The Patensie Citrus brand is underpinned by the distinctive quality and taste of the citrus grown in the Gamtoos valley. +27 42 283 0303 www.patensiecitrus.co.za Logistics African Road Transport Services ARTS is a privately owned Transport Consulting business with the head office situated in Durbanville. 086 101 ARTS Metal Sheetech s.a Established in 1996, Sheetech S.A offers a wide range of metal fabrication and metal pressing solutions hence offering customers a one stop solution to their needs. +27 31 464 8015 www.sheetechsa.co.za Power ABB ABB South Africa offers a wide range of power and automation technologies solutions from a comprehensive product and service portfolio. www.abb.co.za Kraus & Naimer Today, Kraus & Naimer employs some 1100 people worldwide and manu¬factures around 4.3 Million switches per annum. +27 11 608 6060 www.krausandnaimer.co.za Property Management Hyprop Africa’s leading specialist retail property fund following the acquisition of Attfund’s portfolio of shopping centres across SA. +27 11 447 0090 www.hyprop.co.za
Intellepark IntellePark and Security (Pty) Ltd. are the leading system integrator in Southern Africa of Parking Revenue & Guidance, Building Management, Access Control, CCTV, Fire & Gas Detection, License Plate Recognition and Intercom Solutions +27 11 463 9673 www.intellepark.co.za Tekweni Ceilings Celebrating 26 years in South Africa, specialising in ceiling & partition requirements, internal and external. +27 11 708 0934 Arrowhead Arrowhead Properties is a listed property loan stock company holding a diverse portfolio of retail, industrial and commercial buildings in secondary locations throughout South Africa. +27 10 100 0076 www.arrowheadproperties.co.za
Rail PRASA The Passenger Rail Agency of South Africa (PRASA) is a South African state owned enterprise responsible for most passenger rail services in the country www.prasa.com Compressor & Engine Engineering Compressor & Engine Engineering (Pty) ltd (C&E) is a compressed air specialist company. C&E was founded in 1989 with our head office located in Boksburg East Gauteng. +27 11 914 1093 http://www.ceeng.co.za/
Shipping Elgin Brown & Hamer Proudly South African, Elgin Brown and Hamer is the oldest ship repair company in South Africa, having been in existence since 1878. www.ebh.co.za
SA Shipyards Leaders in commercial and naval ship building and repair +27 31 274 1800 www.sa-shipyards.co.za Cummins Established in 1919 in Indiana, USA, Cummins today employs more than 40,000 people worldwide, and has an annual turnover of US $10,8-billion. Cummins has a global network of 500 company-owned and independent distributor facilities at more than 5200 dealer locations in over 190 countries. Cummins range of engines is used in a wide variety of applications, including; mining, trucking, boating, power-generation, construction and agriculture. www.cummins.com
Telecommunications POTRAZ The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) is mandated by law to issue licenses in the postal and telecommunications sector, and to set the terms and conditions for activities in the sector. www.potraz.gov.zw NetOne NetOne is the first cellular network operator in Zimbabwe based on Global System for Mobile Communications (GSM) www.netone.co.zw Wine La Motte One of the finest wine estates in SA, encouraging a ‘culture of excellence’. www.la-motte.com
For more information about how your company can be recognised for excellence across many areas please get in touch.
Your Industry, Their Future, Our South Africa
MAR 13 PAGE 99
DHL AFRICACONNECT. YOUR RELIABLE CONNECTION TO SOUTHERN AFRICA AND BEYOND. ·······
DHL Global Forwarding offers you the most reliable road freight network in Southern Africa. With a wide range of services, from consolidation and dedicated vehicles, to super-link loads we have solutions for all your transportation needs. With value added services, like customs clearance, insurance, smart sensors, SMS notifications and ePOD we can adapt according to your requirements. Overland transportation with DHL Global Forwarding is easier than you expect. www.dhl.co.za