Minimise Risk, Achieve Goals When you effectively manage the risks faced by your company, you increase the likelihood of achieving your long-term business objectives. Marsh Risk Consulting MD, Volker von Widdern explains moreâ€Ś
The name that holds water
Every month we discover awe-inspiring stories of successful entrepreneurship, world-leading innovation and universal inspiration. In the future we will bring you further stories of business excellence and highlight the hard work that is going on in South Africa to grow the nations industries into global leaders.
Your success is our inspiration
EDITOR Joe Forshaw SUB-EDITOR Harriet Pattison WRITERS Colin Chinery Tim Hands Roland Douglas Christian Jordan RESEARCH DIRECTOR Chris Bolderstone PROJECT MANAGERS James Clark Ajuanne Payne Emily Woodhall Hal Hutchison ADVERTISING SALES SALES DIRECTOR Andy Williams SALES MANAGER Daniel Marshall SALES EXECUTIVE Holly Graham SALES EXECUTIVE Mark Leonard STUDIO STUDIO DIRECTOR Martyn Oakley DESIGNER Harvey Tarlton ACCOUNTS Mike Molloy, Jane Reeder ECP LTD MANAGING DIRECTOR David Hodgson OPERATIONS DIRECTOR Chris Bolderstone FINANCE DIRECTOR Scott Warman 2a Ardney Rise, Norwich, Norfolk, NR3 3QH, United Kingdom If you would like more information about ways in which IndustrySA can promote your business please call +44 1603 411568 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 issue forty five...
In May, President Zuma’s inauguration gave a lot of reasons for businesses to be hopeful. He said: “This is a nation that has worked tirelessly to build a new society from the ashes of apartheid, opting for reconciliation and progress instead of retribution.” And on the social side, no one can deny that much has been achieved; but what about in business? Although the country has seen a dramatic transformation, there is still a lot to be achieved before business is as fluid as it is in some nations. Zuma said in his inauguration speech: “As the National Development Plan outlines, the structure of the economy will be transformed through industrialisation, broad-based black economic empowerment and through strengthening and expanding the role of the state in the economy,” and this has bought excitement as well as dismay as many businesses favour minimal intervention from the state. Either way, as long as investment continues to be pumped into the economy, commerce should continue to grow. What has been a central point in Zuma’s tenure is the relationships his office has built with big name partners from around the world. The likes of India, China, Malaysia, Brazil and Russia have all strengthened their ties with SA and the fruits of this are already being seen – Brazil in the rail industry, China in the shipping industry etc. International trade and reaching out to commercial partners around the world, as I’ve said before, will be vital for the growth of the economy and if Zuma continues with what he has started, the globe will eventually look to South Africa for products and services across the board. Let us know your thoughts on Zuma’s inauguration speech online @industry_sa.
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jUn 14 PAGE 3
3 EDITOR’S PAGE Looking forward to a prosperous future
6 NEWS All that’s happening in South Africa
8 EnTREPRENEUR Realising a dream in Southern Africa
12 Innovation Backed by the University of Johannesburg
14 Destination Director Modderfontein’s new mega build
16 Ryan Searle Motor-mad
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20 Marsh Risk Consulting Reducing your risks, insuring your future
72 BidVEST Top Turf The evergreens
36 BKB Truly agri-cultured
76 PPECB Fruit and cyber
44 Stadium Management
82 Norman Goodfellows
A standing ovation
No hiccup for NG
Containing the market
A pragmatic approach to asset management
58 Int. Trucks Port Elizabeth
92 Scientific Engineering
Turning up the heat on innovation
96 Top Fix
Scaling great heights
68 Abeco Tanks
100 Durban ICC
Safe, secure, effective
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NEWS All that’s happening in South Africa
Rekindling the class of commercial farmers Construction work on a R60-million multi-purpose training and development centre at the Agricultural Research Council in Roodeplaat, Pretoria began earlier this month. The centre will be built through a partnership between the Department of Rural Development and Land Reform and the Agricultural Research Council (ARC) and hopes to boost the government’s drive to reinvigorate black commercial farming in South Africa. Rural Development and Land Reform Minister Gugile Nkwinti, speaking to SAnews, explained the objective of the program was “to rekindle that class of commercial farmers destroyed by the Native Land Act.” The new facility will accompany the existing program, the National Rural Youth Service Corps (Narysec). Established in 2010 and with over 14,000 members, it aims to provide young South Africans
with the skills needed to find employment or start their own business. The new centre will be essential in helping young people learn the skills and expertise necessary to grow their own food and help provide for future generations. “We need to produce young farmers who can grow vegetables, produce meat, and those who can also look after the environment to ensure that the environment around us can carry us through the next 100 years” Nkwinti said. Shadrack Moephuli, Council CEO explains: “We will provide them with the training so that they can be productive themselves, understand the use of technology, how to respond to the needs of consumers, but also how to ensure to identify the diseases at their respective farms and solve the problems on their own.”
Plans in place for further ECD centres of excellence R16 million has been assigned for the construction of further Early Childhood Development (ECD) centres of excellence across Cape Town. Suzette Little, Mayoral Committee Member for Social Development and ECD said at the announcement that Cape Town remained committed to giving young children a safe learning environment at ECD level helping to prepare them for their formal schooling. The ECD Department has spent over R7 million so far this financial year on the construction of ECD centres of excellence. Both the Leonsdale and Scorpio centres in Elsies River and Ocean View have been completed with the new Strandfontein centre on track for its completion date. Plans to build further ECD centres of excellence in Delft, Mitchells Plain, Dunoon, Ocean View, Heideveld and Lotus River have been given a budget of R16 million by the directorate.
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Little explains: “Children need a solid start in life. We are making a massive investment in early childhood development by building these centres of excellence, as part of our goal of getting to the point where every child has access to a facility that can provide the building blocks so crucial to their future.” Strong partnerships with communities and parents taking responsibility is essential for these projects if the ECD centres are truly going to help children. “I encourage residents to approach the authorities to find out how you can get involved in the development of the community by, for example, starting a food garden. In some cases, there is the option of volunteering at a local school for those who are unable to pay the school fees. Our responsibility towards our children must take priority at all times, to ensure that they grow up to be active, well-functioning members of society,” says Little
The inauguration speech of President Zuma In his inauguration speech, President Zuma explained that economic transformation will take centre-stage during this new term of government: “Today marks the beginning of the second phase of our transition from apartheid to a national democratic society. This second phase will involve the implementation of radical socioeconomic transformation policies and programmes over the next five years.” The economic transformation programme will help to promote local companies and entrepreneurs with a vision to further develop communities where households will have access to housing, water, electricity, sanitation, safe and reliable public transport, health, education, security, recreational facilities, a clean environment and adequate nutrition.
President Zuma explained: “The end result of all these transformative economic programmes is a growing inclusive economy which creates jobs and provides opportunities for all, especially the youth.” The government will also continue to build new railways, ports, schools, universities and develop roads and more infrastructures around the country. “We will promote productivity within the public service and ensure much tighter accountability, with firm consequences where there is a failure to deliver services to our people. “The road ahead is long and demanding. The challenges ahead may seem insurmountable, but we are determined to succeed, as we have always succeeded in our efforts to overcome challenges” President Zuma said.
Volkswagen Group South Africa produces its two millionth engine Volkswagen Group South Africa (VWSA’s) marked a momentous occasion when the 500,000th EA111 engine rolled off the production line this month, making it engine number 2,000,000 to be produced at the company’s manufacturing plant in Uitenhage in the Eastern Cape. Production of the EA111 engine, which started in 2010, powers the Volkswagen Polo and the Polo Vivo models both locally and equivalent models abroad. Richard Reid, head of VWSA’s engine plant said in a statement: “Since then, there has been a steady growth in production volumes, with this year’s production set to reach the 175,000 mark.
“Last year in September, we introduced a fourth shift in the engine plant which increased the production capacity from 147 000 to 175 000 engines. The bolstering of production was due to the high demand from the Chinese market.” With an increased growth in production, VWSA have introduced new production line technology, including a state-of-the-art testing facility that helps to ensure each engine is 100% proof tested before leaving production and hi-tech interactive machinery that assists operators with instructions via a screen which is connected to the electronic bolting equipment.
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Engineering mobile technology for Southern Africa Editorial: Christian Jordan
Zoona is on track to grow into one of Southern Africa’s most important companies when it comes to mobile payment technology. CEO, Mike Quinn tells IndustrySA more about this innovative company and the journey which saw him go from Canada to Ghana to the UK to Zambia to South Africa in pursuit of the perfect entrepreneurial opportunity…
Social entrepreneurship is a route that many modern business people choose to follow. It involves creating innovative solutions to social problems and of course this can bring big rewards, both financially and ethically. One such entrepreneur who chose the social route is Mike Quinn. The young Canadian came to Africa 11 years ago, looking to forge a career in the development sphere. After setting himself for an entrepreneurial life, with a fantastic education and outstanding work ethic, Quinn became involved with Zambian start-up, Zoona. Today, he is the CEO, contemplating international expansion and expecting exponential growth in the coming years. Quinn recently took the time to tell IndustrySA more about his history and the progress that Zoona, Zambia’s leading mobile payment technology company, has made since its establishment back in 2009.
ENGINEER TO ENTREPRENEUR “I did an engineering degree in Canada, in Vancouver,” he says. “During my degree course, I realised that I didn’t really want to be an engineer but I finished the course anyway. I engaged with a young organisation at the time called Engineers Without Borders and I joined the chapter at my university.
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Their goal was to see if students and engineers could become more engaged with global development issues and they started a volunteer programme with partner organisations in Africa. When I graduated back in 2003, I applied and they sent me to Ghana where I spent a year working on a rural agricultural project. “Following this, I went back to Canada and started in a consulting engineering job for six months, but my heart was still in Africa. “I took a second leap with Engineers Without Borders and they sent me back to Africa, to Zambia. I spent 18 months working on another agricultural business project, spending most of my time engaging and understanding the challenges of smallholder farmers in a very drought-prone part of the country. “I knew that I really enjoyed working on development issues and I’d started to build a good understanding of working in Africa, but I felt I lacked an understanding of the big picture. So I went to London and got into an international development master’s programme at the London School of Economics. “Following that, I got lucky and was accepted to Oxford Business School on a Skoll Scholarship for Social Entrepreneurship. At the time I didn’t have any private sector experience but I did know that I was interested in social
entrepreneurship and was quite entrepreneurial myself. I learned about business, social enterprise, entrepreneurship, venture capital and a host of other topics. “When I graduated, I knew that I wanted to be an entrepreneur and I wanted to work in Africa in a business that could contribute to African economic development.” The following few months saw Quinn hunting for an opportunity to get back to Africa and seeking out potential investors who were interested in working in developing nations. “I had developed good network in London and I had started my own company which would help source investment for entrepreneurs that I had met in Africa. I spent a lot of time pitching to investors in London and I was eventually connected to a social investment fund in Washington DC that had investments in Kenya but was looking to expand. I told them, ‘if you buy me a plane ticket to Zambia, I have a great network and I can find businesses there for you to invest in’. So that’s how I got back to Zambia after finishing at Oxford,” he says.
ZOONA Soon after arriving back in Zambia, Quinn found an opportunity which sparked the entrepreneur in him. Zoona had been established by two brothers, Brad and Brett Magrath, and after meeting the founders through chance, Quinn realised
that the business had great potential. “Through sheer luck and serendipity, I had a connection that put me in touch with the founders of Zoona; two brothers who built technology for mobile payments in Zambia and they had a very ambitious business plan. They were also very capable, experienced entrepreneurs. I went to them with the backing of the investment fund in Washington and facilitated a $200,000 early stage investment. During this process I realised that it was much more fun working with entrepreneurs to build a business from scratch so I convinced my retired parents to mortgage their house and lend me $100,000 to put in the business myself, making me a full partner with the founders,” he says. The three partners later became four with the addition of Keith Davies, an Oxford MBA colleague of Mike’s who left a cushy job at Citibank in Johannesburg to join Zoona. The four then managed another two years of frequent cash flow crises to keep the lights on before becoming the first Zambia based technology start-up to ever close an international venture capital deal in early 2012 led by Omidyar Network and Accion Frontier Investments Group. So what does Zoona actually do? Mobile payment technology can sound complicated to begin with but the Zoona model is remarkably simple – perhaps a driver behind its success.
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Entrepreneur “The Layman’s understanding of mobile payments in Africa is consumers storing money on their phones and sending money to and from each other and using their phone as a bank account. This is based on a success story from Kenya called M-Pesa, which has been the most successful model to date,” says Quinn. “Our business looks at the industry a little bit differently. We focus on providing business solutions to micro, small and medium sized enterprises, ranging from ‘mom and pop general goods shops’ to larger distributors of fast moving consumer goods like Coca-Cola.”
Editorial: Christian Jordan
“As a business, our real goal is to become a billion dollar pan African company” The Zoona payment platform, developed in Cape Town, allows customers to send money to friends, family, business partners, suppliers or whoever else they need through an easy, quick, and safe cashless transaction. As one example, someone can walk into a store in Lusaka and send money to someone in another town via an over the counter transaction. The agent then processes the transaction through a mobile phone and makes a commission. The person receiving the money then receives a SMS and they can walk up to another agent and claim their money in cash through which the agent also makes a commission. Quinn also describes the situation of Coca-Cola distributors in Zambia as a prime example of how Zoona can benefit small
businesses making B2B payments. “Previously the whole system would be cash,” he says. “Distributors would sell their stock for cash and drive to their supplier with a pile of cash and purchase more stock. Now, they can deposit cash into their Zoona account using any of our agents and they can then send the money electronically using their mobile phone to their supplier.” And the impact that Zoona has on local business does not stop there. The company also provides finance solutions for small businesses to expand, driving employment and economic growth. “We also offer financing in the form of working capital to these small businesses. One of the key constraints is that small businesses need float in their Zoona accounts to process money transfers or make payments to their suppliers but small businesses are often cash constrained. We provide short-term liquidity in the form of overdrafts to solve this problem. We also provide expansion capital to help our customers open new outlets,” explains Quinn. “We want to live our brand promise of ‘helping businesses grow’ because the more transactions our customers do, the more we grow ourselves.”
CASH IS KING The Zoona model is perfectly suited to markets where cash is used as the dominant payment method and because of this, Quinn is positive that the market still has plenty of room for growth. When asked if competition between Zoona agents could be a problem he says that, for now, that is not a worry: “Zambia is such a cash driven economy – 85% of adults don’t
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have a bank accounts so the majority of money movement is through the hand to hand trading of cash. Because of this, we are finding that the demand for agents is high and we are not even close to the point of saturation. Competition is not a concern; we are growing so quickly that even if we put a new agent close to an existing agent, both businesses will grow.” The Zoona agents are some of the most important elements in the business model and without whom the idea would fail. To them, cash is important and working as part of Zoona they have a chance to create a prosperous career and one with almost endless opportunities. “One example is a lady named Misozi, one of our agents in Lusaka,” Quinn explains. “She was 19 when we found her and she had graduated with a high-school diploma but she didn’t have a lot of opportunities or business experience. She became an agent for us in a good location and has been able to grow her business. She is now 24, she has nine outlets, employs 14 people and she makes $9,000 commissions every month. She never cuts corners and does everything properly. It is so heartening and we feel if we can replicate that model, we’re on to something with creation of employment and growth in the economy of Zambia.”
now growing between 10-20% each month. We had 44 people in the company at the end of December and at the end of April we had 70 – one of our biggest challenges is finding desks and chairs for people! “In Zambia, we are the market leaders and we are just at the tip of the iceberg. I expect us to grow by ten times in the next couple of years. We have a strong brand and good technology. We have around 500 agents and we want to get to 1000 by the end of this year and 5000 by the end of 2015.” When asked about the long-term goal of the organisation, Quinn responds with a typically ambitious statement: “As a business, our real goal is to become a billion dollar pan African company and perhaps beyond that one day so our strategic push right now involves taking the model into new markets.” And this just shows; no matter where you come from and what your idea, as long as you have ambition and a determination to succeed, then you can conquer any market and solve any problem – epitomising the nature of a ‘social entrepreneur’.
CONSTANT DEVELOPMENT The future looks bright for Zoona. As we move swiftly through 2014, it is inevitable that we will see more and more Zoona green popping up around the country. Quinn explains that recently business has seen a big boost and the company now occupies a very strong position in the Zambian market. “Business has really taken off in the past 18 months. We are
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South African’s solving social problems yet again Editorial: Christian Jordan
This country has, for some time, been producing products that are helping to change people’s lives for the better. This month IndustrySA looks at the Tshulu Stove, an innovative new wood burner that can be used for cooking or heating and is set to drastically change the way rural communities live. Chris Bradnum and the Tshulu Trust are behind the design and this partnership looks set to bring good things to South Africa. Chris Bradnum is the Head of the Industrial Design Department at the University of Johannesburg. He has over 22 years professional industrial design experience and has spent the past 16 years in academia. His areas of research interest include design for development, energy and sustainable development and user centred design approaches. Professional industrial design projects he has been involved in include work for the Department of Home Affairs, medical equipment design, sports equipment design and kitchen products. But his most recent design, a product that has been attracting a lot of attention from the media and from the design community, is the Tshulu Stove – a safe and environmentally friendly wood-burning stove for use in low-income households. The Tshulu Stove is based on the ‘rocket stove’ design, developed by Aprovecho in America, which includes a burn chamber and directed chimney of heat to the base of the cooking pot. Bradnum and the University of Johannesburg worked with the Tshulu Trust in the households in the HaMakuya district in Limpopo province to come up with the inventive stove and he says that one of the most vital attributes behind the Tshulu Stove is that it reduces the use of paraffin, a dangerous and unstable source of energy for stoves like this. “The majority of low-income households in
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South Africa rely on open fires or use paraffin as their primary fuel source for heating and cooking needs. A recent study by the Global Alliance for Clean Cookstoves estimates that three billion people in the developing world cook food and heat their homes with traditional cookstoves or on open fires,” explains Bradnum in a University release. “More than four million premature deaths occur every year due to smoke exposure from cooking on open fires or using inefficient stoves in the homes.” Bradnum says that his research, and that of the Global Alliance for Clean Cookstoves, found that as an alternative to electricity, gas could be ideal in terms of clean cooking and efficiency, but there is a general mistrust of gas stoves and uncertainty about their safety and sustainability. In many areas, paraffin is the fuel of choice for cooking. However, in the Ha-Makuya, Vhembe District in Limpopo, where Bradnum conducted research, the community tends to use wood fires for cooking. “The cutting down of trees is strictly controlled in the area by village headmen and the local chiefs, so households can only use wood that has fallen off the trees or specific areas that have been demarcated for tree felling,” says Bradnum. “This means that the community must spend extended periods searching for wood. The fallen branches are of little use in open fires as these burn
up very quickly and don’t generate enough heat for cooking. However, these smaller branches burn extremely well in the Tshulu Stove.” Innovatively, the Tshulu Stove reduces the amount of wood used for cooking and reduces the amount of smoke and emissions given off by fires. It is made up of a number of specifically designed parts. “The Tshulu Stove, includes innovations such as introducing air below the burn chamber, a removable ashtray, standing height cooking, an inner sleeve that reduces the amount of heat loss from the burn chamber and an outer sleeve that reduces the chance of burning the stoves users,” says Bradnum. In laboratory testing conducted at the University’s SeTAR (Sustainable Energy Technology and Research Centre), the stove has already proved to be incredibly efficient. “The combustion efficiency levels are ideal at: 2% for paraffin, 5% for charcoal and 10% for wood, with lower percentage indicating better efficiency. The Tshulu Stove achieves an average efficiency of 3%, a fraction above the ideal paraffin stove,” says Bradnum. He concludes: “In effect the Tshulu Stove will save an average household, cooking three meals a day on the stove, 7kg wood per day over that of a three stone fire. This translates into a saving of 2500kg of wood for one household in a year.”
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The “New York of Africa” Editorial: Joe Forshaw
Something big is bubbling in Gauteng. The Chinese are coming to throw their weight behind the construction industry and provide what is set to be one of the most advanced cities in Africa. Every once in a while, one of those construction projects is announced that everyone knows will leave a big mark in the history books and for the South African property market that announcement came last year from Chinese diversified property company Shanghai Zendai Property. Shanghai Zendai, listed on the Hong Kong Stock Exchange, promised the South African economy a huge boost when it announced that it would develop a 1600 hectare site in Modderfontein, just outside Johannesburg, into a “New York of Africa”; a truly all singing all dancing mega city that will house around 100,000 people. The sites former owners, South African chemicals and explosives firm AECI, said that preference was given to the Chinese because they were willing and able to buy more of the site for cash up front. Other offers had been for smaller parts of the site but AECI was always keen to sell the whole site in one deal. AECI chief financial officer, Mark Kathan said that local buyers “never made firm offers” and chief executive Mark Dytor said: “The problem is in the South African economy, there are not many guys that can come with that much money up front, knowing it would take such a long time to develop and to get the returns – so this was ideal for us.” In March this year, AECI announced completion of the transfer of its surplus property at Modderfontein, and also its property development business to Shanghai Zendai Property for R1.06 billion in cash. The transaction involved the acquisition of about
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1600 ha of land and the buildings thereon, as well as property development business Heartland Properties and investment holding company AECI Real Estate. The Modderfontein development will take 10-15 years to complete and over that time a reported R80 billion of investment will be bought into the region. Shanghai Zendai Chairman, Dai Zhikang has excited many South Africans by saying that the development will contain a financial hub, 35 000 houses, an educational centre, a trade and logistics park and a sport stadium. “It will become the future capital of the whole of Africa,” Dai said. “This will be on par with cities like New York in America or Hong Kong in the Far East.” According to the company’s local legal adviser, Edward Nathan Sonnebergs (ENS), the development will also include an African heritage theme park and a convention centre. However, ENS Africa said: “No plans have been approved yet as the deal was conditional on contractual undertakings in the following months on behalf of both the buyer and the seller.” Importantly for the South African economy, Dai is confident that the development will become a hub for Chinese firms investing in sub-Saharan Africa. The deal is set to create around 22,000 jobs over the next 10 years, 65% of which will be semi-skilled and unskilled. Shanghai Zendai estimates direct and indirect benefits for the economy will total R14bn over the same period. Previously, the Modderfontein site was home to an explosives factory that opened in 1896 to support the gold mining industry. Dai said that the site includes a wetlands
area that will be protected throughout the entirety of the development and could eventually become the equivalent of Central Park in New York. Dai, who has been described as a ‘maverick, a visionary, an art collector and businessman’ founded the property group Shanghai Zendai Investment Group in 1994 and Shanghai Zendai Property in 1998 - the latter boasts landmark developments across 12 cities in China and one project under way in Auckland, New Zealand. The BBC estimated his net worth at $1.2-billion in 2011 and when asked by a BBC reporter how he tells a good investment from a bad one he answered simply: “From the heart”. His impressive list of personal accolades started early after he earned a bachelor’s degree from the Renmin University of China, majoring in international finance, and a masters degree from the Graduate School of Finance at People’s Bank of China. It is perhaps Dai’s personality that has sparked people’s interest in this project as the site in its current state is nothing to get excited about. Still largely undeveloped, Shanghai Zendai will need to add roads, electricity and other infrastructure to the site before any real development gets underway. On the technological side of the development, important news was announced last month when PCCW Global, the international operating division of Hong Kong Telecom (HKT), will build the network and provide the technology infrastructure that will support the whole development. The Hong Kong based company says: “PCCW Global,
as the venture’s strategic technology partner, will provide Zendai with a wide range of services, including systems development and solutions integration, application development and management, telecoms and IT services, cloud computing services and e-commerce solutions.” It’s easy to see why this project has attracted so much attention and with the most recent artists impressions providing more reasons to be excited, it is certainly a good time to be involved in South African construction.
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A motor-mad leader
Editorial: Joe Forshaw
Ryan Searle is the Head of Audi South Africa. He tells us that over the next six years, the company is looking to become the leading premium automotive brand in the country.
Q: Tell us more about your personal history with the company? When did you start? What was the attraction to Audi?
Q: What is your view on the automotive industry in SA? Can it be genuinely globally competitive?
I joined Volkswagen Group SA in 2002 as Audi National Sales Manager and then moved over to the VW brand as Volkswagen Marketing Manager in 2005. I took over as the Head of Audi South Africa in 2008. My interest in the Audi brand dates back to my youth when I had the opportunity to witness Sarel van der Merwe in the Audi quattro dominating the South Africa rally circuit in the eighties. It was love at first sight!
This question does not affect Audi as we are a full importer, but let me answer in general terms as someone involved in this industry. There are a number of challenges that the industry in South Africa faces, the biggest one being economies of scale. There are seven OEMâ€™s in SA who manufacture for both local and export markets. To be globally competitive, volume plants should be producing 150,000 units plus a year - this is what makes it attractive for suppliers to invest - which in turn increases local content, which makes vehicle manufacturing viable in a country at the tip of the African continent. Due to this location there are additional logistic costs of importing components from the mother plants to SA and in turn exporting the FBU to the export market versus manufacturing in, say, Europe. To be fair these are largely offset by government incentives offered through the Automotive Development Programme (APDP). With a local market at around 450,000 passenger cars and 160,000 light commercials the local market is very competitive, there are nearly 60 brands competing here so the majority
Q: Did you always want to work in the automotive industry or did you stumble into it? I grew up in the â€œDetroitâ€? city of South Africa (Port Elizabeth) in the days when Ford / Volkswagen and General Motors were running their production facilities at full capacity. My father worked for Ford and then Volkswagen so it was impossible to ignore the energy and the passion of the motor industry. I was fortunate to be granted an opportunity by Barloworld Motor in Cape Town in 1994 selling motor cars for the Barons Group and one thing lead to another.
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Ryan Searle of cars sold in SA are imported. So the only way to grow volumes is either through a bigger local market or more exports. Export opportunities into the mature markets are relatively limited and only the US and Europe allow SA to import cars into their markets duty free. Emerging markets tend to have punitive import tariffs making it unattractive to export to these markets. We need to grow the local market through sustainable incentives and initiatives. The APDP focuses on increasing production volumes and nothing on the local or African markets where our focus should be. In short, a globally competitive motor industry is possible in SA, and a lot has been done to move in this direction, but more needs to be done in the future. Importantly, the industry, government, labour, the parastatals and the suppliers need to work together with one common goal to make this a reality.
Q: What is your vision for the company over the next five years? Audi wants to be the number one premium automotive brand in South Africa by the year 2020 in line with the Audi global strategy. Audi will offer the most compelling product to the South African customer. Last, but not least, Audi‘s vision is to be the number one premium brand in customer satisfaction every year for the next five years.
Q: 2013 was expected to be a bumper year for Audi. Did these high expectations materialise? They most definitely did materialise. It was the third consecutive record year for Audi in terms of volume and premium market share. Audi delivered 19,335 vehicles to the South African consumer and secured a record 22.7% market share in the premium market in 2013. This is a great performance and meant that Audi doubled its volume in the past five years, making Audi the fastest growing premium brand in South Africa.
Q: Some people often group Audi together with other premium car brands. Is there one factor that separates the company from the rest in South Africa? Audi does compete in the premium segment of the South African vehicle market with many other premium brands competing for premium market share. Audi is a progressive brand and remains honest in its endeavours. We delight our customers accordingly and this sets Audi apart.
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Q: What advice would you give to people who hope to work their way up through the ranks in the automotive industry and reach senior positions like yours? It is important to secure a tertiary qualification in order to succeed in the motor industry. Post my degree I took the decision to learn about the motor retail environment and to embrace the selling and servicing processes in the automotive retail space. It was the best post graduate degree that I could have ever imagined. Thereafter it was important that I continued to invest in my education and both Barloworld and Audi have granted me plenty of opportunity in this regard. If you want to reach a senior position within the motor industry you have to be passionate and willing to work long and hard hours with a fair amount of personal sacrifice along the path to success.
Q: What is the idea behind Audi Ambassadors? What do they actually do for the company? Audi appoints individuals who embody the Audi brand values of Sporty, Sophisticated and Progressive. We endeavour to provide them with the vehicle in the Audi range which most defines their personality. ChianoSky is both Sophisticated and Progressive, she’s young and influential and the perfect fit to the Audi A1 range. Siya Kolisi and Cameron van der Burgh represent Sporty – both pioneers in their sporting codes and respected role models in South Africa. Our newest Audi Brand Ambassador is Siyabulela Xuza, who is a South African innovator and an exceptionally accomplished young individual. He represents the brand’s innovation qualities impeccably and lives up to the brand promise of “Vorsprung durch Technik” at the young age of 25.
Q: Which Audi do you drive currently? I currently drive an Audi S5 Sportback
Q: If you could pick from any Audi in history, which would be your favourite? The Audi A6 allroad
Q: What have been the biggest challenges you have faced personally in your journey to the top of Audi SA? My daughter was 2 years old when I was nominated to represent my company on an international executive leadership training course which took me overseas once a month for one week every month for ten months and I had to hold down my job at home. My son was born in the
Ryan Searle same year. My wife was very patient with me and somehow we survived the challenge. What doesn’t kill you makes you stronger.
Q: What is the most difficult decision you’ve had to make during your time at Audi? When you are passionate about a brand and intent on making that brand the number one premium brand in South Africa you have to make a number of difficult decisions every day. A difficult decision that is designed to secure an outcome which meets this objective does not seem that difficult when you are delivering that difficult decision.
Q: What does it take to be ‘Head of Audi SA’? Do you need mechanical or engineering knowledge or is it more useful to be versed in legal, financial and management practices? Audi South Africa is an importer brand and primarily sales and marketing driven by nature. I think it would be more useful to be versed in a legal, financial and management knowledge but a mechanical or engineering background can also find a home in Audi as long as you believe in the brand and are equally passionate about “Vorsprung durch Technik”.
Q: Finally, if you weren’t working for Audi, what would you be doing?
A professional rally driver or a vet (I love driving and I l ove animals).
“When you are passionate about a brand and intent on making that brand the number one premium brand in South Africa you have to make a number of difficult decisions every day”
may 14 PAGE 19
Effective risk management = effective business management Editorial: Roland Douglas Production: Ajuanne Payne Managing the risks faced by your company; now there’s a task that can get complicated and potentially expensive. But if you have the correct advice and service from seasoned industry leaders, you will undoubtedly reap the rewards. Marsh Risk Consulting MD, Volker von Widdern tells IndustrySA more about the benefits of effective risk management. Risk: The potential of losing something of value, often the result of interaction with uncertainty. Risk is something that all businesses flirt with and something that, in some cases, needs to be mitigated. So, how do you go about this? Everyone knows that to alleviate risk you buy insurance and insurance for business is one of the world’s biggest industries. It involves sharing your risk with an insurer at a cost. Years ago, this was a simple idea; you pay a premium and the insurer pays if you receive a loss; and the same remains true today but the techniques used by the insurance industry to analyse and reduce the risk have become almost like a science with specialists exploring every aspect of business with a fine-tooth comb. In South and Southern Africa, the market is no different to the rest of the world – there are many risks to deal with so who can you turn to for the highest quality service surrounding risk? Many international risk advisors / insurance brokers and insurance companies now have homes in South Africa so there is a raft of options to choose from but if you want the best then you cannot overlook Marsh. Marsh, a global leader in insurance broking and risk management, is a wholly owned subsidiary of Marsh and McLennan Companies and in Africa the company
PAGE 20 jun 14
is headquartered in South Africa with direct Branch representation in Namibia, Botswana, Zambia, Malawi, Zimbabwe, Uganda and Nigeria. Importantly, in South Africa Marsh has a risk consultancy division – Marsh Risk Consulting (MRC) and in 2012, this division merged with Alexander Forbes Risk Services creating one of the largest and most experienced dedicated risk consulting companies on the continent. The risk consultancy side of the insurance industry is concerned with helping companies to better identify, understand and manage the risks they face. One man well versed to talk all things risk is Volker von Widdern, Managing Director of MRC SA. The industry veteran recently told IndustrySA more about what risk consultation actually involves. “The core of our business is in two themes; qualitative or hazard/operational on one side and financial and quantitative issues on the other. What are the kinds of things that can burn, break, injure people, poison the environment etc. those come under hazard/operational. “If you look through a risk lifecycle and you’re looking at a business for which you may buy one year of insurance, we would start the assessment of the business by doing a risk survey or property survey. This involves assessing every aspect of the business from a risk point of view – say it’s a factory; what are the throughputs, what plant is
Marsh Risk Consulting
on site, what consumables are on site, what are the fire loadings etc. “Then you would write up all of your findings in a substantial report, around 100 pages, and underwriters will use that report to evaluate and price the risk. “Within the report, you need to asses critical elements. For example, if you were reviewing a printing factory, the fire loading colloquially would be enormous because of the paper, the glue and packaging materials. You would look out for high levels of protection and prevention – things like fire sensors and air extraction etc. Practically speaking, we know where the key risk areas are. “A big part of the risk understanding is not only the fire, burn, break; it’s the understanding of business interruption and the consequences of the particular kind of loss,” explains von Widdern. The first port-of-call is to understand the risk as deeply as is possible and being able to recommend risk prevention and reduction strategies and this is where the report developed by MRC becomes important. “The critical outputs of the survey report are what we call the estimated maximum loss (EML) and the maximum possible loss (MPL) scenarios,” says von Widdern. “EML is a large loss scenario but where protective systems work - so the fire prevention works, or you can minimise the impact of plant failure etc. The MPL is where your
prevention systems don’t work - maybe a plane hits your roof and wipes out your sprinkler system for example. “The first order of business is to understand the risk and understand the likely insurability and size of a possible claim on the risk, write the report, and hand it in. The report then goes to our insurance market brokers. “After that we raise many recommendations for the clients on how we can assist them to improve the risk – things always need attention and this leads to the next level of consulting which is risk management or risk programme delivery. Here, we go right from the bottom and help develop standards, help with training, help with implementation, we have a very strong audit programme, we do benchmarking and validations and all the like and we effectively become the rent-a-risk manager providing the right resource as required across the whole qualitative operational risk area.”
COMMITTED Marsh has by far the largest risk consultancy team in the country and von Widdern says that this shows the company’s expertise and commitment to the industry. “Our team has around 110 people working on this and the next biggest team for any other broker has fewer than ten and this demonstrates the commitment we have to this side of the work,” he says.
jun 14 PAGE 21
WHEN YOU ARE PASSIONATE ABOUT SOMETHING, YOU PROTECT IT IN THE BEST WAY. ZURICH INSURANCE. FOR THOSE WHO TRULY LOVE THEIR BUSINESS. Speak to your broker or visit www.zurich.co.za
2014 Zurich Insurance Company South Africa Ltd. Authorised Financial Services Provider no. 17703.
PAGE 22 jun 14
Marsh Risk Consulting
“Our expertise covers both themes: The qualitative, the hazard right through to the strategic risk, and the quantitative, where you start with claims experience and aggregate that all up into a structure where you recommend to the client what financial model they should use to best capture and retain their premiums to minimise the cost of risk.” Following the assessment of all of the qualitative aspects involved, MRC then has to make quantitative calculations and review all of the financial impacts of potential risks. This covers everything from business interruption costs to supply chain disruption costs. “Throughout the year, we hope that the client doesn’t have a claim but what if they do? We are now talking about how we can help the client with that claim. We have a forensic accounting team that is expert in dealing with claims. Our team drastically improves the data that goes to the insurer for the claim and reduces the effort for the client. This shortens the time of the claims and accelerates confidence and cash flow of the claim and this makes clients happy,” von Widdern explains. “When we have gone through the physical assessment of the risk, we have to look at measuring and pricing the risk. “What has come to the fore in the strategic risk area or corporate risk area is the quantification of risks, risk financing and insurance optimisation. What you’re trying to show here is that there’s no point to a large corporate
insuring every last dollar of its risk because it’s too expensive and insurers are not there to reimburse petty cash. Insurers are there to look after you when you really need it; several hundreds of thousands upwards, relative to the size of the company. “You have to understand where to pitch the risk transfer layer. We have an actuarial and analytical team which does that. “We estimate the maximum loss for the business, we look at claims for the last five years, we work out an estimate for the average cost of claims for a year and we note the company’s profits and so on and so forth. Through this process we recommend the excess or deductible and we do this from an analytical point of view as we know it’s important for clients to understand the efficiency of pitching the deductible at the right number. So, the quantitative side of risk becomes a very important part of our lives,” he says.
SUPPLY CHAIN RISK One of the services making MRC unique in its offering is supply chain risk assessment – such an important part of modern insurance offering but so often neglected. Von Widdern says that MRC is the only company to offer supply chain assistance and this separates the organisation from the chasing pack. “In the field of supply chain risk assessment, there is
jun 14 PAGE 23
company profile difficulty in achieving adequate insurance coverage and our unique analysis substantially improves the coverage terms for our clients. “We are the only risk consultants in South Africa’s insurance industry who do supply chain risk assessment. “It’s unlikely that you can get a risk solution from anyone else other than Marsh where we will motivate a more pragmatic risk orientated outcome, in partnership with the insurers,” he says. But what does supply chain risk assessment actually involve? Von Widdern defines: “It’s any disruption to the supply chain where the underlying assets or business
PAGE 24 jun 14
interruption cover for the company’s own assets is not the primary risk exposure consideration.” Consider the 2011 ‘Bangkok floods’ as an example. Many factories that make hard disk drives were completely flooded and left inaccessible and unusable. Instantly, industry analysts began to predict global shortages of hard disk drives and the price quickly doubled. One company was reportedly set back between US$225–$275 million. Some reports suggested that the insurance industry responded by raising rates in some areas between 50 and 200% or by outright not accepting new clients in Asia.
Palabora Mining Company NON-STANDARD LIFE INSURANCE
CAR HIRE INSURANCE BrokerserV
EMPLOYEE AND RISK BENEFITS
Azriel Aero Aviation
EVENTS AND ENTERTAINMENT
Xelus, Total Risk Administrators
INSURANCE Beyonda Group
MOTOR STAND ALONE SAU
Ad Ultimum, IUM, Paladin, Paradigm
WHY LOOK ANYWHERE ELSE? We’re all different. We think, work and live differently. At Centriq, we see insurance in the same way – differently. It’s this way of looking at you and your clients that makes us a partner you can trust and turn to, whatever your clients’ insurance needs, from assets to liabilities to people. Over the years, we’ve built relationships with leading UMA business partners in our industry that position us to offer each insurance broker and their clients unique solutions provided by dedicated and competent people – that’s the Centriq difference.
jun 14 PAGE 25
Arch Underwriting Managers at Lloyds (SA) wish Marsh Africa every success in the future Arch Underwriting Managers at Lloyd’s (South Africa) (Pty) Ltd is one of Lloyd’s service companies offering direct local access to Lloyd’s security via Arch Syndicate 2012. We are a wholly owned subsidiary of Arch Underwriting at Lloyd’s Ltd, the London-based managers of Syndicate 2012. Our experienced team in Johannesburg is available to assist clients with flexible solutions to meet their specific needs. In particular, we seek partnerships in the facultative, wholesale, agency and retail markets. Address: The Campus, Augusta Building, 57 Sloane Street, Bryanston Tel: 011 575-1041 | Fax: 011 576-1041 | FSP No: 43830
“You buy your computer from Dell or Lenovo or whoever but the hard drive comes from elsewhere. The hard drive supplier has nothing to do with you. So when the computers don’t arrive because the hard drives were late, no one realises that the supply chain insurance is deficient,” says von Widdern. And don’t think that you are immune to supply chain issues – these can affect any company, small, medium or large. A recent study by the Business Continuity Institute has uncovered deep-rooted sources of supply chain failure. Respondents from various industries in 62 countries revealed that 85% of organisations reported at least one supply chain disruption over the last 12 months, and 50% of companies had more than one disruption. Fortunately, MRC’s global Supply Chain Risk Management Practice (a specialisation within the company’s Strategic Risk Practice) provides unique, proprietary solutions that can help organisations ensure that the right plans, processes, and procedures are in place to remain competitive and overcome adverse events, and as the sole provider of this service in South Africa, the company is undoubtedly the first port-of-call when it comes to managing supply chain risk.
PAGE 26 jun 14
HOW CAN MRC HELP? While offering a fantastic portfolio of services, one of the challenges facing MRC is demonstrating tangible results after all, even with all the reports, numbers, figures and policies in the world, a client needs to see value at the end of the process. “In the food industry, we had a situation where a client had an unfortunate loss. When this happens, insurers become nervous and can sometimes impose strenuous new conditions on an insurance policy such as increasing the excess. “What we did was to review the property risk surveys and implement a strategy which helped the client with an immediate plan that would protect the structural assets across all sites quickly and effectively. “Because of this, the very high deductibles that were applied were retracted immediately and returned to the prior lower levels as soon as the risk management programmes commenced. “Our input helped to improve the relationship between the client and the insurer enormously and this allowed the technical improvements to be deployed and risk exposures were improved significantly in the following year,” explains von Widdern. So there is clearly a benefit to be had from high-quality
Marsh Risk Consulting risk management processes and it’s not just heavy-industry businesses that now know this. “We are busy in the mining and financial services sectors because of the scale of those industries,” says von Widdern. “We have a raft of clients in the middle market sector which are mostly in the manufacturing industry; it could be motor, hospitality, light industry, distribution, food, retail – we have many of these types of clients who are actively engaged in risk finance.” But although this sounds attractive, where do you go and who do you speak to for this kind of service? Fortunately, it’s not just a case of endless online form filling. MRC’s team is large and has a plethora of skills in a vast range of areas. “We need technical engineering people to understand how mechanical things work and understand when they break down how long they will be down for,” explains von Widdern. “Then we need people on a fire, health and safety standard side. We recruit people and develop them. Our development comes from the survey routines we have established over many years; the audit procedures, the technical standards and benchmarking, and people learn these and learn what best practice is. “Then we have chartered accountants working for us. They are offering the highest level of insurance consulting
to the captive insurance companies that we service here. These are people who may have been junior accountants through the chartered accountant training routes at auditing firms and who have looked for jobs in commerce. We try and recruit them and demonstrate that there are good opportunities for career growth as both accountants and consultants in an area of specialisation like insurance. “The same happens with asset valuations. We would recruit an asset valuer and they would like working in a large organisation where the client base is highly diverse and they can gain diverse experience,” he says. Clearly, insurance is a ‘people’ business. People are the most important factor and through its people MRC is taking strides towards its ambitious long-term goals. “We want to be the leading risk advisor, reducing the cost of risk both qualitatively and quantitatively in respect of cash flow and exposure. What that means is that by engaging with clients we want it to be recognised that we add value by reducing risks and that improves business performance. “We think that by demonstrating to companies that you can use risk management as a strong lever towards operational improvement, it will become less of a grudge purchase and more of a gain sharing, success building process,” says von Widdern.
Inniu Underwriting are proud to be associated with Marsh SA.
“It’s not about the pieces, but how they work together.” Inniu Underwriting are Insurance Specialists in Large Corporate, Mining and Industrial Risks. Contact us on 011 476-4420 or at www.inniu.co.za to experience our excellent service and delivery.
Authorised Financial Service Provider FSP No 34049
jun 14 PAGE 27
The Brainchild of Gary Corke and Dave Manuel, Emerald was started in 1999 with the idea of specialising in corporate property underwriting. From humble beginnings with a premium income of R30 million in its first year, the company reached over R1.1 billion worth of gross written premium at the end of 2013. From the 1st January 2010, the growth of the company reached an exponential point with the acquisition by Santam of the entire share capital of Emerald. “With a combination of Dave looking to retire, Super Group (one of the shareholders at the time) looking to exit from non-core businesses, and the desire and need within Emerald to change, Santam entered the picture. Santam was looking for a solution to their corporate property business, which resulted in bringing the entire corporate property portfolio of Santam into Emerald, who now does underwriting on behalf of Santam,” explains CEO, Bernard Ray. As a result of this merger, both companies underwent a restructure transferring both the business unit and the people from Santam that worked specifically on corporate property accounts to Emerald. “Obviously there was a need for rationalization and a restructure as the two businesses had effectively been in competition in the corporate property space” Ray explains. The combined portfolios from each company provided access into a potentially greater market share, on Emerald’s terms. Initially the goal was to ensure the profitability of the combined portfolios, but the business nevertheless continued to grow. As a fully intermediated company, all of the company’s business comes through intermediaries. Marsh, a strategic partner to Emerald, is one of the major intermediary companies providing business to Emerald, which then provides the insurance product for the policyholder. “Marsh has a strong relationship with its clients and a large part of that relationship relates to assisting clients in terms of its risk management. The risk, which is then passed over to Emerald in terms of underwriting is better, and we understand the risks which creates less exposure, and thus allows us to give the client a better product designed for their needs” explains Ray. The synergistic relationship between Marsh and Emerald helps to build relationships between the client and its intermediary and between the intermediary and the underwriter, therefore creating better knowledge and ultimately, an improved risk. Looking to the future, Emerald wants to continue as the preferred provider of corporate property insurance products to both South Africa, and now a wider geographical market as far as South East Asia. “The goal is to continue our positive growth in a manner that provides a profitable return to our shareholders” says Ray. Emerald will continue to set its own strategic goals in association with Santam ensuring that these goals remain aligned with its shareholder. Geographical diversification into emerging markets and managing the risk pool efficiently is just one of the strategies undertaken by Emerald. Emerald places a heavy focus on its CSR campaigns and considers this side of business as an imperative. “Our approach is definitely one of customer centricity, but in order to fully understand the needs of our customers we have to look wider at the community, the country and probably even the world we conduct business in.” Ray explains. The Emerald Experience promises to “encompass the greater needs of the community and the environment”, which together with expansion into Asia and a continued and valuable relationship with Marsh, looks set to continue for many more years to come.
Palabora Mining Company
solutions that Shine
Emerald Risk Transfer is currently
For more information on how Emerald
the largest Corporate Property and
can assist your Corporate clients, visit our
affiliated Engineering Underwriter
website or call us.
in South Africa, and underwrites
t +27 11 658 8200 W www.emeraldsa.co.za E firstname.lastname@example.org
Continent. The solution orientated approach of the Emerald team to create sustainable, quality products is part of their culture.
Find us on Facebook www.facebook.com/emeraldrisktransfer
This flexible approach, coupled with the
Or follow us on Twitter
support of their excellent Reinsurer panel,
allows Emerald to be truly innovative. The aim of the company is not to be the cheapest by cutting corners, but rather to be the best by offering expertise and skill. Emerald writes business into the insurance licence of Santam Limited. Santam has a Standard & Poors rating of A- with a stable outlook.
Emerald Risk Transfer (Pty) Ltd (Reg. No. 1998/025512/07) is an authorised financial jun services provider (FSP No. 13893). Emerald is a wholly owned subsidiary of Santam Limited.
14 PAGE 29
company profile Envirosure Underwriting Managers is a niche Underwriting Agency • Specialising in insuring transporters against hazardous spills • Insuring garages or commercial sites with underground or above ground tanks for gradual pollution Our additional value added products are: • Excess Solution – excess is bought down to nil in RSA or R50,000 cross border • Side Tank Cover – an indemnity of R80,000 or R150,000 is on offer • Premises Risk – Insuring the transporters premises for spill incidents
Your environmental hazard insurance solution
Envirosure has a 24 hour toll free call centre called Hazcall24, with qualiﬁed operators who will immediately mobilise our preferred response company, Spill Tech, to the incident scene. Spill Tech is the leading oil and chemical spill response company in Southern Africa with a national footprint. Spill Tech is a SASOL approved emergency response service provider. Our insurer is Guardrisk insurance company and our Re-Insurer is Hannover-Re. Envirosure is an Authorised Financial Service Provider – FSP: 38594
Contact: Sjanine Tanner email@example.com 031 2054918 New National Assurance Company Limited (Principle Insurer)
But on the journey towards becoming the ‘leading risk advisor’ is not straight forward. As any business person will know, especially those in the insurance industry, sometimes things that are out of your control can swoop in and spoil your plans.
“We think that by demonstrating to companies that you can use risk management as a strong lever towards operational improvement, it will become less of a grudge purchase and more of a gain sharing, success building process” In the case of MRC in South Africa, the global economic slowdown of 2008 was one thing that had an impact on the growth of the business. “We didn’t continue growing at our normal 15-20% each year. It was very evident that markets had shrunk, the availability of credit had shrunk and companies were very careful about where they spent money. “We had a few knocks in that period but on the other side, the retail sector and the property sector was growing nicely in South Africa. The influence of global risks and the shock to the financial system certainly came through to South Africa.”
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But even though this was a difficult time, MRC managed to come through relatively unscathed with highs in one market sector making up for lows in the next. One of the side-effects of the on-going success of the company has been the movement of business to a new office, a move which took place in October last year. “When Marsh and Alexander Forbes completed the merger transaction, it was essential that we were located together in single buildings where multiple offices existed, to maximise the payoff of the merger. In August 2012, we moved into an office that is next to our current site and in October 2013, we moved into our current head office premises. “It’s an excellent, smart new building with brilliant client presentation facilities and a beautiful view. It’s been very good to bring people together; it’s organised and well structured. All of our colleagues are accessible in this building by going up or down a few flights of stairs,” says von Widdern. Now in a top-of-the-range new complex which contains a team with almost unrivalled industry expertise, the future looks bright for MRC and von Widdern suggests that even with the ever-increasing amount of competition in the industry, his team are comfortable in their position. “We have certain competencies but we haven’t locked
Marsh Risk Consulting up the market. There are other service providers for every one of the services we offer. We are under constant pressure to justify a premium price. Market entrants are constantly coming in so we have to try and be nimble as well as being corporately well aligned. “There is a lot of competition but it keeps us alert and that is fine.” This confidence is not unfounded. The Managing Director has had a long and illustrious career in the industry and as you speak to him about the various achievements and accolades he has picked up over the years, you get the sense that there is nothing going on in the industry that he is not in-tune with.
PASSIONATE LEADERSHIP “I’ve been in financial services, in one form or another either asset management or insurance and risk, for most of my career. “I started in the asset finance industry but even then we had short-term insurance broking company as a subsidiary and we capitalised on an opportunity where we could change the model for premium financing. There I saw the real benefits for integrating operational systems with client transactions data and we managed to significantly turn around a premium financing business.
The business we started off then remains South Africa’s most successful premium financing company, IoM” he says. From there, he remained in the asset financing industry and eventually moved to Guardrisk as one of its earliest employees. Guardrisk, the country’s first cell-captive insurer, pioneered the concept of cell captives on an international basis. “A cell captive is a specially approved insurance licence where a corporate is entitled to rent or to operate a branch of that licence in the name of the insurer. It’s beneficial as you can potentially access a licence to write two kinds of insurance. The license means that you can issue an insurance policy from Guardrisk to cover yourself as the corporate and secondly you can issue insurance policies to your customers. “This is very valuable because if you have a reason to look after your customers or add insurance as a product for your customers, you will have the licence that supports the product. This is the correct and regulated way to do things. Instead of going to a big insurer and asking them to write a specific product for you, the cell captive industry was born to allow companies to issue tailor made insurance products to either customers or to themselves, but in a regulated and capital governanced environment.
TRANSITION RISK SOLUTIONS PTY LTD (Underwriting Managers) FSP No : 40534
Transition Risk Solutions was founded in 2009 by experienced short term insurance campaigners Winston van Zyl and Tony Rose. Winston and Tony combined have spent more than 50 years in the reinsurance, insurance, retail broking industry, holding senior positions at the various corporation’s that they have worked for. Transition has secured panel positions at many of its targeted accounts. Growth followed strong relationships with major national, international and independent brokers of which Marsh is one of their leading suppliers. At the outset Transition adopted a strategy of writing follow lines on the larger Assets All Risks type policies depending on risk segmentation and quality Transition specialises in corporate assets risks for large corporate client’s i.e. Telkom, Eskom, Impala etc with operations in South Africa and beyond. Our segments include Mining, Industrial ,Energy , Manufacturing and all other property portfolios says Winston. The UMA offers covers such as Material Damage, Business Interruption and Machinery Breakdown as well as all assets associated with their clients activities. Transition’s partnership with New National (South Africa’s oldest empowered insurer) has been in existence for the past three years. New National has just exceeded the R1billion mark in premium income and boasts impressive empowerment credentials. Due to New National being involved in other classes of business (motor, liability, engineering, marine etc.), Transition is able to offer a seamless product to its clients. The partnership is also a welcome step towards transformation in an industry where change happens slowly. “We share the common vision of meaningful transformation in the corporate insurance space” says Rose. Address: 11 Boundary Road, Isle of Houghton, 1st Floor, No 2 Harrow Court, Parktown, Johannesburg Directors: Winston van Zyl (cell no: 0823383960) and Tony Rose (cell no: 0834538673) Ownership: 50/50 between Winston van Zyl and Tony Rose respectively Tel: (011) 4846802 | Fax: (011) 4849385 | E-Mail: Winston@transitionrisk.co.za and firstname.lastname@example.org
New National Assurance Company Limited (Principle Insurer)
jun 14 PAGE 31
company profile “That was seen as one of the biggest innovations in the insurance industry. The concept started in South Africa in 1993, the licence was awarded in late ’95 and I joined Guardrisk in ’96. I became the MD in ’99 and remained there until 2002. We went from a start-up to a R3 billion company in six years,” says von Widdern. Guardrisk started in the short-term insurance but grew very quickly adding numerous different products to its portfolio. “In ’99 we started a life company (still one of the big innovations in that space), we also issued a license which was focussed on risk financing and building reserves for HIV Aids called Aids Guard, we started a licence in Mauritius called Guardrisk International and we did all of this in six years,” notes von Widdern. “Since then, Guardrisk has continued to do very well; it’s now more than double that size at R10 billion. By the time I left, the company had become a 100% subsidiary of the Alexander Forbes group. There was a natural fit with having a very strong distribution chain in Alexander Forbes (both on the short-term and life side) and the products offered by Guardrisk.” Von Widdern looks back fondly on his time with Guardrisk calling it “a fruitful and innovative time for me, being involved in the start-up of a company and taking it to critical mass and also being involved in a number of innovations there,” and when he left to join Marsh, his
Specialists in the Motor Fleet Insurance Industry “We are very proud to be associated with Marsh for the past 14 years” Tel: +27 11 781 7939 Fax: +27 11 781 7940 Email: email@example.com
excellent risk selection • accurate underwriting • integrity • equity • fairness Authorised FSP Number 12118 | Registration Number 2000/011175/07 Underwritten by Compass Insurance Company Limited, FSP Number 12148
PAGE 32 jun 14
personal development and that of his new employer didn’t slow one bit. “When I arrived at Marsh, I had the option of becoming a senior financial executive or working in more of a consulting type role. Marsh in South Africa was fairly small at the time but had some very large corporate accounts like Anglo American,” he says. “We wanted to focus on very large clients in a way that we could add value, make sure that we understood the full range of strategic risks and bring a new level of thinking. “I came at it from a financial strategic element. I was also appointed to the board of Marsh and through that process understood that we had access to risk consulting engineers and a variety of other specialist risk areas. As a result of my interest in that area, that division was handed over to me in late ’02 and from early ’03 I started travelling around the world, seeing how all these specialist practices worked whilst still continuing with my normal job in South Africa.” From 2004 to 2006, he had responsibility for Latin America, Africa, Australia and Asia in terms of the strategic development of Marsh Risk Consulting. A very busy time for von Widdern, he would travel for roughly one week east – to Australia, Taiwan, Hong Kong, Singapore and back, and the next week west - to Brazil, Argentina, Bolivia, Columbia, Mexico, USA and back. “I would meet the teams and try and develop our strategy and client contacts
Marsh Risk Consulting
jun 14 PAGE 33
company profile “We put the teams together and they were very complimentary in terms of their skills sets,” he says. The Marsh/Forbes combination was one which allowed for service levels of the very highest order. The skills and customer bases of the two companies complemented one another perfectly and to this day, both continue to reap the rewards of that decision.
“In the local market, the approach and the value proposition of Forbes and Marsh was very similar; to give the highest quality professional service and really understand clients well. It was really the upper end of professionalism and technical competence” and so forth.” He then took on a slightly different role, with responsibilities in the Middle East as well as Africa because Marsh’s global reporting changed. “I got to know all the specialist practices and assimilated those so I learned a lot about strategic risk and business continuity, and from a financial side I had assimilated risk finance concepts from Guardrisk. We developed risk consulting strategies across many geographies. “From 2009 to 2011, I was given the responsibility of the Middle East as well as South Africa so I spent half of my time in the Middle East and half in South Africa. That was how I got to know those countries and roll out strategic value propositions for a variety of risk consulting services. “In the mean-time we grew the business in South Africa and in 2011 we completed a deal where Marsh bought Alexander Forbes and from the beginning of 2012 my focus was purely on South Africa because we then had a very large risk consulting team. “We had nearly 100 colleagues in the combined risk consulting team based on 45 from Marsh SA and the Forbes team was already 65 strong. Forbes in South Africa had nearly 800 people whereas Marsh only had around 200.
PAGE 34 jun 14
“In the local market, the approach and the value proposition of Forbes and Marsh was very similar; to give the highest quality professional service and really understand clients well. It was really the upper end of professionalism and technical competence. “Forbes by their size and history and scale, had a very well established sectoral footprint – hospitality, financial services and others. Marsh, because of the globals, was very strong in mining, banks and some other industry elements. In almost every industry sector, Forbes had very good penetration and that was just a fact of life as they had, through their networks, grown a very solid company over 40-50 years.”
RISK MANAGER OF THE YEAR In October 2013, at the Gallagher Convention Centre in Johannesburg, von Widdern was recognised for his contribution to the industry and was named Risk Manager of the Year by the Institute of Risk Management South Africa (IRMSA). The awards recognise the best risk professionals in South Africa and von Widdern puts his success down to the wide range of activities that he has overseen throughout his career. “It was a big surprise. It’s given to corporates and their risk managers.
Marsh Risk Consulting opportunity,” he says. “I always knew that I wasn’t going to be a formal reporting accountant. I always found the CA route to be highly versatile and open many opportunities to add value through financial problem solving. “I had the opportunity to convert a premium finance book and start many other businesses. When I was in a private company the entrepreneurial environment suited me. “I qualified as a chartered accountant and I did an MBA with Henley while I was at Guardrisk. “I learnt a few tough lessons as a founder and manager of businesses that we acquired, I realised that in commerce not everyone does what they say.” All of this points to one very concrete conclusion: Under von Widdern’s leadership and with clear targets in place, the future looks very bright for MRC and with the tag of ‘grudge purchase’ gradually being applied less and less, companies are now looking to the big risk advisors and insurers as partners and investments rather than costs and hindrances. The message from von Widdern is clear: “When you consistently use the right level of risk expertise, you can position the business as best in class and thereby minimise your cost of risk on a consistent basis.”
“Perhaps in my favour was that I’ve been lucky to gain experience from a variety of risk practices. From property hazard, business continuity, supply chain, environmental risk; all the qualitative and operational risk areas, through to risk financing, captives, quantitative risk assessment, buying and establishing an asset valuation team, doing the same in the environmental space, building a forensic accounting team for claims - in the context of my 12 years at Marsh, I’ve seen and experienced a variety of risks that are perhaps unusual and we’ve developed all of them successfully so the scale and variety might have been different to the experience of most risk managers.” The success achieved by MRC and von Widdern throughout his career has not been down to luck or being in the right place at the right time. Hard work, determination, persistence, innovation and entrepreneurialism have all contributed to the success and these qualities were instilled early on in his career. “I studied part-time and in those days most of us had to go into the army so I joined the army and when I left, through friends and contacts, I was offered a job where we had the opportunity to buy businesses, fix them up and run them for profit. For a new accountant, that is like heaven. It’s a highly creative, highly stimulating
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jun 14 PAGE 35
Triumph of farming and co-operating Editorial: Colin Chinery Production: Hal Hutchison
Heir to a century old tradition of farming co-operation, BKB is the dominant player in the South African woollen and livestock industries, and twice voted the best company to work for in the agriculture sector by Deloitte‘s survey of South African employers. “We have clear values, and do everything on behalf of our clients,” says Jacobus le Roux – GM, Public Relations and Corporate Marketing.
As a major brand and player in agriculture, BKB is the outcrop of one of South Africa’s great farming traditions – the co-operate organisation. Formed almost 40 years ago following the amalgamation of three farmers’ organisations, and now unrivalled in its reach, the Port Elizabethheadquartered business manages and markets wool, mohair and livestock on behalf of its shareholders and clients. The leading livestock and auctioneering organisation in South Africa, BKB also supplies agro-equipment, products and services, and markets over 62 per cent of wool clip and 35 per cent of mohair produced. “Our profitability has grown every year for the last ten - and I don’t think a lot of companies can say
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that in first world economies,” says Jacobus le Roux – GM, Public Relations and Corporate Marketing. Last fiscal year saw a turnover of R4538m, a striking counterpoint to the 100 year stirrings of the early farm co-operatives, as Mr le Roux recalls. “I imagine it’s the same world-wide where agriculture wasn’t much organised from production right through to the end of the supply chain.
FARM TO FARM “For wool marketing there were over 100 small brokers going from farm to farm in those days before modern transport; buying the wool and then exporting it. And I guess it happened with many other commodities as well. “But the farmers were unhappy. They were not getting a good price because the people buying were
selling on at a higher price. So they came together and formed their own co-ops with the aim of securing better prices.” As a result new brokering houses were formed. But driven by economies of scale the numbers shrank to three and finally one - BKB. “Forty years ago we were in a one channel marketing system in South Africa. All wool and mohair had to come through that single broker who did all the handling of the commodity on behalf of the South African Wool Board and the South African Mohair Board. It was in those days, a strictly regulated industry. “But with the democratic dispensation in South Africa came de-regulation, and in 1997 the abolition of commodity boards - wool, wheat, potato and so on. Non-profit companies were formed to look
after the research and statistics in the different production spheres.” The following year BKB was converted into a public company, profit-driven, with the stakeholders primarily producers and farmers. “You’ve still got to look after the interest of the farmers because the higher the price secured by the farmer for his commodities the better for the company. It’s a fundamental principal of business which I don’t think a lot of people understand. “We never take ownership of the commodity; we only sell it on behalf of the primary producer. In other words we earn a commission. The higher the price for the producer, the better we do, and we stand by that fundamental business principal. “Our company culture and style are built on a set of values; People are our biggest asset, the
jun 14 PAGE 37
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ALL FOR THE CLIENT “Whether it’s wool marketing or livestock trading or mohair brokering, we do everything on behalf of the client.” Crop spread and diversity is a core strategy for both stability and growth. “We are well spread right across the agricultural spectrum and so in a sense spread the risk. Some years you will do fantastically in wool or mohair at a time when it’s not so good for livestock. “And this is the space we are currently in. We’ve had an excellent year for wool and mohair - so far a record - but for several reasons the average price for livestock in South Africa is under pressure. “And this is an example of why we diversify the business. BKB is also involved in the grain industry and sugar, and has over 60 shops and country-wide trading branches. “Our warehouses are equipped to collect samples of wool and mohair for objective measurement by the South African Wool Testing Bureau, and we’ve
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got the biggest single shearing service in the world for sheep and goats and employing around 2,000 people.”
“People are our biggest asset, the entrepreneurial spirit is encouraged, we are profit-driven, we believe in an environment-friendly work ethic, and our service excellence is nonnegotiable” Born and raised on a farm and a lifelong agriculturalist – he is a former merino breeder - Mr le Roux has been with BKB for nearly ten years. “I think we have changed a lot in terms of our business culture. It has become faster, more efficient, and also more sensitive in terms of acknowledging that while we are a public company and profitdriven, we must also make a positive contribution
jun 14 PAGE 39
company profile in terms of care for the environment and social investment. Without that there’s no place for you.” For Jacobus le Roux, environmental responsibility is a “very, very big issue. “Across the world there are many very good stories and developments but also a lot of hot air as well. But as a company we began addressing the Green issue some nine years ago. Agriculture depends on Mother Earth; everything we trade comes from the soil. “We feel so strongly about this that we included environmentally friendly business practices as one of our five core values. We have two programmes; one to train staff in this aspect in terms of living more responsibly with regard to the environment, and the other a programme for our clients. “For example we have come together with the South African wool and mohair industry and developed a code of best practice. Basically it stands on three legs because we believe you cannot see environment on its own. “These three legs are; care for the environment,
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no harm to animals - in other words animal welfare and number three, principled employment; no child labour, adhering to minimum wage regulations and good labour practices.
“We are the only agricultural company with a truly country-wide footprint” “All this is a pretty basic requirement. If you don’t adhere to these standards you are not going to sell your products and you will become irrelevant.”
MOST DANGEROUS PLACE With strong competition in the South African agricultural sector across all its diversified parts, how does BKB differentiate itself?
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company profile “The one factor that makes us the biggest is our footprint. We are the only agricultural company with a truly country-wide footprint. All the others are based in regions. This is our biggest asset and also our biggest challenge since you have to keep your eyes wide open right across the whole country not just a region.
“When people think about wool and livestock they think BKB; absolutely so” “We are the dominant player by far in the woollen and livestock industry in South Africa. When people think about wool and livestock they think BKB; absolutely so.” But competition is not something that BKB fears; in fact quite the opposite. “Competition is always a good thing because it keeps you on your toes. The most dangerous place is the comfort zone,” concludes le Roux.
“Petroleum Marketing in South Africa is changing … and East Cape Fuels together with Engen Petroleum are at the forefront of this change in the Eastern Cape” The Petroleum Market across South Africa is a highly competitive, capital intensive industry coupled with high operating costs and subject to tight fuel margins. The future for the industry is a constant evolution of marketing options to better meet the needs of customers. Increasingly, all customers will seek out suppliers that provide a comprehensive range of products and services, delivered through high quality facilities providing convenience and speed.
Management Team: The Engen ‘Sales and Distribution Company’ concept was introduced by Engen Petroleum in the wholesale sector in 1996. This concept, based on location strengths enabled the Sales and Distribution Company; in partnership with Engen; to build a powerful sales and distribution network. This concept remains unique in Southern Africa and has proved very successful to date. East Cape Fuels is a BBBEE company which has operated as the Sales and Distribution Company in the North Eastern Cape for the past 17 years. Operating from two depots, namely Queenstown and Elliot; they successfully distribute wholesale diesel, paraffin and bulk lubricants to farmers, stores and contractors in the area. They operate competitively within economical, geographic boundaries. East Cape Fuels has maximised the market area providing strong commercial terms and business support systems in the area. East Cape Fuels has a VERY successful, longstanding business relationship with the BKB who is their largest customer. The working relationship whereby the product is delivered by East Cape Fuels to the ‘BKB’ customer has resulted in a very well serviced community who can continue their farming operations in rural areas without any delay in fuel delivery. We believe; together with the BKB we have become the “face of Engen” in the community of the Eastern Cape, South Africa.
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2014/CORP/E/004 jun 14 PAGE 43
A standing ovation for stadium management
Editorial: Helen Lake Production: James Clark
South Africa is home to FNB Stadium - one of the largest and most iconic sports stadiums in the world - and behind it is management company, Stadium Management South Africa (SMSA). In 2009 Stadium Management South Africa (SMSA) was appointed by the City of Johannesburg to manage four of the city’s stadiums – FNB, Orlando, Dobsonville and Rand. The 94,000 seater FNB Stadium (formerly Soccer City), home to the Kaizer Chiefs, is instantly recognisable worldwide for being the flagship venue of the 2010 FIFA World Cup South Africa. Nestled in the south of Johannesburg where soccer is at its most loved and most vibrant, it was the first stadium in Africa to host a match in the history of FIFA World Cup™. Not far behind it is the Orlando stadium, home of the Orlando Pirates, it boasts a magnificent heritage. This stadium takes up to 40,000
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spectators and made yet another mark in history when it hosted the 2010 Vodacom Super 14 Final and SemiFinal. The Dobsonville and Rand Stadiums are also impressive venues, with Dobsonville being the home of the Moroka Swallows. All four stadiums benefited from generous investment and refurbishment prior to the 2010 FIFA World Cup. With massive venues of such iconic status and undeniable revenue potential, the event management and planning must be second to none and, thanks to SMSA, it is. Since 2010, SMSA has managed over 300 events at the stadiums with over 4.5 million visitors. Their services are world class and they continually strive to be the leaders in their industry. “We understand our
Stadium Management SA
clients’ objectives and deliver solutions that allow our clients to maximize opportunities for their venues or events by leveraging all available channels to deliver clear and tangible benefits,” says CEO, Jacques Grobbelaar. Although the venues are government owned, SMSA operate on full financial risk basis, independently funding the commercial business and management of these multimillion rand venues.
THE WHO BEHIND SMSA SMSA is made up of highly qualified and experienced professionals, but on top of the corporate pyramid is CEO Jacques Grobbelaar and Directors, Barry Pollen and Russell Stephens. Jacques Grobbelaar’s
experience includes the successful delivery of more than 380 major events many of which took place at some of South Africa’s biggest stadiums including Kings Park, Johannesburg stadium and the old FNB stadium. He served as a specialist consultant for Arup Major Projects Consultancy team on the 2010 FIFA World Cup Master Plan for Polokwane Municipality. He was also shortlisted for the Executive of the Year Award at the Stadium Business Awards 2013, an accolade that recognises “leadership, innovation and achievement in the delivery, operation and management of sports facilities” on a global scale. While Grobbelaar is based at the FNB stadium, Barry Pollen is based in the UK. Barry was
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Stadium Management SA
responsible for the Host City Event Master Plan for the 2010 FIFA World Cup and he was representative for design and construction of the Soccer City Stadium (now the FNB Stadium). His stadium management experience is international, stretching as far as Wembley Stadium in England, the Millennium Stadium in Wales, Shah Alam Stadium in Malaysia and Hong Kong Stadium in Hong Kong. Russell Stephens, based in the USA, has 23 years’ experience in the event, sports and venue management industry with consultancy work that specifically focuses on technology. He served as technical advisor for Polokwane’s Event Master Plan for 2010 FIFA World Cup.
Johannesburg shares in 22% of the profits, it has allowed the City of Johannesburg to reduce its community development budget by R192 million. In addition to its economic success, since taking over the stadium management in 2009, SMSA and its stadia have been shortlisted and won 20 plus awards. In 2010, the FNB (Soccer City) stadium won the Leaf Award, an international architecture award for the Best Overall Project and Winner Public Building categories – among many other prestigious architectural awards. In 2011, the company won the Sports Event of The Year Award for 2010 FIFA World Cup at the Stadium Business Awards.
BIG CHALLENGES BIG ACHIEVEMENTS With such a wealth of experience behind it, SMSA has seen unrivalled success. The effect of SMSA promoting, managing and hosting category A – B fixtures is quite astonishing with the economic multiplier effect of more than R100 million per event. This means that ten fixtures a year is putting R1 billion into the City of Johannesburg economy. Not only that, but as SMSA has a self-funded annual operational budget of R60 million and the City of
The Nelson Mandela Sports and Culture Day took place on the 17th August 2013 at the FNB Stadium with crowds of people arriving to watch the three international sports games and one live concert. SMSA gave the world front row seats to its innovative, collaborative and outstanding service. The event began with the South African Legends playing the Italian Masters, followed by Bafana Bafana playing Burkina Faso before the Springboks took on Argentina and the event closed with singing
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Carryon Projects On a trip over to England in 2003, Emile Murray was captivated with the temporary fencing at Heathrow Airport used to cordon off areas under renovation and realised that the traditional chevron barrier tape seemed to be a crowd controlling tactic of the past. After extensive research back on home soil in South Africa, Murray saw a potential gap in the local market to introduce the sturdy designation fencing and crowd control barriers. “Carryon Projects prides itself on its unique design and fabrication of ‘made for South African’ temporary fencing. Our fence is a superior product made to withstand the harsh South African conditions; we continually perform routine maintenance on our products to ensure a professional product suitable for display” founder of the company, Emile Murray explains. A decade on, Carryon Projects supply temporary crowd control and construction hoarding fencing for the events and construction industry. As an event management support company, Carryon Projects maintain a comprehensive range of temporary wire and IBR barriers as well as event equipment including: portable signage, boom gates and fire station structures in addition to specialised fencing products ranging from wooden picket and rustic style fencing. Carryon Projects is a preferred supplier for all events managed through or in conjunction with Stadium Management at all of the four stadia currently under Stadium Management’s control. The company covers the management and maintenance of the FIFA 2010 “Stadium Fence”, supplying and erecting additional event fencing and the planning and coordination of the fencing safety plan. Over the next few years the company hope to increase its presence within the construction and manufacturing industries, providing temporary construction hoarding and wire mesh fencing. Construction companies are still opting to utilise costly semi-permanent IBR fence or inferior wooden staked neon shade cloth so Carryon Projects
hope to challenge this mind-set, showing that its fencing is not only the more cost effective choice but that it eliminates the need for the contractor to maintain a suitable “stock-holding” of this high maintenance product. This will help to eliminate the cost to contractors of transporting, erecting, dismantling and storage of the product. Carryon Products has many expansion plans in the pipeline including the development of a new “Clear-Vue” temporary crowd control fence that is to be marketed later this year and will be aimed at the high end events and functions, lending a professional and stylish finish. Carryon Projects has also introduced a versatile and innovative ground screw to its product line which can used as an alternative to structural foundation. The company hopes to market this for several applications including the events industry where it can be used for the erection of temporary event structures such as flagpoles, marquees and temporary grandstands and for the stabilisation and security of temporary fencing, advertising structures and event signage structures. The new ground screw will also be marketed for use in the construction and manufacturing industry, aiding the erection of site offices, semi-permanent fenced enclosures and for the stabilisation and security of perimeter temporary fencing or hoarding. Carryon Projects continue to be involved in many projects with Stadium Management ranging from the local and international sporting matches including the Super Rugby, Soweto Derby and Shell F1 Event to local and international concerts hosting global stars from Justin Bieber, Bon Jovi and Eagles to Bruce Springsteen, U2 and Coldplay. Carryon Projects also assist Stadium Management at local culture events including the Nelson Mandela Memorial, Higher Life Church Revival and the ANC Rally. With new products lines, a continued and invaluable relationship with Stadium Management and plans for expansion, the future for Carryon Projects is looking very bright indeed.
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company profile and dancing from top local and international artists. The event was a huge logistical enterprise and a first-time experience for everyone involved, believed to be the first event of its kind, with Soccer and Rugby matches being played on the same day on the same pitch. SMSA worked closely with the South African Football Association (SAFA) and the South African Rugby Union (SARU) to plan the pitch conversion to the finest detail, especially considering that the rugby posts used at the FNB stadium are considered to be some of the biggest and heaviest posts in world rugby. As a result, SMSA, working with the Department of Sport, SARU and SAFA, brought in lightweight aluminium poles and altered the size of the soccer pitch down to 100 metres in length. It took three teams and numerous practise sessions to get the pitch conversion down to a perfect 20 minutes. “The knowledge and experiences of our Directors and senior staff ensures that we always deliver innovative solutions to our clients with a focus on excellence and attention to detail on every project.” explains Grobbelaar. Along with the catering, hospitality, security, car park, health
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and safety and numerous other support services, SMSA successfully delivered a day for the history books with all proceeds from the event going to the Nelson Mandela Children’s Hospital.
IN THE COMMUNITY – SMSA TRUST When the stadia were being refurbished for the 2010 FIFA World Cup, the government were adamant that each stadium was managed in such a way that they remained open and accessible to the public. SMSA went the extra mile to make sure this was upheld through the work of SMSA Trust projects and by having regular tours of the stadia. SMSA Trust has a huge impact on the lives of children in orphanages and children’s homes such as Reach for a Dream Pretoria, the Othandweni Centre and the Teboho Trust. By offering complementary tickets to domestic and league soccer matches as well as international games events, SMSA Trust are giving these children a once in a life time experience. They sponsor the Soweto Rugby Club and provide the team with the use of the FNB
Stadium Management SA Training grounds - free of charge - for their league matches. By doing this SMSA shows its understanding of the need to invest in our sporting communities as a way of building a sustainable future.
STRIDING FORWARD Obviously maintenance of the stadia is expensive and there isn’t always a World Cup around the corner to cover the costs, so how does SMSA ensure future success? “Our commercial model is based on a formula that provides sustainable, profitable and active venues, with no burden on the taxpayer,” explains Grobbelaar. The FNB Stadium alone has a reported monthly operating cost of R2.5 million and so SMSA has designed a strategy that gives the stadia a sustainable future. In order to remain active in competing for headline sports events to host at the stadia, SMSA have secured long-term tenant agreements with the three resident teams and they have a strategic agreement with the Premier Soccer League to host cup finals and semifinals. International artists and concerts bring in a large proportion of the revenue too and so SMSA has secured a partnership with the biggest concert promoters in the country, Big Concerts. The big events matter, but so do
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the smaller ones. SMSA are ensuring that full use of the facilities is made available with super-suites at the stadia that are perfect for weddings, galas, and year end parties with all the exquisite stadium views. The auditorium at FNB stadium seats 156 people and is equipped with state-of-the-art technology for use at conferences and launches. By making full use of the facilities and having a team of highly experienced and qualified staff to manage them, SMSA is hosting events of a consistently high quality and is looking ahead to a bright future. Just around the corner on the 26th July 2014 is the Carling Black Label Cup at FNB Stadium – a big Kaizer Chiefs vs Orlando Pirates rivalry match that is set to see the stadium packed to capacity. 2015 bookings have started with a bang as we anticipate the world famous boy band, One Direction, to hit the FNB Stadium on the 28th and 29th March 2015.
“We understand our clients’ objectives and deliver solutions that allow our clients to maximize opportunities for their venues or events by leveraging all available channels to deliver clear and tangible benefits” jun 14 PAGE 51
The full range of freight services Editorial: Tim Hands Production: Hal Hutchison
Since its establishment in 1997, Milltrans has worked tirelessly to become one of the leading figures in the South African freight and container transport industry. As would be expected of a company with the ability to cover 12,000,000 Southern African kilometres each month, it has accrued in this time a vast range of knowledge and experience of the sector, allowing it to handle even the most exceptional of freight needs. Backed up by its fleet of some 55 trucks and 140 trailers, and with branches in East London, Port Elizabeth, Cape Town and Johannesburg, the company is perfectly equipped to provide the solutions to any freight requirements.
The origins of Milltrans can in fact be traced back to 1990, where the J.J Stapelberg-established J+F Vervoer focussed on the transport of maize across South Africa. The key expansion in 1997 saw the company’s acquisition of additional trucks which, in turn, allowed it to begin transporting scrap metal and containers, eventually becoming registered as Milltrans at the coming of the new Millennium. “Over time, our single office in East London has grown to include offices in Port Elizabeth, Cape Town and Johannesburg,” states Managing Director Frans Stapelberg, “giving us that all-important cross country footprint which allows us to continue to go from strength to strength. Alongside our unwavering
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passion for what we do, and for providing the very best in customer service, we know that Milltrans is destined to be the leader in the freight and container transport industry.” Its business is divided into several principal activities, aside from this specialism in providing long and short distance road and freight container transport, which sees the company operating along all the major South African routes. “We also specialise in the loading and offloading, as well as the packing and unpacking, of containers for the purposes of customs inspection, subcontractors and clients. We take care of the whole process, from placing these ready to be packed and unpacked to collecting them once they are ready to be transported.
We also, from our depot in Markman Port Elizabeth, offer an extensive container storage and warehousing service. With both the depot and warehouse being bonded, this means that we can take on any warehousing and container work relating to SARS, and transfer immediately to storage or warehousing any goods arriving on container,” says Stapleberg. Milltrans’ provision of services goes deeper still. “Another significant area of business for us is those services involving Side Loader trailers, and equipment loading and offloading containers. This means that the ‘container-lifter’ is able to handle jobs with multiple containers, as these can be loaded from a truck on the ground and reloaded onto another truck for transportation. We are also licensed to transport
loads carrying hazardous chemicals, while perhaps some of the most interesting work we do comes under the Cross Border Transport and Abnormal Loads heading. We have had extensive dealings in traversing the borders to neighbouring countries such as Namibia, Mozambique, Botswana and Lesotho, and some of these trips have been on behalf of the very biggest companies – Transnet and Coca Cola, to name but two. “We have recently added to this fleet, in fact, so our wide range of abnormal vehicles with a 100 ton carrying capacity now includes a 45 meter extendible trailer capable of carrying 55 tons,” explains Stapleberg. Among these many facets to its operations, the
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Milltrans work Milltrans undertakes in road freight, warehouse facilities, and container handling and storage emerge as the three sectors in which it has the majority of its dealings. Stapelberg sums up where Milltrans currently finds itself within its particular industry sector at present: “At Milltrans we have a secure, fair market share in the industry, and we are able to offer both competitive prices and services - we are certainly ahead of the game as well as the competition in most aspects of the business.” Crucially, however, far from allowing the company
“We have a vital cross country footprint which allows the business to continue to go from strength to strength” to remain in its already secure foothold within the industry, there is in fact a strong focus on securing some significant developments within the coming years. “Milltrans’ target over the next two to three years is to expand our operations domestically and internationally. While doing so, we will inevitably be looking at increasing profits, and as such, we are also planning on entering the building and construction industry soon. Milltrans’ specialism in Cross Border Transportation to various countries such as Namibia, Mozambique, Botswana and Lesotho will also be a significant element of this development of operations,” says Stapleberg. The Milltrans story so far is one characterised by a continual focus on hard work, dedication and the ability to adapt to on-going changes in the industry and company, which has seen the company reap such notable successes. “We also pride ourselves on very high staff morale, while the high standard of service delivery have all helped to produce a successful, cohesive team, propelling a business which works together to achieve the impossible,” details Stapelberg, on the key elements behind Milltrans’ rise to its current status. His description of the competences required of his company’s staff also goes some way towards explaining the extent of the company’s achievements: “Dedication and above average service delivery are expected of the staff. While we of course offer full training in the majority of positions in the company, any relevant background experience is a real bonus, and when we are looking to fill a position this is a notable factor in our decision-making process.”
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A final, perhaps most vital aspect of Milltrans’ sustained development within the industry has been its ability to adapt and ensure that its business is constantly in line with the ever-changing demands its customers have of it and the services it can provide. “The impact of the renewed and sustained drive towards a more ‘green’ way of living in South Africa has been extremely positive on our business. Along with the construction of new wind tower plantations has come an increased demand for transportation of material used in the construction of these towers, and with the extent of equipment and expertise we have at hand, Milltrans has had the opportunity of taking part in these projects as a transporter of the material. This has had the dual effects both of allowing us to gain an active role in an improved way of life in South Africa, and further growing our business and the variety of services we can offer,” concludes Stapleberg.
“The impact of the renewed and sustained drive towards a more ‘green’ way of living in South Africa has been extremely positive on our business” jun 14 PAGE 55
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Find out more at www.InternationalTrucks.co.za or by visiting your nearest International dealer.
PAGE 56 jun 14
Driving partnerships. Gordon Alexander had already had a long standing relationship with Milltrans when he took over the International Trucks dealership in Port Elizabeth, from Tyco/ Imperial Commercials at end of 2008. “I was working on Frans’ trucks in my workshop. Back then, the trucks were all distinctly painted red with green trailers. It has always been important to Frans that his fleet looks neat and well maintained, including the trucks of his subcontractors. He says it creates confidence with the customer that the load will be in good hands.” Lizette Alexander, Gordon’s wife, says it was just as well that they did not know exactly what running a dealers entails. “We thought we would carry on with the workshop, but just with a brand behind us. Targets, standards, business plans and audits were a bit of rude awakening for us, but we just adapted the parts of the standards that were applicable to us.” The dealership sets itself very high standards. When International rolled out a dealer incentive scheme, PE was the first dealership to achieve the targets set. Gordon says he expects his customers to get the best service, and to be able to give that service you have to comply with the standards. They have also been Parts and Service Dealer of the Year since 2011. “This was part of the Dealer Standards Programme” says Lizette. “What we lack in terms of a smart premises, we make up for by providing customers with the best, personal service possible. Our work days evolve around making the customer experience the best that we can make it.” The dealership also puts a very high premium on customer satisfaction. They not only make it their business to know what a customer wants, they also know what the customer does not want. “Nobody wants to have a truck overhauled, when they just sent it in for a lube service. On the other hand, my customers really appreciate it when we
pick up critical parts that must be replaced before the next service. This saves both time and money. My staff understands the importance of keeping my customer informed, as well as giving him various options. The words ‘we cannot do that’ is not in our vocabulary. We make a plan to deliver, at the right price. Providing the customer pays, of course.” The dealership enjoys the Scot-Byers CSI workshops presented by Nicholas Byers. “He will come in and say your stats show this trend. You need to get these things and place. Sometimes it is a hard decision, but we always take the advice, like when we had to appoint another service technician. He also showed us how to categorise our customers, and respond differently to each category of customer. Milltrans, for instance is an “A” category customer. They pay their account on time, get a special discount, and let us perform any critical repairs we may deem necessary. This minimises downtime, and costly breakdown repairs. “In the transport game these days, you have to keep your running costs to a minimum. International is very good about that. The 9800 has a proven track record for the lowest lifetime maintenance costs. The durability of the truck means it not only has a second life, but often a third and fourth. Our dealers have standard repair times and Inter Dealer Repair Rates. The customer can have an account with his home dealer, and have his trucks repaired almost anywhere in Southern Africa at the price he would pay his home dealer. The home dealer is then supported by the Global Parts and Service Team, which looks at the dealer enquiries that came through to Tech Services on the Navistar Service Portal, and they respond with practical solutions for the dealers.” We recently attended the Navistar Global Parts and Service Summit for Eastern Hemisphere Dealers in Dubai and one of the dealer concerns was about the quality
of aftermarket parts available in the world market. Navistar addresses this issue by providing SA dealers with aftermarket parts with the same warranty as the original OE product. At the close of the Summit, there was a recognition dinner. There were four awards for Outstanding Performance, one for each “region”: Europe, MENA (Middle East/North Africa), Far East and Southern Africa. International Port Elizabeth got an award for Outstanding Parts Sales Growth. The caption on the award reads “IN RECOGNITION OF ACHIEVING THE MOST SIGNIFICANT PARTS SALES GROWTH IN THE SOUTHERN AFRICA REGION”. “We are dedicated to great parts and
service support to keep our customers on the road and their businesses running smoothly,” said Dave Allen, vice president, global parts sales, service and operations, Navistar. “Our dealers deliver on that commitment every day and we are proud to recognize International Trucks Port Elizabeth in South Africa as our Eastern Hemisphere dealer with the most significant year-over-year parts sales growth.” Gordon says: “The theme of the Summit was ‘Working Together to Achieve Results’. Our dealership works as a team, also with the dealer network and NC2 Trucks South Africa, to deliver the best results for our customers.”
from left to right: Carlos Junquera, Director, Parts & Service- Eastern Hemisphere; Dave Loakes, Managing Director NC2 Trucks Southern Africa; Lizette Alexander, General Manager International Trucks Port Elizabeth; Gordon Alexander, Managing Owner, International Trucks Port Elizabeth; Tom Clevinger, Sr. Vice President/ Managing Director- Global; Dave Allen, Vice President- Sales, Service & Operations Global Parts Business; John Pfennig, Director Worldwide Development.
“We create wealth and cherish agriculture” Editorial: Harriet Pattison Production: Hal Hutchison
A leader in the agricultural field, OVK is committed to its staff and growing a business that is so much more than milling maize. With an efficient financial department, vehicle dealerships and fuel distribution points, OVK continues to make a valuable contribution to the economy of communities along the way...
Agriculture remains big business in South Africa, ranging from intensive crop production and mixed farming during the winter and summer rainfall areas to sheep farming across the more arid regions. Maize continues to be the largest locally produced field crop in the country with South Africa becoming the 7th largest producer of green maize and maize in the world today.
THE MAIZE MARKET With South Africa the main maize producer in the Southern African Development Community (SADC), production can exceed 10 million tons in a good year. Weather can often have a detrimental impact on maize production and due to a regional drought in the early 1990’s, the total production in 1992 dropped to just three million tons but with plentiful rain falling during the later months in 1995 came a
PAGE 60 jun 14
bumper crop in 1996 nearing 12 million tons. Maize is largely produced across the North West province, the Free State, the Mpumalanga Highveld and the KwaZulu-Natal Midlands. Local consumption of maize is estimated at eight million tonnes each year with the remainder exported. While more than 9 000 commercial maize producers are responsible for the majority of production, the rest is produced by thousands of much smaller businesses. Wheat is the second most important grain crop produced in South Africa and is largely produced in the winter rainfall areas of the Western Cape through to the eastern parts of the Free State. Most of the wheat produced in South Africa is bread wheat, with small quantities of durum wheat being produced in certain areas, used to produce pasta. In Southern Africa, wheat is mainly used for human consumption such as bread, biscuits and breakfast cereals with the remainder used for bird seeds and animal feed.
OVK The major agricultural company, OVK is headquartered in Ladybrand with a strong presence across the Eastern Cape with numerous trade branches that stretch from Cradock to Dordrecht and up to Arlington. Offering a wide range of agricultural provisions for crop and livestock farming at competitive prices across its branches, OVK also handle the storage, distribution and marketing of its grain including wheat, sunflower, soya beans and oats. The company has recently taken over Dewetsdorp, Edenburg and Hopetown, helping to boost its already expanding footprint. Over the past two decades, OVK has continued to establish itself as a firm leader in the agricultural industry with an exponential 27% increase in turnover from R2.8 billion in 2012 to R3.57 billion, including grain turnover, in 2013. “With the high potential of the region, its farmers
and the diversity of the types of farming in its service area, OVK makes a valuable contribution to the economy of the RSA and to the Free State, Eastern Cape and Northern Cape in particular” OVK say in a statement. OVK has a number of vehicle dealerships with Toyota, Case and New Holland. The Toyota agencies in Ficksburg and Ladybrand sell new and used vehicles and recently the Ladybrand dealership underwent R6 million improvements. OVK also has six highly effective fuel distribution points with Shell, Total and Engen. 30 million gallons of fuel is distributed each year between the points which are located within OVK’s operational area including Fouriesburg across to Hopetown. Bulk fuel trucks deliver the fuel to the company’s 44 trade branches and to farmers and clients, ensuring the service remains efficient and competitive. In addition, OVK also operate its own finance division focusing on harvesting and short-term insurance and owns the
jun 14 PAGE 61
Dit neem geslagte om ’n naam te maak!
Gariep Abattoir in Strydenburg. With OVK owning a 34% shareholding in Cape Town Mohair and Wool, this helps it to maintain a strong presence within the Eastern Cape Province. Founded in 1993, Cape Town Mohair and Wool (CMW) began as a private company, SA Mohair Brokers Limited, and last year celebrated its 20th anniversary within the wool and mohair industry as a world leader in the marketing of wool and livestock mainly via the internet.
THE TWEESPRUIT MILLS
Manufacturers of high quality maize meal and wheat meal, OVK operates in its own Tweespruit Jou familie boer al vir geslagte, Mills. The maize mill, built three decades ago in en jy weet dis nie kinderspeletjies nie. 1974 supplies a large variety of maize products, including samp and mealie-rice under the brand By Monsanto weet ons dit ook. Ons reputasie is, soos joune, ook nie oornag gebou nie. Dis die resultaat van jare se harde werk saam met jou, die boer – name, CHALLENGE and super maize meal under in die laboratorium en op die land. Daarom ondersteun ons ons tegnologie, the OVK brand name. The mill also manufacturers navorsing en ontwikkeling met spanwerk, steun en professionele advies. Dis immers die kombinasie hiervan wat jou help om jaar na jaar volgehoue maize meal for animal food, a variety of pet foods prestasie te handhaaf en geslagte lank sukses te behaal. and bird seeds. The flour mill, opened in 2002, DEKALB® – Dis mos mielies!™ manufacturers various flour products such as Monsanto tel: 011 790-8200 | www.monsanto.co.za white and brown bread flour and cake flour. These Kontak gerus ons kliëntediens by: 011 790-8200 of email@example.com DEKALB en Monsanto is geregistreerde handelsname van Monsanto Technology LLC. products retail under the brand name SUPERBAKE. Monsanto Suid-Afrika (Edms) Bpk, Posbus 69933, Bryanston, 2021. To ensure the increase in demand continues to be met today, equipment is updated on a yearly basis skills, expertise and knowledge. and in 2006, the capacity of the flour mill was A10855 Dekalb Electric Wing Corp Advert 125x88 - Afr.indd 1 2014/05/30 Using the Peromnes job evaluation system, OVK increased, helping to ensure a higher quality product participate in the national salaries survey which is produced. With a fleet of delivery vehicles, the guarantees employee salaries are market-related. mill offers nation-wide delivery, distributing across Operating in the agricultural industry, OVK Gauteng and Natal, reaching as far as the Northern maintain a strict health and safety environment, Cape. with regular inspections and tests and a system In the company’s financial statement, Chairman of committees helping to ensure standards are Manie Botha said: “The new wheat mill in Clocolan meticulously maintained. has, in the meantime, been brought into service and The Grain Department is at the centre of the board is confident that the mill will add much this company and is divided into three sections: value for shareholders in the long term. The wheat administration, marketing and operations. With industry is currently experiencing a difficult time, such a fast growing market and a customer base that but we believe that a growing middle class will stretches across producers, millers, grain traders increase the demand for wheat products.” and manufacturers of animal feed, it is essential STAFF TRAINING that OVK stays abreast of the continuous flow of OVK continuously strive towards its company logo: current produce information to effectively advise its “Prosperity creating agricultural organization” and members of any changes. with over 900 employees, training is offered on an “OVK has recently begun to focus more on our ongoing basis to ensure its clients receive the best communication with our members as well as our service and expertise. With the company actively personnel. Management extends an open invitation involved with the AGRISETA and complying with to you to feel free to invite us to your Farmers’ the Skills Development Act, OVK’s strategy is Association, farm or, if you wish to visit our head simple: to train and develop employees ensuring that office, you are very welcome. OVK has always had an each individual feels equipped with the necessary open door policy and I invite you to visit or contact ®
PAGE 62 jun 14
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jun 14 PAGE 63
me or any of my management team” Managing Director Stefan Oberholzer said in a statement.
PLANNING THE FUTURE During the past financial year OVK implemented a loyalty scheme where R10.1 million was returned to clients throughout the year. Even with the establishment costs of the new Tweespruit wheat mill, the OVK Group still achieved a profit before tax of R112.7 million, which is slightly less than the previous year’s R125 million. The Group’s turnover increased by 27% from R2.8 billion to an impressive R3.57 billion, including the grain turnover, in 2013. The dividend together with the loyalty scheme amounts to more than R31 million, which OVK paid
PAGE 64 jun 14
out to its shareholders and clients. With the significant reduction in accounts in arrears and the implementation of the loyalty scheme and term loans, as well as the conversion in April last year of R33 million of shareholders’ loans to shares in OVK Operations can be seen as some of the highlights of the past financial year. During the year the diversification of the company, both geographical as well as within the business, was emphasised. Despite the arid conditions within the eastern Free State, the irrigation areas still performed well as a result of higher grain prices. An analysis of the business indicates that there are even more divisions within OVK which make a significant contribution to OVK’s profitability and that the
Saam bereik ons meer Hand in hand with the Agricultural Industry and OVK, Willard Batteries has been pushing the boundaries for sixty years. Whether it’s the latest Willard Super-Safe range with roll-over technology or batteries for high performance, off-road, agricultural and everyday vehicles, Willard Batteries caters to your every need. Now with a 25 month warranty on the IQ range, Willard Batteries offers a variety of options to choose from and will redefine the way you experience batteries forever.
Willard Batteries. The power of technology.
“The impact of the renewed and sustained drive towards a more ‘green’ way of living in South Africa has been Sextremely PECIALIST positive on our business” RANGE T TM
jun 14 PAGE 65
company profile company is less dependent on an individual sector within the agricultural environment. The income from general trade increased by 8.2% from R1 271 million to R1 376 million. As a result of increasing pressure on margins, as well as available production credit the net profit of this department was negatively affected with a decrease from R47,0 million to R45,2 million. The net profit was 3.3% of turnover in 2013 compared to the previous year of 3.7%. Despite this challenging environment, OVK strive to remain competitive to benefit its clients and shareholders and with the future developments of the
new branches in Barkly East, Elliot and Prieska. With a vision to be the leading and successful agricultural company in the supplying and marketing of agricultural requisites and services, OVK ensure its company remains committed to these duties through its ethical and professional corporate management team and well-trained and efficient employees. A bright future lies ahead for this leading agricultural company and OVK intend to grow its expanding footprint throughout the Eastern Cape and maintain servicing the investments in its enterprise consistently and effectively.
Engen-OVK partnership goes from strength to strength Engen, South Africa’s leading petroleum products
company, enjoys a successful and growing
“Engen and OVK have come a long way together,”
business partnership with agricultural retail group
agrees Hannes Michau, at OVK, headquartered in
OVK, which goes back to the early 1990s, the
Ladybrand in the Eastern Free State.
companies say. “Over time Engen became a true service partner, 20 years of growth
demonstrating technological leadership and
Paul Leask, sales manager: agricultural
customer-centricity. They’re everywhere and
cooperatives at Engen Lubricants, says the
availability is never an issue, with many distribution
relationship started small but went from strength
partnerships and their own extensive retail network.”
over the years. Agricultural focus “In the early days, Engen was a relatively minor
The agricultural sector has been a strong growth
supplier of fuels and lubricants to a few of OVK’s
industry for Engen’s lubricants business over the
smaller branches, but the partnership began to
years, with one in every two SA farmers depending
develop with their takeover of several Senwes
on the company’s local expertise and technical
branches in the Southern Free State,” he says.
excellence, says Leask.
In time, Engen’s lubricants business with the
This focus is borne out by Engen’s long-standing
company began to show significant growth, and
association with leading players such as OVK,
Engen formed a dedicated agricultural lubricants
and its role in co-managing events like the recent
sales team to service a future key customer and
NAMPO Harvest Day show (in partnership with
Grain SA since 1978).
PAGE 66 jun 14
“The impact of the renewed and sustained drive towards a more ‘green’ way of living in South Africa has been extremely positive on our business” jun 14 PAGE 67
Holding water and winning ground Editorial: Colin Chinery Production: Hal Hutchison
While mineral are the big earners, water is ultimately South Africa’s most precious commodity, and for 30 years Abeco Tanks has been delivering on two major issues; provision and retention. “When it comes to tanks, we are the specialists,” says Sales and Marketing Director Mannie Ramos. ‘The name that really holds water’ is a powerful claim - especially in South Africa where investment in water resources must double in ten years if the country is to meet growing demand.
evaluation and development ongoing, Abeco Tanks has become a leading innovator in the development of water storage solutions.
And it’s a slogan and commitment Abeco Tanks has delivered on to impressive effect, installing over 200,000 tanks in 30 years across 32 countries, with South Africa its biggest customer. “When it comes to water tanks we are the specialists; pure and simple,” says Mannie Ramos (Junior), Sales and Marketing Director of the Bedfordview, East Rand manufacturer. Using modern technology and with product
Established in 1983 by Mannie Ramos, father Mannie, with the aim of satisfying an increasing need for hygienic storage of water, Abeco realised that the greatest need for sanitary water lay in communities with limited resources. And so it adopted as its guiding principle the manufacture and development of the most cost effective solutions to water storage needs, without compromise to safety, hygiene, quality or durability.
PAGE 68 jun 14
Abeco offers a full design manufacture and installation services for ground level, elevated and circular galvanised tanks, as well as special tanks such as two partitioned compartments for fire tank all manufactured in accordance to SANS 10329. With a modular design Abeco tanks offer a great number of advantages such as safe hygienic water storage and resistance to ultra violet or light penetration. Rugged, durable – typically a 50 year lifetime and of simple design, the tanks are transportable to remote locations and easy to access in limited spaces, while rapid installation reduces project lead time from installation to completion.
An IS0 9001: 2000 registered firm, Abeco also supplies tanks for hot water, fuels, corrosive liquids and effluents, delivering across a market that includes agriculture and industry, mining, government and local authorities, township developments, water utilities, hospitals, education establishments, apartment blocks and shopping centres. “While concentrating on Africa - which is where our bread and butter is - over the last 30 years we have installed 220,000 water tanks in 32 countries on almost every continent,” says Mr Ramos, who joined his father’s business after gaining an MBA degree at Henley Business School in England. “We put up the first five million litre modular tank
jun 14 PAGE 69
“We know that if a question arises concerning transportation, we will know the answer or where to find it” R&B Logistics is a privately owned transportation company providing truckload and partload services throughout South Africa and neighbouring countries. Our business is built on a reputation for providing innovative, reliable and cost-effective transportation.
Tel: 011 4202542/2609 Fax: 011 4202459 / 086 662 6966 Cell: 0845126966 Contact: Willie Jacobs Email: email@example.com Address: 6 Burnley Road, Benoni South Postal address: P.O Box 12725, Elspark 1418 in Africa, and among other notable installations is 500 cube metre water tanks on 25 metre stands erected on the north east coast of Central America and designed to withstand hurricanes. “We are the only manufacturer of pressed steel tanks that is SABS approved, but there are an increasing number of guys starting to import from the Far East etc. These are inferior products, but people can be quite cost conscious, buying cheap and then finding themselves battling with after sales service,
unable to get hold of anyone.” From taking an order for a large tank to its installation takes a maximum of four months, and last year’s fire that closed a section of ArcelorMittal’s Vanderbijlpark plant, put pressure on Abeco’s lead times – a critical customer issue. And steel prices are a continuing challenge. “Three years back steel prices increased 100 per cent - three or four increases in one month, and with two or three price rises this January it’s still an issue.”
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PAGE 70 jun 14
Abeco Tanks SOUTH AFRICA NUMBER ONE
range is timely. “These are tanks that can go up to 30 million litres, competing with concrete reservoirs, going up in a fraction of the time and at a cost probably 20 per cent cheaper. “It’s where our focus is on at the moment and takes us up to a whole new ball game.”
But South Africa’s steel industry wins an Abeco bouquet. “We source our super strength steel locally and buy direct from the mills. We have tried to source internationally but the quality level does not come up to that of South African steel.” South Africa receives an annual rainfall of 492 millimetres, nearly half the Earth’s average, with the eastern half of the country far wetter than the western. And as well as alternating periods of droughts and floods, hot dry conditions result in a high evaporation rate. Despite this, the number of South Africans who have tap water has almost doubled over the past 16 years, nine out of ten having access, according to the latest census. But growing demand is one reason why more than R570-billion will be needed for investment across South Africa’s water value chain, in the coming ten years, according to Minister for Water and Environmental Affairs Edna Molewa - money which will be needed to pay for resources infrastructure, water services and conservation, and demand management. With South Africa struggling to find the massive investment for new dams and water transfer schemes, JO’BURG BOLT introduction of a new powder coated Abeco’s recent
WORKING TOGETHER A family business - brother Duane heads Technical Operations - Abeco’s strategy is very much on taking the business to the next level, says Mr Ramos. “We have introduced a new range of tanks, currently are engaged in a significant joint venture in Namibia, and the company is growing at a rapid pace. “The intention is to keep it in family but there are of course instances of companies reaching a certain size where this comes a bit harder. “Our mission as always over the past 30 years, is to work together with water storage users and their service providers to satisfy their needs effectively, and in so doing to establish lasting relationships “We sell a quality product, keep in touch with our customers, and provide excellent back up services. Our tank is our word.”
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jun 14 PAGE 71
Landscaping South Africa Editorial: Harriet Pattison Production: Ajuanne Payne
From instant lawn suppliers to landscaping top golf courses, Bidvest Top Turf have continued to grow since it began over three decades ago, blossoming into a horticulturist company with a firm footprint across Africa and heavily focused on being green; in more ways than one…
Founded over 30 years ago, Bidvest Top Turf has grown from an instant lawn provider supplying the East Rand in the province of Gauteng, to expanding into landscape construction all over Southern Africa. Managing Executive of the Bidvest Top Turf operation in South Africa, Jonathan Ferguson, who has now been with the company for two decades, explains the company’s successful rise from supplier to landscaper: “We grew instant lawn on various farms and supplied this as a product into the market. The obvious expansion of the business would then be in those early days, into landscape construction because people didn’t only want the instant lawn to be supplied they now
PAGE 72 jun 14
wanted it to be laid as well, so the business soon began to supply and install instant lawn for various clients.” Joining the company in 1987, Ferguson qualified in the early 1980’s as a horticulturist with a higher technical diploma in horticulture. “I moved into landscape contracting and the green services business and I’ve been here ever since” Ferguson explains. Bidvest Top Turf began maintaining the gardens it was building and eventually the business grew from its roots as a lawn supply business into a multidisciplinary green industry business in South Africa.
THE EARLY YEARS In 1979 a turning point for Bidvest Top Turf came
Bidvest Top Turf
when the company Sun International opened the gambling and gaming resort, Sun City. “One of the most notable things in our early years, is the job at Sun City” Ferguson explains, “We were very involved with the construction of the first golf course, the Gary Player Country Club and we did the landscaping around the resort. It was an anchor job for our company in 1979.” Bidvest Top Turf continued to work with Sun International throughout the 1980’s, “They built resorts all over South Africa so we followed them around. We followed them to Mauritius where we still operate to this day. Our first job over there was the Le Touessrock Hotel.” Three decades on, Ferguson
explains the company’s footprint continues to expand: “The business developed and grew as South Africa grew. We worked in Sub Saharan Africa, Swaziland, Botswana, Zambia, Namibia and we’ve been as far as Angola, we have quite a footprint down in Southern Africa.” In 2004, Bidvest Top Turf were acquired by Bidvest, Ferguson explains this move changed the face and business plan of the company. “The focus for the business since 2004 has been on annuity type income, rather than landscaping and constructing type income because of the stability in the annuity type environment. It is recurring work whereas in the construction environment, the revenues go up and
jun 14 PAGE 73
Africa’s leading Irrigation specialists Controlled Irrigation was established in July 1968 as a design and installation operation and has since been responsible for a large portion of the major irrigation design and installations in South Africa but have since gone from a construction entity to a design and supply entity.
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GREEN FOCUSED As well as being involved in landscaping and golf courses, Bidvest Top Turf has developed product lines for vertical landscaping, such as roof terraces, which are becoming increasingly popular in South
“We would like to develop ideas around what we call labour based contracts, instead of using mechanisation, use labour and employ labour to do what machines would normally do” Africa. Like so many other businesses, the focus on being green and running a sustainable company is important to Bidvest Top Turf. Ferguson explains: “We’ve got a huge initiative for green buildings
PAGE 74 jun 14
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and sustainable development. The Green Building Council of South Africa certifies, rates and grades buildings for their green components that goes from the energy they use, to the water they consume to the environmental quality and ecological value of the gardens.” With so much focus on ensuring green credentials are maintained, Bidvest Top Turf has gone one step further with an innovative solution for controlling pests. “We want to use birds of prey to control pests on industrial sites such as pigeons that are nesting in awkward places. We launched that a couple of months ago which is a very green product and instead of poisoning birds we are using natural ways to control them” Ferguson explains. Bidvest Top Turf have another idea nestled away which Ferguson admits he is excited about: “I think urban agriculture is a new opportunity for us, it might link back to roof garden buildings growing around food and cities growing their own food instead of carting it in from farms 100 miles away. Of course, it takes a lot of effort and input but I think it’s an interesting avenue for a business like ours.”
Bidvest Top Turf MANAGEMENT DEVELOPMENT PROGRAM With operations in both South Africa and Mauritius, Bidvest Top Turf now have over 1 000 employees. Basic skills are taught to all staff members when they join the company and a Management Development Program (MDP) encourages those in supervisory positions to move up to management. Interns are also taken on board by the company to offer them practical training and employment if it’s available. Ferguson explains: “I think we can do what we call labour based contracts, instead of using mechanisation, use labour and employ labour to do what machines would normally do, it takes a bit longer but you’ve employed people rather than using mechanisation. “We have a social responsibility, South Africa has massive unemployment estimates of 25% to 30%. Our industry has relatively low barriers to entry from an education point of view and the skills can be trained relatively easily to uneducated people. We grapple with a regulated labour environment, which doesn’t help and if it wasn’t so regulated I think you would
see a lot more entrepreneurs starting and taking the risk of employing people.”
“THE FUTURE IS LOOKING GOOD” For a company that has significantly grown over the last 30 years, where does it want to venture into next? “Africa is one of the fastest growing areas in the world so if something comes up in Mozambique, or Botswana or even further afield we would obviously have a look at them” Ferguson explains. “Generally what happens is South African companies follow other South African companies so if a large South African construction company got a large construction job in another country, we would ideally like to follow them because we know them and we know that the project is properly funded. It is always a challenge working out of your own country” says Ferguson. For a company that has grown from instant lawn suppliers to national landscapers, the future is looking very green indeed. “There’s new exciting products and new sectors that we could be getting involved with so the future is looking good” concludes Ferguson.
FOR SIDE DISCHARGE, MULCHING OR GRASS COLLECTION, THERE IS A “ZERO TURN”, RIDE-ON
WALKER “ThePETROL impact of AND the renewed AVAILABLE IN BOTH and sustained drive towards DIESEL VERSIONS a more ‘green’ way of living
Tel:011 472 0477 or email:firstname.lastname@example.org in South Africa has been
extremely positive on our web:www.walkermowers.com business” jun 14 PAGE 75
“Our communications will be revolutionised” Editorial: Roland Douglas Production: Emily Woodhall South Africa’s Perishable Product Export Control Board is making the move from old-school pen and paper to 21st century tablets as it looks to modernise its communications and information management systems. CEO, Stuart Symington tells IndustrySA more about the company and its developments in what is set to be an important year for the organisation.
It is definitely true that in some countries and in some industries, the most important and influential companies can remain under the radar to a certain extent. Take South Africa’s agricultural industry for example; you have your big name players, the likes of Afrifresh, Karsten Fruit, du Toits Vrugte and the Two-A-Day Group to name a few, all efficient and successful companies but all relying partly on export as an important income stream. This is where the Perishable Product Export Control Board (PPECB) comes in - perhaps not the most well-known of all companies in the agricultural industry but one which holds the most clout when it comes to the export of foodrelated products. The company holds the vision of enabling its customers to become the preferred suppliers of perishable products worldwide; a sizeable task but one which the PPECB has taken significant strides towards in the past few years. CEO, Stuart Symington tells IndustrySA more about the company’s remit and important plans for development in the coming months. “We don’t export,” he says. “We inspect exported product. We are a government agency; we belong to the Department of Agriculture, Forestry and Fisheries (DAFF). Where most
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state-owned companies get their funding from the National Treasury, we get ours from the client. We operate under a statutory mandate yet we collect our income from customers. “Our business model is very simple. It’s non-profit; our financial model is to break-even. We look at what it will cost to do business for the next year based on volumes predicated from all industries and then we charge a levy for the volumes inspected to cover those costs. As a monopoly, we cannot be seen to be making surpluses or losses.”
A FULL-SERVICE PORTFOLIO The PPECB has an impact on many different industries and its influence is felt far beyond South African shores. All perishable products that intend to leave South Africa for foreign markets have to be inspected by the PPECB and of course, this takes a large and knowledgeable workforce. “We have 1500 inspection points around the country and we have about 500 inspectors. We employ permanently 360 people and we have 200+ temps at any time to account for the season,” explains Symington. “We look after about 200 different product lines that include many varieties of different commodities”, he adds. Some of the country’s most important drivers of foreign exchange are inspected by the PPECB and its not just the way they are packaged – the inspection includes everything from
food safety to cold storage during transportation. “What we do is inspect the quality of a product, and these perishable products are mostly fruit products (including vegetables and flowers). We also provide inspection services in the cold chain. We don’t just inspect products; we look at the cleanliness of containers, the operational side of the refrigeration units, performance of cold stores and refrigeration trucks, and we inspect reefer ships and monitor temperatures throughout voyages. “When looking at fruit quality, we would look externally at size, colour and blemishes for example. Internal quality is assessed for the composition of sugars and acids in the product. “We provide a food safety service. We do auditing of food safety on farms and at pack-houses. “We pre-screen phytosanitary issues and issue quality certificates for cold-chain and product inspection. Our mother department inspects for phytosanitary issues and they issue the phytosanitary certificate. Phytosanitary concerns plant health; we make sure that pests do not get onto the product before being exported to other countries. Things like insects, spiders, flies, diseases and fungi are phytosanitary issues and other countries do not want to receive products with these attached. “If you want to export to England, the English import
authorities will want to see a phytosanitary certificate. If you don’t have it then the import authorities will order it to be taken away. In order for the exporter in South Africa to get a phytosanitary certificate from DAFF, they will need a quality control certificate from us. “Phytosanitary compliance is very important as access to international markets can be restricted if this is not dealt with correctly,” explains Symington. PPECB’s core activities surround the fruit sector with South Africa being an exporter of choice for Europe, the Middle East, the Far East, the USA and, of course, the rest of Africa. But strict guidelines set out by the big name retailers in these regions mean that inspections have to be meticulous and meet universally high standards. “The product range we deal with is mainly fruit,” says Symington. “We deal with everything from subtropical fruits (mangoes, lychees and avocados) through to citrus fruits (grapefruit, orange, lemons and soft citrus). Then there is also the deciduous fruit basket of apples, pears, table grapes and all of the stone fruit types. “We also look at maize and carry out mycotoxin analyses on maize and groundnuts at our laboratory in Pretoria. We have just bought new technology to look at MRLs (maximum residue levels) of chemicals on fruits. Supermarkets in Europe would prefer a zero or miniscule amount of chemical residue
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TEL | 0861 777 025 FAX | +27 21 531 7258 on all of its fruit products. If the residue is over the maximum level allowed, then the supermarkets will reject the product. “We can also work with frozen meat, frozen fish and dairy products. Africa is on the rise in the dairy industry. There are a lot of dairy products in the form of long-life milk or UHT, condensed milk, cheese and yoghurt. South African supermarkets are spreading rapidly across the continent so many South African dairy products are being exported into Africa,” he says.
CHANGING TECHNOLOGY The PPECB is an old organisation. “It was founded in 1926 and it’s one of the only organisations of its type in the world,” says Symington; but while it may be old, so far the systems and processes in place have helped to successfully manage exports of perishable products and gain South Africa a foothold amongst the world’s most efficient and well organised international traders. However, very soon the company’s processes will be upgraded in a huge step towards increased efficiency and connectivity. The whole organisation will adopt the use of tablet-based software for the purpose of speed and centralised storage of information. While this will be a costly investment, it will be one that will provide much greater efficiencies for inspectors
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and customers. “Because of the climb in volumes and technology available today, we are moving all of our inspectors from clipboard, pen and paper to smart mobile devices. “Apart from the time saved, we will have real time information from anywhere in the country. We won’t have to courier bundles of paper from around the country to a central point. We should be able to conduct more inspections because of the time saved, and there should be fewer mistakes due to fewer people capturing data into computer systems,” says Symington. “Time is hugely important because this is a perishable product - you simply can’t delay the product from getting to market as quickly as possible.” When the smart tablet system is implemented, inspectors will have a wealth of information available at their fingertips in a matter of seconds and will even be able to take pictures of products and upload those pictures instantly for future reference. “This means if someone tries to falsify a quality claim on the other side, we have visual evidence of what the fruit looked like before it left,” says Symington. This type of organisation is vital, especially in the current times when South African product is in high demand because of fewer exports from competing countries like Chile. At the end of last year, Chilean farmers witnessed a ‘black
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company profile frost’, which decimated a lot of their fruit producing regions. This resulted in a loss of over 50 million cartons. “In markets where we supply the same type of product at the same time of the year to the same customers, these customers are now short-supplied and desperate for our product,” explains Symington, reiterating the importance of an organised industry. “We believe we do give South Africa an edge because an organised industry invariably performs better,” he says.
Symington. “Recently, we have explored overseas and found the Israelis, the Dutch, the Moroccans, the Turks, the New Zealanders and the Kenyans all have an equivalent of what we do. Essentially they are state owned entities that look after quality control in an export environment with perishable products. We are having our first gathering this year to compare notes as we don’t compete with each other. We hope to open an international inspection forum which is exciting as it’s a first.”
A MODERN ORGANISATION
The PPECB brand is recognised around the world as one which represents quality and safety but the title of ‘Control Board’ is one which Symington admits has been considered for change recently. “Officially, we are the Perishable Product Export Control Board but we would prefer to be known as a certification business rather than a control board. We have looked at changing our corporate identity but the brand is very strong around the world; our logo is on every carton,” he says. Even though the benefits of the PPECB’s involvement with exports are pretty clear, not all countries adopt the same approach and sometimes the private sector is chosen to look after the export industry. However, nations that have a similar state-owned system have agreed to meet this year and share ideas. Huhtamaki Fruit Advertisement.pdf 1 2014/01/30 “We are not the only control board in the world,” says
One area that might be on the agenda for discussion when the company meets its peers might be South Africa’s concerns with citrus black spot. Citrus black spot, a fungal disease that was discussed in previous editions of IndustrySA, affects the appearance of citrus fruits. Although it is widely considered to be no more than a visual defect, the EU market has considered closing its doors to affected SA products because of concerns about the disease spreading and infecting European crops. “Citrus black spot has been in the limelight,” says Symington. “It is a small fungal disease on the peel of some citrus products which has no negative effects on people’s health. However European scientists believe it could have a negative impact on EU citrus orchards so they could consider banning entry to the EU of this product in 2014.” 4:36 PM The trouble with citrus black spot is that it’s a progressive
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PPECB defect meaning it may not have manifested itself when it leaves South Africa. But when it arrives in Europe it may be more obvious, creating on-going issues for the SA Department of Agriculture to contend with. “The logistics of getting products to market also offer many challenges. Temperatures have to be managed over long distances. Since there has been a significant shift from reefer ships to refrigerated containers, the PPECB has had to train more inspectors to certify the increasing number of containers in the system,” says Symington. So what does the future hold for the company? Can these challenges be overcome? Will the move from the old system to the modern, smart tablet system make a difference? Symington thinks it will, and the CEO says that future processes will change dramatically with some customers receiving more frequent or less frequent inspection activity depending on their track records. “Once the laws have been changed in Parliament, we will have the opportunity of auditing systems rather than endpoint inspecting products. This is akin to becoming auditors of pack house quality systems rather than inspecting 2% of every consignment for export. We will review each business in terms of its quality track record, taking into consideration its systems, products and destination markets,” explains Symington. One thing is for certain; although the PPECB might not be the most well known of all the companies in South Africa’s agricultural industry, it is definitely a significant player in the export value chain. If a company wants to operate in the export market with perishable products produced in South
Africa, then there’s no escaping the watchful eye of the PPECB. The next 12 months will be vital for the company, as the introduction of the tablet system will force working practises to change drastically. Although the changes should provide substantial benefits to customers, it will take some getting used to. Hopefully the transition will be smooth and the PPECB will continue to successfully oversee the export quality standards of all perishable exports from South Africa, estimated to be worth around R15billion a year.
For more info about the PPECB go to: www.ppecb.com
Meet Stuart Symington: “Since 2001 I’ve been closely involved with the exports of fruit out of South Africa into 70 different countries around the world. After ten years in the export sector, I was approached to lead this state-owned entity. It came as a surprise as I had not considered working in the public sector. The challenge at the PPECB has been to re-create a culture with a greater sense of urgency around the need to change the way we do business. We have had to become more client focused, and business orientated as an organisation. This has required extra care on ensuring that the organisation is financially stable and runs an acceptable business model whilst operating in a monopolistic space. “Whilst our shareholder (the Department of Agriculture) gives us our mandate to operate, our clients (in the private sector) pay the bills for our services. Being a regulator is a tough task, and it is not always possible to satisfy customers when having to apply the law to their disadvantage. So the PPECB has to walk a careful line of diplomacy between trying to help its fee-paying customers yet taking unpopular decisions when the situation arises.”
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By appointment of the neighbourhood Editorial: Harriet Pattison Production: Ajuanne Payne
From fine wines, to spirits to malt whiskeys to local beers, Norman Goodfellows has recently opened a new distribution centre and launched an innovative new app allowing customers to place orders efficiently on their phones. So what’s next for the leaders in an increasingly competitive industry? IndustrySA speaks to CEO, Solly Kramer to find out what the future holds for this family run company… “We sell you the best times of your life”. Norman Goodfellows has delivered this to its customers for over 30 years since it was founded in 1976 by Norman Kramer. Son and CEO, Solly Kramer, explains that the reason for the name stems from his own stint in the UK all those years ago. “I was at University in Edinburgh and found the word Goodfellows in the Thesaurus there. It is very synonymous with jolly times, good times and good people.”
TRAINING IN THE FIELD With over 140 employees, Kramer explains: “We still have four or five members of staff that started with us in
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1976, so they have been with us for over 30 years. Of the 140 employees today, over 50% have been with us for 15 years or more; we are a family run business.” Customer service is imperative to the company so staff training is an essential aspect. “We pride ourselves on a good shopping experience, in terms of not only value but educated people, whether they are selling you malt whiskeys, beers or wine they really know what they are talking about. “We do a lot of in house training and outsource training. We send five members of staff a year to do the harvest in the Cape with various wine farms. It is done on a rotation basis so we try to give everyone a turn. They spend two days during harvest learning the whole winemaking process. I’m talking about people with no real
education, thrown into it, it’s amazing how they thrive on that little bit of knowledge and how they grow” Kramer explains. With five Norman Goodfellows’ stores, three in Johannesburg and two in Cape Town, Kramer explains that to ensure that customer service is maintained and standardised, the company send in mystery shoppers. “I will phone each store nearly every day and get a response, and they don’t know it’s me. They have learnt from us, they have taken in the same energy that we put in” says Kramer. Having stores in two of the biggest tourist destinations in South Africa, Kramer explains staff training is even more essential to ensure its customers receive expert knowledge and fantastic service. “We have lots of business tourists who shop with us in Johannesburg, they love being served by our local black members of staff because there’s a certain trust in what is being recommended to them.”
SUPPORTING THE LOCALS With South Africa one of the wine capitals of the world, Norman Goodfellows has been supplying fine wines,
beer, malts and liquor to customers all over the world for over three decades. Kramer explains: “Across the board in South Africa we have the widest range of international and local wines and we are the biggest champagne seller.” In addition to spirits which are mainly sourced from global brands including, Campari and Bacardi, Norman Goodfellows also focuses on supporting and stocking more local beers. “Lots of craft and artisan products are coming out of South Africa which have been made locally and are really excellent. We always have a forum and give them a lot of shelf space. Craft beers have become very popular in South Africa and it is a growing sector” Kramer explains.
NOT JUST A RETAIL STORE Norman Goodfellows have recently expanded and opened a new dedicated warehouse and distribution centre in October 2013. Kramer explains that before the expansion, “we were operating out of a very small warehouse; it had one exit and one entrance which were the same. We were running 18 to 28 vehicles out of there so we had to move and in so doing, from an internal point of view, it has given us more control and a lot more
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BREWED FOR THE DREAMERS
ability to buy better, we can buy more in bulk.” The added space has also meant a more efficient service for
“We still have four or five members of staff that started with us in 1976, so they have been with us for over 30 years” the consumer too. “We are running 22 vehicles, they are checked on a minute-by-minute basis with live tracking, so we know exactly where they are and can give the customer an exact time when their order will be there,” Kramer explains. In addition to wine and liquor, Norman Goodfellows has made a name for itself in the party business too, providing a full rental service. Kramer explains: “One of the areas we have cornered the market on, we handle probably 90% of it in Johannesburg, is the big function catering where we do a huge service in terms of glasses,
bars, beer kegs, beer machines, waiters, cocktail-ware, separate bars, beautiful bars ready made for cocktails; we provide a whole party service.” Norman Goodfellows certainly knows its market and is even venturing into the ever lucrative world of social media. The Norman Goodfellows app introduces an innovative online shopping experience for its customers with special and unique deals that are only available once the app has been downloaded. Kramer explains: “It carries a total stock of what we carry and the services we do, so if you want to place an order for a function, it is all available on the app. It’s very experimental for us. We have a lot of success on our email, Twitter and Facebook side but the app side is very good for us because we download our catalogue on to it so it is a good way for people to have that in front of them all the time and they can then place orders from that.” Norman Goodfellows also provide a gifting service, offering customers the opportunity to send friends and family a bottle of South African wine or spirit. “We do a lot of gifting, local gifting and overseas wine gifting. A service whereby if South African people want to send gifts to someone in the UK or America, we cover most of the world. Locally, we do a lot of gifting too.”
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company profile LOOKING TO THE FUTURE With a new retail store recently opened in Benmore, Kramer explains: “People love it, suburban presence is very important, not just as distributors but also retailers; it strengthens that side of our business.” Norman Goodfellows is continually expanding, hoping to move further into Africa over the next few years. “We are dealing with some people in Botswana and Nigeria” says Kramer.
“They have learnt from us, they have taken in the same energy that we put in” Unlike many other liquor stores, Norman Goodfellows have a wonderful retail aesthetic and vision not only to ensure customers have consistently memorable experiences but to run a very successful
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business too. “There has been such a transformation in the retail liquor industry. Supermarkets and bigger liquor stores had become the real face of liquor retail, bearing this in mind we feel that we have a wonderful advantage because those are not nice shopping experiences. What we had to do to survive was to pick up this whole redistribution, we could not solely survive on the retail” explains Kramer. Solly Kramer has a strong vision for the future of Norman Goodfellows and it seems this business flows in his blood after attending the University of Edinburgh and working in the Auchentoshan distillery outside Glasgow for a year in 1974. Now, following in the successful footsteps of his father, he plans on creating a national footprint for Norman Goodfellows: “We are opening a distribution warehouse in Cape Town, improving the main store in terms of look and retail and we are looking to open a business in Durban in the Natal area, so we will have a truly national footprint.”
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We pride ourselves on service, quality, reliability and integrity. jun 14 PAGE 87
Leading asset management Editorial: Tim Hands Production: Chris Bolderstone
Since its founding back in South Africa in the 90â€™s, Pragma has grown into a global leading asset management service provider, with more than 360 staff spread over four continents. The company has consistently invested in its internal leadership and employee development, seeing it awarded the Deloitte Best Company to Work For award for four years in South Africa, and has established relationships with a vast array of clients, each of whom have benefited from their partnership with Pragma.
It was shortly after opening its doors, nearly two decades ago, that Pragma came to realise that offering solely asset maintenance could not ensure that its many clients would receive a return on their assets. As a result, the company developed a fully-fledged asset management program, one informed by an asset management methodology supported by the highest levels of business processes, practices and standards. Pragma has worked tirelessly to develop numerous products and services which are both unique, and highly successful, within the market â€“ such products as the On Key Enterprise Asset Management system, Asset Care and Service Centres, Asset Management Improvement Plan (AMIP) and Pragma Academy. The organisation also holds an important role in the development of the new ISO 55000 standard for
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asset management, which sees Pragma heading up its South African delegation. A combination of all of these aspects of its innovation and ingenuity has meant that the last decade in particular has allowed the organisation to go from strength to strength across all of its services. In the last four years, to illustrate this, turnover for Pragma has increased by more than 100%, and will allow the company to build on what is an already consolidated presence in Africa and Brazil, engaging with its partner in China to take The Pragma Way into the Chinese market. In 2006, the retail arm of Shell, globally known as one of the five major national suppliers of petroleum products, outsourced the maintenance of all their service stations to Pragma Africa. Shell supplies fuel and convenience products through a
vast network of retail and commercial sites across South Africa, conducting constant daily operations through more than 40,000 assets. A key aspect of Pragma’s intervention was the implementation of its facilities management contract (FMC), through setting up a central office in Cape Town and performing an Asset Identification and Verification (AIV) on all sites, with the organisation deploying eight field engineers regionally. Soenke Kleymann, Shell Maintenance Excellence Manager, described his role in the success of the partnership: “My role means that I am responsible for the maintenance of around 6,000 sites, in 17 markets. As Shell Retail we are a sales and marketing organisation, which means that the customer is our primary focus. All our effort must go toward dealing with the customer and ensuring that the customer returns
to our sites in order to fill up their car again and again. As a consequence, any activity that is not directly linked to the customer has been outsourced to a company who can take even better care of it than us. So, maintenance is now outsourced to ensure that all of our sites continue to meet the same high standards that we set, as we have learned that there is no way we can keep control of every aspect of the business.” There are innumerable benefits to this type of outsourcing operation, not least the introduction of single-point responsibility for all maintenance work, from beginning to end, alongside standardised work planning and control processes across all sites. As a result of Pragma’s involvement a number of key business processes have been implemented – the likes of Information, Contractor
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and Performance Management, as well as Work Planning and Control, all came to be a part of the Shell retail way. As Shell Global FMC Manager, Merilee Karr is charged with looking after the 12,000 retail sites that Shell owns globally. “As we have moved through our partnership journey, and gone through what we call ‘new ways of working’, we’ve managed to actually step back which means that we are now able to have Shell clearly define what it is that we need to achieve, and hold our partners accountable for that delivery. Our core business is not maintenance, and it is for this reason that we have partnered with companies like Pragma, in order to use their expertise to deliver the maintenance on our behalf.” Pragma CEO, Adriaan Scheeres, recently appeared as one of the prominent speakers at this year’s Southern African Asset Management Association (SAAMA) Conference, held at the CTICC in Cape Town. Central among the talking points was the question of ‘big data’ in asset management, and why the highest-level of executives in senior management needed to in on the revolution. “’Big data’ refers to a relatively new universe of data being created by web interactions, social media, mobile devices, RFID tags, web
Pragma logs, smart meters, weather sensors, and virtually anything that generates an electrical pulse,” explained Scheeres, and it is a phenomenon that affects us all – it is shaping the conversations we have about our world and turning speculation into informed discourse. It can be crucial to businesses too, who use it to make more informed predictions about who will buy their products and how to develop better, more appropriately targeted offers to their customers. “Increasingly, the failure to harness ‘big data’ will be a competitive disadvantage for many businesses”, explains Scheeres. “Whoever explores it more deeply and aggressively first will have a much greater insight into its commercial, social, and scientific potential and will be able to make decisions that change the course of our lives.” Ultimately, this will allow for less time to be spent on data processing and report generation, and a greater focus on problem solving and consistently improving how we work. Pragma’s dedicated team has the ability to assist asset managers to achieve this goal, by combining custom reports and interfacing tools on behalf of clients and amassing
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Turning up the heat Editorial: Harriet Pattison Production: Emily Woodhall
Established in 1966, Scientific Engineering prides itself on the design and manufacture of niche appliances for industries, ranging from mines to science laboratories. IndustrySA speaks to CEO, Bernard Parschau to find out just what makes this company a leader in an industry which is becoming increasingly competitive.
When you begin to consider the necessity and importance of large industrial appliances including ovens, furnaces and incubators to different industry sectors, it is clear why specialists in the manufacturing field are so successful. Scientific Engineering started trading in 1966 and it wasn’t long before it realised a rather lucrative gap in the market. CEO, Bernard Parschau, explains: “The company had a view of manufacturing locally produced laboratory equipment. There was a drive on at the time to build up the manufacturing base in South Africa, hence the need for someone that could produce products locally. We then started designing and manufacturing our first ovens and larger appliances required for the laboratory industry. The advantage of having these appliances manufactured locally is that the appliances are quite big in volume and transports costs are therefore kept to a minimum.”
HOT HISTORY Before joining the company in 1990, Parschau studied engineering at university and worked at a local research institution. With the help of “a very good executive team”,
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Parschau explains how the company went from strength to strength to reach the successful point it is at today. “Going forward I want to take this business to the next level; project it into the future to make it an industrial player in the scientific industry and other allied businesses.” Over the past 20 years, the company has built up unrivalled expertise across a range of sectors, as Parschau explains: “We developed a complete range of laboratory equipment which included not only bench top ovens and incubators, but also large ovens for the mining and pharmaceutical industry. We developed expertise in all of these areas and became a market leader in locally manufactured laboratory appliances. When designing and manufacturing such large appliances, transportation and logistics often present a challenge when looking to ensure products reach the end user without damage. We’ve changed our business to be solution driven. We have considered the local conditions, and have taken great care in ensuring that our packaging is suitable enough to withstand poor road infrastructure, the result being that it always reaches the customer intact” Parschau explains. Despite an abundance of modern technology now available, Parschau confesses: “We use standard controls that
make it easy to service and operate the equipment. We keep things nice and simple in the way in which we produce our appliances with the aim of making sure they are user friendly. We have equipment that is still fully operational, which we have manufactured 30 to 40 years ago, thus bearing testimony to the fact that it has been designed to last.” On the manufacturing side of the business, Scientific Engineering is leading the way using state of the art manufacturing equipment. “We try to stay ahead of the game because the industry today dictates a fast turnaround time on manufacturing and has to be up to a world class standard. This is something which we pride ourselves on” he says.
SCIENTIFIC LABORATORIES Scientific Engineering is a niche appliance manufacturer, designing and manufacturing up to 800 products for industries including butchery and catering. Perhaps the biggest sector the company supplies to and places the most significance upon, is scientific laboratories, with the laboratory oven range now the company’s best seller. The oven, which Parschau describes as “the backbone of our company” is used in numerous industries ranging from food technology to
university laboratories. It is clear then that the company place a very high value on product quality and design as Parschau explains: “We still have that reputation in the market for manufacturing reliable, quality products. We are one of the few South African companies that are UL listed and place huge emphasis on making sure our equipment complies with regulations, helping boost the consumer’s value for money.”
EMPOWERING EMPLOYEES With 170 employees, Scientific Engineering places huge emphasis on training and development, ensuring that its staff are fully qualified in both knowledge and experience. “We believe that training people and making sure they understand what they do is why we have achieved our success. We realise that our most essential asset is the people that work in our organisation, and have taken it one step further by empowering our people to expand on their knowledge and understanding of the work they do” says Parschau. For the staff at Scientific Engineering, there are many opportunities for development and progression. “As a family focused company, we look at people within the organisation,
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company profile have something which adds value compared to what existing offers are out there. This is then taken a step further and we start developing prototypes which we then produce. If these pass internal tests we send them out for field test either in a pharmaceutical laboratory or in the mines. This helps to ensure that the products designs are in line with market requirements. Once we have achieved that, we start a preproduction run of between five or ten units and double check that it is suitable enough for its intended purpose. When we are comfortable with the result, we approach our dealers so that the product may be launched.” Of course, not all products will make it onto the shelf but Parschau believes market requirements are absolutely paramount: “A lot of manufacturers try and give the market what they think it needs. We at Scientific Engineering believe it is very important, and possible, that with sufficient
so that we may see where the leadership capabilities lie in order for us to foster and help them grow through the ranks in our business.” Training programs allow employees to get a sense of the business, grow within the company and build on their managerial potential. “We manufacture fairly sophisticated equipment. We have therefore set up training programmes to assist our staff in becoming more proficient on the electrical side. This enables them to wire up appliances and have an appreciation for what they are doing.” says Parschau.
MANUFACTURING PROCESS For each product produced by the company, meticulous care to design, quality aspects and market research has to be considered, reviewed and applied before anything can be manufactured. From the time of inception to the time a product reaches the market, can easily take up to 15 months. Parschau explains this detailed process: “We are very in touch with the end user. If we see an opportunity in the market, our sales team looks at gaining market intelligence to identify whether there is room for us to operate within, as well as whether the product falls in line with our core business and abilities. If it passes the first gate, we then make sure we
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Scientific Engineering market intelligence, one is able to view the market carefully and distinguish exactly what is required and not what is assumed to be required. There is a very subtle difference.” Scientific Engineering certainly knows what the market requires and this comes from many years of close relationships with dealers and end users in the field. “We have evolved in the last ten years to be a lot more sales and end user driven, which wasn’t always the case. We are industry leaders but one has to respect ones competition. I think arrogance in any form is very dangerous. There are smaller players and they are also able to satisfy their customers, we just have to be better at the game than they are.” Parschau explains.
plans for our company and recently invested a lot of capital expenditure into the upgrading of our plant machinery. We also have the latest laser cutting and sheet metal processing technology. We’re on a roll and we want to move forward. ” concludes Parschau.
“WE’RE ON A ROLL” With the company’s involvement in the export market since the early 1990’s, Scientific Engineering is now looking to expand further into Africa and to be involved in the primary health programmes as the CEO explains: “We would like to be involved in the primary health programmes where they require equipment and specific applications are to be addressed.” In addition to alliances, the company is also looking to improve upon its products and machinery. “We see ourselves going forward, not only as regional players, but African players as well. We have big
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The one stop business Editorial: Harriet Pattison Production: Ajuanne Payne
Founded in 1999, Top Fix has come a long way in just 14 short years. An enterprise heavily focused on service, capital investment and, perhaps most importantly, its people, are the ingredients for a truly successful business.
Top Fix began its early days as a service and personnel outsourcing company, providing scaffolding management services, and, through its sister company MBM, scaffolding personnel to construction and industrial companies across Southern Africa. It wasn’t long before Founder and Managing Director, Webber Marais, realised an alternative and much more lucrative gap in the market: “As we grew, we saw the opportunity of manufacturing and hiring out our own equipment which is where it all started. Entry into the scaffolding market is really expensive; you need a lot of CAPEX, that’s why we decided in 2006 to raise that capital to manufacturing our own scaffolding. We believed it to be a real opportunity.”
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Marais was right. At the start of 2006, he explains: “There were 4 companies: MBM Administration and Labour Brokers, M&S Projects, personnel outsourcing companies started in the early 1990’s, and Top Fix Scaffolding and Safety Adherence Technology, both founded in 1999. We went on to list these companies at the end of 2006, mainly to raise the capital to expand and manufacturer more equipment and to really compete in the boom of 2006 and early 2007. After the market went down I bought the scaffolding and MBM side out of the listed Group at the beginning of 2012.”
A ONE STOP SERVICE Originally focusing on the building and civil
industry, Marais explains the company’s focus soon shifted towards the industrial and mining sectors, especially the petrochemical market in maintenance and construction. “In 2006 to 2007 the civil and building industry had such a boom I think the timing of the listing was very good. The 2008 recession hit the building and civil industry very hard so obviously the performance of the scaffolding side was not as good as the rest of our businesses.” As a result Top Fix decided to restructure and focus much more on the maintenance side of the chemical and petrochemical industries and, perhaps most importantly, offer an innovative solution for companies: a one-stop service. “Strategically, this is a decision we took in 2007, we just supplied
scaffolding. By changing up our strategy to become a one stop service, providing scaffolding, insulation and industrial coating, we could compete in the petrochemical industry which we couldn’t do before” Marais says. “To compete in this industry you need the scaffolding, the insulation and the painting expertise. With the scaffolding alone you can’t get a maintenance contract because the client wants a turn-key service.” Offering such a convenient and efficient service to various industries, Marais explains that for the moment, the company will remain operating and focusing within Southern Africa, despite expanding fourfold in just two years. From under 1 000 employees in 2012, the company
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now has over 3,000 members of staff. “With an accredited training school, we focus on training all our employees. In an industry which needs to be very safe, we operate in the petrochemical plants, is an area where you need really skilled and trained people, so staff training is ongoing” says Marais.
ALL ABOUT THE PEOPLE With smaller companies emerging onto the market and exploring new industries, Marais explains: “There’s quite a lot of competition in the market, especially providing a service into the bigger companies, but I think we are one of the leading companies in the industry as there are not many that can provide a full service. There are a lot of smaller operators who may provide one of these services but not many with a one stop service like ours.” Reaffirming the company’s spot as a confident industry leader, Marais says, “We’ve got the infrastructure - we have 8,000 tonnes of scaffolding and we’ve got the people and obviously the expertise. We’ve been in the business for a long time and have good people protecting the assets of the company.”
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“As we grew we saw the opportunity of manufacturing our own equipment which is where it all started” The people are clearly very important to this company in helping it maintain the success it enjoys today. Marais explains: “The biggest asset is our people. We have highly skilled people and we work well as a team. We provide a safe and superior service, one of the main reasons we are doing well compared to our competition in such a short time is our people and the service they provide.”
A RECIPE FOR SUCCESS In addition to an increasingly successful team of employees, Top Fix also attributes its success to the impressive equipment infrastructure. Such a strong infrastructure is essential for a company like Top Fix to secure future projects and uphold its position as an industry leader. Marais estimates that just
Top Fix one tonne of scaffolding could cost up to 24,000 Rand today, so the company’s substantial capital investment is imperative. With plans to continue in the successful market where Top Fix currently operates, and for further involvement in petrochemical expansion projects, Marais emphasises that perhaps the company’s real recipe for success remains its people: “Going forward we are going to focus on where we are now and we want to invest more in our people. We have good people and by investing more in them we will achieve an even greater success.”
“We provide a safe and superior service, one of the main reasons we are doing well against competition in such a short time is our people and the service our people provide”
Jotun Paints South Africa (Pty) Ltd
www.jotun.com jun 14 PAGE 99
Where the world meets Africa Editorial: Helen Lake Production: Ajuanne Payne
The Durban ICC has been ever evolving since its inception in the early 90’s. IndustrySA speaks to CEO Julie-May Ellingson about its recent developments and the impact the ICC has on the region.
The Durban International Convention Centre has been voted Africa’s leading meeting and conference centre by the World Travel Awards 12 times in 13 years and is rated amongst the top 20 convention centres in the world by the AIPC. The Durban ICC was built as part of the community development project, Operation Jumpstart, and since its opening on the 8th August 1997 by President Nelson Mandela, the ICC has made astonishing progress. In 2000, it took over management of the Durban Exhibition Centre that has become the home of Southern Africa’s biggest tourism show, Indaba, almost every year since it began. In 2004, work began on expanding the Durban ICC to include the Durban ICC Arena. It opened March 2007, turning it into Africa’s largest, column-free, flat floor exhibition centre and meeting space. The arena is a world class venue for sporting events and concerts with its retractable seating and capacity for up to 10,000 people. Marking the significance of this development, the Durban ICC, as well as the Durban Exhibition Centre and Durban
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ICC Arena, were all named as part of the Inkosi Albert Luthuli ICC Complex, after the former President of the African National Congress and Nobel Peace Prize Laureate, Albert Luthuli. The entire complex is 33,000m² of flexible exhibition and meeting space with operable walls that allow an unlimited number of venue configurations, state-of-the-art technical equipment and renowned high standards of service excellence. 2011 was yet another significant year as the Durban ICC hosted its largest and most complex event, the 17th Conference of Parties of the United Nations Framework Convention on Climate Change (COP17/CMP7). With 2500 meetings held over the two week period in addition to the main plenary session, the conference drew 20,000 delegates to the city of Durban. “Full credit must go to the Durban ICC staff who were amazing. Nothing was ever too big or too small for them to handle. COP17/CMP7 showed that we have the necessary capabilities and experience to host the largest and most complex events in the world,” says CEO, Julie-May Ellingson. That same year, the Durban ICC hosted the 123rd International Olympic Committee Session that
boasted a uniquely African experience for the delegates.
ECONOMIC FOCUS The events hosted at the Durban ICC have had a huge impact on the economy. In the past financial year, the Durban ICC has contributed R2.94 billion to the country’s Gross Domestic Product (GDP) and R2.73 billion to the KwaZuluNatal Gross Geographic Product (GGP). In fact, over the last seven years, they have made a total GDP contribution of R17.4 billion. These are big numbers, but they are not the only way to increase the value of the City of Durban as far as Ms Ellingson is concerned. “We aim to attract international events which will not only bring large numbers of delegates into our city (i.e. bums in beds) but more importantly will build the knowledge economy in Durban and South Africa.” An example of this is the upcoming AIDS Conference, Ms Ellingson tells us. The Conference is set to come to the Durban ICC in 2016, bringing 18,000 delegates to the city and enabling a gathering of experts from all over the globe to come together and share their knowledge on finding a cure for HIV/AIDS.
The Durban ICC team actually targets international associations in key economic sectors with the hope of supporting the region’s economic and societal objectives. “As the Durban ICC we have aligned our focus with the city’s IDP, Provincial Growth and Development Plan and National Development Plan. As such we target specific events in key economic sectors that will directly contribute to the future economic growth of the city,” says Ellingson. With their entrepreneurial vision, the Durban ICC team are dedicated to making Durban the number one destination for conferences and exhibitions.
KEEPING IT GREEN As might be expected from the host of the COP17/ CMP7, the Durban ICC is leading the way in creating a sustainable, energy efficient venue by being one of only two venues in Africa to have ISO 14001 certification. ISO 14001 is an international certification that recognises a company’s dedication to minimising its negative impact on the environment. From the beginning, the Durban ICC was built with materials that endorse a greener environment
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company profile with its large glass panels that allow natural light to flood in and reduce the use of artificial lighting. It has gone from strength to strength with the implementation of innovative environmental sustainability systems and practices. This includes escalators that are only activated when stepped on, bathrooms that are designed to limit water wastage, a reduction in their use of bottled water as well as their promotion of waste separation. “The last assessment indicated that more than 40% of the waste generated at the complex was recycled, which equates to over 87 tonnes of waste being diverted from landfills,” says Ellingson. They have also recently undergone a lighting overhaul that is anticipated to reduce energy requirements by 7%. On top of all this, they have energy efficient cooling systems that build up ice overnight and then use it to cool the buildings the following day. “This initiative, combined with several other electricity reduction measures, such as energy-efficient light fittings, have resulted in a 12% reduction in our total energy consumption, equating to a saving of 1.2-million kilowatt-hours in the last year,” Ellingson explains.
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BIG IMPROVEMENTS In addition to the environmental infrastructure, the venue itself has been undertaking significant upgrades. “We have completed the replacement of the operable walls in our main plenary venue and over the next year this project will continue in our other convention halls too, as our business levels allow,” explains Ms Ellingson. It’s not just the main halls that are important, other parts of the Durban ICC are benefitting from generous investment too. “We are also busy equipping our smaller meeting rooms and hospitality suites with automated dropdown screens and top of the line data-projectors. This kind of investment in the facility ensures that the Durban ICC remains an attractive venue to its clients and competitive in the market,” says Ellingson. The introduction of their new service, ‘Business on Call’, will mean more changes and upgrades to the venue, as Ms Ellingson describes: “We believe there is a need in the city for a ‘lastminute’ meeting facility or office which can be booked at the drop of a hat. In order to cater for this need, we will be converting under-utilised office space into a suite of ten small meeting venues ideally suited to boardroom meetings or small training sessions. The venues will be permanently set up and serviced with all the modern conference amenities, allowing clients to book them at extremely short notice.” The Durban ICC team are further upgrading the air-conditioning and lighting systems as well as the ablutions and development is set to continue over the next two financial years.
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Tel :+27 11 315 – 3336 Fax :+27 11 315 – 3331 Afterhours :+27 11 315 – 9914
Over the years the Durban ICC has won numerous awards for stand out convention and conference services and architecture. In 2013, they were awarded the International Star for Leadership in Quality by the Business Initiative Directions and they were also the Top 500 Companies’ Best Exhibition and Conference Facility in South Africa. The Durban ICC has successfully hosted some of the world’s most prestigious and complex events with a commitment to quality that is demonstrated through its Five Star Rating by the Tourism Grading Council of South Africa. In the next few months, the Durban ICC is set to see a number of important events such as the International Conference on Chemical Thermodynamics running from the 27th July 2014 through to the 1st August 2014, followed by the International Union of Architects World Congress running from the 3rd to the 7th August 2014.
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