issue 33 r40.00
the countdown is on to the 2013 orange africa Cup of nations
SA battles youth unemployment of all South Africa’s unemployed 73 percent are between the ages of 15 to 34
BEE at its best: KzN Oils rajen reddy has built his dream into a multi-million rand business
Coega industrial development zone Investment in the coega IDZ is opening up opportunities that will “drive regional development”
centron is looking to play an increasingly important role in creating a low carbon economy
MANGAUNG: ZUMA WINS SECoND TERM eDITorIAL
The big news as we see out the end of 2012 is that Jacob Zuma has won a second term as African National Congress (ANC) leader. Businessman Cyril Ramaphosa (a director of Lonmin, which owns the now infamous Marikana mine, and who recently bid R19.5 million for a buffalo) will be his deputy. It is a welcome end to a pretty painful year for Mr Zuma and for South Africa. In August we watched in horror as miners were gunned down at Marikana, as a wave of wildcat protests shook the entire mining industry. The unrest then spread to truck drivers and farms in Western Cape province, where protests against low wages persist. This win puts President Zuma in line to keep the country’s top job after the 2014 national elections, given the ANC’s dominance of South African politics. He received 2983 ballots, a huge majority. All eyes will now be on how he uses that, perhaps in the form of reforms he’ll look to push through. Sceptics were right; Mangaung didn’t bring change. But maybe that’s not a bad thing? While there is much work to do, perhaps Zuma is the right man for it? As we enter a wholly optimistic 2013, we wish you Season’s Greetings and hope you all have a happy New Year. We hope you enjoy the magazine and we’ll see you in 2013.
editor ian armitage Sub editor Marie toms editorial Assistant Clare Durrant Writer susan Miller
Advertising Sales Manager Matt syder Sales Donovan smith eddie Clinton research Manager stuart shirra researchers elle Watson sandra Parr stuart Platt tom lloyd Michael fair Sales administrator Daniel george
Financial Administrator suzanne Welsh
ProDUcTIoN & DeSIGN Magazine design optic Juice
Production manager Jon Cooke Images: getty, thinkstock News: nZPa, aaP, saPa
DIGITAL & IT
Head of digital marketing & development Hammit saka
ceo Kevin ellis chairman Ken Hurst Managing Director David alstin Publisher tnt Multimedia ltd tnt Multimedia limited, unit 209, 16 Brune street, london e1 7nJ tntmagazine.com
telephone: +44 (0) 207 989 0491 fax: +44 (0) 1603 624642 firstname.lastname@example.org
Ian Armitage Editor
Call: +44 (0) 1603 343167 email@example.com
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Contents 06 16 22 26 28 30 34
News c o ver
Afcon 2013 preview
The countdown is on to the 2013 Orange Africa Cup of Nations
FOC U S C ult ur e
SA battles youth unemployment
Of all South Africa’s unemployed, 73 percent are between the ages of 15 to 34
FOC U S L it e r at ur e
African Science Fiction Anthology – the continent’s writers join the Galaxy
FOC U S M o ne y
International investments and the freedom of choice
FOC U S B us ine s s
Build your business, even during a recession
Bertus Coetzee, MD of Dolphin Bay, has developed a business model that is ensuring his company’s growth continues
FOC U S P r o p e r t y
We look at one of the country’s most exciting developments – Rabie Property Group’s Century City
Annuity Properties eyes expansion
Richmark’s dream is to help grow the South African economy by creating jobs that empower
Annuity is an ambitious loan stock company that plans to grow its portfolio to R5 billion in five years
Moving into Africa
Having concluded its second major African property transaction the Atterbury Group is looking forward to 2013
60 66 72 76 82 90 94 102 108 114 118
F OC US Ou t sou r cing
Cause and effectiveness
The Effectiveness Company is a leader in business transformation outsourcing (BTO)
F OC US Ener gy
Eskom reports ‘solid’ financial performance, outlines future plans
Centron is looking to play an increasingly important role in creating a low carbon economy
F OC US Ret a il
Delivering excellence in retail (and more)
The Design Company specialises in “designing and building” beautiful and meaningful spaces – retail spaces in particular
F OC US C onst ru ct ion
Turner Morris acquires AFM Clean Tech Turner Morris Midmacor managing director Alwyn Coetsee outlines exciting expansion plans
FOCUS Ec onomic Deve lopme nt
Investment in the Coega industrial development zone is “driving regional development” says Christopher Mashigo
F OC US Au t omot ive
20 years of powerful performance
Subaru Southern Africa celebrates turning 20 with South Africa Magazine
F OC US M a nu fa ct u ring
Sylko in brand revamp
According to CEO Grant Attwood the new packaging will make it “easier to find Sylko products on the shelf ”
F OC US Oil & Ga s
We talk to KZN Oils’ CEO Rajen Reddy who has built his dream into a multi-million rand business
F OC US Tele coms
MTN SA launches commercial LTE network MTN South Africa has announced the commercial roll out of its 4G LTE network
Events calendar www.southafricamag.com
All the latest news from South Africa Business
SA business confidence
weakens: Surveys South Africa’s business confidence deteriorated in November, data from a survey by the South African Camber of Commerce and Industry (SACCI) shows. The business confidence index edged down to 91.7 in November from 92 in October as unfavourable global and domestic economic climates continued to weigh on sentiment. The index was lower by 5.7 points compared to November 2011. “Economic prospects remain uncertain and there appears to be lost growth momentum in most sectors with the growth prospects for the short to medium-term having dwindled to about 2.5 percent,” SACCI said. 6
The Merchantec CEO Confidence Index, meanwhile, also showed South African CEOs have diminished confidence in the economy’s growth. The index weakened in the fourth quarter of 2012, dropping by 5.8 percent to an overall score of 52 points. “This lack in confidence stems from South Africa’s
weakening business and investment climate, the slowdown in Asia’s economic growth prospects and prolonged economic uncertainty in the Eurozone,” Rami Avivi, an associate at Merchantec Capital said. The survey collates responses from over 150 CEOs, mostly from listed companies.
SA adds 70,502 jobs
in November Employment in South Africa rose during November, the Adcorp Employment Index shows. During November, the economy added 70,502 jobs, with employment in informal sector continuing to outstrip the growth in the formal sector, accounting for 25,161 jobs, and growing at an annualised rate of 4.7 percent. Over 43,300 temporary jobs were created during the month. “Temporary work continued to outperform the other categories, adding 43,344 jobs during the month... strong growth of 7.4 percent was achieved in agency work,” Adcorp said. The transport sector saw employment grow at 14.9 percent, with wholesale and retail following at a rate of 10.3 percent.
Mining and manufacturing, hit by a wave of wildcat strikes, continued to shed jobs, losing 31,000 jobs in the month. During September, October and November, the economy added 112,473 jobs, reversing the decline of 82,431 jobs in the four months to August. “The results are unfavourable with minimum wages in agriculture and mining together with dismissal protections throughout the economy, having caused 1.5 million job losses across various sectors since 2001,” said Adcorp Holdings labour economist Loane Sharp. “The current round of tightening of labour laws will exacerbate this trend. “The sectors with the highest job losses were adversely affected by minimum wage laws, which raised wages above their market-related levels.”
Kagiso PMI improves in November Manufacturing activity rose slightly in November, seasonally adjusted, Kagiso’s latest PMI shows, however the sector remains “under pressure”. Manufacturing rose by 2.4 points to 49.5 in November, from 47.1 in October, after most of the workers who
had participated in wildcat strikes in August and September returned to work. However, at a level of 49.5, it remained below the key 50 mark for the third month in a row. With the exception of the inventory component, all of the major PMI subcategories
posted a better performance during November. Business activity gained 2.7 points to 45.9. Kagiso said that while the improvement was a positive sign, the level of the index “continues to suggest that manufacturing output is under pressure”. www.southafricamag.com
Prasa unveils FastJet new trains in talks The Passenger Rail Agency of SA (Prasa) has unveiled plans for a makeover of South African trains, which will see air-conditioning, security cameras and bigger seats in all passenger coaches. The state-of-the-art blue and silver trains would become a reality in 2015, Prasa said during the unveiling at Johannesburg’s Park station. Prasa CEO Lucky Montana said commuters currently travelled like “cattle” and promised the new trains would bring the highest levels of safety and passenger comfort, as well as an increased load capacity. “We are now paying the price for the mistake we made 33 years ago by not investing in our rail system,” he said. “We can’t refurbish most of the current old trains that we have. “These trains will bring comfort and the doors will close automatically... The trains will have air-con and will have CCTV… These trains will have a route map, so there will be a voice giving the routes. These modern trains will also have on-board communication.” Montana said modern depots would also be built, while work had begun on a new signalling system. “Commuters having to wait for 30 minutes before the next train arrives will be a thing of the past, as the new signalling system will allow trains to move faster,” he said. The 1,215-seater, 12-coach trains will be rolled out in the first quarter of 2015. In Gauteng, the trains will run between Mabopane outside Pretoria and Naledi in Soweto. Prasa will also introduce a Business Express Train version of the new trains, with a 1,025 seating capacity. The unveiling came a after Gibela Rail Transportation - a consortium comprising French power and transport group Alstom and local electrical engineering firm Actom - was announced as the preferred bidder to supply Prasa’s rolling stock for its R123 billion fleet-renewal programme. 8
to buy 1time Lonrho subsidiary and lowcost African carrier Fastjet has acknowledged it is in negotiations to buy ailing carrier 1time and bring the popular, nofrills airline back into operation for Christmas. Ed Winter, Fastjet’s CEO, said the talks began before 1time’s business rescue plans failed and it was placed in provisional liquidation. “If this transaction goes ahead … we would hope to get 1time flying again in time for the Christmas holiday period,” Mr Winter said. “Many customers have had their plans dashed by the cessation of 1time’s services and the subsequent huge increases in fares by competitors.” Business Day reported that Fastjet has raised £16 million since December last year to establish itself in Africa. It established a base for its operations in Tanzania. FastJet is the holding company for African airline Fly540, which operates from Kenya, Tanzania, Ghana and Angola. The firm aims to become the first pan-African low-cost carrier.
Police foil Mangaung bomb plot South African police have successfully foiled a right-wing plot to bomb a marquee at the ANC’s 53rd national elective conference in Mangaung. A police statement said four men aged between 40 and 50 had been arrested. More than 4,500 people, including President Jacob Zuma and dozens of ministers and top business people, are attending the five-day conference. The Federal Freedom Party (FFP), a fringe group fighting for self-determination for South Africa’s white Afrikaner minority, confirmed two of those arrested were FFP
members but denied any role in the suspected plot. A police spokesman said there was evidence they were planning acts around the country and not just at the ANC meeting in the central city of Bloemfontein. “Their acts are widespread. We arrested them in different provinces,” spokesman Billy Jones told Reuters. Media24 reported that seven terrorists had in fact been arrested by a joint task team of the Hawks and crime intelligence in Bloemfontein, Douglas in the Northern Cape and Mookgophong in Limpopo.
Madiba ‘doing well’ in hospital To the relief of many South Africans, former President Nelson Mandela is said to be “doing well” after spending several nights in a Pretoria hospital where he was admitted on December 10. Presidential spokesman Mac Maharaj said the South African icon was “comfortable” and there was “no cause for alarm”. “There is no cause for alarm... he [Mandela] is in the hands of a good medical team,” Maharaj said.
An update on Madiba’s health would be communicated once his doctors had updated the presidency, he added. Mandela, 94, was admitted to a hospital in Pretoria for “medical attention”. At the time, Maharaj said Mandela would “receive medical attention from time to time which is consistent with his age”. On December 11 President Jacob Zuma visited Mr Mandela and he said the former president was looking well after a restful night. News of the hospital stay has prompted global concern and Maharaj has appealed to the media and to the public to respect the privacy of Mr Mandela and his family.
Shanduka Group purchases MTN
Nigeria stake Cyril Ramaphosa’s Shanduka Group has purchased a R2.96 billion, minority stake, in MTN Nigeria. It purchased the stake through its Mauritian subsidiary Shanduka Telecommunication from three private investors including private equity company African Capital Alliance and it is the largest investment the company has made outside South Africa, Shanduka Group CEO Phuti Mahanyele said. “This is Shanduka’s most significant investment in another African country,” Mahanyele said. “It is a business that is well established within a market that has great potential for further growth. Shanduka will continue to pursue opportunities in other parts of Africa.” MTN Nigeria is the largest mobile operator in Nigeria with over 45 million subscribers and an estimated 48 percent market share. The Shanduka Group was founded in 2000 and is based in Sandton. The deal is part of a plan to expand on the continent outside South Africa, where growth rates are expected to boom. Nigeria’s economy is expected to grow by between 5.7 and 6.5 percent this year and in 2013. Shanduka has been making investments in Nigeria, Kenya, Uganda, the Democratic Republic of Congo, Mozambique, Namibia, Botswana and Zimbabwe. The company’s investments include coal, platinum, property, energy, telecommunications, fast foods and financial services. 10
CIG launches African expansion
Consolidated Infrastructure Group (CIG) has announced its first African acquisition, which it hopes will spur further purchases on the continent. CIG announced the acquisition of a 30.5 percent participation interest in Angola Environmental Serviços (AES), for a purchase consideration of $15.25 million. It will make the purchase through its wholly owned Mauritian subsidiary, Consolidated Infrastructure Group-Angola 1. AES was incorporated in Angola in 2005 and supplies blue-chip international oil companies with specialised wastemanagement services. “Since 2010, we have been focused on fast-growing, promising African countries. Angola is one of these. AES will help us get into oil work in the country,” CIG CEO Raoul Gamsu said. Initially, CIG wanted 50 percent, but the company settled for 30.5 percent. “The deal worked with a consortium which got a portion of AES. Over the next five years, we hope to get a majority ownership,” Mr Gamsu added. The deal is aligned with CIG’s growth strategy, which is focused on operating many high-performing infrastructureand service-related businesses in Africa.
Zim accepts $550m
empowerment Store goes live deal for Mimosa in South Africa
Zimbabwe has accepted Aquarius Platinum’s indigenisation compliance plan for the Mimosa mine, which it jointly owns with Impala Platinum. President Robert Mugabe and his Zanu (PF) party are spearheading a controversial empowerment policy which compels foreign companies to cede a 51 percent shareholding to black Zimbabwean groups. Aquarius Platinum CEO Jean Nel said compliance with the empowerment law would “offer Mimosa security of tenure” adding that Mimosa had committed to complying with the Zimbabwean law as a “true reflection of the worth of our investment in Mimosa.” Under the agreement Mimosa Investment Holdings will cede 51 percent ownership to indigenous Zimbabwean groups for $550 million. Mimosa has agreed to provide funding for this through a vendor-financed loan vehicle as part of efforts to facilitate the smooth conclusion of the transaction over a period of 10 years. “This loan will bear interest at a rate of nine percent annually and will be settled through the waiver of the right to receive 90 percent of dividends due to the indigenous entities in favour of Mimosa. Any loan balance outstanding at the end of the 10-year period will be payable in cash,” Mimosa said in a statement. “Although the negotiations have taken some time, the final plan represents a significant mile stone for Aquarius and Mimosa as we work towards full compliance with the law and regulations in Zimbabwe,” Nel added.
Technology giant Apple has launched the iTunes Store in South Africa and 55 additional countries, including India and Russia, featuring an incredible selection of local and international music from all the major labels and thousands of independent labels. Local artist include the likes of Desmond and the Tutus, Zahara, Springbok Nude Girls, Toya Delazy, 2012’s Idols winner Khaya Mthetwa and Zahara. The service, previously not available locally, had to be accessed via international addresses. There are 20 million songs available on the iTunes Store to purchase and download. Tracks cost R6.99 each, with album prices varying. Customers also have access to the App Store, the iTunes Match service, and iTunes in the Cloud, which lets users download previously purchased iTunes music to all their iOS devices at no additional cost. iTunes Match, which costs R199.99/year, allows Apple to scan users’ music libraries and match songs for playback from its servers. The launch of the South African iTunes store follows Apple’s move in October to price applications in the local App Store in rand, not US dollars. The firm launched iPhone 5 in SA on December 14. www.southafricamag.com 11
2015 Rugby World Cup:
South Africa have been given a favourable draw for the 2015 Rugby World Cup after being paired with Samoa and Scotland in Pool B, avoiding England, who were drawn alongside Wales Australia in Pool A, which has been dubbed the ‘pool of death’. The winners of Pool B will play the runners-up in Pool A, meaning that if the Boks win their group they could face one of the three in the quarterfinals and New Zealand in the semi-final. “Our aim was to be in the first band of teams and we achieved that, moving from fourth at the start of the year to second in the IRB world rankings,” Boks coach Heyneke Meyer said. “To us, it doesn’t matter who we are drawn against because to win the World Cup you have to beat the best teams out there. If ever there was testimony that the gap between the top teams has closed, we saw that over the past month in the northern hemisphere.”
Favourable after draw for SA suspended
probe The president of South Africa’s football association and four other leading officials have been suspended in the wake of a Fifa report into a match-fixing scandal. Kirsten Nematandani and four SAFA administrators, including new chief executive officer Dennis Mumble, have been relieved of duty for their role in the fixing of four friendlies South Africa played ahead of the 2010 World Cup. A Fifa investigation into the activity of convicted Singaporean match-fixer Wilson Perumal and his Football 4U organisation highlighted the involvement of the five South African officials, a press briefing was told. The results of matches against Thailand, Bulgaria, Colombia and Guatemala in the weeks leading up the 2010 World Cup were found to have been pre-arranged. 12
Pool A: Australia, England, Wales, Oceania 1, Repechage winner Pool B: South Africa, Samoa, Scotland, Asia 1, Americas 2 Pool C: New Zealand, Argentina, Tonga, Europe 1, Africa 1 Pool D: France, Ireland, Italy, Americas 1, Europe 2
Gold Fields unbundles SA assets,
creates new gold mining
Gold Fields, the world’s fourth-largest gold producer, has announced the creation of a new South African gold mining company through the proposed unbundling of its 100 percent owned subsidiary‚ Sibanye Gold formerly known as GFI Mining South Africa Proprietary Limited (GFIMSA) - which holds the KDC and Beatrix gold mines as well as various service companies. Subject to approval by the JSE and the NYSE, Sibanye Gold will be listed as a separate and independent company on both exchanges in February 2013. Sibanye Gold shares will then be distributed to existing Gold Fields shareholders. Following the unbundling, Gold Fields will retain the balance of its current portfolio of assets, including the developing South Deep Gold Mine located in South Africa. Neal Froneman‚ currently CEO of Gold One International‚ will become CEO of Sibanye Gold and Charl Keyter‚ currently Head of Finance for Gold Fields’ international operations‚ will become CFO. Nick Holland, who’ll remain Gold Fields CEO, said: “While some parts of the GFIMSA operations have been in production for as long as 70 years, these assets still have inherent quality and extensive
resource and reserve potential. The separation will liberate Sibanye Gold into a fit-for-purpose, sustainable gold mining company best positioned to maximise longterm value for stakeholders. “By unbundling the cash-generative KDC and Beatrix mines into Sibanye Gold, its cash flows can be utilised to extend the life of the mines and improve dividend payouts to shareholders. The first priority, however, will be to achieve stable and safe production.” Gold Fields said the separation will “enable the two independently governed and managed companies to focus on their respective strategic goals and to operate more effectively as separate entities, to the benefit of shareholders, employees and communities”. Besides South Africa, now the world’s fifth biggest gold producer, Gold Fields, has mines in Peru, Ghana and Australia.
project mineral Anglo American
to grow: AngloGold South African mining giant AngloGold Ashanti and Independence Group have increased their resource estimate for their Tropicana gold joint venture in Australia by almost 1.5 million ounces. Perth-based Independence and AngloGold said there are 7.89 million ounces of contained gold at Tropicana, 330km east of Kalgoorlie in Western Australia. AngloGold holds 70 percent of JV and manages the resource, while Independence Group NL holds the remaining 30 percent. “The growth in mineral resource primarily reflects additional drilling completed as part of the Havana Deeps Pre-Feasibility Study (PFS), targeting the down plunge and along strike extents of the Havana ore body outside the current Havana open pit,” AngloGold said in a statement. The company said detailed mining and metallurgical investigations would be completed next year. 14
completes Scaw SA sale
Diversified mining giant Anglo American has completed the sale of Scaw South Africa, a South Africa-based integrated steel maker, to a consortium led by the State-owned Industrial Development Corporation (IDC). Anglo announced the sale of Scaw South Africa on April 24, 2012 to an investment consortium led by the IDC and Anglo American’s partners in Scaw South Africa - Izingwe Holdings‚ led by Sipho Pityana, Cyril Ramaphosa’s Shanduka Resources and the Southern Palace Group of Companies, which is led by Sello Mahlangu. Anglo said it completed the sale on November 23 for a total consideration of R3.4 billion on a cash and debt free basis. The transaction follows the sale of Scaw’s international businesses Moly-Cop and AltaSteel to Onesteel in December 2010. “The transaction is subject to customary closing conditions such as regulatory approvals in South Africa including but not limited to competition clearance, and is expected to be completed during the course of 2012,” Anglo said in a statement, adding, “Both Anglo American and the Consortium are committed to transferring ownership in a way that limits the impact on employees, partners, contractors, suppliers and customers.”
GDP falls in third-quarter A sharp but not unexpected fall in mining activity dragged down South Africa’s gross domestic product (GDP) in the third-quarter. Statistics South Africa’s (Stats SA’s) latest quarterly GDP report showed thirdquarter growth of 1.2 percent, compared with 3.4 percent in the prior quarter. The growth was the lowest growth in GDP since the second quarter of 2009, Stats SA said. The slower pace was
mainly owing to a sharp drop in mining production caused by the wildcat strikes in the platinum and gold mining industries. The mining and quarrying sector contracted by -12.7 percent. “There were a lot of factors, which contributed to the decline. It was not the strike[s], because the strike[s] only started at the end of the third quarter,” said Gerhardt Bouwer, executive manager of national accounts at Stats SA.
“These figures do not fully reflect the impact of Marikana strikes [and other mining strikes] because a lot of striking activities took place in the fourth quarter of 2012.” The main contributors to the increase in economic activity were finance, real estate, business services and general government service. In the first nine months of 2012, the economy grew by 2.6 percent compared to the same period in 2011.
Tiger Brands FY earnings up 7% South Africa’s largest food company by market value Tiger Brands has posted a seven percent rise in full-year earnings, helped by higher prices, but said it expects a tough year ahead. The maker of bread, breakfast cereal and energy drinks said group turnover increased by 11 percent to R22.7 billion and that diluted headline earnings per share for the year to end September totalled 1,654.2 cents up from 1,545 cents last year. The consumer goods giant said it is expected that 2013 will be another challenging year and announced plans to buyout some
minority shareholders in Nigeria’s Dangote Flour Mills as it expands in fast-growing African markets. Tiger Brands has been ramping up its expansion in fast-growing African markets and earlier this year bought a 63 percent stake in the flour and pasta maker in its third and biggest deal yet in Nigeria. “We will go up to a maximum of 70 percent in total, leaving the balance in Nigerian hands,” Tiger Brands’ chief executive Peter Matlare told the Reuters news agency. Tiger Brands shares have gained 11 percent so far this year. www.southafricamag.com 15
AF R ICA
C u P O F N AT I O N S 2 0 1 3
Afcon 2013 preview FocUS sPort
the countdown is on to the 2013 orange africa Cup of nations (afcon). get ready for the action with quick profiles of the teams and star players. We also rate their chances and predict a winner.
By ian armitage
hen Stoppila Sunzu stepped up to smashed home the penalty that saw Zambia crowned Afcon Champs 2012, I for one couldn’t help thinking ‘that could’ve been South Africa’. It could have been a) if Bafana Bafana were any good and b) had actually qualified for the competition. They have a chance to put that right in January (the reason for Cup of Nations tournaments in consecutive years is CAF is switching to uneven-number years to avoid every second edition being played the same year as a World Cup) when Afcon 2013 kicks off – and it’s on home soil too. Excitement is reaching fever pitch. As always, I’m thinking, maybe, just maybe, this time South Africa can repeat the heroics of 1996 when Bafana beat Tunisia two-nil to win the tournament in front of President Mandela. Who am I kidding? Can they actually win? No. Bafana are ranked 19th in Africa and owe a place among the top seeds to being hosts of the threeweek championship that kicks off on January 19 at the 90,000-seat Soccer City stadium in Soweto. In fairness to Gordon Igesund’s side, Bafana have a chance (albeit very small), but for me, being realistic, it’s between defending champions Zambia, favourites Ivory Coast and four-time winners Ghana – and there’s not much separating them. I’ll also have an eye on dark horses Nigeria, Angola and Morocco. Here’s our best attempt to predict this January’s competition… www.southafricamag.com 17
GRoUP A South Africa As I said, Bafana owe their place in the tournament to being hosts. While I’m the eternal optimist, I fear this tournament could be another damp squib. Key player: Siphiwe Tshabalala. When the Chiefs winger is on form he is almost unstoppable. one to watch: Ayanda Patosi. New sensation. Check out his recent wonder goal for Belgian side Lokeren against Standard Liege on Youtube. Best Afcon results: 1996 champions, 1998 second, 2000 third. Prediction: Group stage. Morocco Morocco have a fantastic football pedigree and will be coming to South Africa looking to win the tournament. They have some real star quality in the side – the likes of Marouane Chamakh, Mbark Boussoufa, Houssine Kharja and Mehdi Benatia. Key player: Premier League and Arsenal star Marouane Chamakh. one to watch: Mbark Boussoufa. Lends an attacking edge to the Moroccan line-up. Best Afcon results: 1976 champions, 2004 second, 1980 third. Prediction: Fourth place. 18
Angola Strong performers in 2008 and 2010, Angola certainly represent a threat a very potent one. Key player: Manucho. Was one of the stars of 2008, netting four times in four games. He is undoubtedly a star and one to keep an eye on in January. one to watch: Flavio. One of Angola’s most experienced players. Best Afcon results: 2008, 2010 quarterfinals. Prediction: Quarterfinals. Cape Verde As finals debutants, the Blue Sharks will be under pressure to get off to a good start in South Africa, who they’ll play in their opening game. The pressure will be on both sides to get a result and stand a chance of getting beyond the group stage. Key player: Heldon. Plays in Portugal with CS Marítimo and was their top goal scorer in qualifying for Afcon 2013. one to watch: Ryan Mendes. The Lille star was a major contributor to Cape Verde’s shock qualification and offers pace in attack. Has a bright future in the game. Best Afcon results: qualification South Africa 2013. Prediction: Group stage.
Afcon 2013 preview FocUS sPort
GRoUP B Ghana Hot favourites to win the group and go far in this competition. The black stars have quality in abundance, experience and flair and look a class act, boasting one of the most talented squads in African history with the likes of Andre Ayew and Kwadwo Asamoah. Came third in 2008, second in 2010 and fourth in 2012. Key player: Andre Ayew. The Marseille winger features on CAF’s shortlist for the African Footballer of the Year. one to watch: Parma’s Afriyie Acquah – a hugely talented midfielder. Also watch out for Christan Atsu, ‘the Ghanaian Messi’. If he is half as good as the Argentine then we’re in for a treat. Best Afcon results: 1963, 1965, 1978 and 1982 champions, runners up 1968, 1970, 1992 and 2008. Prediction: Runner-up. Mali Mali narrowly missed out on 2012’s final and they brushed aside Botswana with ease on the way to South Africa. They have a balanced squad featuring the likes of Mohamed Sissoko, Seydou Keita, Modibo Maiga and Cheick Diabiate. Key player: Seydou Keita. The former Barca man is probably one of Africa’s finest ever players. one to watch: Bordeaux’s 6ft 5in striker Cheikh Diabate has scored 11 in 23 outings for his country. Best Afcon results: 1972 runners up, 1994, 2002 and 2004 fourth place, third 2012. Prediction: Quarterfinals. Niger Niger were disappointing in 2012 and will be buoyed on by that, but with Mali, DRC and Ghana in their group, it’ll likely be another disappointment. Coach Gernot Rohr is convinced his team can cause a major shock… and they upstaged Guinea and qualify for South Africa. Key player: If Niger are to do well in South Africa they will need striker Moussa Maazou to be at his very best. one to watch: Issoufou Boubacar Garba scored five minutes from full against Guinea to ensure Niger’s return to Africa’s biggest football event. Best Afcon results: qualification 2012, 2013. Prediction: Group stage.
DR Congo The Leopards are not a side to be discounted. All their hopes however lie with Dieumerci Mbokani and if they are to do well other players – I’m thinking of Lomana Lua Lua, Jacques Maghoma and Britt Assombalonga - will have to step up. Key player: Dieumerci Mbokani. The Anderlecht star is Congo DR’s dangerman for the 2013 Afcon. one to watch: Tresor Mputu. Regarded as ‘the next Samuel Eto’o’ by Leopards boss Claude Le Roy. Best Afcon results: champions 1968, 1974, third place 1998. Prediction: Group stage. www.southafricamag.com 19
GRoUP C Zambia Group C will most likely be a two horse race between holders Zambia and Nigeria. Zambia showed they were a classy outfit last year under Herve Renard, playing some fine attacking football. Many in the squad play for TP Mazembe, four-time African club champions. Zambia are the running for Caf’s national team of the year award Key player: Emmanuel Mayuka. The Southampton striker starred as Zambia won in 2012. one to watch: Rainford Kalaba. Zambia’s star midfielder. Also watch out for Christopher Katongo. He’s been shortlisted for Caf’s African Footballer of the Year award. Best Afcon results: 2012 champions, second place 1994, 1974. Prediction: Third place. Nigeria Nigeria have to be dark horses for this competition and they’ll run it close. A very strong squad with the likes of Yakubu, Peter Odemwingie, John Obi Mikel, Obafemi Martins and Emmanuel Emenike, and a great history in the tournament. Key player: John Obi Mikel. If the Chelsea man can boss the midfield, he’ll shine and Nigeria could go all the way. one to watch: Many different choices here, but has to be another Chelsea man Victor Moses, a new exciting addition to the squad. Also keep an eye out for Lazio starlet Ogenyi Onazi. Best Afcon results: 1980 and 1994 champions, third place in 2002, 2004, 2006 and 2010. Prediction: Quarterfinals. 20
Ethiopia The Black Lions have qualified for the first time since 1982 and that’s as good as I think it’ll get for them. Early exit. Key player: Adane Girma. Scored two massively important goals against Sudan in qualifying. one to watch: Saladin Said. A star of the future and fantastic goal scorer, with five goals in nine international appearances. The 24-year old is definitely one to look out for in South Africa. Best Afcon result: winners 1962. Prediction: Group stage. Burkina Faso The Stallions have been at the last three editions of the African Cup of Nations and have never been past the group stage. 2013 won’t be any different. Key player: Charles Kabore. Another great African talent at French club Marseille. If he plays well Burkin Faso have a chance of upsetting the odds. one to watch: Alain Traore. Big things were expected of him during the 2012 tournament but he largely disappointed. Best Afcon result: fourth place 1998. Prediction: Group stage.
Afcon 2013 preview FocUS sPort
GRoUP D Ivory Coast This will be the last chance for the Ivory Coast’s ‘golden generation’ to lift the title but many feel that, while undoubtedly the strongest squad in the tournament, they’ll struggle because of the fact it comes midway through a very competitive Premier League season – and stars like Cheik Tiote, Yaya Toure and Gervinho will find life tough. I don’t agree. Ivory Coast will win Afcon 2013, spearheaded by star striker Didier Drogba, who is playing in his final African Nations Cup. Key player: Yaya Toure. The Man City star is one of world football’s leading talents with driving pace. Bags a few goals too. one to watch: Wilfried Bony. 30 goals in 49 games for Dutch side Vitesse Arnhem. Says it all. Chelsea reportedly want to sign him. Best Afcon results: winners 1992, runners up 2012, 2006. Prediction: Winners. Algeria The Desert Foxes are back after missing 2012 and they’ll be dangerous with Rafik Djebbour leading their attack and a sound defence that features the likes of Madjid Bougherra and AC Milan left-back Djamel Mesbah. Not a great record in the tournament since winning as hosts in 1990. Came fourth in 2010. Key player: Rafik Djebbour. Playing well at Greek Superleague side Olympiacos, where he has scored 28 goals in 38 games since joining in 2011. one to watch: Sochaux midfielder Ryad Boudebouz. Highly rated 22-year old. Keep an eye on Valencia playmaker Sofiane Feghouli. Best Afcon results: Winners 1990. Prediction: Quarterfinals.
Tunisia Tunisia were unlucky against Ghana last year in the quarterfinals and this year they’re a side to reckoned with, a side packed with talent from one of Africa’s top club sides, Esperance, and some from Europe. Key player: Issam Jemâa. The 28-year old striker has 31 goals in 67 appearances for his country. one to watch: Youssef Msakni. The 21-year-old winger has often been heralded as Tunisia’s next big thing. Best Afcon results: Champions 2004, runners up 1996, 1965. Prediction: Group stage. Togo The Sparrowhawks are back in the continental competition three years after the terrible attack which saw their bus fired upon at the Angolan border, killing two of their staff and leading to their withdrawal from the tournament. They are the minnows of their group but with star man Emmanuel Adebayor leading a new generation, this could yet be their year. Would be a wonderful way to celebrate their tournament return… but an ongoing pay dispute threatens that, with Adebayor saying he’ll quit the international stage. Key player: Tottenham striker Emmanuel Adebayor is the undoubted star of the team. But will he be there? one to watch: Serge Gakpé. The Frenchborn former Monaco man showed a lot of potential as a youngster. Was tracked by Barcelona at one stage. Best Afcon results: First round 2006, 2002, 2000, 1998, 1984. Prediction: Group stage. eND www.southafricamag.com 21
south africa is the largest and most developed economy on the african continent, but the unemployment rate for younger people has been running as high as 50 percent, prompting a nationwide debate how to deal with this â&#x20AC;&#x2DC;ticking bombâ&#x20AC;&#x2122;.
By susan Miller 22
Youth unemployment FocUS Culture
orldwide, youth unemployment from China to South Africa is often described as a ‘ticking bomb’ – as the global recession and effects of globalisation shrinks markets and demand. Analyst Ebrahim-Khalik Hassen, writing for SACSIS (the South African Civil Society Information Service) suggests that the crisis is more immediate than a ticking bomb in South Africa. It’s already here. Our rate of youth unemployment is untenably high. Of 24 percent unemployed, 73 percent of those affected are between the ages of 15 to 34 years old. And what worries most observers is that many of those in the 15 to 34-age bracket have never worked at all, increasing their chances of being unemployable. The National Planning Commission (NPC) points out that if a person does not get a job by 24, they’re unlikely to ever get a job, suggesting, “60 percent of the entire generation could live their lives without ever holding a formal job”. The NCP also reports that of the approximately one million school leavers each year about 65 percent leave without a high school certificate, so they are at an even greater disadvantage. In many ways the unemployment crisis is an educational crisis – and nowadays even having a matric is not sufficient in the job market. There’s also the point that even those youth who are employed are at the bottom of the employment chain - about 18 percent work in informal or formal retail sector, seven percent are waiters and about eight percent are involved in sporadic construction work. While much of the thrust of government policy has tended towards suggesting the crisis should be tackled by the private sector, there seems to be a growing recognition that state intervention in the form of employment creation will be essential.
Cosatu’s General-Secretary Zwelinzima Vavi recognises the dangers inherent in the situation, warning of a possible uprising if the challenges of the youth are not “addressed quickly”. However, the responses of the trade union movement, government and business have been slow. Some programmes have been suggested, among them Finance Minister Pravin Gordhan’s ‘youth wage subsidy’ scheme. The scheme, to subsidize employers who take on young workers, was backed by the Democratic Alliance (DA) but rejected by Cosatu, with Cosatu’s Patrick Craven calling it a ‘bogus solution’ and claiming it would open the way for businesses to get rid of older workers in order to keep the subsidy. The subsidy was announced by President Jacob Zuma in his 2010 State of the Nation address, www.southafricamag.com 23
with Gordhan indicating that R5 billion was to be made available for its implementation. However, following Cosatu’s opposition and violent clashes on the streets of Johannesburg after a DA-led march on Cosatu’s offices to challenge their opposition to the subsidy, the ANC’s June 2012 policy conference threw their support behind a ‘job seeker grant’ instead. Zuma proposed initiatives like the National Youth Development Strategy and training subsidies while keeping the workforce as it was. Speaking in Parliament in September this year the DA’s Tim Harris said that, in the two-and-ahalf years since the youth subsidy had been under discussion, South Africa had lost 124,000 jobs. Taking the matter further, the DA proposed its own youth subsidy also priced at R5 billion, with DA leader Helen Zille accusing the ANC leadership of putting job creation on hold until the ANC end of year conference at Mangaung is over. “The ANC’s internal divisions trump the needs of the South African people once again,” she said. Zille suggested that a ‘job seekers grant’ could end up entrenching unemployment and even ‘incentivise young people to stay out of work’. The DA’s proposals include expanding access to further education and training through an opportunity voucher scheme that would provide funding to young adults who would like to start their own businesses or further their skills and education development. Vouchers to partially subsidise further education, provide seed 24
the Da’s proposals include expanding access to further education and training through an opportunity voucher scheme that would provide funding to young adults who would like to start their own businesses or further their skills and education development
Youth unemployment FocUS Culture
capital for a business plan and provide a state guarantee to cover loans extended by commercial banks to graduates would be available for those who have completed matric. The party also suggested a Vocational Training and Apprenticeship Programme that would be open to those who had completed Grade 9 and were aged 16 or older. There are suggestions that the Government may return to the subsidy proposal, which Treasury sources claim would create something like 133,000 jobs in five years, but it would still affect only a tiny percentage in the sea of youth unemployment. Among other schemes, the Government launched the National Rural Youth Service Corps (Narysec) in 2010. Run by the Rural Development Department it was set up to target 18-to-35-year-olds and to tackle the problem in impoverished rural areas. The programme offers the youth members two years of skills training in partnership with industry and technical colleges – and
the army, which assists with ‘character development’ instilling discipline, fitness and even first aid skills. For a two-year period the youngsters are also supported in their search for work through government infrastructure programmes or the private sector. Over 10,000 youths have entered the programme but the numbers being reached are again tiny compared to the overall problem. Army officers have also admitted they would face problems if the numbers grow rapidly. Another scheme, the Western Cape Work and Skills Programme, launched in 2009, has helped nearly 3,000 18-to-35-year olds with six-month work placements and a basic monthly wage of R1,200. Anne Bernstein, of the Centre for Development and Enterprise, stresses that South Africa has to address its education systems and national training but acknowledges that youth service might have a role to play. However, she says that without upliftment on a massive scale, relatively small projects such as Narysec may ‘raise more questions than answers’. While calls by the ANCYL to nationalise South Africa’s farms and mines have been blocked and side-lined by senior party officials, there may be growing support for such a move among young, unemployed South Africans. And in the meantime, as the late former chairperson of the Centre for Policy Studies, Professor Lawrence Schlemmer stated, economic and social disempowerment leaves the young “psychologically vulnerable to gangster/criminal culture as well as … the activism of slick political entrepreneurs”. The key questions of where the ANC leadership is heading in relation to youth unemployment, education and training and the future of the Tripartite Alliance, have never needed more urgent answers. eND www.southafricamag.com 25
african science fiction anthology – the continent’s writers join the galaxy.
By susan Miller edited by ivor W.Hartmann
n December 2011 Zimbabwean-born editor, writer, publisher and visual artist Ivor W.Hartmann decided to make one of his dreams come true and put out a call for submissions for AfroSF - Science Fiction by African Writers. It is the first collection of pan-African Science Fiction stories. He was ‘thrilled’ when the first story he received for the eventual 52-strong anthology was from award-winning novelist Nnedi Okorafor, who is of Nigerian descent and famed for ‘weaving African culture into creative evocative settings’. Her submission, Ivor said, ‘set the standard for all the submissions that followed’. This dream of Ivor’s, which started when he returned to writing in 2007, became a reality early in December this year. So why Science Fiction? When Ivor decided to return to writing, the first story he wrote was Earth Rise, a SF short story. He began looking for somewhere to publish it. That’s when the ‘harsh realities of African publishing and publishing for African writers’ became apparent. When he discovered that a pan-African anthology of Science Fiction had never been published, the dream of AfroSF was conceived. Ivor has strong form in independent publishing. He created StoryTime – a micro-press that published StoryTime, a
weekly African literature online magazine, from June 2007 to June 2012. And in 2010 StoryTime launched African Road, an annual multi-genre anthology of African writers, co-edited by Emmanuel Sigauke. So by late 2011 Ivor felt the time had come to pursue the AfroSF dream and knew he had the means to make it happen. He says that if one ‘looks at the last 50 years of publishing in terms of SciFi and African writers, some gems have never been collected into one volume’. But he chose to incorporate the forward thinking spirit embodied in SciFi as a genre, and went for all new stories instead of a mix of original works and reprints. I asked him about the anthology. Does African SciFi have much history? Like most fiction genres that aren’t contemporary, except perhaps romance and crime to an extent, it’s highly underdeveloped in African literature as a whole. What does SciFi offer to African writers? It’s the only genre that enables African writers to envision a future from our African perspective in ways that are not purely academic and so providing a vision that is readily understandable through a fictional context. The value of this envisioning for any third-world country, or in our case continent,
Afro SF focus literature
cannot be overstated nor negated. Science Fiction helps drive social and technological change. If you can’t see and relay an understandable vision of the future, your future will be co-opted by someone else’s vision, one that will not necessarily have your best interests at heart. Science Fiction by African writers is of paramount importance to the development and future of our continent. What does an African perspective offer to the genre of Science Fiction? African writers bring our unique perspectives, and importantly, our unique African mythologies to bear when we write. These perspectives and mythologies are a refreshing change and a voice sorely needed in the wider world of fiction, which is often dominated by Western perspectives and mythologies. What is included in the anthology? The AfroSF stories have a bit of everything in the realm of SciFi -from Comic, Military, Hard, Soft, to Apocalyptic, Space Opera, Cyberpunk, Biopunk, Aliens, Time Travel and more, and fairly liberal mixings thereof. There are a diversity of voices and themes specifically rooted in the SciFi genre. Is there a particular style apparent in African Science Fiction? No, it’s as individual as its writers are. What kind of readership does Science Fiction have in Africa? Well, we’ve been reading SciFi in Africa for as long as it has been around. There just hasn’t been much content produced from our own writers. What has the advent of eBooks meant for you? It has freed anyone willing to do the work from the monopoly of traditional publishers; the same can be said for Print On Demand, also a digital advent. What is next for you as an editor, writer and publisher? Next year I’m taking a break from editing and only publishing African Roar 2013, so apart from that I will be focusing on my own writing. END
REVIEW by Susan Miller: I was very moved by the anthology and found myself weeping when reading Moom! by Nnedi Okorafor, seemingly a story about the degradation of Nigeria’s waters by international oil companies: ‘She would succeed and then they would leave for good. They brought the stench of dryness, then they brought the noise and made the world bleed black ooze that left poison rainbows on the water’s surface…’ I also enjoyed, laughed nervously and was left feeling truly uncomfortable by Home Affairs by Cape Town-based Sarah Lotz, a look into a possibly ‘not so distant future’ when officialdom is stripped once and for all of any human interaction. And we think dealing with Home Affairs and the Revenue Service is bad now. Sometimes corruption IS the only answer it seems. All the stories had strengths and as with all good anthologies, they all need careful reading and digesting – although it’s always tempting to rush through the collection, devouring up the stories one after another. The African scenes, vibes and languages slotted perfectly into the SciFi themes and as with South Africa’s award-winning writer Lauren Beukes’ work Moxyland and Zoo City; they melded into ‘believable’ although often dystopian future visions. Head to http://www.amazon.com/ AfroSF-Science-Fiction-Africanebook/dp/B00AEUH112 to buy and download AfroSF.
investments anD tHe freeDoM of CHoiCe
By Jannie nel, manager, sable fX
he modern world is one of choice. In a rapidly globalising world, shrewd investors everywhere are choosing to increase their offshore investment exposures. Simply put, shopping for investments in a larger investment universe will result in the investor having more choices. The choices that present themselves will often offer the investor higher returns or less risk â&#x20AC;&#x201C; and, sometimes, a good mix of the two, which may not be available in the investorâ&#x20AC;&#x2122;s local market. Offshore investing is an important tool for building a portfolio that attempts to successfully hedge away a number of country-specific risks. In first world countries where returns on investments range from sluggish to negative, more aggressive
International investments focus money
investors are looking for the higher returns offered by emerging markets. Yet in emerging markets, where uncertainty is the order of the day, wealthier investors with too much at stake are looking for the stability offered by some of the more developed economies. For South Africans, taking a look across the border at Zimbabwe serves as a stark reminder of the possibilities. The result is a world where money is flowing all over the place: from emerging markets to developed markets, the opposite, and everything in between. It is a world where high tech, integrated and sophisticated payment networks make globalisation not only possible, but highly efficient. It is a world in which globalisation is occurring at an everaccelerating pace. In this world, a gap is created for independent foreign exchange and international payment institutions which exceed the service and pricing levels of banks. In a world like this, banks and independent institutions compete and evolve continually. Their goal is to stay on the leading edge of technology in order to better serve a client base that has instant access to market information; they will opt for the services of the provider that offers the very best
The result is a world where money is flowing all over the place
service at the very best price. It is a world in which those businesses and banks that offer sub-par value or are too slow to evolve go extinct quickly â&#x20AC;&#x201C; and rightly so. Sophisticated investors are very particular about finding an excellent offshore investment. They are also very specific about which payment institution will be best in helping them move funds to and from the offshore investment efficiently. These investors know how to save time, and they know how to save money. A good independent payment institution can save an investor between
0.5 percent and 2.5 percent on the funds they move, having a substantial effect on the bottom line of any investment. Foreign exchange and international payment institutions have emerged in the modern economy, specifically due to the lack of satisfactory value for money service, and the many hidden or unexpected fees often incurred by using banks. These institutions are fast claiming market share, simply by offering value for money service in the international remittance space. They simplify what has to date been a quagmire of banking systems and regulatory pitfalls. They route funds along the path of least resistance, thereby minimising bank charges. They use bulk-buying power to negotiate better banking fees and obtain better rates of exchange for spot and forward contracts. And then they package and deliver these time and money savings directly to the investor in a user-friendly way. Ultimately, they leave the investor with more precious time and money needed to focus on the art of offshore investing. Itâ&#x20AC;&#x2122;s the next step in the evolution of the global banking system, and smart investors are choosing to benefit from it. END www.sable-group.com/ sable-FX www.southafricamag.com 29
Build your business, even during a recession Bertus Coetzee, MD of Dolphin Bay, has developed a business model that is ensuring that his companyâ&#x20AC;&#x2122;s growth continues unabated.
By Ian Armitage
olphin Bay manufactures wood preservatives for the construction industry, an industry still reeling from the economic recession. It means life is tough. But managing director Bertus Coetzee, hasnâ&#x20AC;&#x2122;t let this get him or his business down, and has developed a business model that is ensuring that his companyâ&#x20AC;&#x2122;s growth continues unabated. He gives away his secrets.
Build your business focus business
Secret 1: Innovate for customer service Bertus says the rising costs of labour, fuel and commodities mean that businesses must adopt innovative new approaches. Dolphin Bay has restructured the company to become far more customer-focused, and has hired new people who are able to implement the vision of customer service. “If clients feel you’re only interested in selling them a product, you’ve got no chance of attracting new business,” he says. “Our unique selling point is trying to add value everywhere we go, so that we are not just selling products, but also the services that go along with them.” Dolphin Bay offers a range of value-added services which are established for each client in consultation with them, based on their needs and priorities, says Bertus. Many of these services are offered at no extra cost. “The success of the programme talks for itself,” Bertus says. “Clients see immediate improvements in their processes and operations that will, of course, translate back into higher productivity and, inevitably, higher profits.” Within a decade of its establishment in 1996, Dolphin Bay had become one of the major suppliers in the southern Africa region. This is due, in large part, to the helping hand it offers clients, Bertus says.
Secret 2: Hire the right people When Dolphin Bay sales exec Mark Duckham visits potential clients, he takes them a cake. They are almost always delighted and a co-operative conversation takes place over tea or coffee. The cake is not a cheap sales ploy, says Bertus. Mark is giving clients a taste of the extra lengths to which the wood treatment manufacturer will go, to help its clients build and sustain their businesses. Mark was recently appointed, along with Western Cape and Eastern Cape sales representative Braam Rust, as the company expanded. In the past year alone, contracts have been signed with seven more large companies due to the advantages of Dolphin Bay’s value-added programmes. “We have had our bumps in the road and it hasn’t been an easy process, but this has made us aware of having the right people working for our company – people who know the industry inside-out, treat every customer with respect, and are born salespeople,” says Bertus.
Clients see immediate improvements in their processes and operations that will, of course, translate back into higher productivity and, inevitably, higher profits
Secret 3: Maintain your integrity Dolphin Bay’s motto is ‘Founded in Integrity’ and Bertus insists that integrity remains paramount to the sustainability of any business. All of the company’s products, factories and manufacturing processes comply with the relevant legislation and industry standards, and relationships with clients are built upon honest and mutual respect. Where problems in the industry exist, Dolphin Bay does all it can to put things right. For example, the correct and legally compliant removal of contaminated waste has become a hotly debated issue. Dolphin Bay has conducted a study by looking closely at national and regional legislation with industry specialists, and has found a way to help clients to remove their waste safely, following the proper legal processes. “It’s important that we deal with this issue responsibly to ensure that the industry’s reputation is not tarnished,” says Bertus.
Secret 4: Track the industry trends Dolphin Bay constantly monitors the trends in wood treatment nationally and internationally to create new markets for the company and its clients. Dolphin Bay successfully registered its product Permacure ACQ – in growing demand in many countries - with the Department of Agriculture, Forestry and Fisheries, and was able to have the producted accepted by SANS (South African National Standards). These measures will create opportunities
for Dolphin Bay’s clients to export the product to countries where timber treated by Permacure ACQ is in high demand. The company has also identified new markets for its wood preservatives in other African countries, especially where electrification is taking place – creating a growing need for treated timber poles. “You need to be passionate about your industry, researching it constantly and soaking up every bit of relevant information, to find the opportunities that will help your business grow,” Bertus says.
Build your business focus business
Secret 5: Form strategic partnerships
We feel it is essential to offer a proper service when we expand into a new country. To do this, we need local distributors, with local infrastructure and staff, who work safely and efficiently
As part of its expansion into other African countries, Dolphin Bay recently appointed international chemical giant Acol as its distributor in Zimbabwe. Acol is a well-established international company with vast experience in the chemical industry, and the most experienced importer of hazardous industrial and agricultural chemicals in Zimbabwe. “We feel it is essential to offer a proper service when we expand into a new country,” says Bertus. “To do this, we need local distributors, with local infrastructure and staff, who work safely and efficiently. “Acol has an outsanding reputation and was the obvious choice. With Acol, we were also able to secure a Zimbabwean product registration with the local Department of Agriculture.” Acol General Manager in Zimbabwe Casper Masvikeni says Dolphin Bay is a “reputable, ambitious organisation offering competitive prices, quality products and a reliable after-sales service.” “We foresee a good working relationship – a win-win situation,” he says.
Secret 6: Turn challenges into opportunities The company’s value-added services developed along with customer demand, Bertus says. “The bigger the customers we took on, the greater their challenges were, and we like to be challenged by our customers and to meet those challenges. It’s difficult, but it makes business far more interesting and enjoyable. “We saw the need in the industry for various services, and now we’re catering for that need. Our clients like to see that we’re really interested in hearing how their businesses are doing. “Of course, this is good for us too. If our customers’ businesses grow, we grow with them. “It’s is a good business model, and it’s working.” END
To learn more visit www.dolphinbay.co.za. www.southafricamag.com 33
rabie Property Group FocUS ProPerty
R south africa Magazine talks to greg Deans about one of the country’s most exciting developments - rabie Property Group’s Century City.
By ian armitage
abie Property Group is an independent, Cape Townbased property company operating predominantly in the Western Cape. Since being established in 1978, it has become one of the country’s leading property developers, having set trends and led the way with what it calls “awardwinning residential, commercial and mixed-use developments, innovative marketing and ground-breaking public private partnerships”. Now that might sound bigheaded, but it’s true. Rabie is a company we’ve come to know well in the last three or four years – we’ve seen the awards - and its Century City development has graced the pages (and cover) of our magazine a few times in the past. It is a fantastic development and Rabie’s role in it has been huge. It’s hard to believe, looking around now, that when development at Century City began in 1997 the 250-hectare site consisted mainly of bush. It was a degraded wetland, which was a breeding ground for water birds. Today it is Cape Town’s largest new combined commercial, retail, residential and leisure precinct. But, as much as it has grown, it is still a work in progress. “When Century City was being planned it was decided to develop the site in such a manner that there would be a successful wedding between the built and natural environment – that was important,” says Greg Deans, a director of Rabie Property Group, a director of the Century City Property Owners’ Association and a director of Century City Connect. www.southafricamag.com 35
rabie Property Group FocUS ProPerty
Aveng Grinaker-LTA Aveng Grinaker-LTA is the main contractor for The Business Centre and 3 Bridgeway in the Century City precinct in Cape Town. Both projects have been undertaken for The Rabie Group and commenced earlier this year with expected completion towards the end of 2013. Aveng Grinaker-LTA is proud to be associated with The Rabie Group and believe that these projects will be delivered safely and in accordance with all specified requirements.
That goal has been achieved. “Century City is essentially a city within a city,” he adds. “We are at the heart of the greater Cape Town metropole and the city combines office, residential, retail and leisure opportunities on a scale unlike anything else in South Africa or indeed the African continent. “This is an integrated environment that is perfectly tailored to the leisure, work and lifestyle demands of today’s society.” Already some R17 billion has been invested in the burgeoning City with new development in the pipeline. It is a remarkable feat. In 2004 when the Rabie Property Group acquired the remaining undeveloped land and associated rights, the built form on site had been just over 280,000sqm. 36
this is an integrated environment that is perfectly tailored to the leisure, work and lifestyle demands of today’s society
Take the headache out of Occupational Health and Safety compliance… …By outsourcing to a group of experienced and dedicated professionals with a proven industry reputation. Safe Working Practice (SWP) is a leading national health and safety consultancy. With a large portfolio of contracts throughout South Africa, we can provide any company with a sound safety management system that will help to significantly reduce the number of preventable fatalities and disabling injuries on site. Our range of services are ideal for: • Construction • Property Developers • Contractors • Engineers • Architects • Agricultural • Manufacturing and industry • Retail • Corporate Our services include: • Client agent • Safety plan, files and documentation • Safety advisory • Emergency procedures • Incident and accident investigations • Mentoring of safety officers • Premises and site audits • Health and Safety training • Our unique and real-time web-based reporting system
Tel: +27(0) 76 509 4590 Email: firstname.lastname@example.org
Fax: 086 776 4812 www.safepractice.co.za
Proud to be associated with the outstanding developments by Rabie Properties. Installation of more than 12000 piles at Century City since inception in 1998.
The leading geotechnical contractor in the Cape. TEL: +27217970525 - FAX: +27217972360 email@example.com - www.esorfranki.co.za
Keeping construction safety standards in good health
hile some companies still have occupational health and safety on the proverbial backburner, it is gratifying to know that there are those companies that believe health and safety lies at the core of all their operations. This is according to John Kilian, SHE & Risk Management Consultant at Safe Working Practice (SWP), who says that SWP’s involvement with the Rabie Property Group first came about a year ago when the Rabie Group was investigating an appropriate health and safety consultancy to oversee some of its key developments in the West Coast area. “The Rabie Group is a company that understands that when it comes to occupational health and safety compliance, you sometimes need to look beyond the basic legislative requirements,” says Kilian. “It’s about implementing a comprehensive and thorough health and safety plan, which will serve all stakeholders involved, particularly those that are employed by the
company,” he added. SWP first became involved with the Rabie Group during 2011, when SWP’s SHE & Risk Management Consultant for the West Coast area, Christian Baesgen began a series of consultations with the Rabie Group management team. Building a good client relationship is all about building trust,” says Baesgen. “Having established a connection with the client, we began working hand-in-hand with the principal contractor for the projects,” he added. SWP was awarded two initial contracts by the Rabie Group to develop a health and safety plan for some of its key commercial developments including offices for a Business Centre and the Bridgeway Number 3 development, within the new Bridgeway precinct, located on the southwestern edge of Century City in Cape Town. Since then, SWP has maintained a positive relationship with the Rabie Group and has been awarded new contracts on a number of its residential developments as well. In addition to implementing and overseeing the entire occupational health and safety plan for these projects, SWP’s role included assisting the principal contractor in maintaining a high standard of health and safety compliance on site. “Regular contact and ensuring maintenance of the health and safety plan is crucial during this process,” says Baesgen. “When you’re working with people, health and safety is not just about implementing a plan and walking away from the project. It’s about changing people’s attitudes towards health and safety, which has a direct and positive impact on their behaviour.” He goes on to say that to by making a real difference when it comes to people’s attitudes towards health and safety, we were able to provide the Rabie Group with a sound safety management system that would help to significantly reduce the number of preventable fatalities and disabling injuries on site.
As a leading property developer, of awardwinning residential, commercial and mixed-use developments, the Rabie Group has a firm understanding of the impact that a sound safety management system can have on your organisation. “Work-related injuries and fatalities, not only have a negative impact on your bottom-line, but also on the company’s industry reputation, “ says Baesgen, “But, most importantly, health and safety is about people, and ensuring that your employees return home safely at the end of the day.” Established in 2004, SWP is a leading national health and safety consultancy, specialising in the construction, transport, commercial, retail, agricultural, mining and education sectors. With a large portfolio of contracts throughout South Africa, SWP has a full team of qualified consultants with the depth of knowledge to support and assist clients with all health and safety related services. “Safety is a non-negotiable entity within the construction sector today,” says Kilian, “At SWP we ensure that we offer our clients the highest levels of quality, professionalism and excellence on each individual project from start to finish” he says. “This enhances the reputation of the construction company, ensuring that their clients and stakeholders view the organisation as a reliable supplier with reduced risk, increased productivity, a secure investment, and solid construction partner. Although SWP was established in 2004 in the Western Cape, and already has a national footprint and nationwide network of branches, the changing needs of the industry and the ever growing demand for an established occupational health and safety consultancy, prompted the company to set up an additional head office operation in Gauteng this year. “It’s clear to us that there is definitely a positive shift in industry attitudes towards health and safety,” says Kilian. “Furthermore, clients are looking for a reliable company, who they can partner with and that will oversee the entire occupational
Rabie Project “Quayside” health and safety plan from planning through to implementation and maintenance,” he says. SWP’s range of services meets all the requirements of the current construction regulations. These include compiling a site specific health and safety plan, on behalf of the principal contractor, risk assessments, the compilation of a safety file with all documents required by legislation, follow-up inspections, maintenance of the implemented plan on site and ongoing recommendations. SWP has also pioneered South Africa’s first and only real-time web-based reporting system, providing clients with a standardised and highly accurate report and record-keeping system. “SWP not only offers a cost-effective solution to ensuring your business is fully compliant, but also offers a powerful business management tool to ensure controls in protecting your staff, members of the public and your investment,” concluded Kilian. For more information please contact John Kilian on firstname.lastname@example.org or call +27(0) 76 509 4590 and check out the SWP advert for our full range of services.
rabie Property Group FocUS ProPerty Ontarget Interiors Due to Ontargets’ involvement with other projects for The Business Centre nationwide, The Rabie Group saw the value in appointing Ontarget to bridge the gap between the client and the project team. From space assessment, through to layouts, interior design and implementation, Ontarget ensures projects are completed on time and on budget.
“There has been a surge,” says Deans. “It is safe to say Century City has bucked the trend. Yes the pace of development since the highs of 2005/6 has slowed, but it has never really stopped. Thing are now really moving again.” Century City is a big idea, with equally big ambitions. According to Deans, there has been a tremendous rise in demand for residential units, particularly at Rabie’s Quayside development, which launched late last year. It has already sold almost all of its 63 residential units. Quaynorth was brought forward because of demand and has sold just as well. “Since Rabie came on board in 2004 the development has grown from strength to strength. I think what is exciting is that Century City has more than got that critical mass and we expect the pace of development to continue gaining momentum as we go forward. “Those two projects in particular (Quayside and Quaynorth) are highly successful, with both selling fast.” 40
There is a lot going on within Century City at the moment and strong residential sales over the past 15 months have far exceeded expectations and are prompting further new development. Other projects underway include Palm Royale, a luxury residential apartment block at Oasis Luxury Retirement Resort. “We are working around the clock to try and accelerate further new development,” Deans explains, adding that planning for a new residential development comprising a total of around 130 apartments and a few standalone villas was well advanced. This project, called Ashton Park, will be built on a site adjoining the new Curro private school that is under construction but due to open in January 2013. “The school has definitely been a catalyst for the increase in residential sales and we expect it to continue to be so going forward.” It is a similar success story with Century City’s commercial properties.
Century City continues to outperform the office market generally and vacancies recently dropped to an all-time low of around six percent, prompting significant new office development. “Of the current construction projects several are commercial projects. Very few are speculative and most are have already secured tenants.” Commercial projects under construction include the new 9,000sqm regional offices for Chevron, 4,000sqm offices for Business Centre and the 4,000sqm Bridgeway Number 3 development – all of which are situated in the new Bridgeway precinct. “There is a lot going on,” Deans says. Indeed there is. Horizon Capital and Eric Salomon are also developing six office blocks at Park Lane, while Rabie’s R90 million Quays sectional title office development is about to commence on a neighbouring site. Nearing completion is a 3,700sqm office block in The Estuaries, which has been let
at a rental of R143 per square metre, while the 2,500sqm Courtyard sectional title block in Central Park, which is sold out, was recently completed. “What’s the secret to our success? I think it comes back to the product of Century City. There’s the central location, well-maintained infrastructure and a safe and secure environment. Those are the major drawcards for those who have relocated here. “Going forward, we are flexible enough to accommodate a range of people who want to come here. We are in the position that we have already got the building development rights for something like one million bulk square metres so in terms of planning approvals, there’s no applications needed for development rights – we have a basket of rights to draw down from. “We’ve remained active and vibrant and people want to live here and invest here. It’s an exciting future.” END To learn more visit www.rabie.co.za. www.southafricamag.com 41
Q& A : Richmark Holdings
Richmark Holdings focus property
R Richmark’s dream is to help grow the South African economy by creating jobs that empower people and provide the necessary funding to support emerging ventures.
By Ian Armitage
ichmark is one of South Africa’s leading angel investors. It is in the business of finding the BIG businesses of tomorrow, nurturing them, supporting them and pushing them forward. Richmark was founded in 2000 with the goal of helping talented South African entrepreneurs build companies from scratch, focusing on very early stage businesses. Formed by Gavin Varejes, a leading entrepreneur, businessman and philanthropist, the firm started out investing in very early stage businesses. The focus was on telecoms, as Mr Varejes saw that as the “next great investment sector”. His vision was prophetic. Vocall Cellular (Pty) Ltd was one of the first investments Richmark made and today it is listed as one of Vodacom’s largest Super Dealers. Another successful Richmark investment was a company called Cellfind (Pty) Ltd. Richmark invested in it at a very early stage, exited through the sale to Blue Label Telecoms Limited on its listing in November 2007 and today it is regarded as the leader in location based services. Richmark has certainly earned its stripes and has developed a keen instinct for identifying pearls to invest in. South Africa Magazine caught up with chief operating officer Geoff Whyte for an update on the company’s performance…
Richmark Holdings focus PROPERTY
Geoff thanks for your time. How is the business performing? Despite the tough economic environment, Richmark has performed well over the last year and we are on track to deliver our stretching five-year business plan. We have been insulated, to a degree, from what have undoubtedly been tough trading conditions by the strength of our customer relationships and excellent reputation in the sectors in which we operate. There are some significant challenges however â&#x20AC;&#x201C; most notably the conservative approach the banks are taking to lending currently. This has meant 44
This venture has also been commercially very successful
that we have to manage cash flows carefully across the group. We have also spent a great deal of time working on appropriate financial models to accommodate the fast pace of change in our technology businesses. Is there anything that stands out as a highlight? We are particularly excited about our successful rollout of interactive touch screens to the South African cellular market through our BluChip subsidiary. Evolution Cycling Group has also acquired national distribution rights for Raleigh and Huffy â&#x20AC;&#x201C; two leading global brands. This was a major coup for the company.
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How would you sum up the current business environment? The economic environment is very tough. This puts every one of our businesses under the microscope and reduces our margin for error. Are there lots of opportunities for Richmark/investors like you? The tightening of bank lending and our standing in the market means that we are being brought more opportunities than ever before. Our challenge is to focus on those ideas with the greatest potential and those that fit with our core strengths as an organisation. What are some of the recent trends you’ve witnessed? As the cellular market reaches saturation, we’ve seen a slowdown in the rate of growth in this sector. At the same time, we’ve observed that the rate of technological advance is accelerating. Market demand has also been impacted negatively by the reduced availability of personal credit. This has affected most areas of the economy. A big driver for you is making cellphones more readily available in rural SA. How is that going? We responded to a call from Nelson Mandela to focus on making cellphones, accessories and airtime available in the rural areas of South Africa. As an added bonus, this venture has also been commercially very successful. Our ability to tackle complex challenges of this nature lies in the diversity of companies across the Richmark Group. This allows us to put together customer solutions based on a combination of capabilities that no-one else in the market can offer. That’s given us an edge over the competition on many occasions. eND To learn more visit www.richmark.co.za. 46
Richmark Holdings focus property
We responded to a call from Nelson Mandela to focus on making cellphones, accessories and airtime available in the rural areas of South Africa
ProPerty firM eyes
Annuity Properties focus property
South Africa Magazine profiles Annuity Properties, a property loan stock company that plans to grow its portfolio to R5 billion within five years.
By Ian Armitage
anico Theocharides is the joint chief executive of Annuity Properties, a property loan stock company with what he describes as a “quality portfolio of A-grade properties”. The newly established firm is in its infancy but is backed by experience and listed on the JSE Main Board in the Real Estate sector in May, with a portfolio of four properties in prime locations throughout South Africa. It was a watershed moment. And Annuity hasn’t looked back. “We started with four properties in our portfolio - the Sasfin head office in Waverley, the Woolworths Call Centre in Cape Town, the Oakfields shopping centre in Benoni, and the Cell C head office in Rivonia. The intention behind the listing was to put together a good-quality portfolio to bring to the market to be used as a platform for growth” says Mr Theocharides. “We feel that the quality of the portfolio together with the fundamentals of the underlying leases is strong, and we have an excellent tenant mix which resulted in us getting good support in the market at the time of our listing.” More than 40 percent of Annuity’s leases expire beyond year 2022 with built-in escalations of around eight percent over the period, he says. “That’s great for investors because it provides a fair amount of certainty in terms of that underlying income stream. We have quality tenants backing up a long lease expiry profile.” Annuity is doing something right and investors were clearly keen on it. Mr Theocharides and his team managed to raise over R400 million during the listing – without too much www.southafricamag.com 49
Annuity Properties focus property
Sasfin Sasfin chose Annuity Properties as its preferred partner into the listed retail, commercial and industrial property sectors, due to the compelling credentials of the founders and executive management team of Annuity. In forming and growing this partnership Sasfin is seeking to facilitate its direct property equity investment deal flow to Annuity, so as to best service Sasfin’s significant property investor client base. Sasfin Capital also prides itself on advising Annuity on financing and capital raising for acquisitions.
difficulty. What was the secret? The company already has a great track record - that of its promoters and management team, he says. “They include the co-founders of Primegro Properties, which they transformed from a R600 million into a R2.5 billion business in just over three years,” Theocharides explains. “They were also instrumental in bringing CBS Properties to market, which they again grew into almost a R2.5 billion portfolio before selling to the Public Investment Corporation (PIC).” Annuity’s “veterans” - Derek Greenberg, Martin Ettin and Lionel Levinsohn - have collectively more than 100 years of experience in the property sector and many years of expertise in the listed property space. Prior to Annuity, Theocharides had built a career in investment banking and corporate finance, which included negotiating and implementing many deals in the listed property sector. “We believe we have a wealth of deal making experience and a good 50
balance of skills within the team. We are entrepreneurial and do have very well established networks. I think that the fact that we were able to secure some of the highly sought after assets in the new acquisition portfolio is testament to that. The entrepreneurial ethos within the team and the ability to move quickly as a young company without the corporate beaurocracy do differentiate us.” According to Theocharides, Annuity has benefited from the “strong networks and relationships” that come with that experience and expertise. “That’s absolutely right. The group of promoters have come to the market twice before very successfully and that, in combination with Sasfin, one of our shareholders which has contributed two of its properties into the fund, speaks to the networks and the relationships that have been built up over many, many years.” The plan is to grow its portfolio to R5 billion within five years.
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Our mOst VALuABLE prOpErty is Our CONNECtiONs with Our CLiENts
2012/12/14 2:34 PM
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“Since our listing we have announced a further six acquisitions which are in various stages of the transfer process but all six are unconditional as to the approvals required and all the funding has been raised so once each of these acquisitions has been implemented our portfolio value will be around R1.5 billion,” Theocharides says. “The acquisitions comprise a R817 million package, which includes retail, commercial and a small proportion of industrial properties. We bought the highly sought after Langeberg Mall in Mossel Bay for R410 million; the Atrium office building in Milpark, Johannesburg for R134 million; the Virgin Active building currently being developed in Bryanston for R118 million; the Riverhorse property in Durban, known as Thynk Retail Park, for R117 million; and the BCX office building in Midrand for R38.2 million. We also completed another smaller acquisition of just under R50 million - the Ethos Building, on a five-year lease, a great property in a fantastic location with excellent tenants. “So we have more than doubled our initial portfolio. Our focus has been on the larger metropolitan areas. One of our distinguishing characteristics has been our long lease expiry profile combined with the strength of the underlying lease covenants.” The company’s primary focus is on investment in commercial and retail properties, together with a smaller percentage of quality industrial properties. “At the time of coming to market we made an effort to attract a good spread of retail and institutional investors. We think that for a company our size it’s really important 52
to get good liquidity in the tradability of the units, and we are happy with our existing shareholder mix. We recently raised a further R500 million in equity to partly fund our new acquisitions and were pleased to have received very strong institutional support for our units” The ambitious growth target was one of the main reasons for the JSE listing. “We needed to access the equity markets primarily to raise capital,” Theocharides explains. “As a listed company, we generally also benefit from improved debt terms and preferential pricing relative to privately held companies of our size.” Theocharides calls this “an unprecedented time” in the listed property space.
Annuity Properties focus property
“The JSE has seen eight or nine new property listings in the past 18-24 months. That is phenomenal. As it is, there are only around 25 listed property companies on the JSE so it’s a very large proportion that has listed recently. In the context of the global economy uncertainty and volatility in the general equities markets, there has been capital available supporting the listed property sector. We decided the way for us to go was to bring in a high quality, A-grade, portfolio to the market – there aren’t any government leases and I think that a number of the listings that have come to the market have been characterised by a government element. We have an incredible lease expiry profile. That is a major plus, as I said. It offers great visibility and relatively lower risk. “Going forward it is important to us that we deliver on our promises to the market and what we told the market at the time of listing was essentially threefold: the first
We have more than doubled our initial portfolio. Our focus has been on the larger metropolitan areas. One of our distinguishing characteristics has been our long lease expiry profile
message was that we had a fairly aggressive growth strategy. Our second message was that we intend to maintain and build a good quality portfolio. The third message was that we wanted to bring new properties to the market, properties that the listed sector had not previously seen, and increase the size of the sector. “I think the package we announced and are taking ownership of now is a continuation of that story,” he adds. “It is in line with our stated strategy and we believe we’re achieving what we told the market. It is important for us as a young company to earn the trust of the market over time and we would like to think we are starting to do that. We are pleased with our performance to date. We recently published our maiden set of results and we were slightly ahead of initial guidance to the market. “The aim now is to pursue the right deals for the right reasons. We’re not prepared to grow merely for the sake of bulking up our portfolio. Strategically if I was to look at our portfolio in a couple of years time, it would probably be 40-45 percent retail, 40-45 percent commercial and 10-20 percent light industrial. But of course this may change over time as the market changes. At the moment, for example, we’re slightly overweight on good quality retail, which is a position we’re very happy to be in. How do we get there? It is about working on those networks we have established and continue to establish with property owners and developers. We’ve got an entrepreneurial ethos in the company, we are young and we have the benefit of being able to move quickly. Our business is all about relationships, creating the opportunity and being able to close the right deals quickly. It’s a very competitive environment but we’re very excited about the future.” END To learn more visit www.annuityproperties.co.za. www.southafricamag.com 53
Having concluded its second major African property transaction, the Atterbury Group is looking forward to an exciting 2013.
By Ian Armitage
Atterbury Group focus PROPERTY
he Atterbury Group is a property investment and development company that develops and/or owns upmarket offices, regional shopping centres, residential ‘lifestyle’ estates, industrial parks and leisure developments. It has built up a dominant position in South Africa (its most famous project is the Waterfall Development in Joburg) and according to marketing manager Zahn Hulme, who talked with South Africa Magazine in 2011, and has since left the company, the Group “focuses on two key areas” – property and investment. “We have been active since 1994 and have built up a sound reputation for delivering award-winning real estate across all commercial property sectors,” she said. Atterbury is a little bit different to most. It takes on both Greenfield and Brownfield projects with the objective of developing “A-Grade” business and commercial nodes. Property means something different to them; according to Hulme, “it’s not just about bricks and mortar, blueprints or financial transactions”. And it has its eyes on Africa. 2012 has been quite the eventful year for the ambitious and fastmoving group, notably seeing the firm conclude its second major African property transaction. Following the successful development of Bagatelle (the Mall of Mauritius) in 2011, Atterbury acquired an 85 percent stake, together with Sanlam, in Ghana’s Accra Mall, the country’s first A-Grade shopping centre.
We have been active since 1994 and have built up a sound reputation for delivering award-winning real estate across all commercial property sectors
Atterbury Group focus PROPERTY
Atterbury, which is at the implementation stage, described the achievement as “the culmination of efforts put in over the past few years”. “Atterbury has enjoyed tremendous local success and is well placed for the future following our first major international venture with the development of the mall of Mauritius,” Hulme told us in 2011, before explaining, “we took a strategic decision to expand into sub-Saharan Africa.” Ghana represents an attractive investment, with sustained growth potential and political stability. Atterbury describes those as “prerequisites” to the “bold move” and says that Accra Mall is “fulfilling a regional function” and is “strategically situated in close proximity of established residential and business areas”. “During the building of a significant property fund, we identified the opportunity in Ghana and we will peruse the development of several other commercial properties in he country,” Atterbury’s ‘Atterbury News’ October 2012 newsletter says. “Atterbury’s strategy is to invest in countries that can accommodate a number of investments instead of spreading ourselves thin over too many geographical locations. Our strategy is also important and beneficial to retailers that are looking to expand their businesses into new countries. The economy of scale and operating costs are vastly improved if the critical mass is there to begin with. We are doing developments with some of the major South African retailers as a key component of our new malls in sub-Saharan Africa. 56
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OUR MOST VALUABLE PROPERTY IS OUR CONNECTIONS WITH OUR CLIENTS We know the importance of relationships. Working together allows us to understand your needs so we can offer the best real estate solutions for you. This is how weâ&#x20AC;&#x2122;re moving real estate forward. www.standardbank.co.za/cib
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We have an understanding of South African tenants and many of them have already established their brands across the continent. Most of the funding is sourced through South Africa and the banks have established a level of comfort with them as well. “Our purchase of the lead stake in the Accra Mall meets our investment criteria and furthers Atterbury’s goal of providing excellent total returns to investors. It also helps us achieve a healthy measure of international geographic diversification in our portfolio,” it adds. In order for the Ghanaian venture to succeed, and to explore further opportunities across the continent, Atterbury has established Atterbury Africa Limited, a venture is described as a vehicle for “the Atterbury model of partnering with local expertise”. “Atterbury Investment Holdings has a strategic investment in this African venture, which furthers its goal of geographic
Atterbury Group focus PROPERTY
Over the next five to seven years, various investors will partner with Atterbury as their developer of choice to build a portfolio of prized retail and commercial property assets in Africa diversification in sub-Saharan Africa,” Atterbury says. “Over the next five to seven years, various investors will partner with Atterbury as their developer of choice to build a portfolio of prized retail and commercial property assets in Africa. Hyprop recently brought a 37.5 percent interest in Atterbury Africa and will invest a further R750 million over the next five years.” Atterbury plans to expand and make minor changes to Accra Mall, which was originally developed in 2007 with South African retailers Shoprite, Game, Mr Price, Trustworths, Woodin, Vlisco, Puma, Rhapsody’s, TM Lewin and Foods Inn. Local retailers include Body Basics, Dalex Finance, Enda, Trendz and Say Cheers. Atterbury is currently busy with couple of other mall projects in Ghana – the 27,300sqm West Hills, which will be anchored by Shoprite Checkers, and it has acquired land in Achimota, north of Accra. It is also engaged with mixed-use hotel and retail development in Zambia. Atterbury Investment Holdings is the investment holding company of the Atterbury Group and Atterbury Property Developments is its development leg. END To learn more visit www.atterbury.co.za. www.southafricamag.com 59
Effectiveness Company focus outsourcing
South Africa Magazine talks to Suzanne Ravenall, CEO and founder of the Effectiveness Company, a business transformation outsourcing (BTO) specialist.
By Ian Armitage
uzanne Ravenall believes that to effect major change, ideas and intentions, and even processes, aren’t enough. She says it is easy to bring fresh, innovative ideas, products, projects and theories to the boardroom, but often they don’t go anywhere because organisations lack the operational implementation staff, skill and capacity to successfully follow-through and execute them. This is where her company, the Effectiveness Company, comes in. It is a leader in the business transformation outsourcing industry (BTO), providing clients with “sustainable operational outsourcing solutions”. “The Effectiveness Company was founded in order to fill a gap in the market for a company that provided business leaders with effective execution and operations management,” Ravenall says. “Often it is easy to come to the table with ideas, new products, ground-breaking projects and fresh approaches, but what is more challenging is implementing them in the right away, successfully. That’s where the services we provide come in. The top of the agenda for most CEOs is the ability to execute. There is a massive requirement around execution. We help bring ideas to life, endto-end, and effectively implement business operations as opposed to picking up the pieces. We provide outsource with a view to providing performance improvement.” The Effectiveness Company uses various innovative outsourcing/insourcing models to achieve its goals. www.southafricamag.com 61
effectiveness company FocUS outsourCing
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An example is the ‘executionbox’, a tool designed to equip employees with the right skills. “That’s what we do, equip,” says Ravenall. “We equip people to work more efficiently, quickly and with predictable and sustainable outcomes in line with expectations. But it is more than business, these are skills that can be used in every day life.” Core services/products include business consulting, outsourcing solutions in CRM, HR management, back office management, supply chain management, asset management and contract management. It operates in all of South Africa’s nine provinces. “We’re a bit of a trailblazer, with standardised tools,” Ravenall says. “We think laterally time and time again and are truly innovative – it is part of our DNA. Innovation is actually one of our KPIs and part of our employee measurement criteria. “Our drive is towards market leadership and excellence and we want to be an international leader.” The Effectiveness Company really is a trailblazer. It has been in the BTO industry for the last 12 years (it was founded in 62
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1997), despite the fact the industry has “only really” been around for the last five, Ravenall says. “We’ve been a BTO company since the start, from day one,” she says. “When we first started, outsourcing was commonly known as ‘utility outsourcing’ and typically involved a company outsourcing certain transactional aspects. Over time, outsourcing has evolved from utility to enhancement to BTO. BTO is in demand. Companies feel that the world is speeding up, and organisations simply can’t do it all, it can get overwhelming. It’s become more strategic and it’s still fairly new.”
There are cost benefits but it is also about bringing expertise to an environment to have a positive impact on customers, the way they operate and the culture of a business
There is more to outsourcing than cost savings, as the Effectiveness Company proves – although that is a key part of it. “When we go into a company and they are underinvested we might find this can cost more money to fix,” Ravenall says. “There are cost benefits but it is also about bringing expertise to an environment to have a positive impact on customers, the way they operate and the culture of a business. Whilst we operate in five areas - Field Services (CRM), Labour Managed Services and Training (HRM), Back Office (BOM), Supply Chain Management (SCM) and Asset Management (EAM) - and offer services primarily in outsourcing and consulting, we’re specialists in execution. It is about bringing that speciality component in, and that ability to execute.”
Effectiveness Company focus outsourcing
The BTO industry is really starting to come to the fore. It is a great opportunity for companies like the Effectiveness Company. “If you look at the industry number globally it’s enormous. We’re in a place where we’ve built a solid business and we have provided something that is unique. We’re in a marketplace where people are now starting to understand BTO and realise a desire to partner not transact, and share risk. People are much more open to discussion and making transformations, partnering with businesses to outsource. I don’t think for us that things will dramatically change in terms of what we put in place, but it is a case of capitalising on how the marketplace is changing and moving, in an increasingly tough and competitive environment. Costs are tight and businesses need to do more for less.”
The Effectiveness Company is the only BTO company in Africa to offer what it does, Ravenall says. There are lots of other outsourcing companies, but none in this niche. It is a unique proposition. “To stress, although well laid-out plans and strategies are fantastic, they are meaningless without execution,” she concludes. “We have built a generic and scalable toolkit consisting of process, methodologies and systems, for the purposes of execution, that could be placed in anyone’s hands regardless of qualification, providing sustainable business transformation.” END Look out for this fast-paced and dynamic business. Visit www.effectivenesscompany.com
Registered Auditors and Professional Accountants
We’re in a place where we’ve built a solid business and we have provided something that is unique
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Eskom reports â&#x20AC;&#x2DC;solidâ&#x20AC;&#x2122; financial performance, outlines future plans
eskom FocUS energy
love them or hate them, we all have a lot to thank eskom for. By ian armitage
skom has to overcome numerous hurdles. Chief amongst those is getting the public to save energy and getting municipalities to lower profit margins. It has also had to convince ratings agencies to maintain its ratings to keep borrowing costs down, while meeting increasing demand for energy. Eskom has worked tirelessly with the aim of becoming Œfinancially selfsustainable¹ and less reliant on government support. As part of that, unfortunately, tariffs will rise. Eskom has applied to Nersa for a 16 percent increase in electricity prices each year for the next five years. The new tariffs would come into effect in April. Public Enterprises Minister Malusi Gigaba described the increases as unavoidable. “It is not fair, it is necessary,” he said, following a recent business breakfast in Fourways. According to Eskom spokeswoman Hilary Joffe, 13 percent of the 16 percent increase is for Eskom’s “own needs”, while three percent is factored in to support the introduction of independent power producers. We caught up with Hilary recently and asked her a few questions…
Hilary, Eskom recently released an interesting set of interim results. Are you pleased with performance? I think it is another fine set of results. It is building on the three-and-a-half-year track record, following worst ever losses of R9.7 billion in our 2008/9 financial year. So yes it is continuing on the path towards financial stability, combined with our usual transparency that people expect from us. The results were at best flat and we have indicated that we in fact expect to be lower for the full-year because we make most of our profit in the first part of the year, so at best we will break-even in the second half. The one issue that is of concern, really for the country as much as for Eskom, is the decline in sales and that reflects the weaker than expected economic growth; particularly weak commodity sectors. Also the impact of the industrial unrest that we had in the latter part of the period and, to some extent, the buy-backs that we did earlier in this year. I think that is of concern and the trend is likely to continue in the second half of the year. We would really like to see the economy thriving. Is there anything you can do to lessen the impact? I think when we get our new capacity online from late next year - especially within the commodity sector - it will lift some of the constraint gradually over time. It wonâ&#x20AC;&#x2122;t happen straight away as those units come online one by one so it will take a little time before we have really big increments of new capacity. That will help to make the power system much easier to manage and certainly lessen the need for measures such as power buybacks. On the upside, I think we may also be seeing some impact of the energy efficiency programmes, which weâ&#x20AC;&#x2122;ve had in place for some years now. So there may be an element of that in the demand growth to the extent that we still have economic growth in SA, with perhaps more efficient energy research. I think that is something that is certainly a positive. 68
eskom FocUS energy
you mentioned the new capacity that will be happening. Give me an update about it. Are you pleased with how the projects are coming along? I think this is really the area of focus over the next year - getting those new projects up and running. They really are mega projects. Medupi is really a huge project. It will be the first brand-new coal fired power station capacity that has been commissioned for almost two decades. It is a challenge and is one that we are giving a great deal of focus to. We are on track at this stage. The first unit of Medupi is due to be synchronised to the grid towards the end of 2013 and then the other units will be at eight-month intervals after that. At the end of 2014 we would start getting the units of Kusile online and there is the Ingula pump storage scheme, which is also advancing nicely. It is challenging but I think next year will be exciting. Why are those projects important? I think those projects are really important for not only for Eskom but also for the country, least because of the job creation. We have 17,000 people at Medupi and another 14,000 onsite at Kusile, so there are a lot of people working on these projects, and the positive for the country is that SA will be able to hold on to the legacy in terms of the skills that are being developed by these people. That is really one of the reasons why we have been urging that the country starts making decisions on new build projects beyond Medupi and Kusile â&#x20AC;&#x201C; because we will need them.
There has been a lot of kickback from various people in the media about the tariff increase. What is your view on this? We donâ&#x20AC;&#x2122;t have the tariff increases yet. The Nation Energy Regulator of South Africa (Nersa) decides those, and they will make the decision after an extensive process of public participation. We have two weeks of public participation throughout the country and they take place in January. We have submitted our application and we have been having lots of talks and engagements with stakeholders across the board, appeared in parliament several times, engaged with customers and labour unions and everything else, and the public hearings are the next step. Nersa will make its decision on February 28 and the tariff increases would be implemented from the April 1 for Eskom customers and July 1 for municipalities. So, we submit our application to Nersa and they have a careful look at it. We have submitted inline with the strict regulatory rules that are in place. www.southafricamag.com 69
Why are the tariff increases important, from an operational perspective? They’re vital. The tariffs are another landmark event happening next year for us. It will really shape our positive financial sustainability for the next few years. In terms of what we’re trying to achieve it is to make sure that we have the resources to secure a supply of power to support growth and development in South Africa and that means ensuring we have the resources both to supply electricity using our existing assets, but also to support the financing of the new assets that we are putting on the ground – power stations, extensive investments, etc. In addition to our big building programmes there is also a very extensive programme of capital spending to lengthen lines, refurbish and extend our existing infrastructure. Eskom has applied for increases of 13 70
percent annually over each of the next five years plus another three percent to pay for new independent power producers, which are mainly renewable energy producers that the government programmes will be bringing in. We have to connect them to the grid and we have started signing agreements with them. A couple of things to note are, first of all, the regulator’s decisions were previously in three year cycle but we are asking for a five year cycle so that we can transition to cost effective tariffs over a longer periods and lessen the impact on the economy. I think also that even though the tariffs have been rising in the past four years, prior to that, for more than two decades, South Africa had below inflation electricity price increases. They were very far below cost reflective levels and we are migrating towards tariffs that cover the full costs of producing electricity.
eskom FocUS energy
What would be the consequence if, for example, Nersa came back and wanted something lower? People do ask us why the tariff increase is above inflation but there are a couple of factors. Some of our key input costs are rising at rates, which are well above inflation, most notably coal. We applied to the regulator for a revenue requirement to cover our costs and of the revenue that we’re applying for, between a fifth and a quarter is coal. Our coal costs have been increasing in the last three years at an average of 17 to 18 percent. We have capped that over this coming five years at 10 percent and we are hoping to even get it lower if we can agree a coal pact with the mining industry. Our maintenance costs are also running above inflation because our power stations are aging and it is very hard to keep the lights on. We’ve capped staff costs at about inflation with some provisions for head count increase because of the new power stations and new customers. We have built in significant efficiency savings over the five years and challenged ourselves to achieve efficiencies. We need to be looking at being an efficient producer. Some of the big drivers of the increase that we’ve put in for relate to the need to support the financing that we have done, and need to do, to invest in infrastructure. We have got R213 billion of debt on our balance sheet and we expect that over the next five years to increase to about R360 billion. That will be the kick as we finish the big build programme and we need to be able to support that. On the one hand, we have to allow for a return on assets. In practical terms, most of the return on assets that we protect over the next five years will go towards meeting the interest costs on that debt. One of the drivers is to ensure that we can get the ratings that we need from the rating agencies to support financing this build programme and future
builds that we would be able to do and at the moment Eskom has an investment grade rating only by virtue of the support that we have from the government. So we are looking at getting to a standalone investment grade rating by the end of the five year period. We want to emphasise that those investment grade ratings are very important in terms of enabling us to access the capital markets to get the funding that we need at cost effective rates for our very significant investment in capital spending that we’re doing. In the past we have been granted less than we’ve applied for and if that does happen – and it will depend on how much less than we’ve applied for – we will have to look at our numbers and see what we can do and what we can’t do. eND To learn more visit www.eskom.co.za. www.southafricamag.com 71
Centron is looking to play an increasingly important role in creating a low carbon economy in carbon intensive SA.
By Ian Armitage
s we’ve seen in the local press, South Africa is looking to introduce a carbon tax to reduce harmful greenhouse gas emissions, although nearly two-thirds of emissions will be tax exempt until 2020 to lessen the economic impact on industry. In it’s 2012/13 budget the treasury proposed a 60 percent tax-free threshold on annual emissions for all sectors including, electricity, petroleum, iron, steel and aluminium. It is a significant move, and with President Zuma’s commitment to reduce greenhouse emissions by 34 percent by 2020 and 42 percent by 2025, SA businesses are under pressure to find “credible and economically viable solutions” to reduce their carbon footprint. According to some, the country’s greenhouse gas emissions rank in the top 20 worldwide, accounting for almost half of Africa’s emissions. 72
It is a serious issue and many, as we’ve seen in previous editions of South Africa magazine, have already started committing to a greener supply chain. Green is a top agenda item. “Companies are becoming more aware,“ says Steve Mummery, managing director of Centron Energy SA. “South Africa has taken a leading role within Africa to protect the environment with the aim of contributing to a cleaner, healthier environment for current and future generations. We clearly saw this at COP 17 in Durban last year where we had great interest from local and overseas visitors at our stand.” To help meet the challenge head-on, just under three years ago, Centron Energy SA introduced a solution to “significantly reduce emissions” from all diesel and petrol engines. It is called Centron fuel enhancer and it is a patented and environmentally safe fuel technology that is registered with the E.P.A and blended locally through
Centron focus energy
Improchem, which is part of the A.E.C.I Group in Durban, for the local and African markets that Centron serves. The product has a “proven track record” and not only reduces harmful exhaust emissions and greenhouse gases but also reduces fuel and operating costs by “enhancing the quality of the fuel” and creating a cleaner more efficient fuel burn. “The use of proven, tested fuel enhancers helps to achieve reduced operating costs, emissions and maintenance thereby improving performance and increasing productivity,” says Mummery. “Several industries are under pressure. The South African mining and metals industry in particular is feeling the strain of reducing its energy intensity and improving the quality of the fuel used, particularly in underground mining operations where safety is paramount and the need to reduce harmful gases in the fuel is of major concern to the safety, health and environmental officers of the various mining groups and of course the mining unions safeguarding the well being of its members. The mining industry has been well documented in actively seeking alternative measures to help keep the industry sustainable and competitive in the global market.”
Centron premium eco-friendly fuel solutions
According to Mummery, Centron “can play a major role” in this initiative as it is “compatible with all Diesel and Petroleum fuel blends” including certain Bio-Fuels. “But this is far more than just selling a fuel additive,” he says. “The SA Government estimates that up to 25,000 sustainable jobs will be created in the next five years in the green industry and listed companies that are implementing sustainable environmental policies tend to find favour with their global investors and customers and even the share price can reflect this mindset when people, profit and planet come into play. Centron is working on some very interesting initiatives in the Bio-Fuel industry in SA and Africa with non
food crops, as a five percent blend of certified Bio-Fuel is generally accepted in traditional fuel with Centron used to stabilise further the end product. This is becoming more critical as we look to reduce foreign oil dependency and the need for fuel supply security. “Another area of interest is renewable energy, taking used engine oil and transmission oil from a mining company or municipality and turning it back into a usable spec fuel to be reused on site without the oil having to leave the site, with Centron as the catalyst to treat the final product. “We are also looking at ways to improve heavy fuel oil which is a low grade of oil used in boilers and furnaces and produces very high emissions.” www.southafricamag.com 73
Centron focus energy
Centron can be used as both an upstream and downstream product in the petroleum industry at refinery level, distribution level and OEM level, Mummery says. “We are also looking to introduce a retail programme in 2013.” One stumbling block could be cost. He isn’t concerned. “We recognise that cost is always an issue but it shouldn’t be as Centron is proven to bring about independent documented fuel savings of up to 15 percent,” Mummery says. “In a diamond mine that has been using our product for over two years, and uses approximately one million litres of diesel per month, we averaged a fuel saving of 13.9 percent across their entire operation. That was documented in their latest annual report. This is a saving of over 100,000 litres of fuel per month at an average price of R10.00 per litre, not to mention a significant reduction in harmful emission gases across the entire operation.” Mummery’s challenge is capitalising on the undoubted opportunity. “What we want to do is to create a premium fuel services business in South Africa and across Africa as this is a multimillion dollar business in the States. “As with human beings, we are only as good as the food/energy we put into our bodies, the same applies to fuel. One wants to put the best fuel into your car or mining equipment to get the best performance out of it and increase its lifespan and of course asset value. With the global deteriorating fuel quality this is becoming critical. “The SA government is also looking to introduce low sulphur fuel 15 PPM in 2017 onto the market down from the current 50 PPM currently available at the pumps,” he adds. “This in itself creates problems particularly with older equipment and engines as the removal of sulphur causes the fuel to become drier which causes lubrication problems which can severely affect pistons 74
Clean Air Testing Solutions Clean Air Testing Solutions (CATS cc) was established early in 2010 and is an independent testing facility performing vehicle emission tests in the fuel industry. We quantify harmful emission levels as well as green house gas levels. Our focus is on developing accurate testing protocol and standard procedures through the use of the GHG protocol guidelines. We use these guidelines for sustainable development, as well as industry best practice for performing vehicular environmental emissions, fuel consumption and vehicle maintenance saving tests for small and bulk fuel users. These practices are undertaken with the use of EPA accredited and certified GREEN fuel enhancers by making use of EPA approved and accredited testing equipment.
Fuel Filters before and after
Opacity before and after Centron in action
Centron automated dosing system at a diamond mine in Lesotho
PO Box 14203 Bredell, 1623 Tel: 0027 82 887 8863 0027 11 979 5132 Email: email@example.com Our mission is to promote environmental well-being in all aspects by performing test work according to international best practices. We strive to provide a totally supported monitoring and evaluation service based on ethics, integrity, honesty and professionalism, while engaging with the latest technology in the field, to provide solutions by minimising harmful emissions and reducing the carbon footprint.
and injectors. As we have found in the States, Centron acts as a super lubricant through the fuel to counteract the dryness of the fuel in an eco-friendly way and will certainly help the SA government with this process. “We are currently working actively with mines in South Africa and across Africa, including rail service providers and transport companies across the continent. We are also working with a leading cellphone company in Nigeria to reduce its fuel consumption and emissions in the thousands of base station generators it operates in Nigeria and west Africa.” Centron is looking at the marine industry too, and even defence forces and motor sport in South Africa, Mummery says. “The reduction of fuel consumption is fundamental to sustainable development,” adds Gregg Campbell, a keen environmentalist and key account manager at Centron Energy. ”By dealing with the root cause of any problem, negative symptoms are automatically being mitigated
We offer the best possible customer service experience by providing: · Superior value · High quality & relevant technology · Customised testing and services · Superior service and support offered to protect the quality of our current environment and provide appropriate solutions for the benefit of present and future generations
and triple-bottom-line savings are being achieved thereby creating a revenue source that can pay for the longer term sustainable development technologies such as Hydrogen and fuel cells. The opportunity to reduce our fuel consumption, carbon emissions and maintenance and increase asset value reduces local foreign oil dependency, increases local GDP and increases forex reserves, encourages foreign direct investment and ultimately secures not only local national security, but the security of our global village and our future generations.” Mummery concludes: “This is a technology that is here and now and is an African solution to an African problem embracing people, profit and planet.“ Centron Energy is a company we expect to hear a lot more of and is certainly one to watch as South Africa transitions to a lowcarbon economy. END To learn more visit www.centron.co.za or email firstname.lastname@example.org www.southafricamag.com 75
in retail (anD More)
The Design company specialises in “designing and building” beautiful and meaningful spaces – retail spaces in particular.
By ian armitage
The Design Company focus retail
etail space planning is of strategic importance to the retailer. Now, just a few years ago, space planning was pretty much only about planograms – creating a pictorial representation of the products on a shelf, in 2D, to provide to stores with a standard merchandising instruction. But the approach didn’t work. Stores had to interpret how to implement their size-group planogram to best fit their actual space, and in so doing reliably deviated from the intent of the central team. Things have changed. And the change is spearheaded by Cape Town-based The Design Company (TDC). Now don’t let the name fool you, it does far more than it would imply. “It isn’t about what colour the walls should be, or whether that curtain is just right. What you will hear are discussions about aspects of brand DNA, retail solutions and a total strategy,” director Marc Olivier says. “We try to understand what the brand DNA is. The first step is always to define the strategy for the brand. It is part of understanding the mechanics of what the brand must do. We include the client in the process. The
research and the strategic planning are carried out in partnership with them so that by the time we produce the design brief, it is what they expect.” TDC’s client list reads like a who’s who in South African retailing. “We provide an end to end solution, from creating the brand to the visual merchandising and we are also able to offer clients specific items on our menu of services,” says Olivier. “For this to work there have to be a number of disciplines in place, all doing the work that they do best. You’ll never find one of our designers doing procurement, or a project manager designing: each project/brand has a dedicated team.” As successful as TDC is, it is eager for more. It is refining how it operates. “We have five interrelated disciplines for a full client offering,” says Olivier. “That starts with TDC strategy that sets business and personal strategies as well as change management and coaching. We then have a conceptual design studio called Colours & Co. which specialises in corporate identity development, branding and visual merchandising. We then have TDC Retail, our traditional business for design and build of retail solutions. Then we added TDC Architecture just over a
We provide an end to end solution, from creating the brand to the visual merchandising
year ago, which is design and build of exterior and interior architecture solutions. The last discipline is TDC Events, where we design and execute memorable events. Those are the five different disciplines encompassing a 360-degree creative hub from strategy to creativity, detailing, procuring and finally implementation. That is what the business covers at the moment and plan to re-launch next year as TDC & Co. That will basically cover those five disciplines.” I know what you’re thinking, why? “I think it was the need to diversify a bit,” says Olivier. “We had gotten to a certain size in the industry where we had pretty much touched every big retailer at some stage and there are also a lot of international companies coming in who are looking for a much more cohesive solution where it doesn’t just touch on the retail design and build, but really extends into a brand expression that is fully aligned. We felt the only way you can do this is to ensure that all the different touch points on the brand are interrelated and cohesive in the way that they’re managed. We found that a lot of our clients who are very busy running
The Design Company focus retail
their businesses have struggled dealing with all the different agencies and pulling everything together. If you’re dealing with three or four agencies it is very difficult, from a client’s perspective, to pull that into a cohesive solution that fully represents the brand. That is when we look and say ’Does everyone understand what that brand strategy is? What is the essence of the brand? What are the values and how does that translate into the different disciplines from branding to interior solutions?’ We don’t want to become a marketing and advertising agency, that’s not our game, but we did feel that by adding on these other disciplines we were able to offer a cohesive solution from corporate identity, development and setting the guidelines, to making sure that the interior solution is relevant and where architecture is required, being able to add that on as well. Because it is all in-house, we have micro teams that align all work across all disciplines, are relevant and responsible to each other in making sure it’s a cohesive offer.” Clients have welcomed the move. “They have,” says Olivier. “New and existing clients have latched onto it very
We were able to offer a cohesive solution from corporate identity, development and setting the guidelines, to making sure that the interior solution is relevant and where architecture is required, being able to add that on as well
The Design company FocUS retail
Centrelec Electrical Contractors Centrelec Electrical Contractors have six branches around South Africa. We have specialised our business in various fields of the electrical industry from new developments, shop installations, equipment repairs, emergency calls and other areas of the industry. over the past twenty years Centrelec has built up a client base of some reputable companies and architectural firms as well design companies, including The Design Company. our aim is to provide good prices and excellent workmanship. our clients are our main concern and we endeavour to entertain all of the client’s needs wherever possible.
quickly. There was a hunger and a need for us to do it so we tapped into that.” The time now is to makes sure “the vision of becoming a 360-degree creative hub is realised,” he adds. “We want to make sure that we have the correct support structures in place and to this end, we are setting up a management company where different divisions will be represented to look after the interests of each of the divisions and cohesive offer in general. It is all geared towards making sure that is realised. We also want to introduce a design academy, where we will put in a finishing school. We think that the students coming out of colleges today really don’t understand the practical implications of what they need to do and there is a big gap between the colleges and the actual practical world. We want to put together a three to six-month academy where they can come in and get to grips with what is required in the industry. Everyone in our management company will be responsible for making sure that the 80
through collaboration, we are always striving to be better than we are at present
0027 860 772 759 www.centrelec.co.za
We install and maintain top quality electrical infrastructures in shopping centres and businesses throughout South Africa
Our aim is to consistently exceed our client’s expectations "We live by an ethos of integrity"
academy is supported and fed and students are ready to go out there into the industry so that they are ready to work as soon as they land rather than taking a year or so to get to grips with things. We also need to find a physical home. We are currently in Paarden Eiland and feel like it’s a bit of a concrete jungle so we want to create a campus that houses all the divisions - a nice leafy space that has space. That is important for us to find that home where staff can engage with nature and feel calm in the way that they can think about what we’re doing. It really is about space for us - ‘head’ space, ‘design’ space, and ‘people’ space. The person that we have brought in to head up TDC strategy we have also employed as a full-time life coach who works with our staff. That is very unique. Our staff are our most important assets. We want them to feel balanced. Our industry is about people and our clients and we want that to all run smoothly. “We have also developed a trust called The Green Room Trust and it is all about social
awareness, looking for sustainable materials and sustainable ideas. SA has really grabbed hold of green initiatives. Actually, Pick n Pay came to us a few years ago and we developed a green library that we extended to the retail market. We spent about a year with them working on how to reduce their carbon footprint throughout their stores.” The relaunch will take place gradually over the next 12 months. “The idea is to pull everything together as a 360-degree creative hub,” says Olivier. TDC is 20 next year. In that time it has weathered several economic downturns but has grown every time. Olivier attributes this trend to the company’s non-negotiables: integrity, honesty and never assuming that they are at the top of their game. “Through collaboration, we are always striving to be better than we are at present,” he concludes. END To learn more visit www.designcompany.co.za. www.southafricamag.com 81
Turner Morris acquires leading KZN cleaning e q u i pm e n t i mp o r t e r
Following the acquisition of KZN cleaning equipment company AFM Clean Tech, Turner Morris Midmacor managing director Alwyn Coetsee outlines exciting expansion plans.
By Ian Armitage
Turner Morris focus construction
urner Morris Midmacor is diversifying. The company, renowned for distributing, importing, exporting and manufacturing construction equipment, has acquired cleaning equipment company AFM Clean Tech (American Floor Machines), the leading supplier of industrial cleaning equipment in KwaZulu-Natal. According to managing director Alwyn Coetsee, it will be a “welcome addition” to the business and will “form a separate division of Turner Morris in the future.” “Diversification is the best business model for tough economic times and that is exactly what we have done with this acquisition,” says Coetsee. “Despite the enormous pressure we have experienced in the construction industry, Turner Morris managed to show a strong growth in 2012. Declines in consumer confidence and decreased sales threaten all businesses and we are no different. This acquisition will enable us to spread our risk, and even better our successes of 2012.” Diversification can be good for businesses in any economic climate. By extending the range of services on offer, a company can often increase its revenue from existing customers or expand into new markets. In addition, by building on an existing brand name and bank of contacts, new ventures already have a head start. This is exactly what Mr. Coetsee has planned. “One of our core objectives is to always make sure we look at new opportunities and offer the best www.southafricamag.com 83
Turner Morris focus construction
range to our clients – this is a continuation of that. AFM specialises in industrial cleaning equipment and are a leader in KZN,” he says. “There are a number of rental companies out there that use their products, which overlap nicely with our existing businesses, but we’re also planning to expand our business into the cleaning industry. We have national sales and back-up support in 12 Turner Morris branches throughout South Africa and we will roll this out nationwide in all our branches – so we expect some growth in that sector. “We were actually a customer of theirs, buying a lot of cleaning equipment from them over the years for rental purposes and for resale. They came up for sale and we decided to acquire it, first off, to
One of our core objectives is to always make sure we look at new opportunities and offer the best range to our clients
get products at a cheaper rate, and also to expand our business. It raises a lot of synergy but there is a big enough difference in that kind of business to give us an extra leg to stand on.” Turner Morris is highly successful. Don’t let the decision to diversify fool you. It will merely make the business stronger. “It will. Much, much stronger. All our branches will start from a zero base in terms of this industry and it will grow fast in the first few years. We’re looking forward to getting some good results in that industry.” Mr Coetsee says Turner Morris’ strength is its experience, its heritage, its national footprint and its product range, which includes product from the likes of Honda, Weber MT and
Hymech Developments: Leader of the pack
ymech Pumps is one of South Africa's leading pump manufacturers, recognised for excellent product quality, performance reliability and technical innovation. It provides a 50mm and 80mm option, equipment and related technologies for water tankers, cooling towers, cattle dips, industrial plant drainage, flood and sprinkler irrigation, dirty water handling, paddy fields, trench dewatering and public works. South Africa Magazine asked Toni Biscardi to tell us more… Toni, first up, who are Hymech? We manufacture the Hymech 50mm & 80mm centrifugal pump along with that generator frames, pump frames, firefighting units and have a full assembly line for these products and are a leader in the field, recognised for our excellent product, performance and service. We also have a wide range of pump parts and are also able to fabricate units according to customer specification. When was the company founded? The company was founded in 1986 and we’ve got 50 employees, all at our head office in Johannesburg. What are your unique selling points? Well we’ve been around for 26 years our products ability to work over long periods, its durability, quality, backup, performance reliability and technical innovation. Where do your pumps tend to end up? Mainly in the agricultural industry - for farm drainage. They’re also used for fire fighting, tank filling, pressure washers, water tankers, and for trench dewatering. There is a wide range.
Name: Toni Biscardi
Is that across SA? Yes It is and into neighbouring countries. Has this been a good year and are you excited for the future? I’d say we have recovered from the economic crisis. We’ve kept our share in the market, definitely. And yes, we’re looking forward to 2013. What’s the secret to your success? It has to be our levels of service, turnaround time and availability of spares. Just ask any customer! Tell me more about your relationship with Turner Morris? We’ve have fantastic relationship that stems for over 20 years!!
CONTACT HYMECH TODAY FOR YOUR GENERATOR FRAMES, PUMPS, PUMP FRAMES, FIRE FIGHTING UNITS OR PUMP PARTS. Fax: +2711830-1547
Turner Morris FocUS ConstruCtion
Uni-corp (Singapore) Pte Ltd Warmest Greetings from Singapore! We are a Singapore company, with our new plant in HaiMen City, JiangSu Province, PRC. We have a team of Singaporeans managing the factory here. We pay a lot of focus on quality. We do testing on every equipment before they are delivered.
Turner Morris Construction Equipment. “We have the 12 branches and we also have a widespread dealer network in Africa. We’re 77 years old this year and have we have long established relationships with many clients, who’ve come to know us well and are loyal. We also have a unique and extensive range of equipment. It covers all needs in small construction and we’re certainly a onestop-shop – whatever you need, we can get. That is a big part of our success.” Turner Morris also offers extensive aftersales and back-up support. “Back-up and aftersales service is absolutely vital. Customers buy from us with confidence – they know that they can get spare parts and support for the product, which often represents a significant investment on their part, 86
and where downtime can be very costly. I would say that because we are the market leader in small construction equipment, our volumes are a big plus. We have enough volumes to buy specific items from several manufacturers whereas smaller players will have to buy all their products from one place to get the critical mass. I pick the best products, and put a fantastic range together. We manufacture an extensive list of items in our factory in Johannesburg too, and the products we manufacture have been established over many years and, as a result, people have confidence in them. Because we have the manufacturing capability, spare part availability isn’t an issue. That’s another plus. “We also offer this range of equipment for hire because sometimes buying it isn’t right for the client or the job.” Looking to 2013, Coetsee is confident of “steady,
Established since 1975, our management team has their industry experience of over 37 years to bring Uni-corp to greater heights. We have started as a pure precision engineering works service provider and repairer of construction equipment till now, being a manufacturer of our own products. Our strong foundation comes from our precision engineering works manufacturing background. “Quality you can trust.” This is our belief when delivering each product from our manufacturing plant. We have been close and longtime partners with Turner Morris for over 13 years. We have witnessed how both of our companies have grown together, a relationship that remains precious. Shall take this great opportunity to wish upon the best for Turner Morris in the Brand New 2013! Here is to Continued Success! TAN Poh Kwang (Mr) Advisor 21 Dec 2012, Singapore
We also offer this range of equipment for hire because sometimes buying it isn’t right for the client or the job
Turner Morris focus construction
sell something, firstly, we are selling the right tool for the job, whatever the job. We want to sell the correct equipment for the correct application and a broad knowledge of the product certainly helps in respect to advising the consumer and supplying the right product. From a strictly sales perspective, you need to know the key selling features of a product. You need to understand how it works and what it does. In a market like ours, where it becomes more and more competitive every day, and with cheap product flooding in from China, it is the only way to maintain your market share. You must know the product and sell on its features and benefits. “Then you have to be able to offer the back-up support, the value-add.” This is an exciting time for Turner Morris. The rollout of the AFM acquisition is underway and we look forward to bringing you an update soon. END To learn more visit www.turnermorris.co.za
Helping people to get things done Honda sets the standard for reliable, hard-working engines. Our engines are built with high-quality components designed for optimum performance in the harshest environments. We’ve got a well-earned reputation for our engine quality and performance. When you choose a Honda engine, or a product powered by Honda, you know what you’re getting. An engine you can count on, now and in the future.
de v elopment
Investment in the Coega IDZ is opening up opportunities that will “drive regional development, diversify and expand industrial bases as well as create direct and upstream employment,” says Coega Development Corporation’s Christopher Mashigo.
By Ian Armitage 90
Coega IDZ focus economic development
ccording to Christopher Mashigo, an executive manager of the Coega Development Corporation (CDC), the Coega industrial development zone (IDZ) in Port Elizabeth has helped “create jobs and drive growth” in the Eastern Cape. Established by the South African Department of Trade and Industry, with the Eastern Cape Provincial Government and Eastern Cape Development Corporation as shareholders, and managed by the CDC, the IDZ is designed to “position South Africa as a hub for Southern African trade,” he says. And it is succeeding. In 2001 the government established four industrial development zones (IDZs) at Coega just outside Port Elizabeth, East London, Richards Bay and OR Tambo International Airport. The zones were designed to “induce investment and create jobs”. Critics say IDZs have largely failed, and the rate of job creation has been disappointing. They think more could have been accomplished for economic development through direct investment from the state. Mr Mashigo however says IDZs work and their successes should not be
measured in mere years but in decades given that they are long-term development investments. He pointed to a number of investment projects in Nelson Mandela Bay and the Eastern Cape, including the deep-water Ngqura port project and a proposed multibillion-rand oil refinery. “Investment in the Coega IDZ is opening up opportunities that will drive regional development, diversify and expand industrial bases as well as create direct and upstream employment,” he says. “The municipality and CDC are collaborating to put incentives on the agenda to create investments that create jobs and diversify the employment base.” With the government trying to transform the country into an industrial state, a great noise has been made about the Industrial Policy Action Plan and the new growth path. In this financial year [2012/13] alone 5,364 jobs have been created and 6,505 people have been trained by the CDC. Since inception, the CDC, and its Human Capital Solutions unit, has trained 25,586 people and created 6,875 construction jobs, 3,484 permanent Coega IDZ jobs and 44,786 indirect jobs. The employment figures – some 3,770 jobs – are
driven by direct investments in the IDZ by business, such as Dynamic Commodities, Discovery Health, Acoustex, Benteler, Cape Concretes and Cerebos, Mashigo says. New developments in the IDZs are focused mostly on functions in the industrial and manufacturing value chain, he adds. “With a bouquet of projects valued at more than R140 billion, the IDZ is set to steer the Eastern Cape into the economic future, ensuring investments comes here and to help the region contribute more to the economic and developmental growth of South Africa.” At present, the Coega IDZ contributes about 5.9 percent to the Eastern Cape’s GDP and 0.5 percent to national GDP. www.southafricamag.com 91
“Naturally we want to boost that and grow it,” Mashigo says. Among the most recent investors is Discovery, South Africa’s largest medical aid scheme provider. Discovery Health opened a call centre at Coega that has employed 336 people and is expected to employ 400 by January 2013. “That is an exciting project creating jobs. Discovery has grown fourfold in the last 12 to 14 months, which is a fantastic story of growth.” The Coega IDZ is home to 22 operational investors, amounting to R1.2 billion in investment, and a further R7.5 billion in investment is in implementation stage. One of the major investments includes Fortune-500 company First Automobile Works (FAW), China’s largest vehicle manufacturer, who are building a new R600 million vehicle and truck assembly plant, Mashigo says. That investment is in Zone 2 of the IDZ, where the CDC plans to set up a tool, die and mould (TDM) cluster. FAW’s construction firm, WBHO Construction, recently broke ground on the site of the plant, which is due for completion by December 2013. FAW’s investment is great news for Nelson Mandela Bay and the Eastern Cape economy. “It is fantastic. Production capacity would be 5,000 trucks a year in the first phase and 30,000 passenger vehicles a year in the second and the investment is valued at R600 million, with R200 million earmarked for plant construction and equipment, and R400 million to start up and run the facility over the next few years. The trucks are destined for the local market as well as a number of African countries and this is all part of a bigger plan to create a platform for Tier 1 suppliers who aren’t yet present in SA.” Mashigo says partnership, cooperation and the right incentives were “critical” in securing the investment. “We have worked with government at all tiers to ensure and to continue to ensure we create a more competitive environment for all investors.” 92
This isn’t the only major coup. AfriSam, a leading black-controlled, unlisted cement company, recently signed a lease agreement worth R634 million to establish a Greenfield milling and blending plant in Zone 5 of the Coega IDZ. The new facility will supplement its existing supply into the Eastern Cape market. The construction of the plant will create about 400 temporary jobs, while its operation would create about 90 permanent jobs. “This will see the Zone 5 metallurgical cluster filled,” says Mashigo. “It speaks of growing investor confidence in the IDZ. I believe AfriSam chose Coega because of the quality of its infrastructure and proximity to the Port of Ngqura, which makes it cost effective to import the raw materials needed to produce cement products.” There is much more going on. “We also have a wide variety of opportunities in agro-processing and a lot of local produce is being processed, packaged and exported from Coega IDZ through to
Coega IDZ focus economic development
Discovery has grown fourfold in the last 12 to 14 months
Ngqura and to international destinations. Dynamic Commodities has a staff of 1389 and they have exported more than R140 million of fruit sorbet, So Shi, and other fruit products around the world. We have Coega Diary, which produces UHT milk for local retailers, and there is EC Biomass with makes bio fuels from wood chips.” Renewable energy is “an interesting field”, he says. “We have three wind energy projects and one solar project that are in various stages of development, all of which will be contributing to the national grid by 2015. On top of that we have secured two ferromanganese smelters with a combined investment value of over R8 billion and the Coega IDZ is also home to the first steel mill in the Eastern Cape, pioneered by AgniSteels, an Indian company which partnered with a local business to form a consortium. “The IDZ is coming into its own and is contributing to the future of the Eastern Cape,” Mashigo concludes. END To learn more visit www.coega.co.za.
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Powerful 20 Performance years
Subaru FocUS autoMotive
the last 12 months have been fantastic for subaru says ashley lazarus, marketing manager at Subaru Southern Africa, not least because it celebrated 20 years of operation within sa.
By ian armitage
hat a year 2012 has been for Japanese auto manufacturer Subaru Southern Africa (SSA). The brand kicked off with the launch of the allnew Subaru XV, which included a national TV advertising campaign that you can’t have failed to notice, and saw the firm smash all its sales forecasts and even run out of stock in the second month. “It was fantastic,” says Subaru Southern Africa’s marketing manager Ashley Lazarus. “Positioned below our bigger Subaru Forester, XV was launched into a very competitive crossover market. Backed by a strong advertising campaign, we exceeded our initial sales forecast, to the point of being out of stock in month two of launch. The XV has done well for us in opening up Subaru to a younger customer profile compared to our traditional older customer.” There was another benefit. “The XV also brought to market the new product development philosophy from Fuji Heavy Industries, reflecting Subaru’s new focus on interior refinement, sleeker exterior design and improved engine and transmission efficiencies, with improved performance dynamics and lower fuel economy,” Lazarus adds. “The same product developmental philosophy will follow through in the next generation 2013 Forester, due for launch in March 2013.” Subaru Southern Africa has been busy. In addition to the new vehicle launches and the introduction of its new “new product development philosophy”, it has also upgraded its dealership network, relocating and re-launching a new outlet in the Johannesburg suburb of Bruma. Lazarus says it was a “was a wonderful opportunity” for the brand to introduce a “new look Subaru retail concept”. “As it is known, Subaru Johannesburg, which is fully owned by Subaru Southern Africa, was relocated from its previous site to its current www.southafricamag.com 95
Subaru FocUS autoMotive
bigger and more prominent location,” he says. “The opening ceremony of this flagship facility took place in March, and with it the new look-and-feel retail concept was launched. Customer feedback and experience with the new dealership has proved positive, but more importantly their satisfaction with the overall brand engagement from sales to aftersales has been enhanced – this being a core element of the Subaru brand experience.” Now as great as all this is, it is surpassed. 2012 has also seen Subaru Southern Africa celebrate 20 years of operation in South Africa. “We turned 20,” Lazarus 96
satisfaction with the overall brand engagement from sales to aftersales has been enhanced
says. “Recognising the important contribution from all stakeholders, such as our manufacturer (Fuji Heavy Industries), to our shareholder (the Toyota Tsusho Corporation), our dealers and service centres, and most importantly our loyal passionate customers, the celebration of this significant milestone provided the perfect opportunity to reflect on the company’s history and accomplishments to date, as well as to fervently strengthen the course and positioning for future success. “After 20 years it all boils down to what our customers think about us. To have also been voted as
Grindrod Logistics is very proud of our relationship with Subaru over the past 15 years and we wish them further success in the future
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the number one most-loved cars in South Africa by Subaru owners according to the 2012 AutoBrand Survey is the highest honour we could receive. In a market with over 70 automotive brands, with many models and grades available, this is an amazing accolade for us to have achieved. This achievement follows on from us attaining the number one position in 2011 as well. The survey is considered the biggest automotive survey of its kind in SA, and is conducted for Ramsay Media, the biggest local auto magazine.” Part of the 20-years celebration campaign included the launch of a special edition Subaru Forester kitted out with an accessory package, specially tailored for use in South Africa’s off-road and bush context, Lazarus adds. “Also, Scoobyfest, an annual Subaru Owners Club event, culminated in close onto 80 owners converging for a funfilled day of varied challenges including skidpan activities, hillclimbs and race track
driving time trials,” he says. “The day bore testament to the love and passion, which our customers exhibit for our brand, and was a wonderful way to celebrate the brands 20 years of existence in South Africa. The day’s attendance is considered to be one of the biggest gatherings of any automotive owners groups in SA, for any one specific brand.” Now it doesn’t stop there (I told you Subaru Southern Africa had been busy!). 2012 also saw the Subaru team put in a great performance in the Bridgestone Production Car Championship, including a second place finish overall from driver Hennie Groenewald. Lazarus says that all within the Subaru Southern Africa family are “extremely proud” of their achievements. “Both our team drivers Hennie Groenewald and Richard Pinard did well despite very strong competition from the BMW and Audi teams,” he says. “Hennie managed to finish second overall in the championship, which is a great achievement www.southafricamag.com 97
Subaru FocUS autoMotive
considering our competitors have a competitive edge due to newer race cars, compared to our cars being four years old. Hennie finished the season with the most number of wins by any driver, and expectation is high for 2013, as we will be racing a new pair of Subaru STI sedans.” It hasn’t been all good news, however. One big challenge for Subaru Southern Africa this past year has been the appreciation of the Japanese yen against rand. With all but one model fully imported from Japan, the strengthening of the yen has impacted significantly on its price competitiveness and positioning, and has also hampered Subaru Southern Africa’s ability to trade effectively at a retail level, due to lower levels of profitability. “Competition has been rife, especially against Japanese competitors who are sourcing vehicles from outside Japan, and those who manufacture in South Africa with import duty tariff reductions,” Lazarus says. “Across the entire automotive industry, even premium German luxury brands 98
have pursued strong price discounting and incentive campaigns. For Subaru Southern Africa, competing in such a price-driven market has proven challenging against the backdrop of higher importation costs due to the strong yen.” Just as well then that Subaru is a brand South Africans have grown to trust. Subaru Southern Africa places a strong emphasis on ‘superior customer service and satisfaction’ and is known for its brand promise of “Confidence in Motion”. Being ranked #1 in Dealer Service ratings across the industry in the 2012 AutoBrand Survey, which Lazarus mentioned earlier, doesn’t hurt either. “That is a remarkable achievement for us, considering our brand size in SA and the stiff competition especially from the premium luxury brands who pride themselves as being superior in the arena of customer service,” he says. “Being recognised for our superior dealer service is a great demonstration of the dealer network’s commitment to our brand in South Africa, and our on-going
Leading the way in fuel wholesale and distribution The company was born from the need that existed to look after smaller users of petroleum. Elegant Fuel only delivers depot-certified product to its clients over a vast area that includes Gauteng, Mpumalanga, Limpopo and the North West province. Due to its attention to detail and personal service, the company has seen month on month growth for a few years running and is the preferred non-refining wholesaler to diesel depots, mines, garages, the agricultural sector and even public transport operators. It has even come to the rescue of branded garages when they have run out of fuel. “Drawing from hard-earned experience and a never-say-die attitude of its founders, Elegant Fuel has established itself as the foremost supplier of petroleum products in the northern provinces of South Africa,” “With a customer satisfaction mindset, it has its finger firmly on the pulse of the economic, industrial and agricultural heartbeat of the province.” Through excellent strategic planning and communication, Elegant Fuel strives to deliver the best quality products to its discerning customers. Customer satisfaction is front of mind across the product range, from low-sulphur diesel to high-octane fuel. Elegant Fuel retains its logistical edge on the competition through agreements with all the major petroleum depots in the country, including Sasol Secunda, Sasol Natref, Total Waltoo, Total Alrode, Shell Alrode, Caltex Alrode and BP Waltloo to name a few.
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“Through the use of state-of-the-art bulk tankers, we pride ourselves in unmatched levels of service and industry expertise gained from our industry leading partnership with Faith Wheels tankers.” “Elegant Fuel always strives to put the customer first by introducing industry-leading cost-cutting measures and passing these savings on to our customers.” “It is interesting to note that in these financially troubled times, Elegant Fuel is still seen as a lucrative investment opportunity with low risks and high rewards by investors from both the public and private sector.” Elegant Fuel also enjoys a Level 4 BEE rating and is certified by the Department of Energy, speaking volumes of its commitment to transformation within the petroleum industry. Doing business with Elegant Fuel has now become even easier, with online orders allowing increased ease of purchase. Also available online is a list of representatives that cover the various areas. The company prides itself on its 100% no contamination record, which speaks volumes of the quality of the products and the integrity of management. Given the integrity, expertise, passion, hard work and commitment produced by the Elegant Fuel team, our market-leading performance comes as no surprise.
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pursuit of enriching the customer experience with us. Of course, there are still areas for improvement within this, but at least we know that the investment put into this is already paying off and certainly heading in the right direction.” The future is bright for Subaru Southern Africa. The automotive market has experienced double-digit growth compared to 2011, with strong growth especially within the entry-level segments, in passenger car, SUV and crossover segments. Lazarus says the market is very price conscious, with a lot of price discounting, discounted monthly finance deals with residuals and trade cover assistance deals being offered continually. South Africa has around 70 automotive brands all fighting for a slice of a market, which is no bigger than 700,000 units annually, he says. “Right now the customers are in the best position, as they are spoilt for choice
in terms of automotive brands on offer, and their numerous discounted offers available,” Lazarus explains. “Based on recentlylowered economic growth expectations for SA at levels around three percent, the automotive market forecasters are predicting single digit growth for 2013 of around seven percent, which seems reasonable.” Indeed, while those figures might not seem high, I’m sure automakers in Europe are green with envy. “There is a lot on the agenda for 2013,” Lazarus adds. “From a product perspective, our next generation Forester is our biggest product launch in 2013. Representing 50 percent of total sales for Subaru Southern Africa, this model is significantly important as the key product within our Subaru Lifestyle product line-up. “In 2012, we worked on building awareness for our Forester name-plate through TV and print advertising, in preparation for our 2013 Forester launch. For 2013, we will look to harness the heightened
Suburu FocUS autoMotive
We will also continue to delight our customers with superior service and outstanding satisfaction levels
awareness around Forester and leverage this strength to build demand for the new model. “Our key communication goal in 2013 is to grow brand awareness around the Subaru brand DNA. Together with Porsche, we are the only other automotive brand to use the Boxer® engine layout, providing a lower centre of gravity, resulting in a higher level of driving balance and stability. Our Symmetrical All-Wheel Drive™ system, which is standard across our current model line-up except in the BRZ, is renowned for its impeccable levels of handling and grip. This year marked the 40th year of Symmetrical AWD anniversary since its first introduction. Subaru is also synonymous with having received arguably the highest safety ratings across the industry. In combination with the engineering safety dynamics of Symmetrical All-Wheel Drive™, active and passive safety tools such as our RingShaped Reinforcement™ technology, it is easy to understand the five-star EuroNCAP, ANCAP and JNCAP safety ratings across the line-up. “Dealer network expansion is also vital for us to grow our physical footprint across Southern Africa. Presently, we are represented by 11 dealerships and four service centres and evaluation of further brand representation is underway in order to reach new market locations. Subsequent to this, we will also continue to delight our customers with superior service and outstanding satisfaction levels. It is important for us as a smaller player within the overall market that we capitalise on our ability to interact and engage directly with our customers on a deeper level. There has been strong growth specifically within the rental and fleet segments of the automotive market. This has not been an area of focus for Subaru Southern Africa, due to limited product offering suitable for these sectors. With our new XV and the soon-to-be-launched Forester, we will look to focus on these sectors with the total cost of ownership being a strong factor in our favour.” Subaru has always been associated with powerful performance vehicles. The brand wants to offer Subaru owners adaptive ways to enrich their lives through a uniquely satisfying driving experience. eND To learn more visit www.subaru.co.za. www.southafricamag.com 101
in BranD revaMP according to Ceo grant attwood, the new packaging has been designed to make it â&#x20AC;&#x153;easier to find sylko products on the shelfâ&#x20AC;?.
By ian armitage
Sylko focus manufacturing
hat a year 2012 was for disposable product manufacturer Sylko. It celebrated its 65th birthday. No mean feat. It also saw Sylko revamp its brand and packaging. According to CEO Grant Attwood, the new packaging has been designed to make it “easier to find Sylko products on the shelf”. It has standardised “the look and feel” and also added a few new features to make products “easier to use”. The honeycomb is the new symbol of the revamped brand and it appears on all packaging and is embossed on foils. Mr Attwood says it is a “symbol of the strength of our products”. As the firm gears up for 2013, we caught up with Grant and asked him a few questions.... The last year seemed like an exciting one. Was it? South Africa’s economy, like everywhere, is not doing as well as it was. SA is on about three percent economic growth, and to people in Europe or another depressed economy that probably sounds brilliant, but we’re used to double that. That said, to be honest with you, it hasn’t been a bad year. I think we had a great year when we had the Soccer World Cup in 2010 – it was a phenomenal year. We have since benchmarked against
that and I have to say that this year hasn’t been close to that, but we have been doing well especially when you see what is going on out there globally, we’re still well positioned. If you look at our profits, they are a bit down but we’re still making a very good return on our investment. It’s been a tough year and we expect a tough year next year as well, for everyone in SA - but we’re weathering the storm. We’re trying to keep an emphasis on people development and product development and trying not to let the doom and gloom get in the way and cut back too much on expenditure. We’re trying to continue to spend on infrastructure even though things are a little tougher than we’d like them to be. How are you preparing? What have you been doing in terms of product development and innovation to try and get the growth that seems hard to get hold of? We’ve got a product development pipeline that we’ve established so there are always new products in different stages of development. In the last few months we’ve seen quite a few new products coming to market and a few products are due to be launched early in the New Year. There are some quite innovative
We wanted to make sure that customers could identify when they were buying a Sylko product and also be able to locate the product they were looking for on the shelves
Sylko FocUS ManufaCturing
products that haven’t been seen in SA really yet, mostly in the supermarkets. We’re launching quite a few new innovative products here and there. Lots going on, are you excited by what 2013 could hold? I think so. I think it is going to be a very interesting year. We have a great bunch of customers who have really supported us over the past few years and our relationships continue to get better and better. It is difficult to try and gaze into a crystal ball but we’re on a firm footing, we have a lot of very experienced staff – many of whom have been with us for a very long time – so we have a great base to work from that helps carry us through from year to year. We’re all excited and I think our customers are giving us their support. We should
have a good year in 2013 despite prevailing market conditions. you have been around for 65 years now having celebrated that milestone in 2012. Does that give you an advantage in terms of reputation in the market? I think it does. There is very good brand recognition around Sylko and we have done a whole new packaging re-launch this year to make it stand out better on shelves and make it easier for customers to identify the Sylko logo. We are a proudly South African company and quality and ease of use is of great importance to us. Why did you decide to take that move with the new packaging? Well it’s something that needs
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to happen every few years anyway. Packaging does need refreshing from time to time, but what we have found is that we had lost some of the cohesiveness across the range and we wanted to make sure that customers could identify when they were buying a Sylko product and also be able to locate the product they were looking for on the shelves. If we look at the foil category, for example, we found a lot of new entrants into the categories and it was quite difficult for customers to find the type of foil that they were looking for. We decided to make it easier for them and make it ‘big and bold’. If you look at some other packaging, they use fancy graphics or photos, maybe their logo is really big, and we said ‘well let’s put the customer first and make it easy for them to find the products’. That’s what we’ve done and I think it’s paid off. We have a really nice look and feel across the range now.
Hi-Tech Inks has spread its wings into Africa, the Middle East and India as a Proudly South African manufacturer and suppliers of inks and industry leaders in innovative and customised solutions for valued customers like Sylko. We look forward to meeting new challenges and achieving fresh successes in partnership with our existing and future customers.
Sylko FocUS ManufaCturing
you have added a couple of new features, for example, the easy restart strip on your clingwrap. Was it a chance to spice things up? We did introduce that new feature on the cling wrap, thanks for noticing! We took the opportunity to highlight if there were any other interesting quality issues or points of difference around our products. That’s what we’re trying to do throughout the Sylko range. We’re trying to be a little bit different and add a little bit of extra value where we can. Why did you choose the honeycomb? Honeycomb is really a symbol of efficiency. We are looking to make people’s lives easier and more efficient. The honeycomb is one of the most efficient shapes in nature in terms of its structural integrity and, as we all know, the honeybee is quite the efficient little worker so we built the whole thing around efficiency and making the customers life as easy as possible. What do you think is the secret behind the success of Sylko? How is your approach different to others in the market? That is a million dollar question! I was thinking about this the other day and I think people can undervalue the contribution that a solid staff team can make - people who are prepared to go the extra mile and also people who have an internalised knowledge about the way things work can have a huge bearing on the success of any business. I guess this is why we understand the market place very well. We understand our customers well, our products well, and I guess also we have seen it all before. If we see a downturn, we weather it, if we have a good spell we take maximum advantage of it. I guess that is the saleability. We always keep going and make a plan. You always have to adapt. Whilst you have the underlying stability, you also have to have this adaptation and innovation and a constant willingness to change. That is a very interesting dynamic isn’t it? eND To learn more visit www.sylko.co.za 106 www.southafricamag.com
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B L AC K EM P OW ER M EN T
AT I T S B E S T :
KZn oils following governmentâ&#x20AC;&#x2122;s black empowerment efforts, rajen reddy, Ceo of KZN oils, has built his dream into a multi-million rand business. He talks to south africa Magazine.
By ian armitage
KZN oils FocUS oil & gas
ou’ve read a million times what it takes to be a successful entrepreneur: intelligence, vision, drive, perseverance, and a strong work ethic. But instead of analysing how an entrepreneur behaves, you should instead look how they think. No two entrepreneurs do things exactly the same way. I know one entrepreneur who is probably one of the laziest people you’ll meet, but he’s started two successful businesses. It defies logic. But it’s true. Research by Saras D. Sarasvathy, professor of business administration at the University of Virginia’s Darden School of Business, found that if you looked at how entrepreneurs think, reasoned, approached obstacles, and took advantage of opportunities you’d fine some remarkable similarities. In the face of an unknown future, they act. More specifically they: 1. Take a small smart step forward. 2. Pause to see what they learned by doing so; and 3. Build that learning into what they do next. Now this is the perfect point at which to introduce a man that the Mercury labelled “The oil baron of KZN”, Rajen Reddy.
Mr Reddy certainly ticks those boxes and he is famous for building up his own oil and fuel distribution company, KZN Oils. With headquarters in Durban and a turnover of more than R1 billion, KZN Oils supplies lubricants and fuel to Transnet’s port operations. Under that core fuel and oil business, Mr Reddy also owns 30 petrol stations and is a major fuel distributor for Chevron/ Caltex garages in northern KwaZulu-Natal. Now it hasn’t been an easy road. But Reddy is nothing but determined. “I’ve tried my hand at construction, plumbing, motor repair, fuel and oil and stationary,” he says. “I’ve done it all.” While getting supplies for a construction firm he was running in 1988, Mr Reddy noticed a Shell fuel station site that was about to be expropriated by the municipality. This is where the story starts. “I really did harass them to get the site and I actually convinced the municipality to give it to me on a monthto-month lease while they decided what to do with it long-term,” he says. “It was my dream from a boy to run my own petrol station, it really was. I also ran a tuckshop and motor repair facility from the site. I tried
my hand at a lot of things in those days.” Things took a twist in 1996. “Basically I was in with my bank and my banker told me about new opportunities for black business people,” Reddy says. The spark had ignited. “My banker talked me through opportunities coming up with the port, for black empowerment, through what is now Transnet,” he adds. “I thought ‘what great potential’ and went straight out and canvassed business from them.” It wasn’t easy and took time to crack. “The oil industry is a tough nut to crack and you know for a while I earned money selling www.southafricamag.com 109
KZN oils FocUS oil & gas
We do approximately two million litres of lubricants and we do collectively about 220240 million litres of oil and i think we have the potential for much more. But yes, we have grown a lot and improved
stationary. That is absolutely true. But I had ambitions for my fuel businesses and I knew it was a matter of time. I knew that if I had a fuel contract I could make it happen and despite it being very difficult I had latched on the idea and I wasn’t about to quit. To start, the port wouldn’t listen unless I got a fuel supply contract and the oil company bosses weren’t interested. None of them believed government empowerment was coming. How wrong they were.” Mr Reddy’s big break came on January 2, 2012. That was the day KZN Oils was born, he says. “I remember that day very well. That’s the day zero, the day it began. It is when I got my very first contract from the port to supply lubricants. It was my big break. With the contract in my hand, I went to Total. They agreed to supply me.” The rest is history. Today KZN supplies Transnet, other parastatals and private 110 www.southafricamag.com
companies like Anglo American and De Beers with two million litres of lubricants and more than 200 million litres of fuel annually. “We do approximately two million litres of lubricants and we do collectively about 220240 million litres of oil and I think we have the potential for much more. But yes, we have grown a lot and improved. We’ve opened new partnerships of supply. “Without sounding unappreciative, the oil industry is massive. As we say, ’volume buys the whisky’, so you need a lot of volume.” Last year, KZN Oils struck a deal with Chevron to supply and operate 29 Caltex stations in Northern KZN. “What happened there is that Chevron moved into three strategic locations – Cape Town central, Gauteng central, and Durban central,” Reddy says. “They have then divided the nine provinces into north and south. We were fortunate to get KZN North.
We started off with 29 service stations where we look after the supply and branding for 15 years. We are one year and three months into the contract. “It started off with serious challenges because we had a national shortage of fuel. One had to overcome that. We also had to deal with supply constraints. One had to deal with a logistics constraint. We now have 32 road tankers. So we are adding more to our fleet. Yes, serious challenges, but we are moving along well and in fact we added another service station to our offering. We have 30 now and in two weeks we add another. We are hoping to have another three or four in 2013.” The deal has had positive spin-offs. KZN has been working with Chevron on its own lubricants brand. “We have developed and we’ve got our own brand of lubricant called KZN Oils. It is about a year and a half now that we have our own brand. We have Caltex manufacturing our lubricant. That was quite innovative, even if I may say so, because they don’t
really promote house brands as they focus instead on their own brand. I managed to convince them otherwise and we are hoping to convince other majors to blend for us.” The future is bright, he says. “Oh yes. I think we have got very good infrastructure and I always believed this is the way we should go. We are going to be 15 years old on January 2. I bought our warehouse some seven years ago and that again shows we work on a different model to the oil companies.” Mr Reddy is a poster boy for BEE. He acknowledges that, if it wasn’t for the government’s black empowerment efforts, he wouldn’t be where he is today. He also believes his bank and his management team and staff at KZN Oils have played a major role. “What is critical to our success is the financial institutions,” Reddy says. “Even though they are a stickler for policy and things like that they have really helped. FNB is our bank. They have really come to the party so far. They want to invest where
KZN Oils focus OIL & GAS
I think we have got very good infrastructure and I always believed this is the way we should go. We are going to be 15 years old on January 2. I bought our warehouse some seven years ago and that again shows we work on a different model to the oil companies
they can make money and mitigate risk. We offer that. “A business plan is vital,” he adds. “Entrepreneurs like me don’t like rules and regulations, boundaries, censors, or anything like that, but I am beginning to learn that you can’t be a maverick. You can be exciting, but can’t do whatever you like. The financial institutions and everyone else plays a vital role in the realisation of your plans. De Beers and Anglo American take us more seriously as we move along. We have a fantastic team here. People like my chairman Pete Linnegar and Neil Biggs. People like that make a company. They make the difference. You must not think you know it all.” END Mr Reddy’s story is fantastic. To learn more visit www.kznoils.co.za. www.southafricamag.com 113
M T N S A la u nches
c o mm e r c i a l LTE
MTN SA has announced the commercial roll out of 4G LTE network. Customers now have access to quicker broadband speeds.
By Ian Armitage 114 www.southafricamag.com
MTN SA focus TELECOMS
fter more than a year of testing MTN South Africa, the country’s second largest mobile network operator, has launched its fourth-generation (4G) long-term evolution (LTE) network. It is available on a commercial basis in Joburg (Midrand, Sandton, Rosebank, Fourways, Roodepoort, Fairlands and OR Tambo), Pretoria (Menlyn, Centurion, Pretoria East and Hatfield) and Durban (Westville, Pinetown, Kloof, Hillcrest, Tongaat, Queensburgh, King Shaka International airport and Umhlanga), after going live on December 1. The man in charge of the roll out is Mike Fairon. He says the network will offer speeds of up to 70Mbits/s, although consumers should expect average download speeds of 5Mbit/s and 15Mbit/s. “We want to have 500 live sites by the end of the year,” Fairon, who talked with South Africa Magazine two days after the launch, says. “We’ve upgraded over 1600 base stations to prepare for this activation and it comes after extensive testing.” MTN’s switch-on follows rival Vodacom’s launch of its own commercial LTE services in October, which surprised delegates at the 2012 MyBroadband Conference. “Our system provides faster connection speeds than other networks which run on a 2X5Mhz,” says Fairon. “Along with the launch, we are offering a Samsung Galaxy Tab 8.9 LTE on a MTN 2GB with contract for R799.00 per month, over 12 months. “And we’ll start selling 4G dongles next year. “These things take time. Changes in mobile communications have always been evolutionary and LTE deployment will be the same in that the transition from 3G to LTE over a period of several years, just like with 2G to 3G. “Right now there’s not an abundance of LTE devices in the market, so all operators are subject to what LTE devices are
available. The transition is more than just a technology upgrade however and has to be approached correctly.” He says device manufacturers have a major role to play. “They will determine in many respects the speed at which we can roll out the LTE because you need devices. Right now not all are LTEenabled so we’ve focused on ones that are. We’re currently focused on the data component of the LTE so things like tablets, with the Samsung, dongles, routers and gateways.” The MTN LTE has the potential to “change” how we use and view the Internet. “I think there is an insatiable appetite for speed and a consistent experience when you’re on the Internet,” says Fairon. “You can’t deliver services fast enough to consumers in terms of what they’re doing on the Internet. What we’re seeing is that there is a dire need for speed and coupled with that, when we look at actual activity on the network, there’s a lot of video being consumed. When you put the two together you need certain speeds in order to have an acceptable level of video experience on the network, so the two go hand in hand. Also
when you see what customers are doing in terms of accessing cloud services, they need speed. Indeed, if you look at ICT-based cloud services, they need a certain speed to deliver an experience that is acceptable to consumers and/or business. This will fuel the uptake of cloud-based services. I think there’s a number of components that need to come together to create the perfect storm to drive cloud based services.” If you’ve already opted to migrate to the LTE, you’ll be experiencing speeds of 30-40Mbit/s. It won’t stay that way forever, and as more people join the network the speeds will come down. Even so, it will be fast enough to “fundamentally change” consumer behaviour. “We’re seeing that some of the customers who have brought the proposition already are getting 30 to 40Mbit/s,” says Fairon. “That won’t always be the case. As the network crawls up, it will average probably between 5Mbit/s and maybe 10 or 14Mbit/s, but even at 5-10Mbit/s you can fundamentally change consumer behaviour. They will drive their own changes in behaviour and we will see a larger uptake in videobased services and a lot of uptake in cloud-based services. I think we may even see a dynamic shift in the traditional IT infrastructure market where consumers don’t need PCs and laptops anymore as everything they get will be off the cloud. I think we will see a shift in what consumers purchase from a device perspective.” The LTE will have a number of positive ramifications for MTN, least of which in its bid to break into the fast-growing mobile financial services market. 116 www.southafricamag.com
MTN SA focus TELECOMS
MTN has partnered with the South African Bank of Athens as well as retailers Pick n Pay and Boxer Stores to introduce Mobile Money. Mobile Money is operated by TYME, a distribution channel of the South African Bank of Athens, and the service allows customers to make payments from their mobile phones, including person-toperson money transfers and to purchase prepaid electricity and airtime vouchers. “The LTE absolutely has positive ramifications there,” says Fairon. “We are already seeing a healthy uptake in the new mobile banking services which is again another component of the whole convergence play and how our network and infrastructure is allowing us to converge industries and technologies etc and reshape some of the landscapes.
“The LTE also helps us lead our 2020 broadband vision, which includes the provision up to 100Mbit/s to consumers in urban areas, so this really helps us meet our urban vision that we have put into place and helping consumers get a consistent high-speed connection. Many reports have shown a direct correlation between broadband penetration and economic development so this will drive the economic development of SA at an urban level and then as the network heads up into some of the less urban areas, it will bring economic development to different parts of the country.” END A street level coverage map that shows areas with MTN LTE coverage can be seen on the company’s website, www.mtn.co.za. www.southafricamag.com 117
South Africa Academy of Management Africa Conference (AOM Africa Conference) Gordon Institute of Business Science 26 Melville Road Illovo Johannesburg South Africa 7 – 10 January 2013 www.gibs.co.za Investment in African Mining (INDABA) Cape Town International Convention Centre Coen Steytler Avenue Cape Town 8000 South Africa 4 – 7 February 2013 www.miningindaba.com GIBS Investing in Africa 2013 Gordon Institute of Business Science 26 Melville Road Illovo Johannesburg South Africa 19 – 20 February 2013 www.gibs.co.za The World of Cats & Dogs Exhibition Cape Town International Convention Centre Convention Square 1 Lower Long Street Cape Town South Africa 22-24 February 2013 www.dogscats.co.za SANS South Africa Summer 2013 Radisson Blu Gautrain Hotel Rivonia Road Johannesburg 2196 South Africa 4 – 9 March 2013 www.sans.org 7th Africa Economic Forum Sandton Convention Centre 161 Maude Street Sandown 2196 Johannesburg South Africa March 8, 2013 www.saconvention.co.za
Africa Money Expo 2013 Sandton Convention Centre 161 Maude Street Sandown 2196 Johannesburg South Africa 7-9 March 2013 www.moneyexpo.co.za Hobby-X Johannesburg Coca-Cola Dome Northumberland Avenue Johannesburg 2161 South Africa 7-10 March 2013 www.hobby-x.co.za Retail World Africa 2013 Sandton Convention Centre 161 Maude Street Sandown 2196 Johannesburg South Africa 11-13 March 2013 www.terrapinn.com/exhibition/ retail-world-africa ARA Week 2013 Westin Grand Hotel Convention Square Lower Long Street Cape Town South Africa 18-22 March 2013 www.citac.com/index.php/ archive/items/ARA-week-2013announcement.html WoodEX for Africa Gallagher Convention Centre 19 Richard Drive Midrand Johannesburg 1685 South Africa 21-23 March 2013 www.woodexforafrica.com
Oil and Gas Infrastructure Security Africa 2013 Alisa Hotel 21 Dr Isert Road North Ridge Accra Ghana 21 – 24 January 2013 www.oilandgas-security.com The Nigeria Oil and Gas Conference International Conference Centre Abuja Nigeria 18-21 February 2013 www.cwcnog.com Offshore West Africa International Conference Centre Castle Road Accra Ghana 19 - 21 March 2013 www.offshorewestafrica.com CAPE V, 5th African Petroleum Congress & Exhibition Le Méridien Re-Ndama PO Box 4064 Libreville Gabon 26 - 28 Mar 2013 www.biztradeshows.com/tradeevents/african-petroleum-congressexhibition.html
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