heal Helping to
Into the Wild
Spreading its wings
Wilderness announces reshuffle, targets African growth
Elementary dear Watson
Auto security specialist PFK Electronics acquires Pi Shurlok
KFC has plans to extend its reach to Zimbabwe, Tanzania and Uganda in 2013
The bold and the beautiful
As far as investing in Africa is concerned fortune will favour the brave
AFRICA OUTOOK ISSUE 01 AL S O TH I S I S S UE : Bi o T h e r m E n e r g y | EAB S C | e t h e kwi n i
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W E L C O M E Welcome to Africa Outlook This is a new era. In March, South Africa Magazine was brought by a team of private investors keen to push the envelope and bring new-life to the publication. As part of that we’ve changed. We’ve a new name and a new focus. While there has been change, you shouldn’t fear – we’ll continue to bring you all you’ve come to expect from one of region’s leading B2B publications; it’s just in a new format, with a more encompassing remit that covers the entire African continent. Why change? Well, over the past decade Africa has been the second-fastest growing economy in the world, with GDP accelerating more than five percent a year on average. The continent is increasingly being taken more seriously as an investment and business destination, but in many sectors, a window of opportunity does still remain open for establishing an early mover advantage. Africa and South Africa are changing and we’re changing with them. This month we look at how KFC and Coca-Cola are expanding into Africa, learn more about how Netcare is helping to heal South Africa and how Durban-based PFK Electronics’ acquisition of Pi Shurlok has enabled the firm to diversify. We also talk to eThekwini Municipal spokesperson Thabo Mofokeng, look at South Africa’s power problem and renewable future and talk to Keith Vincent, the acting CEO of Botswana and Johannesburg-listed Wilderness Holdings, which recently announced a major reshuffle and is targeting African growth. As always, continue to watch this space. We’ve much more Ian Armitage planned for the coming months. Editor, Outlook Publishing Enjoy the magazine.
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C O N T E N T S
FOOD & DRINK
In this issue of Africa Outlook... 06
NEWS All the latest news from across Africa
K F C sp r eads its win g s Africa Outlook talks to Bruce Layzell, KFC General Manager New African Markets, about the firm’s growth across the continent and particularly in Nigeria
E A B S C to in v est $ 5 0 0 m in E thiopia The East Africa Bottling Share Company (EABSC) plans to invest $500 million in Ethiopia as it plans expand capacity
As far as investing in Africa is concerned fortune will favour the brave E D U C AT I O N
Africa’s top business schools Leaders are not born, they’re made EMPLOYMENT
The bold and the beautiful
Lost generation Youth unemployment in South Africa. There’s more to it than you think
T he city that wo r ks f o r you Cape Town is miles ahead of the other South African metros when it comes to quality of governance and financial management
1 2 5 yea r s and countin g In November the JSE celebrated 125 years of trading
H elpin g to heal S outh A f r ica Netcare strives for quality patient care, grounded by an unwavering commitment to its values
W inds o f chan g e Africa Outlook talks to green energy specialist Jasandra Nyker, CEO of independent power producer BioTherm Energy
I nto the wild Wilderness announces reshuffle, targets African growth
L i v in g in ha r mony Q&A with eThekwini municipal spokesperson Thabo Mofokeng
AUTOMOTIVE E lementa r y my dea r W atson The acquisition of Pi Shurlok has enabled Durban-based PFK Electronics to diversify says MD Gary Stanton
N E W S BUSINESS
DT I h o s t s inaugural SA Premier B u si n e ss Aw a r d s South Africa has produced many ethical, world-class and globally competitive companies and their efforts were recognised at the recent inaugural SA Premier Business Awards - the country’s top business awards. Hosted by the Department of Trade and Industry, Proudly South African and Brand SA, the awards aim to “recognise South African companies that invest in both M oney
Nigeria’s Zenith Bank lists on LSE Nigeria’s Zenith Bank has listed $850 million worth of its ordinary shares on the London Stock Exchange (LSE). The bank said it listed the shares as global depository receipts (GDRs) at $6.80 each. In an email statement, Zenith said one GDR represents 50 ordinary shares. JP Morgan is the depository bank, while Citi is the custodian. Zenith listed 125 million GDRs which will trade on the LSE’s International Order Book, the world’s largest and most liquid GDR market. The company’s market capitalisation at listing was $4.24 billion. Ibukun Adebayo, Head of Primary Markets, Africa at London Stock Exchange, said: “Zenith Bank’s listing
human and technical resources in various projects” as well as stimulate local job creation and broader participation in the economy. Trade and Industry Minister, Rob Davies, said the awards provided a platform for recognition of achievement in business. “The objective of the awards is to recognise and honour local businesses that promote the spirit of success, innovation, job creation, quality and
good business ethics in South Africa. They will also showcase the best that South Africa has to offer in terms of businesses, products and services,” said Davies last month. Categories included a Manufacturer Award, Exporter Award, Small, Medium and Micro Enterprises Award, Rural Development Award, Most Empowered Enterprise Award and Proudly South African Enterprise Award. The top award for the evening, the Lifetime Achievement Award, was presented to South African entrepreneur and businessman Dr Richard Maponya, who received a standing-ovation. The event was held in Sandton, Johannesburg, and was attended by business leaders, captains of industry and senior government ministers and officials.
highlights London’s leading role in supporting Nigeria’s burgeoning financial sector. Three major Nigerian banks have listed in London demonstrating UK and international investors’ appetite for exposure to this fast growing and increasingly diverse economy.” Zenith Bank is the third Nigerian Bank to list GDRs in London following Guaranty Trust Bank and Diamond Bank. The listing means that the two largest Nigerian banks by market capitalisation are now listed in London. The London Stock Exchange is the largest international stock exchange for African companies. Since 2008, Africa-focused companies listed on the bourse have raised over £4.2 billion in new and further issues. Zenith Bank is headquartered in Nigeria, with subsidiaries in the UK, Ghana, Sierra Leone, The Gambia and representative offices in South Africa and China. It has a customer base of over two million accounts at 366 branches and total assets of $27 billion. Zenith said in October the listing was aimed at improving liquidity in its stock rather than raising capital.
go to www.aFRICAoutlookmag.com/news for all of the latest news from africa
FO OD & DRINK
P OLI T I C S
SABMiller launches cassava beer in Ghana
Kenyatta wins Kenyan election
Global brewing giant SABMiller has launched a cassava beer in Ghana, a move it says will increase choice for low-income consumers. The beer will be brewed by SABMiller’s local subsidiary, Accra Brewery Limited (ABL), under the brand name ‘Eagle’. The move “builds on” the success of the world’s first commercially made cassava beer‚ Impala‚ which SABMiller unveiled in Mozambique 18 months ago. Mark Bowman, Managing Director of SABMiller Africa, said: “Part of our strategy across Africa is to make high quality beer which is affordable for lowincome consumers while simultaneously creating opportunities for smallholder farmers in our markets. The launch of Eagle in Ghana ticks both these boxes. “Eagle is aimed at attracting low-income consumers away from illicit alcohol. This is a virtuous circle: smallholder cassava farmers have a guaranteed market for their crop, which is then used to make consistently high quality, affordable beer for consumers; and the government realises increased revenues as people trade up into formal, taxable alcohol consumption.” Much of the cassava in Ghana is grown by subsistence farmers and there is an estimated 40 percent surplus each year, partly because there is little opportunity for farmers to sell it in commercial markets. Eagle will be sold in 375ml bottles at a price point equal to 70 percent of mainstream lager. This is made possible by a reduced excise rate agreed with the Ghanaian government in recognition of the use of locally sourced commodities and the longterm contribution that Eagle is expected to make to agricultural and economic development in the country.
Uhuru Kenyatta has won Kenya’s presidential election by the slimmest of margins – 50.7 percent. The election commission said Mr Kenyatta had narrowly avoided a runoff in a credible and transparent poll. He hailed his win as a “triumph of democracy”. Speaking at the Catholic University in Nairobi, Kenyatta said Kenyans were celebrating the “triumph of democracy, the triumph of peace, the triumph of nationhood” and he had “demonstrated a level of political maturity that surpassed expectations”. He also called on rival Raila Odinga and other leaders to “join us in moving our nation forward”. Mr Odinga, however, said he would challenge the outcome in court. He asked his supporters to avoid violence. The poll was seen as a critical test for Kenya, whose reputation as a stable democracy was damaged by violence that followed the 2007 election.
Hundreds of people were killed in that post-election violence after clashes broke out when Mr Odinga claimed he had been cheated of victory by supporters of President Mwai Kibaki. Mr Kenyatta, Kenya’s richest man and son of its founding president Mzee Jomo Kenyatta, stands accused of organising the bloodshed and is facing charges at the International Criminal Court (ICC). He is accused of fuelling the communal violence that saw more than 1,000 people killed and 600,000 forced from their homes. Western powers welcomed the peaceful vote.
Mandela game to teach young about apartheid Plans have been announced to turn Nelson Mandela’s time in prison at South Africa’s infamous Robben Island into a video game. The people behind the new project, launched at Cape Town’s gateway to Robben Island, say it will be designed as an educational tool. The project, called Mandela 27, aims to help children understand his life and will see Mandela’s story told through the game and a website. There will also be a mobile reconstruction of the prison cell where the he spent 18 of his 27 years (1963-1990) behind bars. It will tour the UK, South Africa, Sweden and Belgium from 2014 and aims to draw on cultural links between South Africa and Europe during the apartheid era, such as Nelson Mandela’s 70th birthday concert at London’s Wembley Stadium.
go to www.aFRICAoutlookmag.com/news for all of the latest news from africa
I N V E S T
A F R I C A
and the beautiful
As far as investing in Africa is concerned fortune will favour the brave. Writer Ian Armitage
sk any fund manager, investor or business development director and they’ll all say the same thing – this is the time to invest in Africa. It’s where it’s at. The continent is now regularly touted as the ultimate investment destination and investors that have traditionally detoured around it are changing their stance. It’s easy to see why. Over the past decade Africa has been the secondfastest growing economy in the world according to the World Bank, with GDP increasing an average of five percent a year. And even as the
global economy has slowed, growth in Africa has largely remained on track, with the World Bank predicting the continent could be on the brink of an economic takeoff much like China 30 years ago. So what’s driving it? At the World Economic Forum in Davos, African leaders said that political and economic stability had boosted the continent’s profile. “African leaders have collectively come together to do things that [are] going to make Africa to move forward. We have collectively dealt with the issue of democracy in the continent of
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Africa. We are entrenching democratic rule. We have taken a decision to grow our infrastructure; to grow our intra-trade. We are moving to integrate the five economic regions in the continent,” said South Africa President Jacob Zuma. Nigeria’s Goodluck Jonathan agreed. “Before this time, the growth rate has been stagnant, just as Zuma said. But over the period the growth rate of a number of African countries is significantly above the world average. Countries like, of course, Ethiopia, Ghana, Niger, Liberia, though they are small economies. But in terms of growth it’s quite significant. That shows a focus and a promise,” he said. Investors concur. “This is a great time in history to start investing in Africa. You have the entire continent which is open to you, very little competition, a political environment that is better than it was 20 years ago, and it will get better,” the chairman of Citadel Capital, Africa’s largest private equity firm, Ahmed Heikal, told CNBC’s Access: Middle East in a recent interview. He said now is the time to invest in the continent and that over next three decades, Africa will flourish on the back of improved governance and political stability. “Africa has improved tremendously along this third dimension and it is what is getting the world to take notice,” Heikal explained. “There are some countries that are mineral and petrochemicalbacked, others that have demographics that are very favourable and therefore sectors like agriculture are important opportunities.” The investment really is happening everywhere. Africa is open for business. The 2013 Investing in African Mining Indaba – the world’s largest mining investment event – provided proof and saw fund managers and analysts from around the globe flock to Cape Town. “The core message about the continent today is that Africa is
Investors from around the world are eyeing Africa
Investors are attracted to Savvy Kenya
“There are rising opportunities and vast untapped resources in the infrastructure space in Africa,” Sheahan said.
Africa’s rising consumer class
I think we can agree that Africa’s natural resources are a big factor in the continent’s growth potential; so too is the continent’s rising consumer class. According to the McKinsey Institute, household consumption is now higher in Africa than India or Russia, and it is expected to grow – it estimates that the number of African households with discretionary rising,” said Bernard Sheahan, income is expected to jump by more than director of Infrastructure and Natural 50 percent to almost 130 million by 2020. Resources for Africa and Latin “Africa is increasingly being taken America at the International Finance more seriously as an investment and Corporation (IFC). business destination, but in many He pointed out that growth rates in sectors, a window of opportunity does Africa are well above the world average. still remain open for establishing an “There is increased political early mover advantage,” says Ajen stability; we’ve seen positive political Sita, Africa Managing Partner at Ernst transitions in countries like Guinea, & Young. “However, competition is Senegal, and Ivory Coast. This means intensifying and that window is closing. better economic governance, it is not “For companies and investors perfect in some countries, but there looking for long-term sustainable are improved policy choices which growth, we are in no doubt that the points to progress in investment time to act on the Africa opportunity climate reform. Underpinned by social is now. Now is the time to invest in transformation in Africa, the continent understanding markets, identifying is about to see a demographic partners, developing opportunities, dividend. Its population is growing configuring industries, building brands faster than other regions.” and establishing local credibility.” A record 7,700 delegates attended Africa has a billion consumers and the 2013 Mining Indaba, from 100 within the next five years will be home countries and six continents. to over 250,000 dollar millionaires.
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A F R I C A
“The opportunities for growth in this part of the world will be huge over the next seven years,” Brandhouse CEO Gerald Mahinda told delegates at Ernst & Young’s Strategic Growth Forum – Africa. Yum! Restaurants International has jumped in on the action and continues to expand its KFC footprint on the African continent. What it described as a “carefully considered approach” saw the number of KFC restaurants in new African markets grow to 63 at the end of 2012 - the figure excluding South Africa, Egypt, Morocco and Mauritius, which if included brought the total number of KFC restaurants on the continent to almost 900 outlets. By the end of 2012 KFC saw stores operating in Angola, Nigeria, Namibia, Botswana, Mozambique, Lesotho, Malawi, Swaziland, Ghana, Kenya and Zambia. It has plans to extend its reach to Zimbabwe, Tanzania and Uganda in 2013, with much longer-term growth plans to establish itself in the Democratic Republic of Congo, Ethiopia and Senegal.
The good news is that Nigeria’s economy is expected to grow even faster this year, driven by progress in the agriculture, banking and oil sectors, while high inflation rates should ease”
“Africa is undoubtedly one of the fastest growing regions globally and KFC is fully committed to harnessing this opportunity and building a sustainable business model on the continent,” KFC General Manager of New African Markets, Bruce Layzell said. “KFC has established a dedicated department to focus on all aspects of optimising business in Africa, from marketing and supply chain, to infrastructure and human resources.” Oil-rich Nigeria is one market where KFC has enjoyed success (see page 46). With it being Africa’s most populous country and second-largest economy – where economic growth was around six percent every quarter in 2012 – it has ambitious plans to grow its operations there. Nigeria ticks all the right boxes so far as investors are concerned and as its middle class grows along with the appetite for foreign brands, more foreign restaurants and lifestyle companies are entering the country. “The good news is that Nigeria’s economy is
expected to grow even faster this year, driven by progress in the agriculture, banking and oil sectors, while high inflation rates should ease slightly,” one investor told Africa Outlook. Growth in the country is forecast at 6.75 percent compared with an estimated 6.61 percent in 2012, according to an outlook from the national bureau of statistics (NBS). “Energy reforms ... banking sector, agricultural reforms and oil sector reforms are expected to drive higher growth during the period (20132016),” the report says. GDP should expand by an average of 7.2 percent next year, 6.9 percent in 2015 and 6.6 percent in 2016. The rapid growth of mobile subscribers is another big draw for investors.
In 2012 South African company Shanduka Group bought shares in MTN Nigeria - the largest mobile operator in Nigeria with more than 45 million subscribers and an estimated market share of 48 percent worth R2.96 billion. “This is Shanduka’s most significant investment in another African country. It is a business that is well established within a market that has great potential for further growth. Shanduka will continue to pursue
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worldwide for changeability in the administration, interpretation, and enforcement of existing regulations The Chinese are as well as in the unpredictability of eyeing further environmental regulations. investment in Mozambique The country topped the globe for the absence of regulatory duplication and inconsistencies and was ranked seventh in the global survey for legal Nigeria into the Brics,” processes that are fair, transparent, she said. non-corrupt, timely, and efficiently Nigeria isn’t the only administered, while it was also ranked country worth looking ninth for its taxation regime. at. The Fraser Institute Investors are also eyeing Ghana, placed Botswana which has abundant natural resources, ahead of other African including timber, oil, silver and nations in its 2012manganese, as well as cocoa and gold. 13 Survey of Mining President John Dramani Mahama Companies which asked recently launched a project to build respondents to rank the a $10 billion IT hub near Accra within jurisdictions in terms three years. of their perceptions of Dubbed the City of Hope, it will performance across have Africa’s tallest building, and 15 key policy factors came with the assurance that such as government government would partner the policies, taxation, private sector to create jobs. environment regulations, Mr Mahama said the private sector infrastructure and would spearhead development. political stability. “Government has made investments According to the over the years and it is now time numbers, Botswana’s for the private sector to spearhead overall score increased job creation in Ghana and the entire opportunities in other parts of Africa,” said to 78.1 in the 2012-2013 African continent,” he said at the Shanduka Group CEO Phuti Mahanyele. edition of the study, project’s launch. Investors are also eyeing Nigeria’s power sector “We can see that already in several and the country is among those that are leading the compared to 76.9 in the 2011-2012 survey. sectors, including ICT [information, charge in Africa’s economic revolution. The score represents communications and technology] “Nigeria’s large market, growing middle class and its highest in the survey. and telecom.” rapidly transforming economy continues to attract It was fifth overall. Local technology giant RLG international investors, who find these opportunities “Botswana is the Communications, which has pioneered irresistible,” another expert told Africa Outlook. bright spot in Africa. It Ghana’s IT and communications Many are predicting that Nigeria may soon join is the highest ranked sector, is playing an important role in the Brics (Brazil, Russia, India and China and South jurisdiction on the the development, investing in City of Africa), nations, with the country’s Finance Minister Hope with the aim of making Ghana and Coordinating Minister for the Economy, Dr Ngozi continent and has improved its score “globally competitive”. Okonjo-Iweala confirming that Nigeria has what it over the last five The IT hub will be made up of takes join the Bric nations in an interview with the years,” Fraser Institute six towers, including a 75-storey, BBC. She admitted however that even though the researchers said. 270m-high tower, two 60-storey fundamentals are right, infrastructural constraints, Botswana was towers and three 42-storey towers. such as epileptic power supply, hinder growth. It will also include a university, “When we solve those problems, we are going to ranked the country with the lowest risk schools, shopping centres, offices, be in the low double digits and that will parachute
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A F R I C A
South Africa is Africa’s largest economy and has the continent’s most mature stock market
makes it such an attractive country for investors. MTN has exposure across 21 African and Middle Eastern markets and with pan-African mobile penetration still relatively low. As for the mining space, South Africa has been blighted by large-scale strikes at a number of gold and platinum mines. Investors remain cautious on that sector, which faces various structural challenges. Outside of South Africa, Nigeria, Ghana, Botswana and Kenya, there is also an exciting future for Mozambique. Investment in the exploration and exploitation of coal reserves in the country has amounted to more than 3.8 billion euros over the past few years, says residential areas and a hospital, as well Konza is part of the as social and sporting amenities. government’s ambitious Mineral Resources Minister, Esperança Bias. In an interview with Radio Mozambique in Maputo she Roland Agambire, Chairman of Vision 2030 initiative to the AGAMS Group and CEO of RLG improve much-neglected also reported that the country’s coal production amounted to 4.9 million tons last year, the largest Communications Limited, said his infrastructure over the amount so far. dream of building the city was inspired next 18 years. “There exist the conditions for the country, by by former President Kwame Nkrumah SA: Africa’s largest 2020, to annually produce more than 50 million tons and Tetteh Quarshie, who exhibited a of coking coal and thermal coal,” she explained. lot of patriotism by setting the pace for economy “Mozambique is being referred to having the African leaders. “While bringing modernity and South Africa is of course potential to become one of the five biggest coking coal export countries in the world.” excellence into the design of the City the continent’s largest Mozambique also has vast oil and gas potential. of Hope, all efforts have been made in economy, accounting Anadarko Petroleum Corp made significant gas incorporating the Ghanaian ingenuity for approximately discoveries offshore in early 2012 and it owns a 36.5 and culture in the architecture as its 18 percent of GDP percent working interest in Area 1, the site of a inspiration,” he said. as well as its largest series of significant gas discoveries in the Rovuma Kenya has launched similar project, market by some way, Basin. The company estimates that Area 1 contains dubbed “Africa’s Silicon Savannah”. making up 80 percent 100 trillion cubic feet of natural gas, about 30 The $14.5 billion project will see the of the region’s listed trillion cubic feet to 60 trillion cubic feet of which country build a new city intended to be capital. It is also the is technically recoverable. It makes it one of the an IT business hub. strength of South largest finds of the last decade. It will take 20 years to build Konza African companies in Mozambique has really captured the imagination. Technology City about 37 miles from penetrating other fastThese investments really are just the tip of the capital, Nairobi. growing African markets an iceberg. Will Africa have issues from time to It is hoped that more than 20,000 – we mentioned time which will scare investors, which will worry IT jobs will be created in Konza by Shanduka Group and investors? That’s a fact of life. But fortune favours 2015, and more than 200,000 jobs telecommunications the brave... by 2030. giant MTN earlier - that
E DU C A T I O N
L eade r s are not b orn , t h e y ’ re ma d e
Africa’s top business schools Business schools play an important role in building the leaders of tomorrow, after all, these people are not born, they’re made. In Africa the challenge is making sure they have the right mix of global and local – and academic and vocational – perspectives. Writer Ian Armitage
ith the world’s sights increasingly set on opportunities in Africa, the continent is working hard to produce the business leaders of tomorrow. At the front-line is the Association of African Business Schools (AABS), an association of Africa’s leading business schools, which is working hard to ensure the right mix of global, local, academic and vocational perspectives. It is also keen to ensure Africa’s ability to one day leapfrog rivals in the West. The dual challenge for the AABS and African business schools generally is that they need to meet local needs - emerging economies, by definition, do not yet have cadres of globally savvy executives - while also ensuring that what they offer is globally relevant. Many of the continent’s institutions work with schools in Europe and North America. Spain’s IESE Business School, for instance, offers an ‘International Faculty Programme’ to help develop African staff. Here, Africa Outlook gives a lowdown on just what the continent has to offer. We wouldn’t want to rank them; which one is ‘best’ is dependent on what you study and what you’re after. What is clear is that if Africa is to fulfil its growth potential - and reduce youth unemployment and poverty - essential business skills are a must.
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Construction of the new education and training facility for NMMU Business School in Summerstrand is currently underway and well on track. The new facility will be the first four green star certified campus in Africa and construction will be completed by the end of this year
H e n l e y B u si n e ss S c h o o l (South Africa)
Henley Business School is one of the oldest business schools in Europe and one of the few business schools globally to hold triple accreditation status (AMBA, EQUIS, AACSB). In South Africa, Henley organises programmes, including the Henley MBA, to cater for the Southern African region and the rest of Africa. Henley is committed to developing “strong and competent” African leaders, recognising that “Africa needs more leaders who can manage purpose-driven enterprises”. All workshops are currently held in Johannesburg.
Nelson Mandela Metropolitan U n i v e r s i t y ( N M M U ) B u s i n e ss S c h oo l ( S o u t h A f r i c a )
The NMMU Business School at the Nelson Mandela Metropolitan University is ranked among the best universities and business schools in South Africa and offers a “learning pathway” in management and leadership, from junior level through to the Management Development Diploma (MDP) - the apex is the sought after Masters degree in Business Administration (MBA). According to its website, NMMU Business School “supports working individuals in their on-going quest and journey of career advancement, personal development and leadership at any given time of their career” and empowers “workforces, human resources and leaders to be high-performance assets, helping stakeholders and industry to enhance their most valuable asset for future and sustainable growth, prosperity, and success”. NMMU describes itself as a “new breed” of business school, with a forward-thinking vision and approach. “Our solution to challenges of changing times is innovators, independent thinkers and individuals that are agents of change,” it says.
E DU C A T I O N
U n iv e r si t y o f C a p e T o w n Graduate School of B u s i n e ss ( S o u t h A f r i c a )
At the recent Fifth Eduniversal World Convention of the Best Business Schools, University of Cape Town Graduate School of Business (UCT GSB) was rated as the ‘best business school in Africa’, based on votes from Deans of other international business schools. The award shows that the Cape Town-based graduate business school is a pivotal player and leading teacher on the African continent in emerging market expertise. UCT GSB is also the only African business school to have a full-time MBA programme featured in the Financial Times’ Top 100 Global MBA Ranking. The GSB MBA has ranked for the ninth consecutive year by the FT, this year coming in at 74.
G o r d o n I n s t i t u t e o f B u si n e ss Science (South Africa)
T h e U n iv e r si t y o f S t e l l e n b o sc h B u si n e ss S c h oo l ( S o u t h A f r i c a )
University of Stellenbosch Business School (USB) is ranked among the best universities and business schools in South Africa and it holds triple accreditation status (AMBA, EQUIS, AACSB). USB has also been rated in the A category for business schools with major international influence by Eduniversal and places a great deal of emphasis on leadership development, providing its students with “global qualifications that can serve them greatly all over the world”. Its academic framework is built entirely on the Pedagogy of Hope.
The Gordon Institute of Business Science (GIBS) didn’t feature on this year’s FT Top 100 Global MBA Ranking but it was 60th in 2012, 67th in 2011 and has regularly featured on the list since 2004. A focus on executive education and a close relationship with business is GIBS’s strength and unique selling point. GIBS was established in 2000 to be a place where “people with potential, healthy ambition and respect for best practice are willing to engage like-minded peers and colleagues” and the campus and its facilities “have been designed to create a learning environment in which we all stretch our thinking, challenge existing ideas and develop a personal and organisational sense of where we need to go next.” The school is named after Sir Donald Gordon, founder of insurance company Liberty Life.
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GIMPA celebrates it’s 50th Birthday, Picture courtesy of GIMPA
Ghana Institute of M a n a g e m e n t a n d P u b l ic Administration (Ghana)
Ghana Institute of Management and Public Administration (GIMPA) describes itself as “the leading management development institute in Ghana” with a vision of becoming a “world class Centre of Excellence for training in Leadership, Management and Administration, Policy Analysis, Consultancy and Research, Distance Learning, Gender and Development programmes”. The key to GIMPA’s success over the years has been consistency of purpose. Through the provision of high quality programmes and services, caring faculty, customised educational approaches and the cultivation of a participant-centred learning environment, GIMPA has, it says, “contributed to the national development efforts by building the much-needed capacity development”.
L a g o s B u si n e ss S c h o o l (Nigeria)
The MBA programme of Lagos Business School (LBS), will equip “you with the requisite knowledge, skills and abilities to jump start a career in management” and this is a unique institution, highly ranked among its peers in Nigeria and worldwide. Due to the quality of its programmes, LBS has consistently been rated highly by the FT and offers a “world class business management education” that “will provide you the knowledge, tools and experience to handle the intricacies of the current and future business environments”.
emplo y ment
YOUTH Thereâ€™s more to it than you think
What is behind South Africaâ€™s youth unemployment crisis? Is it simply that there are no jobs or is it that young people are reluctant to take jobs that are not in line with their studies or aspirations for a (much) better life? Writer Catherine Wijnberg
he level of unemployment in South Africa officially decreased in the fourth quarter of 2012 by 0.1 percent, down from 25 percent to 24.9 percent (2012 Fourth Quarter Labour Survey). Sadly though, while any reduction in the unemployment rate is good news, in truth this marginal change reflects more an increase in the number of discouraged work seekers (youths who are no longer looking for work), than an actual increase in employment.
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With limited jobs and a mounting sense of despair, one would expect the unemployed youth of South Africa to be keen to seek alternative, or indeed any, forms of employment. It seems though that this is not the case. The recent article “ When a McJob is worse than no work at all” by Jonny Steinberg in the Sunday Times (12 Jan 2013) raised a seldom considered perspective, namely that many young South Africans have a deep disdain for work they perceive to be misaligned to their dreams. Entrepreneurs raised with the belief that ‘any road that gets you to the top is the right road’, are familiar with the many successful people who have worked their way up through newspaper rounds, bar jobs and manual labour – far more in fact, than those for whom success was magically bestowed. Youngsters are often astounded to hear stories of how hard the road to success really is - such as the case of John Smith a young, highly educated man who moved to Australia and, unable to find ‘real’ work in his new country, and without the capital to start his own business, took a job as a manual labourer picking carrots for a year. During that year he learnt about the people, the culture, the farming industry, the climate and about how, when and where business was happening. That one year as a carrot picker gave him the tools he needed to become a successful and wealthy business owner.
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Educational institutions have a critical responsibility in bridging the gap between the market (employers) and The road to success can be graduate skills. Many international long and hard students come to South Africa for workplace experience because this forms an integral and compulsory part of their course requirements. Their universities have learned that they serve society (and their students) best by incorporating experiential learning (specifically internship) programmes into their education process. The Big Issue This is rare in South Africa, where more often than not our graduates So what is behind South Africa’s youth unemployed in South Africa), is that unemployment crisis? Is it simply that there are many factors that play a part leave colleges and universities with no work experience whatsoever. As in this dilemma. there are no jobs or is it that young That our education system is lacking an employer, this is a problem – too people are reluctant to take jobs that many candidates with qualifications is well known, but the role education are not in line with their studies or are lacking in the skills that are really establishments play in meeting aspirations for a (much) better life? needed by business, such as computer the needs of the business sector The truth, especially for graduates, skills, communication skills, teamwork (and latest Adcorp 2012 stats, indicate (rather than simply the needs of the and an understanding of the student) is not always considered. there are around 600,000 of them
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workplace ethic – for example arriving on time, working hard and delivering 100 percent (not 30 percent). Formal education is vital and valuable to develop critical learning, analysis and interpretive skills, but in a tight market the employer needs more.
A Global Problem
A study by PepsiCo USA reminds us that this is indeed a global problem. Their results confirmed that graduates with a year of work experience under their belt were far more likely to get employed than those with no industry experience. Shelby Thompson, PepsiCo’s head of recruitment, said: “With one in five graduates struggling to find work after university, this research highlights the need for students to be thinking about gaining valuable industry experience outside their university courses. “The graduate market is tougher and more competitive than ever before, meaning that students must work harder to develop the business skills needed to make them stand out from the crowd. A placement year is a great way to build this experience,” says Thompson. Here in South Africa it would help if tertiary institutions developed far closer working relationships with the business sector into which their graduates move. This opens the route for internship and work-placement to bridge the gap between academia and the practical world, and creates a two-way information stream to keep education on track and relevant to market place needs. An additional challenge in South Africa is that scholars are often greatly misled about the speed at which success happens in the workplace. The realisation that in most cases they will have to start at the bottom and earn their stripes can be very distressing to a graduate who
was led to believe he/she would be a senior manager within two years. This expectation of instant success, fuelled by family, friends and teachers, and fanned by an overdose of tenderpreneurs and flashy politicians, is in direct conflict to the reality of the world, which is that the path to success is found alongside hard work, commitment and effort.
A South African Solution
In South Africa there is a third dimension that is often forgotten, namely a deep fear of failure and of the unknown. Fear is normal for any new employee, but for a youth raised by parents who have either held menial jobs, or indeed no job at all, the workplace is truly an unknown factor. Add to this the enormous pressure to succeed from a family for whom this may be the first graduate, or indeed the first real job, and one begins to understand some of the pressures. The new Graduate Asset Programme (GAP) seeks to bridge the gulf between the academic world and business by matching 24,000 graduates to small and medium host enterprises. The ethos of GAP is to boost growth in the host business with the assistance of these young, energetic graduates, whilst providing graduates with much needed work exposure. The initiative is very much business – needs driven, and seeks to create a genuine win-win for the business, the graduate and the country as a whole. Statistics show that 30 percent of internships translate into longer term placement, and where the business is growing, this creates a genuine job expansion. While many graduates exiting tertiary institutions may be ‘diamonds in the rough’, our own experience has shown that graduates can deliver valuable work, especially in the SME sector, where flexibility and youthful energy is highly valued. So whilst it’s
true that South African graduates have dreams of achieving great success and may be reluctant to take just any job, given the chance most are willing, capable and eager to learn, and desperate to grab with both hands the opportunity to shine. GAP will launch in July 2013. Its roll-out is one of partnership with corporates, implementation specialists, workplace readiness providers, sector bodies and Host Businesses. To learn more, please visit www.fetola.co.za.
atherine Wijnberg is the Director and Founder of the Fetola Foundation (www.fetola.co.za) a fast-growing economic development agency and not-for-profit organisation made up of respected development practitioners across Southern Africa. She has owned and operated small businesses in three countries across five different sectors, and has successfully conceptualised, designed and implemented several award-winning community and business development programmes, including the Old Mutual Legends programme. Her most recent initiative, the Graduate Asset Placement (GAP) Programme, seeks to place 25,000 unemployed graduates into internships over the next three years, creating in the region of 8,000 permanent jobs.
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In November the JSE celebrated 125 years of trading. Africa Outlook investigates. Writer Ian Armitage
he JSE describes itself as the “engine room” of the South African economy, enhancing job opportunities and creating wealth. It is the 16th largest securities exchange in the world and by far the largest of Africa’s 22 stock exchanges. Now, South Africa may not be getting much good press of late, but its stock market remains promising. Since wildcat strikes erupted across the country, the image of South Africa has been damaged thanks to a number of negative headlines. However, the country’s equity and bond markets bucked the trend, at least until November, with the JSE hitting new highs in October. So why is that? Well South Africa offers investors frontier markets-type growth,
but with more liquidity, more mature capital markets, greater data richness and greater transparency. Although markets such as Nigeria, Kenya, and Ghana hold great potential for sustained high growth, South Africa is the most mature stock market on the continent. Stocks that stand out are British American Tobaco and MTN - year-to-date both are up by at least 30 percent on 12 months ago. Interested in investing? Then you need the JSE. ‘South Africa is credited with being one of the best regulated and most liquid emerging markets, as well as being Africa’s largest by far,’ the Financial Times’ Andrew England recently reported, adding, ‘Many of its companies offer exposure to the much-touted Africa growth story, even if the domestic South African investment climate is struggling.’
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Happy birthday JSE
In November, the stock exchange celebrated 125 years of trading. As you would imagine, it has come a long way over the last century and particularly in the last 25 years. Ranked amongst the top 20 exchanges worldwide in terms of Equity Market capitalisation, the last 25 years have seen the JSE Group acquire the South African Futures and Bond Exchanges, bring innovative products to investors on all its markets and diversify its range of services. “From our humble beginnings, today the JSE’s total Equity Market capitalisation is over R6 trillion with about 400 companies and 907 securities (including interest rate; currency, financial and commodity derivatives) listed. Our emphasis in the last ten years has been to build a robust vertically and horizontally integrated market that offers our clients the opportunity to trade a wide range of products in a world class environment. South Africa has for three consecutive years been ranked number one in the world in terms of securities regulation by the World Economic Forum,” says Humphrey Borkum, chairman of the JSE. “Naturally, the success of these efforts is also due to the substantial contribution that our clients have made over the years. We look forward to working with our clients to grow our market in future,” JSE CEO Nicky Newton King adds. To recognise this milestone, in August, the JSE donated R50,000 to Business Arts South Africa (BASA) for the Three2Six art programme which runs a holiday art program for vulnerable refugee children at Sacred Heart College in inner city Johannesburg. “Over 125 years, the JSE has become a critical part of the South African economy. Our industry has an important role to play in the funding of the future development of this country and we are excited by the prospects this holds,” concludes Newton King.
The JSE was founded in November 1887
JSE CEO Nicky Newton King
The JSE provides a market where securities can be traded freely
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Introduction of Quanto Futures
In October 2012, the JSE expanded its commodities product range by adding silver and platinum commodities to its gold, copper and Brent crude Quanto Futures. A Quanto Future is a rand denominated commodity investment product that delivers the same payoff as a pure dollar denominated commodity investment and enables investors to gain exposure to price fluctuations in the foreign commodity while shielding them from movements in the rand and US Dollar exchange rate. The JSE has partnered with Rand Merchant Bank (RMB) as the initial market maker with the commodities referenced as part of the JSE’s existing licensing agreement with the CME Group. Chris Sturgess, Director of the Commodities Division at the JSE says, “The JSE is excited to offer derivative market participants this additional choice of energy and metal products in the form of Quanto Futures, yet another innovative product offered by the JSE making it that much simpler for local investors to gain access to the international commodities markets. ”
New trading platform allows faster transacting The JSE has been bold in restructuring in the light of increasingly tough global competition, adopting new technologies and outsourcing aspects of its business. As part of that, it recently moved its trading platform from London back to Johannesburg. “Speed is becoming increasingly important in the exchange industry due to exchanges having to cope with the rapid rise of automated trading,” says Leanne Parsons, Director: Equity Market at the Johannesburg Stock Exchange. “Exchanges that have trading systems with the lowest latency will retain and grow market share. “
The JSE recently moved its trading platform from London back to Johannesburg South Africa is credited with being one of the best regulated and most liquid emerging markets
Speed is becoming increasingly important in the exchange industry due to exchanges having to cope with the rapid rise of automated trading. Exchanges that have trading systems with the lowest latency will retain and grow market share” In a move that was welcomed by market participants, the JSE launched the equity trading platform, Millennium Exchange™, in July. This has resulted in increased levels of performance, functionality and capacity. A major benefit of the system is that speed has been increased and market participants can now perform transactions at 400 times faster. “There is anecdotal evidence to suggest that when exchanges increase their trading speeds they also boost levels of trading. This is important in order to deepen a market,” says Parsons. According to Parsons, the system has enhanced operational efficiencies and stability and has eliminated the problem of international connectivity link failures, which previously required the JSE’s equity market to be halted on various occasions. This has further led to improved service availability and stability for the exchange’s clients. “A major way in which changing requirements from JSE Equity Market clients have been addressed is through increased flexibility,” Parsons says. “The system allows for the implementation of countryspecific measures. This essentially
entails looking at what is needed and appropriate for the South African market specifically. Different ways of matching and conducting negotiated trades can be facilitated through the central order book. This allows clients to choose products that are best suited to their specific business models thus eliminating a one-size-fit all approach.” The platform is housed within the JSE’s recently completed new state of the art data centre based on Tier 3 specifications and is designed to ensure 99.98 percent availability. “As we have seen with the Borsa Italiana migration and similar migrations during the past year, the new platform provides exceptional levels of performance, functionality and capacity. The JSE’s move to the new equity system, which we have nicknamed Project Jaya meaning ‘victory’ in the language of Sri Lanka, is a victory for the market,” Parsons concludes. This provides the JSE with a platform to grow trading volumes and is but a fraction of new and exciting developments on the exchange. To learn more visit www.jse.co.za.
Last year, we scored a hat trick.
THIS YEAR MAKES IT * A GOLDEN SOMBRERO. Four years in a row, we have advised on more M&A deals than any other law ﬁrm in South Africa, taking top honours in the DealMakers Awards for M&A deal ﬂow in 2009, 2010, 2011 and now again in 2012. Adding even more shine is being ranked 1st by Deal Flow and 1st by Deal Value in general corporate ﬁnance. We say olé to our legal teams - and of course, we take our hats off to our clients.
2009 2010 2011 2012 Wikipedia – Golden Sombrero: The term derives from hat trick, and since four is bigger than three, the rationale is that a four-strikeout performance should be referred to by a bigger hat, such as a sombrero.
011 467 6587
www.cliffedekkerhofmeyr.com Cliffe Dekker Hofmeyr is a member of DLA Piper Group, an alliance of legal practices
c o m p a n y N etcare
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Netcare strives for quality patient care, grounded by an unwavering commitment to its values. Writer Ian Armitage
Project Manager Stuart Shirra
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s South Africa’s largest private hospital group, primary care network and emergency service provider, Netcare strives for quality patient care, grounded by an unwavering commitment to its values. “Our core value is care,” says Kerishnie Naiker, Director Communications at Netcare. “Providing quality care is both a duty and a privilege which we assume seriously. “In 2011, we launched the Netcare Way, a programme aimed at inculcating five consistent behaviours in our staff. This, together with our values of care, dignity, participation, truth and passion directly and profoundly impact the quality of interpersonal interactions that our patients, colleagues and clinical partners experience within our facilities. “In practicing these behaviours consistently, we give practical meaning to significantly living our values and create a minimum benchmark of how we treat everyone at Netcare,” she asserts.
With our commitment to quality leadership and a unique portfolio of healthcare services throughout South Africa, Netcare has the opportunity to play a critical role in promoting high standards of care and creating increasingly greater value in the country’s healthcare delivery system”
A patient undergoing robot-assisted gait retraining on Lokomat equipment at Netcare Rehabilitation Hospital
Since its listing on the Johannesburg Stock Exchange (JSE) in December 1996, Netcare has grown into a business with a market capitalisation in excess of R26 billion. The group earned revenues of R25 billion for the financial year ended 30 September 2012, of which 58 percent or almost R15 billion was generated from its South African operations, and the balance from its business in the United Kingdom. “In 2012, our South African business grew its operating profit by 11 percent to almost R2.5 billion, underpinned by an investment of R875 million in maintaining and expanding our network of world class facilities, hospital beds and technology,” says Keith Gibson, Group Chief Financial Officer. In South Africa, Netcare employs over 20,000 personnel. The Group has also recorded a considerable increase in the number of employees with disabilities – from 245 in 2011 to 410 in 2012, following a concerted awareness and recruitment campaign which is continuing.
The Netcare group’s core business is private hospital care. In South Africa, this is delivered through 55 facilities, including four that are part of private public partnerships (PPPs). “Our portfolio comprises a mix of technologically advanced hospitals and same day surgical units,” explains Jacques du Plessis, Managing Director Hospitals. “In total, we operate 9,262 registered beds, of which 1,543 are intensive or high care beds, as well as 326 theatres, 27 cardiac catheterisation and electrophysiology laboratories, 44 emergency departments, seven transplant units as well as 48 pharmacies serving our hospitals and retailing to the public.” A number of centres of excellence are located in Netcare hospitals. These range from the only dedicated private burns unit in the country at Netcare Milpark Hospital, a specialised paediatric head trauma and drowning unit at Netcare Garden City Hospital, the only intra-operative CT and MRI spinal and neuro surgery units are at Netcare N1 City and Netcare Milpark hospitals, the only level 1 trauma centres accredited by the Trauma Society of SA at Netcare Milpark and Netcare Union hospitals, the largest dedicated private haematology and bone marrow transplant facility at Netcare Pretoria East Hospital, and accredited metabolic medicine and surgery centres at Netcare Waterfall City, Netcare Sunward Park, Netcare St Augustine’s, Netcare St Anne’s, Netcare Greenacres and Netcare N1 City hospitals – to name a few.
Interventional cardiologist performing arrhythmia procedure at Netcare Christiaan Barnard Memorial Hospital, using a robotic catheter system
Netcare’s oncology vision is to ensure that every cancer patient receives treatment of excellent quality”
Netcare Blaauwberg Hospital, one of the 55 operated by the Hospital Division
“We are privileged to have highly skilled and experienced specialists and other healthcare professionals working in our facilities,” says Du Plessis. “We are well positioned to provide efficient, effective and responsive patient care, supported by our group’s ancillary businesses.” Noeleen Phillipson, the Netcare Executive responsible for oncology, concurs: “Netcare’s oncology vision is to ensure that every cancer patient receives treatment of excellent quality. Some of the finest medical and academic minds harness groundbreaking technology to optimise outcomes for patients diagnosed with cancer. The radiation oncology centre at Netcare Unitas Hospital in Pretoria is, for example, considered the most technologically advanced facility of its kind in the private sector in South Africa. In Cape Town, the radiation oncology centre at Netcare N1 City Hospital was the first in the world to use iPlan platform software in focused stereotactic irradiation for treating both cancerous and benign lesions. At the University of Cape Town Private Academic Hospital the head of liver surgery performed the first ever procedure using the Accu2i percutaneous microwave tissue ablation system to ablate liver cancers.”
“We are passionate about providing remarkable care and clinical outcomes to as many patients as possible at the lowest possible cost when it comes to pre-hospital emergency medical services and medical evacuations,” says Phillipson, who is also Managing Director of Netcare 911, the group’s emergency services divison. Netcare 911 has contracts with various medical funders and companies in commerce and industry to provide emergency medical services to their members and employees, approximately six million lives in total. All-round efficiency is a key driver in optimising quality emergency medical treatment. To achieve this, the right infrastructure, technology, fleet and staffing are essential. Our fleet consists of response cars, ambulances, as well as helicopter and fixed wing air ambulances, the latter deployed in long distance evacuations. “We are, for example, currently in the process of upgrading our tracker system and launching smartphone tracking technology which our emergency medical personnel will use as an aid. It’s imperative to ensure that we respond to emergency calls promptly, have resources available in strategic locations and accordingly dispatch the right level of personnel and vehicles,” says Phillipson.
Primary Care Services
The Primary Care Division operates a national network of 88 comprehensive primary healthcare facilities, the largest private network of group general practitioner and dental practices. Medicross’ well equipped medical and dental centres provide convenient access to private general practitioners and dentists as well as to pharmacy, optometry, radiology, pathology, day theatre and other services for both medically insured and private self-pay patients. Prime Cure is an accredited managed care organisation which contracts with medical schemes to deliver managed care to their members. Care is provided through a network of designated service providers. Prime Cure also contracts with employer groups in commerce and industry to provide occupational health and wellness as well as travel medicine services to their employees. These services are delivered, either on-site at the employers’ premises or at Prime Cure clinics. Dr Charmaine Pailman, Managing Director Primary Care, says the division, which recorded 3.2 million patient visits in 2012, is well positioned to participate in primary care service delivery under the proposed National Health Insurance (NHI). To this end, all Medicross and Prime Cure facilities have been benchmarked against the 2011 National Core Standards for Health Establishments in SA, which will in future be monitored by the Office of Standards Compliance as part of the development of a new regulatory framework for the health sector. “We were the first private national network of primary care facilities to undertake this audit voluntarily,” says Dr Pailman. 53 Netcare hospitals have also concluded baseline assessments against these core standards, and assessments have now been extended to National Renal Care.
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National Renal Care
National Renal Care (NRC), a 50-50 joint venture between Netcare and Adcock Ingram Critical Care, is the largest private dialysis provider in the country. It offers chronic haemodialysis at 58 facilities and peritoneal dialysis at 12 specialised units, with a total of 558 dialysis stations. “We’re committed to improving the quality of life for patients with compromised kidney function,” says Robert Souter, Chief Executive Officer NRC. “We also introduced nocturnal dialysis to South Africa some 18 months ago. This service, which offers important clinical and lifestyle benefits to patients, is now established at six NRC units, and we have plans to expand this further.” In addition NRC has 16 specialised acute dialysis teams offering 24-hour acute haemodialysis, continuous renal replacement therapy and plasma therapy services. The Healthy Start programme, a service unique to NRC, focuses on educating patients with early stage kidney disease with the aim of slowing down the progression of the disease to prevent complete kidney failure. NRC’s commitment to contribute to transformation of the South African healthcare environment is evidenced by its 14 public private partnerships to date with public healthcare institutions, widening access to crucial dialysis services.
“With our unique portfolio of healthcare services and our commitment to quality leadership, Netcare has the opportunity to play a critical role in promoting high standards of care and creating increasingly greater value in our country’s healthcare delivery system,” says Dr Dena van den Bergh, Director Quality Leadership and IT. Quality strategy and goals are aligned across all Netcare divisions. “This has created a platform for system-wide learning which contributes to a culture of performance excellence, continuous improvements against measurable quality outcomes and accountability for results. Our commitment to quality leadership is integral to achieving excellent health outcomes for our patients and a safer working environment for our staff and doctors,” explains Dr Van den Bergh. Performance and improvements against our goals are formally tracked, measured and reviewed on an ongoing basis. This is done through a multidimensional quality balance scorecard which covers the group’s six strategic focus areas. “The importance we place on quality is evidenced by the fact that results are reviewed across all levels of the organisation through to board level,” she adds. The six strategic areas on which Netcare’s quality leadership is focused include: A group-wide quality assurance framework and annual audit process to ensure consistent, ongoing measurement of quality programmes and initiatives. Patient-centred care including a real-time feedback system driven by the latest technology. The prevention and management of adverse events focusing on five identified risk areas, namely falls, medication safety, pressure ulcers, theatre safety and needle stick injuries. Improving clinical quality. The focus is on a suite of high-impact NRC’s commitment clinical improvement to transformation areas including the prevention of healthcare is evidenced by its 14 associated infections; PPPs to date with public participation in a national healthcare institutions” antibiotic stewardship programme to mitigate the risk of multi-drug resistant organisms;
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and a number of internationally proven best practice clinical interventions to improve patient outcomes such as optimising care in acute myocardial infarction and preventing venous thromboembolism. A deepening capability for improvement is aligned to the Institute of Healthcare Improvement (IHI) strategic improvement framework of ‘Will, Ideas and Execution’, with the goal of achieving organisation-level results in quality. “By working closely with government and actively supporting national quality improvement programmes such as the Best Care... Always campaign, Netcare is making a meaningful contribution to transformation efforts in the wider South African healthcare landscape.” says Dr Van den Bergh.
Training and Development
Another of Netcare’s key objectives is the training, education and development of its employees, based on the belief that organised learning and development interventions equip employees to continuously improve service excellence and result in increased job satisfaction and individual growth opportunities, says Peter Warrener, Group Human Resources Director.
Organised learning and development interventions equip employees to continuously improve service excellence and result in increased job satisfaction and individual growth opportunities”
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The group’s education facility, Netcare Education, comprises three faculties that provide training in the fields of nursing and ancillary disciplines, management and leadership, and business generic training. Netcare’s skills development spend for the period 1 April 2011 to 31 March 2012, amounted to R42 million. “Given the shortage of skilled healthcare professionals in South Africa it is essential for private sector companies such as ours to be actively involved in training initiatives aimed at increasing the pool of skilled professionals,” says Warrener. Netcare is the largest private trainer of nurses in South Africa. The number of students registered on various nursing programmes in the 2012 financial year was just under 3,300. Three of the group’s facilities – Netcare Sunninghill, Netcare Unitas and Netcare Pretoria East hospitals – are recognised as satellite academic campuses of the University of Pretoria’s medical school. The School of Emergency and Critical Care (SECC) which is operated by Netcare and accredited by the Health Professions Council of SA, is the largest private EMS training centre in Africa. In 2012, over 4,700 students registered with the SECC for various emergency services progammes, while 533 Netcare 911 emergency services staff members underwent training.
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WORKING TO FILL LIVES WITH MORE YEARS As one of the most diversified companies in health care, Pfizer is committed to improving health and well-being at every stage of life. Today’s Pfizer is a leader in human health, primary and specialty care, biologics and pharmaceuticals, with a robust portfolio of vaccines, nutritionals and consumer products.
AND YEARS WITH MORE LIFE Most importantly, we’re bringing together the world’s best minds to take on the world’s most feared diseases, with a renewed focus on areas that represent significant unmet health needs such as diabetes, pain and inflammation, immunology, oncology and recently launched onto the South African market, an innovative smoking cessation product. By working together, we can change the lives of more people in more powerful and effective ways than ever before. Learn about how we’re doing things differently at www.pfizer.co.za
Hartmann south africa Effective January 2013, HARTMANN South Africa and HOLLISTER South Africa, formed a strategic alliance, to provide product and service solutions to a combined customer base. HARTMANN’s core ranges are Incontinence, Operating Room and Wound care products HOLLISTER specialises in Ostomy, Continence and Wound Management Both companies are international and offer superior quality products NIKI BRANDT National Sales & Marketing Manager Private healthcare signatories of the Social Compact with the Minister of Health, Dr Aaron Motsoaledi (seated third from left)
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Collaboration and Public Private Partnerships
Extending it’s special brand of care to the wider South African community lies close to Netcare’s heart. In a country where only 8.6 million people out of a population of some 49 million has medical aid cover, the burden on the state to provide healthcare services is great. “This creates scope for private sector involvement in initiatives to widen access to quality healthcare,” says Melanie da Costa, Director Strategy and Health Policy at Netcare. In 2012, Netcare, along with 22 other private healthcare companies, entered into a groundbreaking Social Compact with the Department of Health. Spearheaded by the Minister of Health, Dr Aaron Motsoaledi, this step symbolises an acceptance that neither the public nor the private sector can individually or successfully confront the immense health challenges facing South Africa. The compact heralds a new standard for collaboration between
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the two sectors to achieve the national health objectives. Jointly selected health initiatives aimed at increasing access to quality healthcare and reducing the burden of disease will be executed through the newly established SA Joint Public Health Enhancement Fund. The private sector signatories will make a fixed annual contribution to fund these planned initiatives. “We look forward to positively impacting healthcare in South Africa through this collaboration,” Netcare’s Group Chief Executive Officer, Dr Richard Friedland, commented at the occasion. “We are ready to collaborate with government on NHI,” says Da Costa. “The experience we’ve gained through various PPPs in healthcare delivery will stand us in good stead in our quest to cooperate with government on its planned NHI.” In South Africa, Netcare has already been involved in a few PPPs with government. Partnering with the National Health Service (NHS) in the UK to deliver medical services and hospital care to NHS patients served as an extremely valuable learning experience for the group. Its latest endeavour, where a Netcare-led private consortium, Tsepong, is involved in an internationally acclaimed healthcare PPP with the Lesotho government, serves as “an excellent model” for achieving significant and sustainable improvements in healthcare delivery while maintaining cost neutrality for consumers. It has the added benefits of providing system-wide gains in efficiency while maintaining predictable government expenditure, as well as technology enhancements, creating job opportunities and the transfer of skills to locally employed staff.
The Lesotho PPP entailed the cofinancing, design and construction of the new Queen ’Mamohato Memorial Hospital, three filter clinics and an onsite Gateway clinic and to operate the facilities for a period of 18 years. The consortium is responsible for delivering clinical and non-clinical services as well as staffing, and other activities. Within its first year of operation, the partnership between the Lesotho government and private consortium clearly demonstrated that quality of care can be transformed in a relatively short period of time. This is evidenced by patient outcomes statistics. Inpatient mortality, for example, reduced from a baseline of 12 percent to just below eight percent and maternal mortality decreased dramatically from 1,115 per 100,000 live births to 495 per 100,000.
Queen ’Mamohato Memorial Hospital in Lesotho
The healthcare PPP in which the Lesotho government has partnered with a Netcare-led private consortium, has received internationally acclaim ”
Corporate Social Investment
Corrective craniofacial surgery, one of the programmes run by the Netcare Foundation for indigent patients with facial anomalies, changed Mr Nelson Kufa’s life for the better
It is extremely heart-warming that healthcare practitioners working at our facilities, also selflessly contribute their time and expertise to the Netcare Foundation’s ongoing programmes”
Over the last five years, Netcare staff volunteers have built houses for disadvantaged families as part of the National Netcare Build project, a collaboration between Netcare, Habitat for Humanity, Aveng-Grinaker-LTA and WBHO, which has been involved over the last two years
By the very nature of its core business, Netcare is made aware on a daily basis of the needs of less privileged individuals and communities in South Africa. Good corporate citizenship is ingrained in Netcare’s fabric and its values of care, dignity, participation, truth and passion are at the heart of many of the group’s corporate social investment (CSI) programmes. Netcare commits considerable resources to initiatives that contribute significantly to social and human development. “The majority of the group’s R36 million CSI spend in 2012 was in the healthcare arena. The key focus areas were pro-bono pre-hospital emergency medical services for indigent patients, initiatives to broaden access to healthcare, community health and welfare sponsorships and projects as well as academic sponsorships,” says Mande Toubkin, general manager emergency, trauma, transplant and corporate social investment at Netcare. CSI initiatives are channelled through the Netcare Foundation, a not-for-profit and public benefit company. The foundation undertakes a number of projects in partnership with other organisations, government and communities. “It is extremely heart-warming that healthcare practitioners working at our facilities, also selflessly contribute their time and expertise to the Netcare Foundation’s ongoing programmes which are widening access to specialised healthcare for the indigent population. Such projects include craniofacial surgery to correct facial anomalies mainly in children, cleft lip and palate repair, paediatric cardiac surgery to address congenital and other heart problems in children from across the African continent, and cataract surgery,” says Toubkin. Toubkin and Naiker also have nothing but praise for the passion with which the group’s personnel across all levels participate in national and local operations’ community outreach initiatives. “For our members of staff, being of service to others is a way of life,” says Naiker. “The manner in which they live the Netcare Way is truly inspirational and for this, we commend and salute them.” Naiker concludes, “Netcare is committed to transformation in the healthcare sector and to the normalisation of South African society.” For more information on the Netcare Group visit www.netcare.co.za.
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RECENT ACCOLADES FOR NETCARE Netcare won in the Supply Chain, Community Development and New Black Business Development categories in the 2012 Oliver Empowerment Awards and was a finalist in the Corporate Leadership, Diversity and Top Empowered Business of the Year categories. Netcare achieved the distinction as the most empowered company in the JSE’s healthcare sector, in the Financial Mail’s 2012 Top Empowerment Companies Survey. Netcare was announced best overall employer in the Healthcare Sector in the CRF Institute’s Best Employers South Africa 2012/13 publication. Netcare won the Insurance Sector Education and Training Authority (Inseta) 2012 National Disability Company Award which honours organisations that contribute positively towards the empowerment and integration of people with disabilities into the mainstream economy.
Netcare was honoured as the Top Gender Empowered Company in the Science, Bio-Technology and Healthcare category, at the 2012 Top Women Awards. Netcare Pharmacies won the 2012 Mail & Guardian Top Companies Reputation Index (TCRI) award in the pharmaceutical sector. According to Brand Finance’s 2012 report on South Africa’s top brands, Netcare is one of the top ten most valuable brands in South Africa. Netcare was announced winner of the 2012 PMR.Africa Golden Arrow Award for private hospital groups and clinics which enhanced economic development, growth and stability through corporate social investment (CSI). The Queen ‘Mamohato Memorial Hospital in Lesotho achieved the distinction in 2013 of being voted one of the top 10 PPPs to be completed in sub-Saharan Africa during the period 2007 to 2012, in a global competition to identify the 40 best PPPs in emerging markets globally, sponsored by the International Financial Corporation (IFC) and Infrastructure Journal. The Queen ‘Mamohato Memorial Hospital PPP project in Lesotho was listed in 2102 by global professional services firm, KPMG, as one of the 100 “most innovative and inspiring” urban infrastructure initiatives in the world. The project featured in the second edition of Infrastructure 100: World Cities Edition, which was released at the recent World Cities Summit in Singapore. It was one of only six African projects to feature.
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Wilderness announces reshuffle, targets African growth. Writer Ian Armitage Project Manager Stuart Shirra
hether you go deep bush in northern Kruger or follow the big cats in the Maasai Mara, a trip into the wilderness will be life-changing and it’s very probably the number one thing on your list of stuff to do in Africa. This is where Wilderness Holdings comes in. It has been providing tailor-made holidays and superb accommodation to African visitors for 30 years. Indeed, it is the largest safari company in the SADC region. “We’re a company that operates on a policy of conservation through tourism and share the benefits with local communities,” says acting CEO
Keith Vincent. “Wilderness began life as Wilderness Safaris in Botswana in 1983 and it is the holding company for many of Africa’s premier ecotourism brands: Wilderness Safaris; Wilderness Air; Wilderness Adventures; Wilderness Explorations; Wilderness Collection; Wilderness Wildlife Trust; and Children in the Wilderness. Each of these brands is a leader in its specific niche.” Wilderness has countless properties throughout Southern Africa: the Okavango Delta in Botswana; Sossusvlei in Namibia; Kruger Park in South Africa, Kafue, Victoria Falls in Zambia; and Hwange in Zimbabwe, to name a few. “We’ve got it all,” says Vincent. “In terms of safari we’ve a vast array of world-class lodges to choose from.”
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Mr Vincent replaced Andy Payne in March, albeit on a temporary basis. “This is part of a significant change,” he explains. “It is part of our bid to improve operations as well as to build further executive capacity and to support our operations in Botswana. We would definitely like to move more of our capacity and certain functions from Johannesburg to Botswana in order to develop the business further. “The move makes sense because Botswana is by far our biggest business so it makes sense for us to make the change.” Wilderness has about 900 employees in Botswana, by far the bulk of its total employee base of 2,500.
“Really it is about what we see as untapped opportunities that exist in Botswana as well as the rest of the region. We think we’ll be better placed to tap into them from Botswana than Johannesburg.” As Africa’s premier conservation organisation and ecotourism company Wilderness is dedicated to ‘responsible tourism’ throughout the areas in which it operates in. These changes play into that, says Vincent. “Our goal is to share wild areas with guests from all over the world, while at the same time helping to ensure the future protection of Africa’s spectacular wildlife heritage and sharing the benefits of tourism with local communities. In the past couple
of years we have been focusing on operations outside Botswana because they have had a tougher time in the tourism market. Botswana was only mildly affected by the economic downturn. “Thanks to our efforts, the business is performing well. I can’t give you too much information at the moment because we are a in a closed period but it is performing well. We started a big reshuffle of functions in our business 18 months ago and the results of those are proving to be very good. We are very encouraged about the outlook over the next couple of years on the basis of our three-year plan and we are well down the track of moving towards the goals of that.
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The North Island resort in the Seychelles
Wilderness safari in the Nyika National Park
“It is a case of really focusing a little bit more on Botswana and exploiting potential here and other opportunities in emerging SADC markets. Obviously because of the economic downturn we have been more internal focused over the past three or four years and haven’t been looking for opportunities to grow too much. There is no doubt there is an upturn in demand throughout the regions now and we’ll definitely, over the course of the next couple of years, be looking at more growth opportunities outside of the regions we are operating in now.” Two countries Vincent is keeping a keen eye on are Tanzania and Zimbabwe. “I think Zimbabwe is turning a corner,” he says. “We’re waiting to see what happens in the elections later this year but we have an incredibly strong footprint in Zimbabwe which we have maintained over the last 12 years despite the political challenges. But, there is no doubt that in the last 18 months there has been significant improvement in Zimbabwe and for us it would be very low cost growth potential because we already have most of the infrastructure in place.” Wilderness has spent a lot of time and money in the last 12 months refining its operations and refurbishing and rebuilding campsites not just in Zimbabwe, but across Africa. It is paying off.
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On Track – Master of Solar Let the African sun power your business Across Africa people are beginning to realise the need for an alternative energy source. Solar is becoming an increasingly good investment if you are looking to save money and the environment. Quick payback periods are assured and can be calculated accurately in advance On Track has powered some of the world’s leading upmarket game lodges and resorts, which are run entirely on solar energy On Track has been successful in building sustainable solar plants all over Africa and has contributed to preserving the environment by reducing the use of fossil fuel and resultant carbon emissions The customer is assured of the lowest total cost of ownership (TCO), and virtual maintenance free operation. It does not end there as continuous research, study and development further assure the customer of continuous upgrades to their plants. This in turn future-proofs their investment in both technical and financial terms
“It is all part of our strategy, the first pillar of which was to make sure our properties are maintained to the highest level. We have been putting in significant levels of capital into the refurbishment and rebuild of some of our facilities in particular in Namibia, where we got rid of a couple of nonperforming assets and refocused what we offered in the country. Namibia was probably harder hit than any of the others regions because it is a very European based market, specifically France, Italy and the UK. We refocused that business. We have been putting significant money into refurbishments and new camps in Botswana too and we are starting to dribble some investment into Zimbabwe. “Making sure our properties were maintained and positioned ahead of all of our competitors was very much the first step because there has been very little capital investment made by our competitors in their camps in recent years.”
The Serra Cafema camp, situated north-west of Namibia A view of the beautiful North Island resort, Seychelles
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Snorkeling at the North Island resort, Seychelles
Just some of the animals you can see on Safari with Wilderness
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www.intextimbercraft.co.za Investment in human capital ties in with the three year strategy too, and Wilderness has ploughed funds into setting up its own business school, says Vincent. “That is very important. Our second step was to invest in our younger generation and we have been making significant investments into staff training and executive training. Basically, we created our own business school and we’ve got a retired professor from Harvard Business School working for us and training our next tier of executive management. The idea is to bring fresh energy through and make sure the business is better able to fight the battles that probably need to be fought. We are moving more and more into the internet phase. We don’t take direct bookings as a business. We are a b2b operator through a network of agents. As part of that we also made a significant investment into an internet based reservation system. Now the camp operation is our core but we’ve been linking it all together in a simplified reservation system for our agents enabling us to drop our cost quite significantly.” Promoting from within is very important to wilderness. According to Vincent, those individuals are more likely to succeed than external hires. That is because they “understand the business and understand the customer”. “We believe our business is like a family and understand clearly that people are the heart of our
A hot air balloon ride over the Busanga Plains in Zambia
business. From an experience point of view, we believe that wildlife and the camp infrastructure is really only 50 percent of the overall customer experience. Our people are the ones that deliver the final part and make the difference. Service is very important. If we are going to be a consumer orientated business we want to keep that people connection. We don’t just want another MBA coming out of another school. And that is why we are training internally and promoting from within. It is easier, we think, to teach the business side. Dealing with customers is a skill that is character based. You don’t learn it in a school. On that front we are very much looking for characters.” Interestingly Wilderness’s visitor profile has changed slightly. “There has been a slight shift,” says Vincent. “Our core market, primarily out of Europe and North America, has been solid. The fallout from the global economic crisis and knock-on on tourism has been in the mid-tier, people spending between $3-5k a head on a 12 to 14 day
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holiday. There has definitely been a slowdown in that part of the market. In the top end, and I’m talking between $7-15k per head, that has shown significant improvement to the tune of at least 20 percent up on the prior year. So, they have definitely taken up the slack. One of the key indicators we look at is how long in advance people book their holidays. If you go back to pre 2008, in particular in Botswana, most bookings – around 80 percent – took place in excess of a year in advance. After the economic downturn that slipped to about 6-7 months. It is now back up to a year. That is a very good indicator of confidence.” He is optimistic about the future. “I think we’ve laid the foundation and I’ve no doubt we can achieve our three-year objectives. There may be some tweaking; if we notice an upturn, it would create an atmosphere where we’d be looking to make an acquisition or move more significantly into other areas. The growth could happen sooner than expected. We are sitting here in Africa and you read press from the international side and it is all doom and gloom. But my bookings in the first half of this year are 40 percent up on the same period last year. Also the local exchange rates have moved in our favour because predominantly we charge in dollars.” To learn more about Wilderness and to book your trip visit www.wilderness-holdings.com.
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Yum! Restaurants International continues to expand KFCâ€™s African footprint. Africa Outlook talks to Bruce Layzell, KFC General Manager New African Markets, about the firmâ€™s growth across the continent and particularly in Nigeria. Writer Ian Armitage Project Manager Eleanor Watson
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frica is undoubtedly one of the fastest growing regions globally and an increasingly attractive investment option, with the latest McKinsey Report suggesting consumer-facing industries in Africa are expected to grow by more than $400 billion by 2020. The Economist Intelligence Unit meanwhile predicts that by 2030‚ Africa’s top 18 cities could have a combined spending power of $1.3 trillion. The short-term outlook for the region remains broadly positive, and growth is projected at 5.25 percent a year in 2012–13. One of the main drivers is the increasing pace of urbanisation and consumerisation. “Africa is undoubtedly one of the fastest growing regions globally and KFC is fully committed to harnessing this opportunity and building a sustainable business model on the continent,” says Bruce Layzell, KFC General Manager New African Markets. By the end of 2012, KFC had 63 new African restaurants, with operations in Angola, Nigeria, Namibia, Botswana, Mozambique, Lesotho, Malawi, Swaziland, Ghana, Kenya and Zambia. The 63 figure excludes South Africa, Egypt, Morocco and Mauritius, which if included, would mean there are almost 900 KFC restaurants on the continent. KFC has plans to extend its reach to Zimbabwe, Tanzania and Uganda in 2013, with much longer-term growth plans to establish itself in the Democratic Republic of Congo, Ethiopia and Senegal. “In Nigeria, our business has been primarily focused on Lagos as we seek to set up a world class system to ensure we can grow sustainably,” Layzell says. “We are now in a position to focus more aggressively on other regions. We are enjoying seeing an expanding “eating out” culture and seeing the competitive landscape widen. This will no doubt start to bring economies of scale to suppliers, encourage more and better property
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KFC has 16 outlets in Nigeria with significant plans to expand
The tasty 21 piece bucket
development and generally stimulate the consumer environment whilst helping with business fundamentals. “Yum! Africa has the vision to be the defining restaurant company on the continent and our efforts in 2013 will be to establish a firm foundation on which we can grow further. “KFC has 16 outlets in Nigeria with significant plans to increase this.” According to some reports Yum! is targeting 300 KFC restaurants by 2020. Mr Layzell warns that taking a blanket approach doesn’t work. “Our KFC restaurants in each market differ - our aim is to make our brand relevant in a local context. We won’t cut and paste a South African KFC into Nigeria
or Zambia,” he says. “There are two factors when looking at market potential – the first is how we do business, call it our internal ambit of control. The second is the external environment - political stability, economic growth, infrastructure investment etc. If these two factors play positively together then we are very bullish about our growth potential.” In Nigeria, KFC is planning to launch a seafood range. “KFC customers around the world enjoy a varied menu obviously coupled with some key brand defining elements like our Original Recipe ™ chicken. Our outstanding Fish Zinger ™ burgers and Zinger Shrimps ™ are a way of bringing diversity to our menu but with a familiar
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Seven-Up Bottling Company Plc
We are now in a position to focus more aggressively on other regions. We are enjoying seeing an expanding “eating out” culture and seeing the competitive landscape widen. This will no doubt start to bring economies of scale to suppliers, encourage more and better property development and generally stimulate the consumer environment whilst helping with business fundamentals”
SUBCO is one of the largest independent manufacturers and distributors of well-known and widely consumed brands of soft drinks in Nigeria We produce and market our brands in all of our nine manufacturing plants, and market our products from over 200 depots spread across Nigeria OUR VISION To become the most admired and innovative company in Nigeria OUR BRANDS Pepsi, 7Up, Mirinda, TEEM, Mountain Dew, and Aquafina water OUR MISSION To inspire and refresh a youthful lifestyle
www.facebook.com/PepsiNigeria www.sevenup.org meat block that we know Nigerians love,” Layzell says. “Nigerians are very much part of the global village and they demand world class products, world class service and world class experiences. At KFC we strive to deliver on this need and we are uncompromising to ensure, through our products, customers’ and restaurants demands are met. Our global reach allows us to tap into the very frontline of product development and consumer trends and we know that success here will hinge on us ensuring that Nigerians get to experience these things sooner rather than later.” As well as KFC is performing in Nigeria, Layzell knows more could be done.
“Our Nigerian store openings have been some of the best in the world,” he says. “However, we know that most Nigerians do not know our brand or the heritage of Colonel Saunders. It goes back to our initial marketing and branding principles and building the brand from scratch but on the shoulders of the global giant and implementing lessons learnt from around the world. Globally, Yum! has a majority of franchised outlets and it is this approach we are currently implementing in Africa. It allows us to marry the process and discipline of our brand systems with in-market experience and knowledge.” Already, despite only entering the country in 2010, KFC has made a valuable contribution to the Nigerian economy. All of its chicken is Nigerian farmed and processed and it has helped improve local standards. Importantly, it has increased consumer choice. “100 percent of our chicken in Nigeria is Nigerian farmed and processed. We have worked with some outstanding partners to upgrade facilities and standards to meet the exact requirements that our brand demands,” says Layzell. “We want to be seen as a Nigerian company that contributes to the Nigerian economy and people on a number of levels. As such, we will always try to localise production where we can source the right quality at the right price. The ultimate goal would be to get Nigerian suppliers to the level of capacity that would allow them to export to other countries. “We apply the same global standards regardless of where in the world we operate. We thus hold our Nigeria suppliers to these high standards. This
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has required many to invest significant amounts in upgrading facilities and support systems. We have really enjoyed how our suppliers have embraced our standards and systems and many have seen our entry as a catalyst to help them achieve world class standards. “I think our entry has raised the bar in a number of areas and most of our competitors have responded positively. This is ultimately giving the Nigerian consumers a better experience of our sector as a whole, enabling us to grow the sector resulting in a win-win situation for the parties concerned. It is interesting to see the increasing number of international brands entering the market and I’d like to think it is because we have shown others that it can be done.” Nigeria isn’t a country without problems however and investors should take note of the challenges of operating there. “Obviously the power supply challenges would interrupt our daily productivity – this is why we have invested in generators etc,” Layzell says. “These added overhead costs make the business model challenging and thus pushes up the price of our products. Congestion makes deliveries challenging but we need to think outside the box for solutions – after hour deliveries are an example of this. The cost of real estate, challenges in tracking down property owners and the myriad of planning permissions required for each store means that we can’t build as quickly as we would like. However, we face these challenges in many parts of the world and the key is to improve the things which are in our control and look to mitigate the effect of things which are not.” All things considered, he is excited by the future. “Every day there is a new report on the opportunity that Africa presents, most showing the usual
KFC has an impressive and diverse menu
numbers of GDP growth, rising middle class, and improving political stability. However, the challenge for all businesses looking at Africa is how to turn this potential into profit. Businesses on the continent still face many challenges and all of the growth talked about in the reports mentioned earlier is yet to flow through into the majority of consumers. We are absolutely positive about our growth potential in Africa though understanding that overall success will not be achieved overnight. It will take time and significant effort, though we celebrate having gotten it right in the initial stages of setting up shop in Nigeria. “We are most positive about our future as a brand in Nigeria.” What does Layzell believe is the secret to the firm’s Nigerian success? “Like any business it is about delivering the right product at the right price in the right location and delivering an exceptional customer experience simultaneously,” he says. “Nigerians demand world class service and we’re going to give it to them.” To learn more visit www.kfc.co.za.
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EABSC to invest $500m in Ethiopia
The East Africa Bottling Share Company (EABSC) plans to invest $500 million in the East African nation as it plans expand its capacity further with the aim of meeting increasing demand within the soft drink industry. Writer Ian Armitage Project Manager Ben Weaver
oca-Cola is the most recognised brand on the planet, a billiondollar product sold in 206 countries. It has been in Africa since 1929, operates in nearly all of Africa’s countries and is one of the continent’s largest employers with almost 70,000 employees in 160 plants. It is a giant and Africans buy more than 35 billion bottles of Coke a year. What many people don’t realise however is that no matter where in the world Coca-Cola is, its brands are produced, packed and distributed by bottlers, suppliers and retailers that are deeply rooted in the communities in which it operates. These are partners in the truest sense, sharing the same vision and mission. “Coca-Cola has ambitious plans for Africa,” says Greig Jansen, CEO of CocaCola producer East African Bottling Share Company (EABSC). “It is investing several billion dollars in Africa over the next decade.” Africa is an important market for CocaCola as it fights a campaign to increase per-capita annual consumption. Nowhere is this truer than in Ethiopia. It was once a byword for poverty and famine but now its economy is booming - it has been expanding by about seven percent a year for almost a decade - and Coke is targeting expansion. “The 2020 vision is about getting ready for tomorrow today,” says Jansen. “In Ethiopia we’re looking at 100 million unit cases by 2020, which is ambitious. It would put Ethiopia on a par with Egypt and South Africa.” Coca-Cola was first bottled in Ethiopia’s capital Addis Ababa in 1959 by the Ethiopian Bottling Share Company, which later opened a second branch in Dire Dawa in 1965. The two plants were nationalised in 1975 and ran as public companies until 1996, when they were bought by private investors. Just prior to that, in 1995, the Coco-Cola South African
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Beverage Company (Coca-Cola SABCO) bought shares in the business and in 1999 signed a joint venture agreement with the plants. In 2001, Coca-Cola SABCO increased its shares to 61 percent and the company changed its name to the East African Bottling Share Company. EABSC continues to run the two plants in Addis Ababa and Dire Dawa. “We employ over 1,500 people in Addis Ababa and Dire Dawa and produce 720 million bottles of soft drinks a year,” says Jansen. “We are one of the top performing countries in terms of growth, profitability and efficiencies.” In April last year, EABSC unveiled an eight-year, $500 million investment plan, intended to boost its presence in the country by the year 2020. The plans will see it open a further three Ethiopian plants. “The proposed plants include one in Hawassa and another in western Ethiopia, whose construction depends on the performance of the company’s other lines,” says Jansen. “In the next two or three months we’ll start the civils in Bahir Dar, a project which will cost $25 million. EABSC’s third plant We have received 30ha will be completed of land from the Bahir by 2014 Dar city administration to build what will be our third Coca-Cola factory and it’ll be completed before the end of 2014. The handover of land will be next month. “If we look at what we’re doing in terms of the new investment, it is something in the region of nine new lines,” Jansen adds. “We’re really bringing in a whole new portfolio over the next couple of years and our strategy is to be able to have a cold Cola-Cola within arm’s reach for all our consumers in Ethiopia by 2020.” Companies interested in doing business in Africa can learn a lot by looking at how Coca-Cola and EABSC operate. Multinationals cannot operate in Africa without ensuring that the communities in which they do business benefit and have a significant stake in those businesses, says Jansen.
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www.vicol.co.za A recent survey conducted by the company found that for every one person directly employed by EABSC, another 10 were indirectly employed. If you do the maths it means Coke impacts the lives of nearly one million Ethiopians. “We have commissioned a study that says close to one million people make a living by distributing and selling Coca-Cola,” Jansen says. Now is the time to invest. “Look at the statistics: something in the region of 90-100 million people live in the country and the population is growing fast. Ethiopia has one of the fastest growing economies in Africa and the world and the government is spending lots of money on infrastructure. There have been huge improvements on the road networks, electricity and in sectors like banking. All of the economy is growing. It is fantastic. I don’t think you can overlook Ethiopia in terms of investment. It is a very safe and stable country. Its location is ideal and the government is very interested in export.” At the end of this year EABSC will have invested a total of $150 million dollars in Ethiopia. That money has led to the completion of a totally refurbished production facility in Dire Dawa, the building of a fivestory top-of-the-line multi-tier PET(plastic) building
and the revamp of the existing Addis Ababa production facility. Addis Ababa is now capable of producing 36,000 PET bottles an hour. “We have increased capacity from the old plants by a factor of four and we currently don’t have a single bottle in the warehouse,” says Jansen. The investments will have positive ramifications for the whole country. “By 2020 we will be water neutral,” Jansen explains. “This means, for every litre of water we take out from the earth, we will put one litre back. We have a best practice in waste water treatment in Ethiopia. We have spent well over $2 million for the plant in Addis Ababa and $3 million for Dire Dawa and we’ll do the same in all new plants. “By 2020, we will also be energy neutral, by then we will not be pulling power off the grid. We will be totally self sufficient on power. We are involved in cleaning up rivers and recycling. We’re committed to caring for our environment.” As Coca-Cola continues to expand in the fastgrowing East African nation, be sure that Africa Outlook will keep an eye on things. To learn more visit www.cocacolasabco.com.
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works for T he city
Cape Town is miles ahead of the other South African metros when it comes to quality of governance and financial management. Africa Outlook talks to Alderman Ian Neilson, the city’s executive deputy mayor. Writer Ian Armitage Project Manager Stuart Platt
hen it comes to quality of governance and financial management few can claim to be better than Cape Town. The City delivers basic services efficiently, is doing more for genuine black economic empowerment and the upliftment of the disadvantaged than any other metro in the country, and even has a functioning billing system. We recently talked to Alderman Ian Neilson who told us more about the City’s fabulous achievements. Are you making strides in your goal to create a ‘better life for all’? The City aims to create a Cape Town that works for everyone. Since being elected to office, this administration has made great strides in delivering on this promise. We are committed to redress and delivery. As such, our priority areas remain those in which the poor and the vulnerable reside. Good financial management has meant that our budgets are used responsibly, which allows for more money to be used on important projects such as the provision of human settlements, safety, health and infrastructure. We have delivered human settlements to previously disadvantaged communities, have invested in roads and public transport and we have put more police officers on visible patrols.
Our tendering system is constantly streamlined and improved and our staff are committed to the idea that “this City works for you”
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You have five strategic pillars. What are they? And why are those pillars important? The work we do at the City is informed by our five strategic pillars or focus areas. These are the Safe City, the Well-run City, the Inclusive City, the Caring City, and the Opportunity City. The Opportunity City will be one in which conditions attract investment and job opportunities. The Safe City, through community and stakeholder involvement, will mean freedom from fear of crime, and safer streets for all citizens. The Caring City is one where all citizens, particularly those most in need, have access to basic services. The Inclusive City is one where every resident has a say and a stake in the future and where community involvement in decision making is important. The well-run city means a transparent and corruption-free local government, which is receptive to the needs of its citizens. These five strategic pillars provide the framework within which the City aims to deliver a home for all her people: where they see a real future for themselves. Those values are informed by our drive to create a city of economic opportunity that addresses the imbalances of the past through a commitment to reconciliation, redress, delivery and diversity.
The work we do at the City is informed by our five strategic pillars or focus areas. These are the Safe City, the Well-run City, the Inclusive City, the Caring City, and the Opportunity City. These five strategic pillars provide the framework within which the City aims to deliver a home for all her people: where they see a real future for themselves. Those values are informed by our drive to create a city of economic opportunity that addresses the imbalances of the past through a commitment to reconciliation, redress, delivery and diversityâ€?
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Please tell me about your aims, targets and projections for 2012-13 to 2014-15? Will we see a lot of change in the city? Our Integrated Development Plan (IDP) sets out our basic strategy. We consulted with more than a million Capetonians during the drafting of that document. It has helped us craft the blueprint of our designs with the aim of a moving beyond the old straight-jackets of compliance. We crafted it with an expansive agenda in mind that sought to activate the full creative potential of this organisation and the combined potential of the private and civil society sectors. In order to deliver on the strategy, we had to change the way that we work. That is why we have structured the City to deliver on the five pillars as five strategic focus areas. 2012 saw many major transport upgrades (upgrading and expanding public transport interchanges (PTIs) over next five years, for example). Are citizens already seeing the benefits? The geographic lay out of the city means that it is physically impossible to build more roads. The City has taken a policy decision to promote public transport over private transport in all its design decisions. A safe, effective and reliable public transport system means it is easier for people to move from their home to their place of work and for communities from far flung areas to interact with each other. As part of Apartheidâ€™s legacy,
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many people were relegated to the margins of the City. We know that, in order to redress this, people need to be able to take advantage of the economic and other opportunities of the central City. Design decisions in the past tried to keep people apart; modern day design must undo those mistakes of the past and bring people closer to each other. The use of public transport and travelling on the city’s roads forms a large and necessary part of the daily lives of Cape Town residents and it is the City’s mandate to ensure that commuters can travel in safety and with dignity. The City manages over 200 public transport interchanges (PTIs) and law enforcement is a primary focus area as part of our commitment to being a Safe City. Security at PTIs is currently provided by various private security companies and supported by the City’s Law Enforcement, Traffic
The City has taken a policy decision to promote public transport over private transport in all its design decisions. A safe, effective and reliable public transport system means it is easier for people to move from their home to their place of work”
Alderman Ian Neilson, executive deputy major
About 3.5 million people live in Cape Town
South Africa and Cat6a 10 Gbase-T Data Cabling Over the years Cape Town-based TNW Data has become an established and reliable supplier and distributor of Networking Products, Cabling & Accessories, Networking Products and Electrical Products. Schalk Bothma, the firm’s managing director, discusses how to approach Cat6a 10 GbE (10 GBase-T) Data Cabling in South Africa. South Africa is not unique in that it is a predominately “UTP” country – as most of our data cabling installations are “Unshielded Twisted Pair” installations and so is most of the United States. Integrators/Installers are trained for UTP installation and most sites do not have adequate bonding and grounding infrastructure for grounded FTP or STP installations. In South Africa we use a lot of PVC skirting and most buildings do not have a dedicated earthing system for the data cabling infrastructure. So what is the problem? “UTP” has been working very well for us and most of the United States of America for a very long time... Well, shielded cabling is almost mandatory to fully comply with the IEEE 802.3an cabling standards and to truly obtain the necessary performance to run 10 GBase-T over copper twisted pair cabling. As we know 10 Gbase-T applications are a reality and the hardware to run these applications are already available. Data cabling infrastructure is a long term investment and needs to be able to service equipment for at least 10-15 years into the future. The cost to replace the horizontal/sold cable within a structured cabling installation is extremely high and needs to be kept in mind when choosing the appropriate solution at installation. Again – so what is the problem, we will just install fully shielded systems when we remove the current Cat5e and Cat6 network cabling systems? Well, specific to South Africa we have the following challenges to deal with when looking at installing “Grounded” Shielded Cabling Systems: 1. Most of our current infrastructure is only for “UTP” installations and does not have the necessary grounding and bonding equipment in place. To get the correct grounding and bonding equipment in place is extremely expensive and time consuming making it sometimes almost impossible. And if shortcuts are used to do grounding and bonding – it will be more harmful and problematic than not using it at all. 2. Most of our current installers/integrators are not trained to do fully shielded installations. 3. The cost of the fully shielded equipment and the actual cost of installing fully shielded systems are very expensive when compared to “UTP” systems. OK – We have Cat6a “UTP” systems available locally and internationally, so why not just install them? Also with Cat6a “UTP” systems there are inherent problems with the technology, examples below: 1. Cat6a “UTP” horizontal/solid installation cable is extremely thick, due to the need for separation of the pairs in the cable and the cables themselves to combat Alien Crosstalk. This means that current pathways and cable trays will most probably not be able to accommodate the “UTP” Cat6a cable and will certainly not be able to accommodate growth. This means upgrading the path ways, which in most cases will cause long delays, down time and huge infrastructure costs, and might even not be possible at all. 2. Performance – Cat6a “UTP” solutions are generally on the very edge of the IEEE 802.3an standard for 10 Gbase-T applications and is very susceptible to bad installations. 3. With the Cat6a “UTP” system being so close to the edge and being susceptible to problems, installations tend to take longer with more problems over the life time of the installation making the cost of maintenance much higher. 4. According the standard for Cat6a “UTP” also needs to be tested for ANEXT. This is a complex and time-consuming process where all possible wire-pair combinations need to be tested for ANEXT and far-end ANEXT. It can take up to 50 minutes to test one link in a bundle of 24 CAT 6A UTP cables.
So now what, should we install Cat6a UTP or Grounded shielded systems? According to many experts in the world, the answer to all the problems above is to install a Cat6a “Ungrounded” U/FTP System using a floating shield around each pair to resolve the alien crosstalk problem in both the horizontal/solid installation cable and work area and path cords. The only difference being that the shield is not grounded or connected anywhere in the installation, and both the keystone and RJ45 connectors in the solution are “UTP” based with no metal parts to connect to the shield. So the horizontal/solid installation cable and cords are “individually shielded” the actual physical installation is done as a “UTP” system. In tests concluded by two well-known international vendors and other experts in the field, the following was proven through extensive and intricate testing: 1. The Ungrounded shield of a U/FTP cable DOES NOT act like an antenna, in actual fact “UTP” cable acts more like an antenna than an ungrounded shielded cable does. The antenna affect is a myth in the industry. 2. Even if the shield is not earthed, it still protects the cable from alien cross talk, in the tests it was clear that even when the shield was not earthed, the shield stopped interference on the pairs inside the cable, and makes the cable more than fully compliant to the IEEE 802.3an cabling standards for 10 Gbase-T. 3. The shield does not cause heat build-up in the cable, in actual fact the cable with the shield tends to be cooler than “UTP” cable during tests. The U/FTP cable will then in actual fact work the same if not better in a POE environment. These tests concludes that an ungrounded shield (U/FTP) on a shielded cable will not create problems in the system and will eliminate alien cross talk to enable the cable to outperform the standards required by the IEEE 802.3 for 10 Gbase-T applications. What do these tests mean to us when it comes to choosing a Cat6a solution? It resolves all problems associated with “UTP” Cat6a solutions AND grounded fully shielded Cat6a solutions for South Africa. When choosing an “Ungrounded” Cat6a solution the advantages are: 1. No need for grounding and bonding, replace current “UTP” Cat5e or Cat6 systems as is with no need for additional costs. 2. Install like a UTP system, no special training or resources needed to install “ungrounded” Cat6a system. 3. Quicker and easier to install – cost saving on actual installation time and slightly cheaper than fully shielded system. 4. Cat6a U/FTP cable is significantly thinner than Cat6a U/UTP cable, making current pathways and cable trays adequate and installation much easier. 5. Cat6a U/FTP cable outperforms Cat6a U/UTP cable on all parameters and makes for much better headroom on a Cat6a installation, the cable is also more robust and less problems occurs during installation. 6. With larger headroom available after installation when compared to U/UTP, there will be lower maintenance costs during the lifetime of the installation. When taking all of these facts and information into consideration and based on the situation in South Africa, it makes a lot of sense to consider an “Ungrounded” U/FTP Cat6a solution for your next installation. Contact Schalk Bothma Managing director email@example.com www.tnwdata.co.za
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The City is committed to redress aid delivery
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Services and Metro Police and the South African Police Services (SAPS). The City has also introduced a specialised Law Enforcement Unit - the Transport Interchange Unit - which deploys dedicated officers to various major PTIs, focusing on Joe Gqabi, Bellville and the Cape Town Station Deck. This has seen a marked reduction in crime and vandalism, through the enforcement of the City’s By-Laws. One of the biggest threats to the safety of commuters is vandalism and anti-social behaviour. Daily patrols by the Transport Interchange Unit ensure that PTIs are monitored and that every effort is made to maintain and improve the commuters’ overall experience of public transport in Cape Town. Are you happy with what you’re doing/have achieved? Cape Town is miles ahead of the other South African metros - Johannesburg in particular - when it comes to quality of governance and financial management. Why is that? What do you do differently? Our public accounts committee – a key oversight committee, with the responsibility of ensuring that the public’s money is spent responsibly – is chaired by a member of the opposition. Our tendering system is constantly streamlined and improved and our staff are committed to the idea that “this
City works for youâ€?. Our Council meetings and portfolio committee meetings are open to any member of the public wishing to attend them. This administration is committed to transparency and accountability and this has gone some way in making us a better run metro. More must be done and challenges remain. The City delivers basic services rather efficiently, is doing more for genuine black economic empowerment and the upliftment of the disadvantaged than any other metro in the country - and even has a functioning billing system. Are you proud of that? Again, how are you able to do it when so many other struggle? We are very proud of our track record but there is always more to do and more people that need our help. Our nationâ€™s history is one of discrimination and it would be foolish for anyone to think that the legacy and effects of apartheid can be undone in a short space of time. We have made huge strides in this task by creating confidence in our governance structures. This confidence means that more businesses are investing in the city which creates more opportunities for everyone who lives and works here. To learn more visit www.capetown.gov.za.
e T h ekwini
M u nicipalit y
harmony L i v in g in
eThekwini is the largest City in the KwaZulu-Natal and the third largest city in the country. Municipal spokesperson Thabo Mofokeng answers our questions in this exclusive Q&A. Writer Ian Armitage Project Manager Stuart Platt
e’ve featured eThekwini Municipality several times in recent years under our previous incarnation, South Africa Magazine. We’ve interviewed majors, we’ve talked to supply chain and service specialists, and we’ve talked to countless spokespeople and officials. Their goals were all the same – speed up service delivery, root out corruption and make Durban Africa’s most caring and liveable city by 2030. The eThekwini Metropolitan Municipality was created in 2000 and is often described by peers as Africa’s best run and financially strongest local government. As it continues to make strides forward, we talk to Municipal spokesperson Thabo Mofokeng in this exclusive Q&A.
Thabo, congratulations to you on the progress the municipality is making. What are your goals now? A lot of progress has been made towards improving the living conditions of the people of eThekwini. The vast majority of our people already enjoy basic services like piped water, electricity, sanitation and access roads as well as public amenities like libraries and clinics. As you are aware these were only enjoyed by a few during the past establishment. The City has a capital budget of over R5 billion and the majority of this goes towards basic services. While doing all this we recognise that there’s still a lot of work that needs to be done, especially due to rapid urbanisation and migration patterns, we are a cosmopolitan city that attracts people from rural areas, other provinces like the Eastern Cape and even people from other neighbouring African countries; who come to our City to look for better opportunities. By 2030 eThekwini will be Africa’s most caring and liveable city? A caring City indicates a fundamental departure from the way people were treated in the past. People are now part of their development. They are encouraged to participate in determining their needs and articulate their views. We do this through processes like the Budget Hearings, the Integrated Development Plan and the Izimbizo (public participation programme) driven from the Office of the Mayor. What are eThekwini Municipality’s aims, targets and projections for 2012-13 to 2014-15? The coming years should be an exciting period for our City, given the number of developments that are either at a planning stage or those already being implemented. National government and Transnet will be making a huge
investment in the further development of the port, including the Back-ofPort development. Linked to that is the development of the transport infrastructure, including the logistics route linking the Port of Durban to Johannesburg via the Free State. We are also looking at the inner City renewal and the development of secondary nodes like Pinetown, as well as a clear focus on township and rural development. To ensure that there is an integrated approach, we want to implement the Area Based Management System (ABMs) so that there could be focused development. The Cornubia Human Settlement project, which will yield about 25,000 housing units, is one of the priority projects which will see a mixed development with commercial and industrial space in close proximity. We are also focusing on industrialisation, with the automotive, maritime and tourism sectors being some of the key focus areas. For an example, in the tourism sector we will see more investments in the cultural nodes like Inanda heritage route, Phoenix and Umlazi. The Municipality will be investing about R500 million to build a central library as part of the learning city programme too. This is to highlight the importance of education in the development of the City going into the future. What about local transport? A lot of work has already been done to improve the public transport system, including the introduction of Public Transport Lanes on major public roads and cycle lanes to encourage the use of non-motorised transportation. The City is presently fast tracking the implementation of the Integrated Rapid Public Transport Network (IRPTN) which will change the face of Durban once it is fully implemented. The IRPTN aims to provide an integrated, fast and reliable public transport system for the majority of its citizens and the first phase is due for completion in 2016. This will see
an investment of about R5 billion and funding for this is provided by National Government. Why is it important? Well, a reliable, efficient and safe public transport system is main characteristic of any developed city around the world. The IRPTN will also seek to address the spatial inequalities of the past. People will have access to government services, linked to schools, work places as well as recreational and leisure facilities. Are citizens already seeing the benefits? Yes they’ve already started to see the benefits of a well planned transportation system through things like cycle lanes and public transport lanes. However we believe the implementation of the IRPTN will revolutionise the transport system as we want to see an integration of all modes of transport - trains, buses and minibus taxis. Informal settlements and a lack of affordable housing are big problems in South Africa. What are you doing in response? Housing remains one of the top priorities for the Municipality. One of the primary challenges that we are dealing with is the scarcity of land in the City and we are looking at densification as a way of dealing with this. We are also dealing decisively with land invasion because if we were to allow uncontrolled land
e T h ekwini
M u nicipalit y
occupation we would be perpetuating the mushrooming of more slums. Council has recently taken a decision to eliminate the transit camps where about 11,000 families live. These were created as temporary accommodation for people living in dangerous conditions and those who were left out of housing developments. We will be providing social housing even within the inner city. We are also looking at gap housing, whereby are providing serviced sites to allow people to build on their own. We are converting hostels, which used to be reserves for labour, into family units too.
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What’s the current backlog? The Municipality has a backlog of over 400,000 housing units. In order to fasttrack housing delivery we are seriously looking into ways of shortening planning process and to address the issue of skills shortage. With the recent headlines regarding Eskom and a possible power shortage, I wanted to talk about energy. What is eThekwini doing to reduce electricity consumption and ease the pressure on the country’s grid? The City has an established Energy Office that deals with issues of energy efficiency. Part of our interventions include the retrofitting of energy efficient lights in our buildings and on street lights, installation of solar geysers in low cost houses and we have the alternative energy park that has been established at the Dube Trade Port. Why is it important to introduce renewable energy? Energy efficiency is the future. It is important that we do everything in our power to reduce the carbon footprint and to adopt the mitigation and adaptation strategies to deal with climate change. Are you happy with what you’re doing/have achieved? Generally we are happy with what we have achieved. We continue to attract events into our City which help to boost our tourism industry. We are happy with the level of communication between us and citizens through Mayoral izimbizo and other avenues. We also have a crack team that engages communities on the ground to deal with whatever issues that may arise. However, like any other City, we believe that resources are a constraint and not enough to deal with challenges we have. We see skills development as critical to ensure success of our infrastructure
development. We also want to do more to capacitate our communities, especially the youth, women and people with disabilities. Durban recently played host to matches for AFCON 2013. Was that successful? It was. The tournament helped to cement our position as Africa’s events capital. We also received international exposure and had a good tourism spend. The tournament contributed towards social cohesion as the games were patronised by all racial groups. Thabo, if the municipality met a Genie who offered to have all of its dreams come true, in order of priority, what would they be? Our priority is infrastructure development. We want to ensure that we have 100 percent coverage of basic services like water, electricity, refuse removal and sanitation. We also want to see investment in the economic levers of the city so that jobs could be created. Issues of skills development, education, health and fighting crime are also on top of the list of priorities. The City is also grappling with issues of social pollution like the abuse of drugs like whoonga, abuse of girls, women and children. We have to focus on these if we have to turn moral consciousness in a positive direction. To learn more about the Municipality visit www.durban.gov.za.
Bio T h erm
E ner g y
ener g y
Africa Outlook talks to green energy specialist Jasandra Nyker, CEO of independent power producer BioTherm Energy. Writer Ian Armitage Project Manager James Mitchell
outh Africa’s energy problems have been well documented and recent issues with the Medupi power station and its operating system, and the impasse between Exarro and striking workers, has ignited fears about winter power shortages and possible blackouts. Brian Dames, Eskom’s chief executive, has admitted concerns with respect to Medupi and it is clear South Africa is in desperate need of more energy after a decade in which Eskom’s pleas for investment in generation capacity were ignored. It has led to renewed calls for a broadening of the energy portfolio to include more flexible energy sources such as renewables. The government is already taking action and in November 2012, it signed the first round of agreements with independent power producers. In total, 28 projects are underway involving an estimated R47 billion in new investments, with those approved in the bid process’s second round to turn sod later in the year. The first round projects will see an initial 1,4000 megawatts (MW) of renewable energy added to South Africa’s energy mix by 2014. Bids for a third round have to be placed with the Department of Energy by August 2013. “It is all part of the Department of Energy’s Integrated Resource Plan, through which it has planned the transformation of SA’s energy mix to 2030,” says Jasandra Nyker, CEO of South African independent power producer BioTherm Energy. “We won three projects in that first round. They are two solar photovoltaic projects - the 10 MW Konkoonsies solar energy facility and the 10 MW Aries solar energy facility - and one wind project, the 27 MW Dassiesklip wind energy facility. Both Solar facilities are located in the Northern Cape on 20ha parcels of land. The Aries solar facility
Bio T h erm
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is located close to Kenhardt while the Konkoonsies solar facility is located close to Pofadder. The engineering and construction contractor on these projects is Juwi Solar and according to Nyker, both solar facilities will comprise about 43,000 photovoltaic solar modules.” The Dassiesklip wind facility is being constructed on an area of 350ha, located 5km west of Caledon, in the Western Cape. The facility encompasses nine 3 MW wind turbine generators and will be built by Group five and Iberdrola, while the turbines are being supplied by Sinovel, Nyker says. “The wind and two solar facilities will produce a total combined output of 47 MW,” she explains. “Both solar projects have expansion capacity, supporting our strategy to initially construct smaller-sized projects with a shorter timeframe to commercial operation and focusing long-term on larger-scale projects.” The wind project will be completed by January 2014 and the solar projects will be completed by December this year. Funding was secured thanks to a R1 billion commitment from leading offshore energy-focused private-equity group Denham Capital, which is BioTherm’s anchor equity investor, as well as debt funding from the Industrial Development Corporation (IDC), Standard Bank and Nedbank. The IDC has also signed up to fund the empowerment and local community trusts that are shareholders in the projects. “South Africa is currently heavily reliant on coal and as a result, we are in the top ten carbon emitters in the world,” Nyker notes. “From an environmental perspective, I think we’re doing right by going down the renewable road, but more importantly, it is necessary to diversify your energy mix because the energy shortfall is well documented. Renewables are
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modular, quick to deploy and have a significant role to play and a bright future within the South African energy mix.” According to the government’s Integrated Resource Plan, a 20-year projection on electricity supply and demand, about 42 percent of electricity generated in South Africa, about 17.8GW will be required to come from renewable resources by 2030. “It is a fantastic opportunity and in the long-term we are focusing on larger-scale projects,” Nyker says. “Preferred bidder selection and financial close for these three projects not only reinforces BioTherm’s position within South Africa’s renewable energy industry but will also be a catalyst for our future growth.” Johannesburg-based BioTherm Energy has a large portfolio of renewable energy projects not only in South Africa but in the rest of Africa. Nyker notes that future expansion
is likely. “We’re planning to bid for future rounds of the Renewable Energy Independent Power Producers Programme in South Africa and we will also continue to adopt an acquisitive growth strategy, which will complement our greenfield development strategy. It’s essential for us to diversify and our strategy is to be sub-Saharan focused. We think that the opportunities are right for renewables on the African continent and we want to take advantage of that.” BioTherm is closely aligned with the national goals of expanding the role of renewable energy in the South African energy mix. It sees wind and solar power not just as energy sources but as an integral part in ensuring that the economic, environmental and social aims of the country are met. To learn more visit www.biothermenergy.com.
P F K
Elementary my dea r W atson
The acquisition of Pi Shurlok has enabled Durbanbased PFK Electronics to diversify says MD Gary Stanton who talks to Africa Outlook. Writer Ian Armitage Project Manager Eleanor Watson
a u tomotive
his is a pivotal moment in the history of Durban-based PFK Electronics. The firm is a renowned designer and manufacturer of aftermarket electronic vehicle systems, telematics systems, and alcohol interlock devices, and in November it completed the acquisition of automotive electronic components manufacturer Pi Shurlok. It was a watershed moment and will enable the company to diversify and expand. That was the point, says managing director Gary Stanton. “It is a bid to diversify our core business to include the manufacture of vehicle components for local and international original equipment manufacturers (OEMs),” he explains. More than that, it increased production capacity – significant growth within PFK Electronics over the last five years meant it lacked production capacity. “The last 18 months have been very interesting,” says Stanton. “We’ve had some fantastic organic growth in the business both through existing customers and products but also with the introduction of new products that we’ve designed ourselves. On top of that, in the last six months, we have acquired Pi Shurlok which adds capacity from a production point of view and turnover diversification as well. It means we are now firmly entrenched in the aftermarket and the OEM market. “Our organic growth has been very aggressive. PFK Electronics has been growing as a company by about 30 percent each year for the past six years. Pi Shurlok hasn’t, but we plan on turning the OEM segment of our business around. With immediate effect the OEM segment of our business is renamed PFK Shurlok. This rebranding provides a strong linkage between the two formerly separate companies.”
According to Stanton, the plan is to grow the OEM business and the acquisition is a “good opportunity” for PFK Electronics to diversify into the OEM arena of contract manufacturing – also known as build-to-print – instrument clusters and plastic injection moulding. “We have amalgamated the businesses together and our production facility is now where the Pi Shurlok facility was so our production facility has moved and merged into one and that has doubled our capacity. That was very important.” PFK Shurlok has established a reputation as an ISO/TS-16949, Ford Q1 and VDA-6 OEM certified first-tier
View of our surface mount technology room
supplier, which, says Stanton, “Are very prestigious ratings that now allow us to supply more products to the OEM market.” Before the acquisition, PFK Electronics’ fully-automated surfacemount device placement capacity was 70,000 components an hour; it has increased to over 150,000 since the acquisition, he says. “What the acquisition does is bring in production technology that we didn’t have access to, as well as broaden our range by giving us access to PFK Shurlok’s combination meter instrument cluster, and exhaust emission-control technology, and it broadens the customer base. “The acquisition represents a huge growth opportunity. With combined business, I’d like to think in five years time that we’re going to be in a position where we’ve doubled our turnover. It is going to be a big effort but everyone is all focused on it.” Stanton explains the new combined staff complement is 550, with office and manufacturing facility floor space of over 10,000 m2. PFK Electronics has acquired production and test equipment, including in-circuit testers and selective soldering, and the
720 TAB (Tethered Alcohol Breathalyser) The 720 TAB serves as a starter cut should the breath alcohol concentration (BrAC) in the sample provided be above the legal or pre-set limit. The 720 TAB can also request repeat samples while the vehicle is in motion to test for alcohol consumption while driving. Should the driver fail a breath test, the result can be relayed via GSM to a control centre and the vehicle will immobilise as soon as the ignition is turned off. The device is equipped with two override functions, giving maximum mobility in an emergency situation and all events, pass or fail, are stored in the unit’s memory.
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Informer Advanced Battery Operated GSM/ GPS Wireless Tracking Device The Autowatch Tracking Informer is a versatile device for applications such as stolen vehicle recovery and monitoring, trailer tracking, container tracking and asset monitoring and recovery. A unique battery operated GSM/GPS wireless tracking device, the Informer operates on an internal battery with a life of more than two years (depending on reporting rate settings). The reporting interval can be set to suit the specific customer application, providing a compelling combination of mobility, longevity and adaptability. acquisition has made it one of the biggest electronic product manufacturers in South Africa. His focus is on PFK’s traditional business too. Stanton says plans are in place to grow its alcohol breathalyser immobiliser systems and the telematics and fleet management products under the Autowatch brand. “I believe our aftermarket products will in future also become an OEM installation. Under Autowatch we have our Autowatch Tracking, so we’re talking to a lot of insurance companies at the moment where we’re introducing different tracking devices to them in addition to our very successful stolen vehicle recovery products. We have launched The Autowatch Profiler system. It is an insurance telematics driver behaviour and profiling system; insurers are very interested by it.
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A Market Leader: The Ghost Wireless Immobiliser At the forefront of the Autowatch Classic Tracking range is the Ghost Wireless Immobiliser. When installed, the product communicates with the Classic Tracking Unit, and is controlled by the WUWA (Walk Up, Walk Away) remote. With its tiny dimensions (59mm x 15mm) the Ghost is ideal to hide in a vehicle’s wiring harness and is almost impossible to find. An infinite number of Ghosts can be interfaced to a single unit, and the Ghost even continues to function if the tracking system itself is found and removed, immobilising the vehicle.
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“We also see growth in our Alcolock range. We are a designer and producer of alcohol breathalyser based immobilisers and we have the Ignition Interlock which uses breathalyzer technology which is integrated into a vehicle immobilisation system so, effectively, if you blow into it and you’re over the limit, it keeps a record of that, immobilises your vehicle and stops you from driving. Our focus at the moment has been overseas on that. We’ve already sold over 20,000 systems into Europe and sales into the US are looking very promising. Ultimately our aim is to increase the number of Ignition Interlocks supplied to the local automotive sector to reduce the amount of alcohol-related road deaths and public transport accidents. “The other area under the Autowatch brand is our traditional vehicle security alarms and immobilisers which we sell to over 500 fitment centres in South Africa. We’ve got about 60-70 percent of the local market share and we have had so for quite a long time. We believe there are some fantastic opportunities into the rest of Africa and our growth strategy will focus on this in the next three years.”
PFK’s instrument cluster assembly and inspection facility PFK also has an injection moulding facility
MyDrive: Intelligent driver profiling
MyDrive offers real-time monitoring and interpretation of driver behaviour. By combining this expertise with AutoWatch’s technical innovation, AutoWatch is able to provide products that are both internationally competitive and locally relevant. At the heart of the technology is a profiling algorithm that assesses driving behavior based on social and psychological measures coupled to actual driving data. This data includes realtime storage of driving behaviour and map analysis which provides insurers with a historic overview of driving behavior, instead of a series of isolated “snap-shots.”
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PFK was established in 1985. It has experienced significant annual growth in recent years, and key to this success is innovation, quality, flexibility in design and manufacture and keeping engineering at the core of the business. “One of our catchphrases is ‘transforming challenges into opportunities’ and we just love to do that. I think it’s really the people passion in the business that does it. We have focused a hell of a lot on recruiting the right type of person, the right type of personality. We do a lot of profile testing before we select people and we need them to fit into the culture and the ethos of the company here. We want people who view a challenge as an opportunity rather than getting bogged down by it. We’ve also got great innovation throughout the business and take pride in providing great customer service, our product quality is good and it’s a one stop shop – we design, we manufacture and we distribute, which makes us very competitive from a cost point of view.” Expect to see a lot more of PFK Electronics in 2013 and 2014. To learn more visit www.pfk.co.za.
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