AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
April 2017
www.enterprise-africa.net
Exclusive Interview with Ian Fuhr
SORBET
GAINS STRENGTH IN UK MARKET ALSO IN THIS ISSUE:
Eqstra Fleet Management / Clientèle / Azmet / BBF Safety
EDITOR’S LETTER Joe Forshaw EDITOR joe@enterprise-africa.co.za Hal Hutchison SALES MANAGER hal@enterprise-africa.co.za Emma Neethling SALES ADMINISTRATOR sales@enterprise-africa.co.za Sam Hendricks SENIOR PROJECT MANAGER sam@enterprise-africa.co.za Shaun Cousins PROJECT MANAGER shaun@enterprise-africa.co.za Shannon James PROJECT MANAGER shannon@enterprise-africa.co.za Peter Littleboy PROJECT MANAGER peter@enterprise-africa.co.za Adam Dowson PROJECT MANAGER adam@enterprise-africa.co.za Emma Smith FINANCE MANAGER finance@enterprise-africa.co.za Harvey Tarlton SENIOR DESIGNER harvey@enterprise-africa.co.za
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Published by CMB Multimedia Chris Bolderstone – General Manager Logo Two E. chris@cmb-multimedia.com Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-multimedia.com www.cmb-multimedia.com CMB Multimedia does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Multimedia Ltd 2017
Welcome to our latest edition
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A key theme of April’s Enterprise Africa is international expansion. A number of popular South African brands are developing to the point where movement into new geographical markets has become the next logical step on the growth path. One market in particular is attracting a lot of attention the UK. Our lead feature comes from South African beauty brand, Sorbet, which is busy implementing a growth strategy in the UK. After opening four stores in London and with a fifth on the way, Founder and CEO, Ian Fuhr has plans to roll out his franchise concept across Britain. We also hear from Eqstra Fleet Management and MD Murray Price who explains that after spending the past eight years installing an all-new IT system, the company is now operating efficiently and looking for growth in new markets, specifically the UK. Leading South African events business, Gearhouse and its subsidiaries have also been active in the UK recently, providing South African tech, know-how and quality to major events. Other features come from Omega Risk Solutions, BBF Safety Group and Azmet Technology & Projects all of which are looking to export expertise from South Africa into new markets in Africa and beyond. Exports look set to become increasingly important in the shortterm future following the cabinet reshuffle which has resulted in Rand price fluctuations. We’ll also have to keep a close eye on the country’s ratings with international credit agencies. Let us know about your export operations and if you’re planning any increase in activity. We’re online @EnterpriseAfri1
Joe Forshaw EDITOR
GET IN TOUCH +44 (0) 20 8123 7859 joe@enterprise-africa.co.za www.enterprise-africa.net
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06/NEWS: The Month that was... A round up of some of the latest news stories from around the country
86/EXHIBITION CALENDAR: Key Upcoming Events Across the Country Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors
8/SORBET: Cue Bubbles: SA’s Sorbet Gains Strength in UK Market Perhaps one of South Africa’s most recognisable brands, Sorbet is gearing up for a global expansion push. The beauty therapist franchise operation has made a mark in the UK and will soon look to other international markets for growth. Founder and CEO, Ian Fuhr is excited and tells Enterprise Africa more about the journey from Johannesburg to London and beyond.
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CONTENTS
50/
20/ INDUSTRY FOCUS: AUTOMOTIVE
28/
INDUSTRY FOCUS: FINANCE 50/CLIENTÈLE: 25 Years of Business Excellence At Clientèle
14/EQSTRA FLEET MANAGEMENT: Pioneering: The Pain And The Gain
56/MIP HOLDINGS: Continental Growth Strategy for SA Software Developer
20/TOYOTA SOUTH AFRICA: Hilux and Fortuner Drive Investment in South Africa
60/BANKING ASSOCIATION: Lack of Foreign Currency Slows African Growth
INDUSTRY FOCUS: SAFETY
INDUSTRY FOCUS: SECURITY
28/BBF SAFETY: Investments Secure BBF Safety’s Industry Status
66/OMEGA RISK SOLUTIONS: Omega to Expand in West and North Africa
INDUSTRY FOCUS: MINING
INDUSTRY FOCUS: EVENTS
36/AZMET TECHNOLOGY & PROJECTS: Make Mine Azmet
72/GEARHOUSE: The Show Must Go On
42/CLOSE-UP MINING: Making Light Work of Surface Mining
INDUSTRY FOCUS: RETAIL
INDUSTRY FOCUS: CONSTRUCTION 46/GHC: Project Managers Growing Despite Tough Time
78/WOOLWORTHS: The Leading Lights in South African Retail
INDUSTRY FOCUS: LOGISTICS 82/FALCONGATE LOGISTICS: First For Freight Into Africa www.enterprise-africa.net / 5
ZUMA’S CABINET
RESHUFFLE CONFIRMATION President Jacob Zuma has made changes to the National Executive in order to improve efficiency and effectiveness. “The changes bring some younger MPs and women into the National
Executive in order to benefit from their energy, experience and expertise. “I have directed the new Ministers and Deputy Ministers to work tirelessly with their colleagues to bring about
MINISTERS • Minister of Energy, Mmamoloko “Nkhensani” Kubayi • Minister of Transport, Joe Maswanganyi • Minister of Finance, Malusi Gigaba • Minister of Police, Fikile Mbalula • Minister of Public Works, Nathi Nhleko, • Minister of Sports and Recreation, Thembelani Nxesi • Minister of Tourism, Tokozile Xasa • Minister of Public Service and Administration, Faith Muthambi • Minister of Home Affairs, Prof Hlengiwe Mkhize • Minister of Communications, Ayanda Dlodlo
radical socio-economic transformation and to ensure that the promise of a better life for the poor and the working class becomes a reality,” the President said in a statement.
DEPUTY MINISTERS • Deputy Minister of Public Service and Administration, Dipuo Letsatsi-Duba • Deputy Minister of Finance, Sifiso Buthelezi • Deputy Minister of Public Enterprises, Ben Martins • Deputy Minister of Arts and Culture, Maggie Sotyu • Deputy Minister of Trade and Industry, Gratitude Magwanishe • Deputy Minister of Communications, Thandi Mahambehlala, • Deputy Minister of Tourism, Elizabeth Thabethe • Deputy Minister of Police, Bongani Mkongi • Deputy Minister of Telecommunications and Postal Services, Stella Ndabeni-Abrahams • Deputy Minister of Small Business Development, Nomathemba November.
ESKOM, COEGA SIGN NUCLEAR AGREEMENT
Eskom and the Coega Development Corporation (CDC) have signed a collaborative agreement on South Africa’s nuclear new build programme. The Memorandum of Understanding (MoU) will see the two state-owned companies work together in support of government’s plans to build local capacity
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through supplier development and localisation around the unfolding infrastructure for the nuclear programme. “We are gearing ourselves up in preparation for the nuclear new build programme in order to deliver the project within the set timelines and budget. We want to ensure that South Africans get reliable, decarbonised
baseload power that will bring sustainable economic growth,” said Eskom’s Group Executive for Group Capital, Abram Masango. Masango said it is critical to lay the foundation for local people to participate meaningfully during the various stages of the project by skilling them for jobs as well as business opportunities.
NEWS ROUNDUP OVER R30M TO TRANSFORM HOME BUILDING INDUSTRY INCOME FROM MINING INDUSTRY ON THE RISE Income generated by the mining industry rose from R393.4 billion in 2012 to R419.5 billion in 2015 according to Statistics South Africa (Stats SA). Presenting the Mining Industry 2015 report, Stats SA said the total income for the mining industry had increased by 2.2% per annum. However, large decreases were reported for platinum group metal ore (R15.5 billion), iron ore (R7.4 billion) and gold and uranium ore (R3.3 billion). “Mpumalanga had the largest income from sales of goods in the mining industry in 2015 with R114.4 billion (or 28.8% of the industry total). The province with the second largest income from sales of goods was North West (R84.7 billion or 21.3%),” noted the report. This was followed by the Northern Cape (R69.5 billion or 17.5%), Limpopo (R45.3 billion or 11.4%) and Gauteng (R44.9 billion or 11.3%). North West had the largest income in 2012, followed by Mpumalanga, Northern Cape and Gauteng. The report, however, noted that total employment in the mining industry had declined. “Total employment (mine employees, employees of subcontractors and employees through labour brokers) in the mining industry declined from 538 000 in 2012 to 490 000 in 2015,” said the report. This was a loss of 48 000 jobs. The biggest losses in jobs were recorded in mining of gold and uranium ore. In terms of mine employees, the North West province was still the largest contributor to persons working in the mining industry (133 000 or 37.8%).
The National Home Builders Registration Council (NHBRC) will be spending more than R30 million in the new financial year in its efforts to bring about transformation in the home building industry. The announcement was made during the launch of the NHBRC Transformation Charter held at Cedarwood, Johannesburg. The NHBRC Transformation Charter seeks to address pertinent issues that relate to the advancement of equal economic opportunities in the human settlements value chain in order to optimise the meaningful participation of priority and vulnerable groups including women, youth, people with disabilities and military veterans.
The launch was hosted in partnership with the Department of Human Settlements, as part of the International Women’s Day celebrations. Speaking at the launch, NHBRC Acting Chairperson of Council, Julieka Bayat, said the NHBRC believes that the transformation charter will assist council in unlocking obstacles to and the effective participation by the identified groupings. “It further asserts measureable goals for us to achieve on the road to a radically transformed home building industry. We also wish to demonstrate our support towards government’s efforts of promoting social and economic transformation,” said Bayat.
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SORBET
Cue Bubbles:
SA’s Sorbet Gains Strength in UK Market PRODUCTION: David Napier
Perhaps one of South Africa’s most recognisable brands, Sorbet is gearing up for a global expansion push. The beauty therapist franchise operation has made a mark in the UK and will soon look to other international markets for growth. Founder and CEO, Ian Fuhr is excited and tells Enterprise Africa more about the journey from Johannesburg to London and beyond.
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South Africa’s leading beauty therapy business, Sorbet, has carved out an unrivalled position in the market, and has achieved success that founder Ian Fuhr didn’t think was possible when he started the business in 2005. Selling various beauty products and treatments, focussing on quality service, and pushing a tried and tested franchise model, Sorbet has become synonymous with quality beauty therapy. On the back of the company’s achievements in South Africa, Sorbet is now looking to international markets to further its growth, building a multinational following similar to other world-famous brands that made their name in South Africa such as Nando’s, SAB Miller (Savanna Cider), Protea Hotels, Distell, Investec and MTN. First on the agenda for Sorbet is the UK where the company established a presence in September 2015 “We are very big sellers of two of the major skincare products – Dermalogica and Environ,” explains
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CEO, Ian Fuhr. “We spoke to both of those companies and asked them where we could go to try and emulate what we’ve done in SA and interestingly they said the UK. I was really surprised by this as it’s a highly competitive, sophisticated market but we investigated and we were surprised that there’s not a single branded national beauty salon chain in the whole of the UK. “In South Africa, we’ve built a brand across the country and we now have 185 stores and we decided that perhaps we could achieve something similar in the UK. We looked at the high-street salons and found that often they were not at the higher end of the profession; not like what we offer in SA so we saw an opportunity. We thought we could disrupt the industry and raise the bar in terms of the look and feel of salons and the quality of the therapists. We decided to go ahead with the support of our two key brands and we’ve opened four stores with a fifth coming soon. They’re all in North London – Muswell Hill, Crouch End, East Finchley, Mill Hill and soon Temple Fortune.”
IAN FUHR SORBET CEO & FOUNDER
INDUSTRY FOCUS: BEAUTY THERAPY
The UK hair and beauty industry is a booming beast, untameable in its growth. It employs well over one million people and beauty sales were valued at more than £4 billion last year. Reports suggest that 98% of salons and mobile businesses are set to maintain or increase their staff count and 43% are set to bring on apprentices. Major drivers of industry growth have been the emergence of a look-conscious male consumer base and big-budget advertising campaigns from major international product developers. “It’s been challenging trying to get a handle on the market and trying to tweak our model but we see it as a long-term project and we have people that are willing to invest and see it through with the view to ultimately build an established, branded chain of beauty salons in the UK,” says Fuhr. Fuhr founded Sorbet after a
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passing comment from his masseuse. She mentioned that there wasn’t a branded chain of salons in the country and he saw the gap. He’d been successful in business with Super Mart and various other ventures and he was looking for a new challenge. He opened the first Sorbet salons in Johannesburg with the help of his niece in 2005. In 2007, his friend and business partner Rudi Rudolph joined the company during what Fuhr calls “dark times” when he was unsure about whether this venture would bear fruit. By 2009, Fuhr’s twin children Jade and Brent joined the business and the company started franchising, going from strength to strength. In 2012, Fuhr’s daughter Courtney joined the business and the number of franchise outlets was continuing to grow. Today, Fuhr is looking to dominate in the UK before going worldwide. “We don’t have a target figure but we would like at least 100 stores,” he says. “We would like to offer the same franchise model that we do in South Africa but we are still investigating franchising in the UK as it’s a different model that we need to fully understand and perfect. We’d like to get to the point where we have sufficient credibility and a business model that we can grow.” THE SA LOOK FOR LONDON The London beauty salon market is large and widespread. There are many types of players; single operator salons, mobile therapists, small mini-chains, major high street names, extreme high-end providers, and different specialists for different types of skin, hair and beauty requirements. Around 11% of the UK’s industry employees are located in London and 28% of the industry’s businesses are located in London and the South East – if you’re going to conquer a market segment in the UK, you must conquer London.
SORBET
Importantly for Sorbet, the salon style that has been developed in South Africa is unique in the UK market. “Customers have never seen a beauty salon that looks like ours – certainly on the high-streets of London,” says Fuhr. He does admit that it’s not what people in London are used to. He says that while the brand is still growing in the UK, customers and employees are starting to get used to a very different way of doing things. “It’s very clinical, professional and hygienic compared to the average nail bar or beauty salon. We’re changing people’s mindsets about what they can expect from a beauty salon. Many don’t know that there’s a better option so they have accepted a certain level of mediocrity.” As the business develops in London, Fuhr himself is constantly on the move, always monitoring progress. He visited the UK six times in 2016, staying for two weeks each time and this will continue in 2017. “We have a general manager that looks after our current stores, an ex-South African who has lived in the UK for a number of years and understands the market and that is extremely helpful,” he says. With four stores operating
successfully and a fifth to open soon, Fuhr is pleased with his UK achievement so far but he knows that the job is far from complete and is prepared for a lot of learning over the coming months and years. “We’re still learning and the product/treatment mix is slightly different. We don’t do much aesthetic stuff in our salons in SA – that’s IPL and laser treatments etc. – but it seems that we need to do that in London so we’re installing new equipment. You have to be able to tweak to meet the needs of the market. “The first phase is to establish a hub of stores in one region and build from there. We will probably focus on our five stores for a while until we gain traction before we start looking elsewhere. There’s other areas of London where we can expand and we feel confident as there’s a lot of ex-
South African’s living there so we will have some brand awareness.” GLOBAL EXPANSION With Sorbet’s expansion into the UK market proving to be a great success in its early days, Fuhr’s mind is already edging towards the next market that can be targeted. Although he doesn’t want to appear arrogant or egotistical, he does believe that the philosophy and business model that has been created is suitable for building a global beauty therapy empire. Although only in the very early stages, there are plans being discussed for African expansion and further afield. “We recently took part in a workshop with students from GIBS Business School who were examining the opportunities specifically for Sorbet in Africa. We’re excited about
//ENVIRON “Environ is a highly successful South African skincare brand which is now distributed in 60 countries around the world. It was researched and established by a well-respected South African Plastic Surgeon, Dr Des Fernandes. We are the largest retailer of Environ in South Africa so when we decided to move into the UK, Environ was extremely supportive and have shown a total commitment to our success. We have been particularly impressed with IIAA, the UK distributors of Environ. They are cutting edge suppliers and have proved to be extremely innovative in their approach.”
Ian Fuhr – Sorbet Founder & CEO
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INDUSTRY FOCUS: BEAUTY THERAPY
the prospects in our neighbouring countries but we won’t push too far north yet. Namibia, Botswana, Zimbabwe and Mozambique are something which we will certainly be looking at. We already have demand for franchising in those countries but we haven’t moved ahead as we need to get the infrastructure and support base correct so that we can support franchisees. “We’ve started to look at other countries too, mainly Australia, as that environment has many similarities to SA, and also Dubai. We will wait to capture other markets before we attack the USA but we are inspired by the likes of Nando’s who have made a great success of global expansion,” he says. SOUL OF SORBET Of course, no effective expansion strategy can be deployed without the drive and dedication of an innovative and reliable employee base. Sorbet’s people, including all franchisees, are obviously vital in the success of the company’s growth. Ian Fuhr is a people person and knows how to develop people by instilling his winning business philosophy. Bringing this philosophy and ethos to the UK operation is an ongoing task. “We believe that our success in South Africa is based on our culture which is people-focussed,” he says. “We believe that the attitudes of our staff are our biggest competitive advantage. We call it the ‘soul of Sorbet’ and it’s so important that I’m writing a second book about it now. We put people before profit and service before reward – we’re trying to integrate this into our UK business but it does take time. People need to have a paradigm shift about why they come to work every day. People think they come to work to make money but we tell them that’s not true. They come to work to serve the needs of people
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and if they do that well, they will make money. The purpose of work is never about money; money is the result. It’s a whole different attitude and business philosophy but it’s certainly worked for us in SA.” Sorbet is not just a brand, it’s an attitude – this is the message that Fuhr tries to instil every day. He is so passionate about this that he ensures all new employees and franchisees undergo a training programme that he runs personally. As the success of this style of culture begins to resonate in the wider business community, Fuhr says that it is clearly a driver behind the international success of Sorbet and hopes it can drive the development of the brand globally. “That’s the big dream as there isn’t one single beauty salon chain or brand that is multi-national and that’s remarkable as most beauty products are multi-national.” CLICKING WITH CLICKS Away from international expansion, Sorbet continues to grow as the market leader in South Africa. This is down to its people and its highly recognisable brand. Importantly, the brand has been developed aggressively in the past five years since Sorbet partnered with South Africa’s leading pharmacy, health and beauty retailer, Clicks. “It’s a very positive element of our business,” admits Fuhr. “They approached us five years ago, they liked our brand and they decided that they wanted to get involved. Ultimately, it led to them developing our brand and our range of products. They sell it exclusively in their stores and we also sell it in our stores. They are a large chain and have a loyalty base of over five million people so it’s been hugely beneficial to us.” With more than 600 stores across Southern Africa, Clicks is a JSE-listed retail powerhouse and
the perfect partner for any beauty/ cosmetic brand to grow with. Sorbet’s product range includes bath and shower products, skincare products, haircare products, brow and lash care products, nail products, and male grooming products. Today, the company’s branded products are complementary to the treatments offered in stores and the two offerings drive demand for one another. “Clicks is developing a new cosmetic range, they do hair and nail products and they are saying that within three years, Sorbet will be the number one brand in the Clicks Group. “We started by creating the brand through the salons and that’s how we made our mark. We didn’t have our own range until five years ago and that has developed slowly. Up until then we were known for our service and our international products, Dermalogica and Environ. The credibility and traction that was achieved by the salon brand has helped tremendously to build the product range and they feed off each other now,” says Fuhr. The strength of the brand in its home market, and the ambitious plans that see Sorbet growing internationally have driven Fuhr to consider a radical strategy for the future of the business. The number of franchise applications, the brand equity, the partnership with Clicks, and the international success of the company mean that Sorbet is an attractive investment opportunity. “Sorbet has become an iconic brand,” says Fuhr. “We get eight to 10 franchise applications everyday here. There’s a good chance that the brand will be listed in the future, that’s how powerful the brand is now.” SHINING IN AN UGLY ECONOMY The fact that Sorbet has managed
SORBET
to grow at the speed achieved over the past few years, considering the bleak economic outlook in South Africa (worsened by global economic uncertainty), proves that this is a business with a sound model, and a philosophy that works. Although effects from a slow economy have started to filter through in a small way in recent months, Fuhr remains bullish about the future and is excited about the growing importance of the franchising sector, which now accounts for around 12% of South Africa’s GDP. “People have been talking about the slowing economy but we didn’t see it at all. However, January and February of this year saw a slowing in our turnover so we do feel it. We’re still very confident that we can continue to grow and try and establish a foothold internationally.
“Franchising is a big thing in South Africa. There’s high unemployment and when the economy slows, people are retrenched or they leave to become more entrepreneurial and one of the options is to buy a franchise so it’s an important part of the economy. There’s a lot of new franchises, franchisees, buildings, and growth, and that comes from a resilience that the population and the business world has to challenges. We’ve become so used to uncertainty that we almost thrive in it – it’s an unusual scenario,” he says. Now, with exposure to new markets and a spread of risk, Sorbet is positioned perfectly for growth, even during the next two years in an economy where growth is expected to remain flat at less than 1%. Growing from four modest
outlets in Johannesburg to a company that owns a powerful brand, enjoys high-level partnerships with influential retailers, operates 185 stores across SA, four in the UK, and planning moves in the Middle East, Australia and neighbouring sub-Saharan African countries, it’s becoming clear that Sorbet is on track to emulate the success achieved by Nando’s and Savanna and become an iconic global brand that is truly South African.
SORBET 021 434 3902 www.sorbet.co.za
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EQSTRA FLEET MANAGEMENT
Pioneering: The Pain And The Gain
PRODUCTION: Colin Chinery
For Eqstra Fleet Management the benefits of radical strategic transformation were decisive and alluring. But the scale of the accompanying IT upscale was to prove unexpectedly challenging. Now, months after its implementations, EFM has a “unique system,� says Managing Director Murray Price, one that is winning global acclaim and delivering the Johannesburgheadquartered business market edge.
INDUSTRY FOCUS: AUTOMOTIVE
EQSTRA FLEET MANAGEMENT MD, MURRAY PRICE
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For Eqstra Fleet Management, 2008 was Leap Year. After decades in the conventional vehicle leasing niche, it was against the backdrop of the worst financial crisis since the 1930s that the South African sector leader made the operational break-out into an all-in-one services business. “We realised we had to
change the entire methodology of the business away from being a leasing business that did parttime fleet management to a fleet management business that does part-time leasing,” says Managing Director, Murray Price. “We wanted to show our customers the benefits through cost analysis of a single access into a multi-platform of services
versus the cost of dealing with independent suppliers in the chain. And 2008 was the moment we made the move.” BLUE SKY: HARD LANDING It was a solo Great Leap in a conformist sector. But as Eqstra discovered, it was one that had landed it on a hard place - an obsolete IT infrastructure platform
EQSTRA FLEET MANAGEMENT
incompatible with the ambitious new world of fleet management. “From the moment we started, the new strategy brought us into a lot of new areas we had not traditionally been involved in. It had been built to handle leasing, and as with all new strategies there was no time for systems to catch up.” Roadside assistance, insurances and warranties had been taken on as core competencies, a tracking business acquired and a fuel card facility added to a portfolio with a multi portal which is unique in South Africa. “With all these ancillaries now added to our core, we realised we needed to change the system and have a complete rebuild.” The result was a partnership with Microsoft and PwC Exordia to implement the enterprise resource
planning process management software (ERP) Microsoft Dynamics AX, into a seamless solution accommodating EFM’s unique fleet management components and ongoing product development. “As part of the project, Eqstra Fleet Management now implements a web portal that allows customers and suppliers to transact directly on the ERP system. This enables us to keep track of all individual transactions and reduce the duplication of effort seen in the traditional fleet management value chain,” says Price. SINGLE ACCESS POINT “In addition, it delivers a single point of access to the full array of our fleet solutions, providing more control to our customers as well as better reporting capabilities across
all aspects of their fleet.” But an implementation expected to finalise in three years turned out to take eight. “Coming from quite an unstructured system cobbled together in the interim and moving on to a very structured system, brought a whole lot of challenges. “We dealt with a lot of pain during six weeks of down-time in November when neither the old nor the new system were available. It’s been a challenge but I feel we have been through the worst of it and the problems ironed out.” Finally launched in late November last year - an exercise that included converting and databasing 175,000 individual vehicle records - Eqstra now has “a unique system,” says Price. “PwC has never done anything
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INDUSTRY FOCUS: AUTOMOTIVE
like this before, a really fully integrated high-end Microsoft solution. And now people are seeing the benefits of an endto-end flavour, one that gives us a much better data consistency than we had potentially on our old platform.” In 2008 leasing accounted for 95% of revenue, a figure now down to 50%, with Eqstra delivering in-house across the entire fleet management service range. “Transactions, insurances, maintenance, tracking and downtime and so on – and I think this is a unique selling point.” SOUTH AFRICAN ’FIRST’ It’s a South African USP winning global acclaim. “We have had some feedback from fleet directors operating across the world who tell us they have not seen this end-to-end solution anywhere else; not in the UK, Australia, or the USA.” Could competitors adopt such a system? “It would take somebody with quite a lot of courage and conviction. What we see with our competitors is everyone trying to make a great front-end, a website interaction that might look very good but but with a legacy problem in the background system. “We were always improving and enhancing our old system, but there comes a point when you have to realise that your work is on the wrong platform. We didn’t have the right structure to deal with this new business model we were adopted after 2008. So we made the big change and we got it before our competitors.” It’s a quantum shift set to help Eqstra become the lowest cost provider across its operational segments. “Obviously there is more and more pressure from customers. They are looking for more for the same amount of money or for less, and we believe we’ve got the platform that allows us to do this.
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//WE REALISED WE HAD TO CHANGE THE ENTIRE METHODOLOGY OF THE BUSINESS AWAY FROM BEING A LEASING BUSINESS// “In the last three weeks of selling we have got a couple of very hot leads which I think we will close on because the customers are saying that’s what they want. A fleet has got a lot of moving parts and they want one point of access; they want consistency and visibility, and they want to see what is actually happening.” COMPETITIVE ADVANTAGE The South Africa fleet management sector is highly competitive. While comprising just 11% of the of the country’s 11.5 million vehicles, some 70% of new cars purchased are for the corporate market according to research by Gatestreet financial services. And sector growth has been estimated at 12% over the next three years. “I think this is absolutely doable. While leasing as a model is going to be challenged all over the world due to proposed changes to the accounting standards, there’s still the need for the professional services we provide, and where we have done very well recently is in managed contracts, and from a South African perspective we see this as a significant growing opportunity. “Looking beyond to Africa, there’s little understanding of the need for fleet management. So leasing is still going to be a key driver - but with the model of Managed Services having a huge scalability. And while I don’t think sub-Saharan Africa is looking as strong as it did, there are still opportunities within that space,” says Price. Eqstra’s strategy north of the Limpopo is to secure back-to-back arrangements with smaller players with the aim of developing inputs
into the new system. “It will take some time, but it’s part of where we want to go. There is money to be taken from our competitors which is obviously what we are after - but while we may look again to grow in Africa, at the moment the opportunities are not nearly as bright as they were three years ago,” explains Price. AGENDA UK Britain is a more promising growth target area. “As a group we have operations in the UK, and Eqstra is looking to put a firm footprint there, but since for us it’s a new market, we are going to be quite circumspect about how we are going to enter it.” Meantime Eqstra is focussing on rolling out each element of its customer portal interfaced from a Smartphone as well as a laptop. “All of this is tied up in us leveraging the investment we have made in technology. We are well positioned now. You have got to bring a full solution in order to differentiate yourself from the rest of the pack, and I think this is where we are going to see our uptake. “You can recognise the pioneer in any business because they are the ones with arrows in their back. But I believe that that this business would not have had a future unless we had changed direction.”
EQSTRA FLEET MANAGEMENT +27 (0)11 458 7555 info@eqstrafleet.co.za www.efm.co.za
THE NEW-LOOK ISUZU KB GETTING IT DONE NEVER LOOKED SO GOOD
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Maintenance Tyres Fuel Insurance Subtotal VAT Total
Chevrolet Utility
Nearest Competitor
R499.02 R194.87 R2,121.89 R589.14 R3,404.92 R179.62 R3,584.54
R510.20 R235.52 R2,387.13 R572.04 R3,704.89 R184.49 R3,889.38
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CHEVROLET UTILITY
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TOYOTA SOUTH AFRICA
Hilux and Fortuner Drive
Investment in South Africa PRODUCTION: Manelesi Dumasi
Toyota South Africa is one of the industry’s leading organisations. Topping sales charts, employing thousands of South Africans, and bringing major investment into the country, this is a business that is changing perceptions of an industry that has been under pressure for some time.
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INDUSTRY FOCUS: AUTOMOTIVE
TOYOTA SOUTH AFRICA
//
The South African automotive industry has been in a state of flux for some time. Previously one of the most important industry sectors in the economy in terms of GDP contribution, automotive manufacture and motor sales haven’t been reliable over the past five years and if there’s one thing that investors hate it’s inconsistency. Manufacturing is dominated by the big international brands including BMW, Mercedes-Benz, General Motors, Ford, Volkswagen, Nissan and Toyota, but Chinese and Japanese brands are also popular and make up a large portion of vehicles sold. Unfortunately, economic challenges and labour disputes combined with a commodity price crash, especially in oil, has created a poor situation for the sub-Saharan African auto-business and some industry captains are hoping for a boost through the creation of a booming export environment. Some reports suggest that South Africa makes up around 0.6% of global vehicle production but the National Association of Automobile Manufacturers of South Africa (NAAMSA) is hoping that the vehicle manufacturing industry can by 2020 increase production to 900,000 units, bolstering its GDP contribution by 8.5%. Research conducted by Econometrix on behalf of NAAMSA found that the automotive industry contributed 7.2% (or R256.7 billion) to GDP in 2015 with 4.4% of that coming from manufacturing and the balance from retail. The reports showed exactly how important the industry is for the country; the end of the industry would lead to more than half a million job losses and R84.5 billion of lost payment compensation for employees. There’s around 900,000 people employed in the industry and around 18% are highly educated workers, 52% are educated and 30% are semi-educated or uneducated workers. Around four million people are dependent on the industry to support their lives, and
between 2013 and 2015 the country’s seven major original equipment manufacturers spent R1.5 billion on socioeconomic projects including skills development, healthcare and small business development and education, according to Econometrix. SLOWING INDUSTRY? Econometrix MD, Rob Jeffrey said that without the auto industry, the country’s GDP would contract by R210 billion and its trade deficit would increase by R40 billion. This prompted NAAMSA President, Mike Whitfield to call for a hasty increase in the development of a new automotive production and development plan to replace the current plan that ends in 2020. “Vehicle manufacture is critical in any economy,” he said. Trade and Industry Minister is reportedly working with the industry to develop a new plan that will map progress through until 2035. Mercedes-Benz South Africa CEO, Arno van der Merwe said last month that exports are the key for the future of the industry. With demand in the local market not strong enough to take up local capacity, but with manufacturers keen to increase output, a competitive export programme looks essential. “If you have a local market that is relatively small - from a global perspective - and you need to generate production numbers in order to gain efficiencies to be competitive, and you have a subSaharan African market that will take time to develop, then it is reasonable to conclude that a sustainable export strategy is key to the automotive industry’s success in South Africa,” he told Engineering News. Dave Everett, Safmarine Global Key Account Owner, a member of Maersk Group agreed, saying: “Some car manufacturers in South Africa export up to 70% of their vehicles and components, mainly to Europe and other parts of Africa, which helps to maintain production growth.” One company which regards exports as vital is Toyota South Africa
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INDUSTRY FOCUS: AUTOMOTIVE
Motors (TSAM). In 2016, the company said it expected to export more than 55,000 brand new Hilux and Fortuners to 74 countries. It also expected to supply locally-produced Hilux’s to 16 United Nation affiliated programmes, funds and agencies. These include the World Health Organisation (WHO), the United Nations Children’s Fund (UNICHEF) and the International Federation of Red Cross and Red Crescent Societies (UNIRFC). In addition, TSAM exported new components to Thailand for the use in their own Hilux / Fortuner / Innova production facilities. POSITIVE TOYOTA SALES Despite the negativity surrounding the industry, Toyota has remained focused on its core business; manufacturing and selling quality vehicles and components in both the passenger and commercial segments. In July 2016, four of the ten bestselling passenger cars in SA came from Toyota. In February 2017, the Toyota Hilux was SA’s bestselling vehicle, retailing 3,086 units and boosting Toyota’s total sales to 10,780 units with a market share of 22.4%. This means that Toyota has once again secured the title of most popular automotive brand in the country. Other
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popular Toyota passenger vehicles include the Fortuner, Corolla Quest, Etios, RAV4, Land Cruiser, Prado, Quantum and the allnew CH-R. Toyota’s MCV and HCV vehicles are sold through Hino South Africa which has taken advantage of the reclassification of some models, specifically the Dyna – now a LCV, to bolster its figures. NAAMSA stated that overall, new vehicle sales were up in February with 48,113 units sold. “The positive trend in new vehicle sales had been maintained during the month, characterised by noteworthy gains in light commercial vehicle, as well as medium and heavy commercial vehicle sales,” said NAAMSA. Toyota’s strong sales performance is helped by a recovering Rand and strong demand from importers meaning that manufacturing in South Africa continues to receive investment. POLE POSITION IN 2016 Serious investment was realised by TSAM in May 2016 when it announced that its Prospecton plant in Durban had received R6.1 billion in order to produce all-new Hilux and Fortuner models. The investment announcement cemented Toyota’s position as South Africa’s largest automaker, producing five
models (Hilux, Fortuner, Corolla, Corolla Quest and Quantum) in complete-knockdown form, as well as selected Hino and Dyna models produced as semi-knockeddown assemblies. President Zuma was on hand to open the new facilities and said: “This is a very important development for our country as it demonstrates confidence in the economy during a difficult period. I wish to congratulate and thank Toyota for its decision to continue investing in local production of vehicles… We continue to support the auto sector because the results are visible… Let me reiterate, South Africa is open for business.” TSAM President and CEO, Andrew Kirby said: “This latest announcement gives evidence of a company that is defiantly committed to South Africa by strategically investing in the people, tools and equipment to produce cars and commercial vehicles of world-class standard that are not only destined for the domestic market, but will also fly our flag high on the international stage thanks to a robust export plan. “But it is in fact more than that – it’s also a celebration of the pivotal role that both Hilux and Fortuner play in the overall development of the South African
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INDUSTRY FOCUS: AUTOMOTIVE
motor industry.” Dr Johan van Zyl, Chairman of Toyota South Africa and Chief Managing Officer of Toyota Motors Europe agreed, saying: “The TSAM of today is vastly different to the same company only 10 years ago. This is all due to an ability to change with the times and I am glad to say that as we have changed, we have become better and more focussed to the benefit of our customers.” “Although we are justifiably proud of the achievements of the motor industry in growing production and especially exports post-1994, we must remember that South Africa currently produces less than 1% of the 90-million vehicles made worldwide each year. “We have to remain world competitive not only in terms of wages and productivity, but also regarding labour stability. I cannot stress enough the importance of engagement – engage, engage and engage again – the need to employ dispute resolution as the first and ultimately only line of defence rather than resorting to strike action as the solution. “Nevertheless, I am confident that
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a fair and equitable labour agreement can be reached and rest assured, that no matter what, Toyota will do its utmost to continue to put its customers and South Africa first.” Of the R6.1 billion investment, R1.9 billion relates to supplier tooling, R1.4 billion to in-house tooling and the remaining amount to investment in in-house facilities and buildings to cater for the new press machines. The Hilux and Fortuner are core vehicles for Toyota locally from both a brand and production perspective, and hence contribute a sizeable 80% of total production volume. The new production line created more than 500 permanent new jobs, bringing Toyota’s total OEM workforce to more than 8500 – the largest of any of the OEMs in the country. In an important marketing and branding exercise, TSAM was celebrating again in February this year after it announced an exciting new agreement with the Kaizer Chiefs which sees Toyota become the vehicle supplier to one of the country’s most recognised soccer clubs. The three-year deal will see Toyota supply
a range of 20 different vehicles to the club for all transportation needs. Kaizer Chiefs Executive Chairman, Kaizer Motaung said: “We couldn’t have asked for a better partner than Toyota to provide us with transport needs for our business. Toyota is one of the biggest motor vehicle manufacturers in the world and their brand is synonymous with quality and reliability across the globe. These attributes resonate deeply with Kaizer Chiefs, as we are a Club that aspires to the same ideals and high standards. We are delighted to establish a relationship with them and look forward to a prosperous and mutually beneficial partnership.” Andrew Kirby said: “Whether it is rugby, cycling, motorsport and now soccer - we are behind South African sport wholeheartedly. The values of perseverance, leadership and endurance are those that are synonymous with the Toyota brand and its history in South Africa. We’re looking forward to driving the Kaizer Chiefs team for the next three years. Remember that Toyota is behind you every step of the way both on the field and off it.
TOYOTA SOUTH AFRICA
We are excited about joining the Amakhosi fans in supporting their team and hope to grow this partnership over time.” SA’S TOYOTA PEOPLE Since opening its doors in SA in 1962, Toyota has become one of the most recognisable brands on the market – not just in the automotive industry. But the brand isn’t driven from Japan with a set of faceless, distant instructions. The company’s thousands of employees, customers and suppliers live and breathe Toyota, making it a brand designed, manufactured, produced, sold and used in SA. This is largely down to the initiative of its people. These people hold the same values today as those that were introduced to the business when Dr Albert Wessels returned from Japan with a permit to import Toyota vehicles (the Toyopet Stout). He was a man of family values and pioneering spirit. The quality of Toyota’s human assets in South Africa was demonstrated last month when Dr Johan van Zyl was promoted to Senior Managing Officer at
Toyota Motor Corporation in Japan. He is the first African ever to hold the position and boasts a strong academic and business background, with a doctorate and professorship from the University of Potchefstroom and a quarter century of service with Toyota. “His exceptional business acumen and knowledge of the industry has been strengthened over the years with travels to Japan‚ the United States and into Africa‚” the company said. After van Zyl was appointed Chairman of TSAM last year and moved to Brussels in his position as the CEO of the Europe Region, Andrew Kirby was appointed to his current role as President and Chief Executive Officer of TSAM, based in Durban. “The road ahead economically will not always be an easy one to travel, but I believe that, with Andrew and the Executive team, we will meet every challenge successfully and continue to build on its proud leadership heritage to remain an integral part of South African life for many years to come. I feel very privileged to have personally shared
in this rich Toyota legacy and for the ongoing role that I have been asked to play,” said van Zyl. Despite the uncertain state of the industry, Toyota’s people will continue to bring positivity and drive to the sector, and this is something which is needed to change perceptions. With 2017 expected to deliver increased new-car production levels, including an expected growth in vehicle exports, it is likely that South Africa’s automotive industry will show improvements. With meaningful growth expected to return to the economy by 2020, perhaps onlookers shouldn’t be as pessimistic as they are right now and start to think about the prospects of the automotive industry, with innovative industry leaders such as Toyota, driving the economy forwards once again.
TOYOTA SOUTH AFRICA +27 (011) 809 9111 www.toyota.co.za
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BBF SAFETY GROUP
Investments Secure BBF Safety’s
Industry Status
PRODUCTION: Manelesi Dumasi
BBF Safety Group is home to some of the most recognised safety footwear brands in Africa. The business is now on a growth path and is implementing strategies that will see it expand and develop to claim an industry leader position in all markets that it operates in.
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INDUSTRY FOCUS: SAFETY
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BBF SAFETY GROUP
//
Like many manufacturing sectors around the world, the South African footwear manufacturing industry has faced significant pressure over the past decade thanks to basement price imports coming from China that have made sustainable operations extremely difficult. Enterprise Africa has heard this from some of the countries prominent clothing manufacturers in the past few months, and it seems that footwear is no exception. Most of the big global fashion footwear manufacturers started creating their products in China a long time ago (think about Nike, Adidas and Puma) but what about safety footwear – the not always glamourous boots, steelies, leathers and hard soles. Could this industry, in high-demand from South Africa’s mining and industrial sectors, face decline thanks to the Chinese factor? According to local manufacturer, BBF Safety Group and CEO, Silvio Ceriani, this problem was the key driver behind the formation of the company in 2014. “Our establishment came about in concerted defence against Chinese imports in the footwear industry in South Africa,” he says. “With Chinese imports growing at a rapid pace, the SA footwear industry was slowly diminishing. We first saw it happen in the casual footwear market and the same started happening with safety footwear, so much so that imports accounted for more than 50% of all safety shoes sold in the country. “It was a concern for local manufacturers, of which the four main competitors were Beier Safety Footwear, Bagshaw Footwear, United Frams and Wayne Plastics. Frams itself had been hit so hard that it started to become an importer of safety footwear and that was a spark behind merging to form an organisation that had some depth. We had strong brands in different parts of the market and we positioned them so we could protect ourselves and share volume – something which all factories require. We created the BBF Safety Group and we’ve been successful.” Today, the BBF Safety Group owns highly trusted, recognised and reputable
brands including; Bova, Bronx Safety, Frams, Fuel, Inyati, Lemaitre, Sisi and Wayne. Calling on experience of more than 200 years in South Africa, BBF Safety Group utilises technical product leadership, performance and quality to consistently enhance the customer service experience. With the exception of Bronx, all brands are manufactured in South Africa and the group has now resolved the majority of the major challenges that came about when merging the different organisations in 2014. “It was a real challenge to bring the businesses together because of the different cultures and people’s reluctance to change,” explains Ceriani. “We had two major challenges; firstly, companies had to adjust the culture that they were used to, and secondly, you have to mitigate against causalities of the merger. People don’t like change and when a merger happens you inevitably lose people, both weak and strong, so you have to minimise fallout. Our merger definitely bought about challenges and we are still facing some today. From a management point of view, everyone is now on board and we have a very clear strategy and direction. We have a good idea of what we want to do with the brands and now comes the hard work of making it all happen – we are in the implementation part of our strategy.” FOOT ON THE INVESTMENT PEDAL The experience, knowledge and brand equity now held by BBF Safety makes for an attractive offering. To ensure that the offering is backed up by consistent quality, the company has made investments into new systems and machinery and is implementing upgrades right now, as Ceriani explains. “After a lot of research, we decided on a new IT system which will act as the backbone and bring together our four factories,” he says. “At the moment, we’re operating across different systems and it’s very difficult to manage four divisions utilising the different systems. It means we have to do a lot more work to get the required information we need so we’ve done a lot of homework and selected a Continues on page 34 www.enterprise-africa.net / 31
INDUSTRY FOCUS: SAFETY
Continues from page 31 JD Edwards system. The next phase of the project is to implement everything and we’re hoping to have this project up and running soon. It takes a lot of resources and time but it has to be done.” From a production perspective, new machinery has arrived from overseas to bolster volume. “We’ve bought two machines, one is a new gum boot machine from Italy, which has been commissioned and is now operational, and the other is a new double density PU machine from Germany – a 30 station DESMA, which is also up and running, giving us extra capacity,” details Ceriani. “We’re also commissioning a double density rubber machine from Italy where we have already completed dry runs and now await the rubber from overseas before we perform additional trial runs. We have designers and mould makers coming from overseas to discuss product designs and moulds for the machine. There are new markets that we plan to enter and each market has its own requirements regarding moulds and upper-design. We will be investing a lot of money in mould design as that is our product as we foresee a great opportunity in creating brand equity. “We have a number of upgrades on our CAPEX list, some that we’ve bought already and some which will be replaced throughout this year. This is mainly auxiliary components for our main machines,” he adds. SAFE TO GROW? The economic climate, that has halted or disrupted the expansion plans of many of the country’s businesses, has had an impact on BBF Safety. Customers are always looking for value, especially when times are tough, and the fear is that they could look to cheaper, inferior products to save money. Fortunately, the company remains positive and the tide continues to turn with the economy expected to return to meaningful growth in the next 24 months. “Despite all the challenges, we are still moving forward and being positive. Have we come through the worst of it? Probably. The rest of this year will
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be tough but we are bullish about the future, expecting growth,” says Ceriani. This growth will come from driving exports into Africa and select international markets. Internally, the company is also looking at the possibility of further mergers and acquistion activity to continue its expansion strategy. “We’ve realised that we are now of such size that we can’t just be dependent on the local economy and therefore exports is a big drive for us. Any serious growth will come from export or acquisition. The local economy is flat and in some sectors it is negative so there is a mixed bag that we have to adjust to. “We’re looking at acquisitions that will happen this year – we are already quite far down that road”. the CEO explains. African exports are key for BBF Safety and South Africa’s neighbours, Namibia, Botswana, Zimbabwe and Mozambique, will be the primary focus. However, it doesn’t stop there; the company already has a growing presence in Nigeria, Ghana, Tanzania, Kenya and Uganda where Ceriani says BBF Safety is still busy building its name and gaining traction in the market. “Definitely Africa is our core focus but I don’t mean all of Africa, there’s some countries that we feel are conducive to good business and we will focus there along with the Middle East. Our secondary focus is on our PU gumboots and we also believe there will be other opportunities that will develop. For example, we recently received an order from Malaysia and we never expected that. Now we will continue to explore that region and see what other doors can open there,” he says. BBF – THE SAFETY PEOPLE Following the merger of the various organisations that make up BBF Safety, the company now employs approximately 1200 people across manufacturing, marketing, sales and management. With the growing export division, a whole range of new machinery, and plans for increasing
market share in the near future, Ceriani would like the staff count to grow although this can be challenging. “In any organisation, people are what makes things happen - without people you don’t have a business. It’s always a challenge and its always time consuming but it’s something we focus on. We want to attract the right calibre people and it’s a very important area for us. We’ve restructured and enlarged our sales force including a proficient export division, so we now have a lot of foot soldiers out there creating demand and that’s extremely helpful. “The footwear industry in South Africa was an ageing industry and we are trying to attract young people but it’s very difficult. We do look for specific skills but they are scarce so we train from within, especially on the shop floor,” he says. Currently, BBF is South Africa’s industry leader and, considering future plans, building a career with the company would be a wise move for any ambitious young South African. The company’s tagline, “We Are Safety”, has never been more appropriate – if you need safety footwear, BBF Safety is the go to name in the country. With the new efficiencies being delivered through the new IT platform, consistent quality and added-capacity from new machinery, increasing sales through an export drive, and a group of brands that are recognised and respected throughout Africa, this is a business with a solid base to build from. “There’s no doubt that we want to be one of the top recognised companies in safety footwear and any other areas that we choose to operate in,” concludes Ceriani.
BBF SAFETY +27 31 710 0400 www.bbfsafety.co.za
BBF SAFETY GROUP
//COIM GROUP BBF Safety has enjoyed a strong relationship with Italy’s C.O.I.M. for more than 10 years C.O.I.M. supplies Urexter products for BBF Safety’s single and double density shoes BBF Safety and C.O.I.M. adopt a collaborative approach to R&D, sharing knowledge and ideas between technicians. Together, the two companies have created new materials specifically for use by BBF Safety. For example, C.O.I.M. undertakes indepth research to provide BBF Safety with best-in-class materials and excellent physical and mechanical characteristics for mining safety shoes to ensure people are protected while working in the harsh conditions. BBF Safety regularly receives C.O.I.M. technicians, in both laboratories and manufacturing plants, to test material samples and ensure complete quality control
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coimgroup.com
BBF Safety prefers Coim since more than 1 Ο years.
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AZMET MODULAR GOLD DESORPTION AND RECOVERY PLANT
AZMET TECHNOLOGY & PROJECTS
Make Mine
Azmet
PRODUCTION: Colin Chinery
Launched in a global recession, metallurgical process plant specialists AZMET has steered impressively towards its vision of providing the latest process technologies and designs to maximise profit and minimise cost. “For AZMET, engineering is not a profession, it’s a passion,” says Marketing Director, Ruan Kukard.
//
A small beam of light is returning to the shadows of the mining shaft. After a protracted downturn that for years has seen mining companies reeling in their spending, commodity prices have begun to move higher. Prices for gold and other metals have rebounded and investors have begun returning to the sector. Which is cautiously good news for
AZMET Technology & Projects, the East Rand specialists in the engineering, design and delivery of metallurgical process plants. “Although there seem to be signs of hopeful activity in the global metals and mining sector, we don’t believe the market will show huge movement in the development of new processing facilities in 2017/18,” says Marketing Director, Ruan Kukard.
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INDUSTRY FOCUS: MINING
MARKETING DIRECTOR, RUAN KUKARD.
But downturn has had a positive influence; the development of numerous innovative and cost effective products and process technologies impacting on OPEX and CAPEX for green and brown field projects and converting uneconomical ventures into viability. It’s a mindset and methodology encapsulated in the philosophy and performance of this venturesome business. WE HAD A DREAM “It all started with a dream to be a global competitor in the design and implementation of metallurgical process plants,” says Kukard, one of a
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team of four which in 2014 founded AZMET with the vision of becoming a prestigious multi-disciplined engineering design and project management company. It was a dream formed in a nightmare; the onset of the worst global mining recession for 20 years. “Both capital projects and studies had been put on hold, so instead of just looking for normal engineering and project management opportunities we started to develop niche products within our line of expertise.” The first months saw AZMET operating out of the home of one of the directors - “it was rather a mess” – but the concept, self-belief and drive
never faltered. Within six months it won its first significant contract, a scrubber installation and design for Randgold Resources. “To get out there and start building a brand was a huge challenge. But our industry knowledge and high motivation, linked to sound fundamental understanding of numerous metallurgical processes, positioned us in the global market to be a reliable, value-added company with the experience to execute world class projects.” Five years ago, the sector was project rich, and many companies were turning down small projects – $5m to $10m - as insufficiently profitable. “If it
AZMET TECHNOLOGY & PROJECTS
wasn’t $80m to $400m it was a waste of time. So we saw this was a good niche market to start off with. Begin with a small project, move up, and get yourself positioned to start running with the big dogs.” Two years on and the Kempton Park company is a leader in its field of expertise, providing engineering, construction, procurement and project management services to the global mining and mineral industry. GROWTH AND RECOGNITION It is overseeing a growing number of projects in Africa, Turkey and Armenia, completing studies and projects for world leading mineral producers, and provide cost effective solutions for junior mining companies. “We are constantly striving to provide our clients with the latest process technologies and designs that will maximise profit and minimise cost, along with an unparalleled safety and environmental consciousness.” The development of the AZMET Containerised Gold Desorption and Recovery Plant, pre-assembled, easily shipped and quickly installed, was an early success. “Although it has a small footprint, the design of the respective process unit operations is the most critical and complexed sections of a gold processing plant. And because we know Africa well and are focussing on it, we decided to containerise it. “We designed and built the plant into standard 40 and 20 ft containers, fully installed with all the mechanical equipment, instrumentation, valves and piping. It takes about 30 weeks to construct and we assemble it in our selected fabricators’ workshops. PLUG AND PLAY “Once it has arrived on site it’s almost plug and play. It takes four to six weeks to install, whereas a Greenfield installation would probably take closer to six months. There’s a huge benefit in savings. “Although our skilled engineers
//WE PRIDE OURSELVES ON BEING INDUSTRY EXPERTS IN THE DESIGN AND SUPPLY OF GOLD, SILVER, COPPER, COBALT AND BASE METAL PROCESSING PLANTS// across all disciplines can execute any metallurgical project, we pride ourselves on being industry experts in the design and supply of gold, silver, copper and other base metal processing plants,” says Kukard. AZMET’s process technologies are focussed primarily on the beneficiation and separation of complex mineral ore bodies. Another area is solutions and business models to treat and recover gold from fine carbon by carbon incineration, taking the beneficiation through to a sellable gold doré bar, a semi-pure alloy of gold and silver
usually created at the site of a mine When beneficiation of complex ore bodies is required, the company has developed numerous process technologies to beneficiate ‘difficult to treat’ ore bodies. Refractory ores, VMS, Heap Leach and multi mineral ore separation and beneficiation are other areas of expertise. “We are driven by ethical conduct, integrity and dedication. For AZMET, engineering is not a profession, it’s a passion. Having the knowledge and drive to be innovative, creative, flexible and committed is a team philosophy,
Chemical Pump & Valve (pty)Ltd was registered in 1994 and has over 50 years combined experience in the pump industry. We are represented throughout the country as well as our neighbors in Namibia, Zambia and the DRC.
We manufacture a range of locally manufactured Chemical transfer pumps to pump all chemicals across the full PH range, in horizontal and vertical spindle design as well as a self-priming pump in the following materials: Epoxy Resin, H.D.P.E, PPL, Cast Iron, CD4, 316, 904 stainless steel & Hasteloy C.
All pumps are available with electric motors and diesel or petrol engines. Most of the range is kept in component form which enables us to deliver at short notice.
CHEMICAL PUMP & VALVE MARKETING ( PTY ) LTD www.enterprise-africa.net / 39
INDUSTRY FOCUS: MINING
AZMET – PROCESS PLANT CONSTRUCTION AND PROJECT MANAGEMENT
and not sparked by individual brilliance. For us creative thinking is a process, not an event,” details Kukard. Unsurprisingly, cost-effective innovation is increasingly seen as an AZMET specialism, with the design and delivery of concepts such as the AZMET Gold Desorption and Recovery Plant at Meli in Ethiopia and at Eti Bakir in Turkey. “We developed and supplied an electro-winning off gas scrubber
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system to remove ammonia and mercury gas emanating from the gold electro-winning process before discharging clean air into the environment.” “We developed and supplied containerised Reagent Make-up and Dosing plants for all gold processing reagents with the benefits of short installation and start-up times on site. “We are in the process of developing a new carbon transfer
pump for the transfer of carbon between the different leach stages that will minimise breakages of carbon and loss of gold. We have designed a new optimised bubble pipe plate (AZBPP) for CIC circuits - patent pending – and typically used on heap leach operations.” “We are also looking at operational contracts with medium sized operations where training and knowledge transfer is required for
AZMET TECHNOLOGY & PROJECTS
clients to operate the process facilities at name plate capacity, whilst investing in the skills development of their local labourers.” A current project is the design and supply of the adsorption, desorption and recovery (ADR) plant for the Amulsar Project, 170km south of Armenia’s capital Yerevan, expected to process 10 million tons of ore annually; containing 7.8 tons of gold over a 12year period. It is AZMET’s main focus. “There are a lot of exciting things in there for us. We have had huge success with our AZMET Gold Desorption and Recovery Plant which has gained traction in Africa and beyond. The benefits and cost savings in procuring one of our plants compared to a Greenfields’ construction project are substantial. GLOBAL PLANS “We would also like to set down a mark in Canada, Chile, Peru, Tanzania and Russia. We believe that the decision to develop unique products and beneficial process technologies, differentiate us in the current global market as an Engineering, Procurement, Construction Management (EPCM) company with added-value,” explains Kukard. With executive members’ experience of 22 projects in 19 countries – more than 90% in Africa - with project values up to $480M, AZMET has shown its capability to execute very large capital projects. “Unfortunately, the market is such that few such projects are currently available.” “The larger EPCM companies are now tendering on small $1m projects, and with the market even more competitive, this has made our nice market more challenging. And being a young company - although one whose members have immense experience – there’s always some hesitation in using the smaller company as distinct from larger ones that have been in the industry for 50 years.
“This is a challenge we still need to face and that’s why our philosophy is to take it step by step. If you look at completed projects, we only have to install a mill and then we can put all these projects together and we’ve done a complete processing plant.” AZMET’s strategy of employing only the multi-skilled makes it highly competitive in the current market, says Kukard. “We always want to keep our overheads low to maintain a competitive edge.
switch-on are noted with caution. “Our perception is that it is looking a little better than 2016. The future is not bright, but it looks like the end of the dark tunnel.” Against the backdrop of a still sluggish and highly challenging business environment, would he still enter this sector today? “Absolutely; it is without a doubt the most rewarding environment. To solve clients’ problems and provide viable solutions where once there was doubt is a success that money can’t buy.”
LEAN ADVANTAGE “And having multi-skilled engineering staff means instead of 50 executing a very large capital project; you need a core of say 10 highly skilled people. We work 24/7, respond to enquires at any time and all hours. For us there is no off-switch.” For the mining and commodities sector, current signals of a tentative
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AZMET TECHNOLOGY & PROJECTS +27 10 020 3811 info@azmet.co.za www.azmet.co.za
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Contact Details Michael Van Kerckhoven
Juan Van Kerckhoven
Project & Sales Manager
Chief Executive Officer
michaelvk@famsys.co.za
B.Sc. (Chem.Eng.), B.Comm
juan@famsys.co.za
www.famsys.co.za
www.enterprise-africa.net / 41
CLOSE-UP MINING
Making Light Work of
Surface Mining PRODUCTION: Timothy Reeder
Established in 2004, Close-Up is a mining company with expertise in every facet of mining projects, from establishment of new box-cuts right through to undertaking mine rehabilitation. It is based in Mpumalanga, South Africa, and specialises in mining, earthmoving and plant hire.
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INDUSTRY FOCUS: MINING
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The first projects and contracts undertaken by Close-Up after its formation were essentially on a sub-contract basis and included topsoil, softs, overburden and coal removal. These were all carried out on the Eikeboom site belonging to the Anglo-Australian multinational mining, metals and petroleum company, BHP Billiton. The coal mine in question is part of the Optimum Collieries operation which consists of a large opencast and underground mining complex made up of four coal production areas, with a reserve base in excess of 270m tons of run-of-mine coal as at 30 June 2009, of which 191m tons are classified as saleable. From this starting point the company expanded rapidly, and has been an integral part of work on some extremely noteworthy sites. Tweefontein, for instance, is 100% owned by Xstrata Coal SA and consists of three mines - the Boschmans, Waterpan and Witcons Collieries - all of which have been structured into open pit, underground and surface operations. This is a complex located 110 km north east of Johannesburg, close to the town of Ogies in the Mpumalanga Highveld area of South Africa and boasts a mining authorisation area covering some 113 km2. Also featuring in Close-Up’s extensive portfolio of successes are Anglo Coal’s Isibonelo and BHP Billiton’s Pullenshope
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mines, the former of which is situated near to the northern margin of the Highveld coalfield of Mpumalanga and has total scheduled opencast reserves of 108 Mt. Alongside these developments, Close-Up has worked on Kwagga (Optimum Coal), Douglas (BHP Billiton), Kriel Colliery (Anglo Coal), Graspan Colliery (Shanduka Coal) and Hakhano Colliery (Umthombo Resources). This latter colliery operates a coal processing plant and produces in excess of 1.5m tons a year of domestic as well as export coal. Close-Up Mining is currently the main contractor at Optimum Coal, Kwagga and Pullenshope Division, as well as at Umthombo Resources. The scope of work which it has been placed to execute on its projects to date has consisted of operations ranging from load and haul of topsoil, subsoil, overburden and coal, as well as road construction, rehabilitation right through to drilling and blasting. It operates under its overriding motto: “Product delivery to our clients, safely, on time and at a competitive cost per ton,” which dictates its daily operations and propels it forward in its bid to achieve constant growth and development. Due in part to the range of work it has previously completed, Close-Up’s current project list continues along ever more impressive lines. Overall the company has equipment to move in excess of 3,000,000 m3 per month, as well as excavators ranging from 30t up
to 120t as well as 966 and 988 front-end loaders. Its work continues at Hakhano Colliery, a total mining operation where Close-Up is involved in the totality of the processes here, from the exposing of the coal to delivering it on the Run of Mine (ROM) pad. At Zevenfontein meanwhile, another mine under the ownership of Glencore Xstrata, Close-Up has been tasked with the opening of a box-cut, a small open cut built to supply a secure and safe entrance as access to a slope to an underground mine, and mining of parting at the site. At Pullenshope, operations have been somewhat different; here the emphasis has been on mining of topsoil, subsoil, overburden placement and spreading of topsoil for rehabilitation. Displaying its full range of capabilities, the Venetia Underground Project is a pure plant hire operation, where the company is tasked with supplying equipment to Basil Read Civils to facilitate the development. Across the diversity of its operations, Close-Up mining prides itself on its peerless safety record. With two dedicated Safety Managers in the company, who work alongside its management, the safety aspect of the business remains at the forefront throughout. It has enabled it to successfully comply with the stringent safety standards of all the major clients in the field, including Optimum Coal, BHP Billiton, Xstrata, Anglo Coal, De Beers and Exxaro. This is a complex process, one
CLOSE-UP MINING
which has ultimately allowed Close-Up to learn a huge amount from these clients and use this knowledge to improve the daily running of its business, particularly with regards safety. Close-Up Mining possesses a wealth of industry experience across its management personnel, invaluable to its maintaining its lofty position in the field. Managing Director Pieter Tenner has 25 years’ experience in the Opencast Mining Field. Having started his career at the Department of Public works in the North West Province, he joined MCC Opencast Mining and worked on Opencast Mining Projects in South Africa, Zambia and Congo. Upon returning to South Africa he joined a local company and headed up their first opencast mining project at the Marikana Platinum Mine, establishing Close-Up Mining in 2004. Plant Manager Carel Botha, meanwhile, has 16 years’ experience in
the mechanical field, with a specialism in equipment used in the mining industry. He spent 11 years with one of the largest plant hire companies in the country before joining Close-Up Mining at its inception. Johan Evert is General Manager of the company, and has worked in the mining industry over the last 25 years. In October 2010 he joined Close-Up Mining and has a total of 17 years’ experience in opencast mining, across both gold and coal. In June of last year, diversified mining company Sentula Mining announced that it planned to sell its 50.5% shareholding in Sentula Coal to Close-Up Mining. Benicon Opencast Mining is a subsidiary of Sentula, and the merger was largely motivated by the age of its equipment which had negatively impacted on Sentula Coal’s ability to meet the requirements of the Anglo Coal contracts it had been hired to execute. The merger was seen as an alternative to the significant investment
needed to replace Benicon’s ageing equipment. “Close-Up and Sentula have identified synergies for the development of joint opportunities in the provision of opencast mining services. Close-Up has the necessary equipment, operational and management resources, and Sentula Coal provides certain equipment, labour and access to mining volumes through established contracts,” according to Sentula, who would be employing a substantial number of Benicon employees as well as acquiring selected plant and equipment from the former entity.
CLOSE-UP MINING 013 243 0794 johan@closeupmining.co.za www.closeupmining.co.za
DRILL & BLAST JEF Drill & Blast is a specialised drill and blast company, which utilises 62 drill rigs in the opencast mining sector, primarily in the coal fields of Mpumalanga. We are a standalone company who supports junior miners and the big mining houses where additional capacity is required or when the drill & blast function is outsourced completely. The company, founded in 1989, has grown into a household name in the industry through volume security and the quality of services it provides.
CONTACT US
13 Celsius St, Middelburg, Mpumalanga, 1050, South Africa PO Box 1558, Middelburg, 1050 South Africa Phone number: 013 246 1123/1033 Fax: 013 246 1158
www.enterprise-africa.net / 45
GHC AFRICA
Project Managers Growing Despite
Tough Times PRODUCTION: Karl Pietersen
Completing major projects - all over Africa - on time, on budget and to top quality specs, GHC Africa is a project management firm with a glowing reputation. Director Mike Woodruff tells us more about how the company will be growing outside of SA, and how it will become known as the ‘go to’ project management company.
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A common trend for growing South African business is to look beyond the border of the country for new opportunities on the continent. Many of South Africa’s biggest and best have established themselves as industry leaders at home and then focussed attention north of the border for further growth opportunities. This has been successful for many but also presents many new challenges – consider the different regulations, the different types of government, the transport and logistics, the employment laws, the tax structures, the unfamiliar markets, and the different cultures. Chasing opportunities in Africa is a challenging but exciting undertaking. Sometimes, however, pursuing new business in other territories becomes necessary. Take the construction business for example. In 2015, the Financial Mail claimed that the industry was in a ‘parlous state’. According to its report, stock prices for the JSE-listed construction companies plummeted and even the biggest had seen revenues fall by as much as 14%. Murray and
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Roberts claimed that up to 93% of its profit and 65% of its revenue during that period was coming from outside of South Africa. However, at the end of 2015, Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile said that the construction industry was an exciting one, claiming “we have every reason to believe that the construction industry is fast proving itself to be Africa’s treasure trove”. Speaking at the 2015 Bauma Conexpo Africa, in Johannesburg he said that half of the 165 top construction and engineering companies in the world had expressed interest in expanding into Africa. In 2017, with the economic climate improving slightly, and the government plunging R900 billion into infrastructure projects, the construction business remains in a difficult position but there may be light at the end of the tunnel. WBHO recently announced slightly improved results, and Investec reported that the economy could return to target growth levels by 2020.
This is of course good news for everyone involved in construction, especially those involved in longterm, large scale projects not just in South Africa, but all over sub-Saharan Africa. GHC Africa is the perfect example. Founded in Johannesburg 25 years ago, the company specialises in construction project management and has completed high-profile instructions in South Africa and across the continent. The key differentiator separating GHC from its competition is its relationships building skills; this isn’t a business that works at arm’s length, GHC project managers like to get close to clients and fully understand needs and requirements of every project. Because of this, alongside a reputation for high quality and on time, on budget delivery, GHC has managed to mitigate the economic woes that have dogged the industry and is continuing to grow. “The last few years have been tumultuous,” says Director, Mike Woodruff. “We’ve been very fortunate as South Africa’s construction
INDUSTRY FOCUS: CONSTRUCTION
industry and the built environment industry has gone through a hard time and remains under pressure but we managed to pick up some nice, long-term jobs which has helped us build our reputation, knowledge base and staff skill set. We’ve had Mall of Africa and Menlyn which were over R2 billion projects and we’ve been involved in Jo’burg Sandton City with a number of projects. Now we are looking to replace that workload and that is the challenge for the moment. “There’s a lot of project managers who like to work from afar and manage by email. That’s not our style. We get involved, we get alongside our clients, we understand the business case of why they’re taking on the project and we like to think we relieve the client of responsibility of ensuring that building is built to meet their needs. We analyse the business case and we make sure that when we deliver the project, it’s something that clients actually need rather than something they want. We get very involved with clients and the evidence of that is in our repeat business – there’s a handful of clients that we’ve been working with for almost the entire existence of this company. “We like to meet people. Our clients have to trust a multi-million Rand or Billion Rand project to our people and they have to know our people are capable. The only way to sell that is by being in front of clients and talking to them about how you can add value. “We push design teams, we make sure they understand that what is good for one project is not always good for all projects. We’re always testing architects and engineers to come up with new and better ways to do things and ensuring its appropriate,” he adds. FULL SERVICE PORTFOLIO GHC’s offering is wide; there’s many ways that this innovative company
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can help you but its core services fall into four main categories – Commercial Management, Construction Management, Development Management and Project Management. “Our core function is to deliver on time, on budget and to top quality standards,” says Woodruff. “We believe we have a different culture to many other project managers as we get involved in the project directly. We also expand our scope beyond that of a normal project manager to help our clients put projects together – we perform a development management role before the project gets underway. We’re also heavily involved in the financial and commercial aspects of the project. Looking at our track record, we’ve completed some very high-profile projects including the Mall of Africa – the largest single phase retail centre development in sub-Saharan Africa – and Menlyn Mall, the biggest refurbishment of a retail centre. “We’re not a big company in terms of numbers but we have a core of excellent people who deliver these projects and we have an untainted record of delivering on time, within budget and to the required quality.” With an impressive completed projects portfolio that includes the Sandton Sun reconfiguration, Nelson Mandela Square reconfiguration, Sandton Tower refurbishment, Jabulani Square development, Barclays Africa HO – Lusaka Zambia, Accra Mall reconfiguration, Midlands Mall Lifestyle Centre, Welkom Hyper reconfiguration to name just a few, Woodruff believes that GHC can bring its expertise to clients in any industry. “Our speciality is retail but we do commercial projects for hospitals and similar. Our client base varies but we think we can apply our principles to any industry. Our added value is where there are many inputs and coordination that requires management to get the job done.
For example, with our work at Kotoka International Airport in Ghana, there are a lot of components such as the building and the tenants and a lot of variables and inputs.” EXPANDING BEYOND SA GHC already has a strong business in Africa and has completed many projects in neighbouring countries. In 2017 and beyond, the company is hoping to grow this side of the business. “We go beyond South Africa; we’ve done projects in Zambia and Ghana and we’re looking further afield to Kenya and Nigeria. Our core market is South Africa but we go where our clients require our services. “If a client came to us and asked us to work internationally, we would certainly consider it. Of course, we would have to consider the process as we don’t work from afar or do things over email, we would want people on the ground. We would have to consider setting up and office and relocating people but if a client insisted that they need a job done and it made sense financially, we would always look at it,” says Woodruff. Ghana in particular has become a market where GHC has achieved great success and many of the current developments that the company are busy with right now are located in the West African nation. “We’re working on the Achimota mixed use development in Accra, Ecobank’s multi-storey office block in Accra, Kumasi Mall close to Accra and the Kotoka Airport project. We’re also involved in multiple projects in South Africa and we’re looking at a big one at Tyger Valley in Cape Town,” says Woodruff. RAPIDLY CHANGING INDUSTRY As one of the industry’s long standing organisations, GHC uses all of its experience to embrace the changes
GHC AFRICA
that inevitably come thick and fast in a sector that is constantly evolving. “We’re 25 years old now, it’s a big milestone for the company. We’ve recently formed a new company, Origin Project Management, a 51% black-owned company. Our clients are very focussed on transformation and as part of our strategy we’ve taken that on board and embraced it,” explains Woodruff. Today, customers are more reliant on project managers as they look to focus on their core business. Changes in regulation, changes in technology and a focus on ‘green building’ have all encouraged clients, and potential clients, to think more closely about how far their own skills can go, and how necessary it is to bring on board a project manager that is experienced. “Clients are now expecting a lot more of project managers,” admits Woodruff. “When I arrived in SA in ’96, project management was almost an unknown discipline; often architects led the way. “The industry has become more complex. There’s environmental issues to consider with green star ratings, safety is paramount and regulations have tightened so we manage that very strictly, and buildings have become more complex with fibre, Wi-Fi, internet connections and various electronic systems. There’s a large emphasis on integrating services into buildings while making sure it is aesthetically pleasing,” says Woodruff. It’s also through personnel where the industry is changing. Naturally, people are a key factor for any business but with project managers that control such important sites and large amounts of money, using the right people is vital and this isn’t always easy. “We’ve seen a general reduction in skills in the industry from a sub-contractor point of view,” says Woodruff. “Apprenticeships are not easy to get and some of the big
companies don’t offer them at all so basic skills like bricklaying are scarce and getting top quality is difficult. We’re finding that consultants are also not upskilling and we have to manage that as clients are expecting top quality.” Fortunately, GHC has the experience and the ambition to embrace the changes that this liquid industry will continue to throw up, always meeting and exceeding client expectations. “As buildings become more complex and as land becomes more expensive, clients want projects built quicker but still within budget so the demand from clients has certainly changed,” says Woodruff. Going forward, despite the economic uncertainty in construction in South Africa, and around the world, the company will focus on maintaining and growing its already
sterling reputation and bolstering its Africa business – this will be a key strategy throughout 2017. “We want to become recognised as the ‘go-to’ project management company and to expand outside of South Africa. We will be looking north of the border for opportunities as our neighbouring countries will be maturing in terms of the consumer base,” Woodruff concludes.
GHC AFRICA +27 (0) 11 706 0615 ghcafrica.co.za
C Africa Proud Supplier to GH ce ed in 1999 and has sin LMAQS was establish d the an ng ute Ga in s ce grown to four other offi t a, East London and Por Eastern Cape in Mthath Cape in s ce offi d iate oc Elizabeth. We have ass po. Town, KZN and Limpo Tel: Fax: Email: Physical Address: Postal Address:
2712 430 2235 2712 430 6487 info@lmaqs.co.za Arcadia, 0084 220 Farenden Street, , 0028 P.O. Box 11340, Hatfield
www.enterprise-africa.net / 49
BASIL REEKIE, CLIENTÈLE GROUP MANAGING DIRECTOR
CLIENTÈLE
25 Years of Business Excellence
At Clientèle PRODUCTION: Karl Pietersen
The Clientele Group has been providing South Africans with affordable insurance products for over 25 years. The company’s goal is to be South Africa’s most reliable and valued financial services partner and, calling on a strong history and a talented employee base, it is quickly managing to realise this vision.
INDUSTRY FOCUS: INSURANCE
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South Africa’s financial sector is one of the country’s most robust industries. Providing services including commercial, retail and merchant banking; mortgage lending; insurance and investment products to millions of people, through innovative and inventive new methods - financial services truly acts as a shining beacon for investors. Backed by a sound regulatory and legal framework which has attracted many of the world’s most prominent financial institutions, South Africa’s sophisticated financial services industry is globally respected and the leader on the continent. It is a driver of the economy and a serious developer of new products and ideas that suit the growing demands of a differentiated client base. As the country has changed, so has the market and today the demand for financial products is widespread. However, although the industry is making great inroads and bringing down the number of uninsured and unbanked, it has received criticism for being too complicated. A report published last year by the Organisation for Economic Co-operation and Development (OECD) found that, in general, South Africans had low levels of financial literacy with just 30% gaining minimum target scores. The trend was consistent in countries around the world with many countries showing low levels of financial knowledge but South Africa placed bottom of the charts. Fortunately, there are companies that have recognised this and that have developed business models and products to suit the market place. Take Clientèle for example. Specialising in life, health and legal products, the company prides itself on offering convenient and easy to understand financial services products to the public through various direct marketing and sales distribution channels.
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This is a business that fits perfectly within the country’s highly reputable industry and has claimed awards that demonstrate its excellence. In 2009, Clientèle was named Best Insurance Company in the Star’s Readers Choice Awards; in 2010, it claimed best rated company listed under the Life Sector of the JSE on the Business Times Top 100 Companies Survey; in 2013 it was awarded 1st position for Service Excellence in the long-term insurance industry by the Ask Afrika Orange index; from 2013 to 2015 it ranked in the Elite Top 20 in the Financial Mail Top Companies, in 2014 Clientèle ranked second in Financial Mail Top Companies; and in 2016, the company took home top honours at the fiercely competitive CCMG Awards. “Clientèle is no stranger to industry awards,” said Henry Dlandla, Executive: Client Services. “We are consistently recognised because we remain committed to putting our clients first. To them we say, thank you for your loyalty, we will not stop trying to find new ways to improve your experience with us.” Clientèle’s product range includes affordable funeral, health, legal, life and loan products, along with investment and wealth offerings. Group Managing Director, Basil Reekie tells Enterprise Africa that the company has changed and developed over the years, coming a long way since its founding 25 years ago. “Clientèle, then called Clientèle Financial Services (CFS), was founded in 1992 by Brian Benfield and Bruce Howard originally as a financial services intermediary. In 1998, we were recapitalized to form Clientèle Life, which later became the launching pad for other exciting ventures, including the IFA Business Opportunity, South Africa’s largest and most successful insurance network marketing based company and Clientèle Legal.
“Lots has changed since our establishment. We now have a staff count of approximately 1,800. Our offering was originally limited to funeral cover and now amongst others it includes savings, funeral, health insurance, legal and life products. The turnover then was also a lot smaller back then, now we have a turnover of a couple of billion per annum. We are also now a JSE-listed company,” he says. In its early days, Clientèle spotted a gap in the market and started to exploit it through innovative marketing and new ways of selling. “There was a huge market opportunity,” says Reekie. “At the time, there was no telesales insurance provider in the market - what Clientèle did at the time was truly revolutionary. By using the previously unexploited mediums of television and the telephone, we made our simple and accessible insurance products available to ordinary South Africans using well-known media personalities.” Thanks to this strategy, Clientèle has become a recognised, award winning South African organisation that provides shareholders with sustained growth and returns on their investments, with Return on Shareholder Equity consistently exceeding 50%, and continues to develop exciting new products. “We are one of the bigger players in the telesales space, as well as the health insurance market, and the legal insurance market,” details Reekie. “We are also leading the way in funeral insurance as can be evidenced by our recent launch of the, first of its kind in South Africa, Ultimate Funeral product which includes our interesting Premium Pay Back Benefit. This benefit pays back all premiums on death of the Main Insured or spouse on top of the cover amount. In the last year, we added to this offering by including the option to receive 50% of the Main Insured’s
Sharing. It’s the most powerful form of humanity. It is something we are taught before we can even walk. Because in sharing lies positive growth for all. The chance to prosper. To give and receive. It holds the promise of a strengthened society. It connects us and evolves us. From learning to getting people ready to work. From dreaming of careers to studying for them. From having fun to meeting responsibilities. From being born free to living free. It stimulates the innovators and inspires future leaders. Sharing is something we practice everyday. We listen, we care, we design, we add value, to your life and that of others. We empower small businesses to think big and big businesses to remember the small. There is a beginning to Shared Growth. But there is no end. And each time we share we know that some day, in some way, it will be shared again. When we share, we grow. When we grow, we all prosper.
Share. Grow. Prosper.
Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7
INDUSTRY FOCUS: INSURANCE
premiums back at age 65 and the rest of the premiums back on a valid death claim.” This type of innovation, creating products to meet the needs of clients rather than creating products that are beneficial to the business, and leveraging the experience and knowledge that the company has built over the past quarter century has created an extremely strong business case which Reekie is confident will only grow in the future. “2016 was tough for the industry,” he says. “However, we have been performing well over the last few years and have no doubt that we will continue to do so into the future. We have increased our profits by more than GDP growth every year for the last 18 years and this is something that we are exceptionally proud of.” GROWING FROM WITHIN The aforementioned awards that Clientèle has claimed over the years are thanks to its people. Financial services is an industry built on people and firms are now looking at how they can attract and nurture people with a mindset and ideas that develop lasting relationships, creating value over the long-term. Following the global financial crisis, investment in people has been a top priority for most serious financial players. According to PwC, ‘the commitment and behaviour of the people within your organisation will be critical in rebuilding the trust of consumers, markets and governments, without which investment, growth and profitability will not recover’. Investing in people and developing people is vital for Clientèle as Reekie explains: “It is incredibly important, especially for us as a relatively large corporate. We are particularly proud of our staff bursary programme which has given deserving employees the opportunity to further their studies. Furthermore,
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we have programmes which allow those with leadership potential to be equipped with essential management skills, enabling an easy transition to the next level. We have made soft and hard skills training available to employees at all levels, free of charge, through our bursary and training programmes. “At Clientèle we focus on the big picture,” he adds. “We are constantly asking ourselves how we can add value to our clients, our company and our people. The insurance industry at the moment is very competitive. Those companies that succeed have to be ahead of the curve. At a management level, we encourage managers to reinvent their systems and processes regularly to make them as client-centric as possible. We have also taken steps to draw upon the ideas and suggestions from staff at all levels. We regularly hold innovation competitions that reward Clientèle’s brightest for their creativity and long-term thinking on real business problems and encourage them to implement their ideas.” Traditionally, buying insurance has gone down in most people’s budget as a ‘grudge purchase’ and the benefits are not realised until a claim is necessary. This is when an upskilled, knowledgeable and passionate workforce comes into play. Claiming on a funeral or hospital policy can add to an already stressful time but if you are able to deal with award-wining customer service agents, who are clear and easy to understand, and process claims quickly and efficiently then you are likely to respond positively and potentially repeat purchase and recommend. This is exactly why Clientèle has adopted a companywide client centric approach, through its staff, to delight customers. “Over the last year, we have continued with our ongoing programme, Treating Clients Well (TCW), to develop into an
organisation that is increasingly client centric,” explains Reekie. “We have seen significant improvements in our service to clients, as well as greater integration of this philosophy in sales, support and service teams.” He goes on to say that the TCW programme is developing a competitive advantage for the company. “TCW has changed the way our staff treat our clients and clients truly are starting to see this and it really is doing truly great things for our brand and reputation.” Of course, to build a workforce that delivers quality service and follows our TCW philosophy, you first have to find people with the basic skill level required and retain them so that they can be constantly developed. Clientèle like many other organisations in the insurance industry has found that there is a shortage of skills in the industry and so is investing in educational programmes. “The skills shortage is indeed evident within the industry. As a result, we have prioritised education for our Corporate Social Investment Initiatives. For example, since 2009 we have invested around R10 million in the IFA Bursary Scheme, offering learnership opportunities for young people. We also ensure that we attract and retain top talent,” says Reekie. According to South Africa’s Insurance Sector Education and Training Authority (Inseta), the industry faces a number of challenges when it comes to attracting and retaining talent – mainly, a lack of interest in the industry, poaching and job hopping, advances in technology quickly changing people’s responsibilities, and lacking professionalism in the industry. This is why corporate initiatives such as those invested in by Clientèle are so vital for industry development.
CLIENTÈLE
A PARTNER FOR LIFE As we quickly move through 2017, Clientèle is planning new products and operations in new markets to ensure it remains a relevant and reliable partner to all its clients. “We are currently developing a new health insurance product range that we will be launching soon and we are expanding our Ultimate product range to encompass all our product categories. When asked about Africa, Reekie said, “We would consider expanding on the African continent should the timing and opportunity be right.” Does the company feel threatened by the current economic climate? Will this disrupt any growth plans? According to Reekie, Clientèle focusses on what it can control and influence and, as such, expects growth to continue.
“The external environment is always important and without doubt something that we always keep an eye on, however we focus on what we have direct control of which is our internal processes and procedures and our products and methods of distribution, rather than the external environment which we have little direct impact on. “We expect to continue to perform well despite the challenging economic times,” he says. Going forward, there are many opportunities for this industry leading organisation. According to Oxford Business Group, ‘the South African insurance market stands as one of the most advanced in the world… Much of the country remains unbanked and either uninsured or underinsured. This presents significant opportunities for local and regional players, as they look
to develop more inclusive products that meet the needs of low-income customers. In addition to providing much-needed coverage, the segment is expected to unlock substantial growth potential for insurers in the years ahead’. It’s history, product range, and quality service offering make Clientèle a perfect partner to meet the needs of this growing sector. Even with the uncertain economic environment, Clientèle looks set to grow this year, capping off 25 years of business excellence.
CLIENTÈLE 011 320 3000 services@clientele.co.za www.clientele.co.za
An ever-changing business environment, cutthroat competition, regulatory initiatives, and a host of other challenges can derail your longterm plans. Developing and implementing sustainable strategies entails an innovative and disciplined approach while navigating immediate obstacles. QED partners with clients to help identify and address current and future challenges by providing cutting-edge actuarial and risk management services.
We are proud to be Clientèle Life’s actuarial par tners for more than a decade and wish them continued success in future.
PROFESSIONALISM | EXCELLENCE | INSIGHT +27 11 038 3700
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www.QEDactuarial.co.za
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info@QEDactuarial.co.za
www.enterprise-africa.net / 55
MIP HOLDINGS
Continental Growth Strategy for SA Software Developer PRODUCTION: David Napier
MIP Holdings is developing new products to go with a new strategy that will see it aggressively target expansion on the African continent. An industry leader in software development for the financial services industry, this proudly South African company tells Enterprise Africa more about ambitious plans for future growth.
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The insurance industry is going to change dramatically in the coming years. The way products are delivered to consumers, the methods through which insurers communicate with clients, the types of products on offer, the way consumers buy, and the legislation that governs the industry are all going through a period of change. Global economic change and the constant advancement of exciting new technology are the drivers of this change and those that remain ahead of the curve look set to reap the rewards of a growing business. According to the Institute of International Finance: “A variety of breakthrough technologies are set to spur a fundamental transformation of the insurance industry. Cloud computing, the Internet of Things (IoT), advanced analytics, telematics, the global positioning system (GPS), mobile phones, digital platforms, drones, blockchain, smart contracts, and artificial intelligence (AI) are providing new ways to measure, control, and price risk, engage with customers, reduce cost, improve efficiency, and expand insurability. These technologies are also enabling the creation of new insurance products, services, and business models.”
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These trends exist around the world, and Africa is no exception. In fact, the African continent is a hotbed of innovation when it comes to the delivery of products, thanks to the diverse customer dynamic. This situation means that Africa’s insurers are now being forced to move from a product centric approach to a customer centric business model. The Financial Times called Africa’s insurance sector a ‘giant waking up’ and KPMG’s regional insurance head for East Africa, James Norman told the FT: “There’s a real buzz about the sector because opportunities are immense. There’s a young population, a growing middle class — most with smartphones — and an increasingly large diaspora coming back. There’s a whole new generation of savvy consumers with disposable incomes and large infrastructure projects being built.” Of course, this is good news for those involved in the sector, like MIP Holdings, an industry leading software development organisation focussed on providing affordable Business/IT solutions to the financial services industry in emerging markets. MIP Holdings has developed a strategy, being implemented right now, intended to grow the company’s presence on the continent.
“Our core business focusses on the collection of contribution and the payment of benefits in the financial services space,” says CEO, Richard Firth. “Right now, we are looking at the African continent but most of our current business is in South Africa. Our new strategic initiative is to move into Africa.” AFRICAN STRATEGY South Africa accounts for around 80% of all premiums in sub-Saharan Africa and its insurance penetration rate is around 13%. Kenya has a penetration rate of around 3% and Nigeria’s in less than 1%, demonstrating the opportunities that exist. “With our strategy moving into Africa, the whole premise for financial services is that you have a monthly income for a policy and the customer claims as and when they require. However, there’s a massive shift underway with the globalisation of the continent and Africa is seeing more people pay daily,” explains Firth. “The transaction volume increases because you have to collect daily to maintain a reasonable customer relationship. The way systems are working is changing and the
INDUSTRY FOCUS: SOFTWARE
volume of transactions is increasing and that is where technology plays an important role. IoT has also contributed to the increase in transaction volume and so the databases and the architecture has grown to facilitate this type of environment.” The landscape in Africa, in each individual country, differs significantly and this makes the way insurance is bought and sold a complex web that all involved must navigate. For MIP Holdings, movement into Africa means changing the way the company works in the mobile space, thinking more about the endconsumer, and adjusting to suit the needs of a different client base. “We are working on how to collect daily,” says Firth. “The assumption is that we collect from someone’s bank account but that can change when we move into new countries, especially in Africa, as many people don’t have bank accounts so, again, technology plays a big role in terms of how we interact and collect from people. The mobile side took a while to get traction in the financial services industry, but that traction is now well and truly embedded so we’ve had to undertake a very serious underpinning of the mobile side in our administration space in terms of communication with the consumer - the way the system interacts now is completely different. Where most transactions were inside the brick and mortar of an insurance company, and there was little interaction with the policy holder outside, today we see the exact opposite. There’s more interaction with the policy holder and less interaction inside the brick and mortar.” With this is mind, MIP Holdings has made investments to acquire businesses on the continent that will help it further understand the workings of the mobile space, specifically collections and billing. “We want to become a major
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player on the African continent from an insurance perspective, that is our big drive. We acquired a business where we are running the billing mechanisms of a mobile network operator in Africa but not in South Africa. For example, MTN Ghana, MTN Afghanistan, Tigo Tanzania – we run the pay-as-you-go networks and the fundamental for us is understanding the billing mechanisms that we will use in the future as mobility and networks are going to drive how insurance in delivered on the continent. These two elements also drive communication to the consumer base. We acquired this business so we can understand how airtime works as we have to be able to convert airtime – we believe airtime could become a currency of the future,” details Firth. A COMPANY YOU CAN TRUST Africa’s financial service providers can feel confident with MIP Holdings entering the continental market. The company has a long and diverse history and boasts experience across a number of different business lines. A member of ACORD (Association for Cooperative Operations Research and Development), and a supplier to many of sub-Saharan Africa’s leading financial services companies based in SA, the knowledge and breadth of experience at MIP is unmatched in the industry. “Our key differentiator is that we operate in any of the insurance silos, from healthcare through to pension fund administration and life insurance. We have many touchpoints in the financial service chain. We don’t have any competitors who can compete in every one of those spaces,” explains Firth. “We compete with company’s in each individual space and what we’re finding is to achieve economies of scale and price competitiveness, it’s becoming imperative to have volume. We have a R&D team of 35 people and they focus on where technology is going
and how it can help us change the consumer interaction with insurers.” The company is based in Bryanston, Johannesburg, was established in 1989, and its solutions focus on the collection of contributions and payment of benefits in the healthcare, employee benefits, and life assurance, as well as in the vehicle warranty and maintenance arenas. It serves administrators of medical aid schemes, managed healthcare, employee benefits, and life assurance and investment products. However, it has taken MIP Holdings a long time to get to the position at the top of the industry that it holds today. “I joined the company in 1996 and there were only four people - it was a very different organisation compared to today,” says Firth. Success came in 2003 when the company was accredited with Proudly South African status, endorsement bestowed on local companies that are helping to create jobs and economic growth in the country and demonstrating a commitment to SA. “Today, we have around 330 people and we look after approximately 11.5 million policy holders through pension, health, life and other sectors.” The advancement of technology and businesses ability to use innovative new business models has facilitated the growth of MIP Holdings and the company is using all of the most state-of-the-art tech to ensure it keeps up to date with trends such as an increased use of IoT by insurance companies, the use of Big Data to improve claims processing, an increasing demand on cyber insurance, the emergence of Peer-toPeer insurance, and a growing focus on mobile applications for interaction between insurers and their customers. “The last few years have been very good. Obviously, technology is playing a bigger role in financial services, and that is true for all
MIP HOLDINGS
businesses – everyone is looking at becoming a technology business because if you don’t, you’ll lose out. There’s a transition underway and everything is going digital,” says Firth. FUTURE PROOFING As we move quickly through 2017, the insurance and financial services landscape continues to change, perhaps now at a faster pace than ever before. With this is mind, MIP Holdings is already busy with innovative new products that will provide the clients with new and exciting ways to connect, all the time with the consumer in mind. “Traditionally, it was the administration and finance system but now we are getting into a whole suite of new products, the first of which is workflow,” says Firth. “Traditionally, workflow means to manage a process inside an organisation and measure its service level and quality but today workflow brings the consumer into that process. With the consumer interacting with the process, we’ve had to put in place some engines where business people can change processes and business rules very quickly. “We are also seeing a shift in the call centre model. We’ve built an automated FAQ input section into software and it’s becoming chat like. Traditionally, email and SMS has been popular but we’re finding in the large consumer space that email is no longer an effective communication method so we are building in digital stamps to recognise people and prevent fraud. We are also working on an important product called the Central Calendar which is like a Facebook timeline where the business has a timeline view of the consumer. Traditionally, we could post prompts in outlook to remind someone to renew a product; now we have centralised all the data and we can show it like a Facebook timeline which is imperative for customer service. We are also integrating the ‘invisible app’ where our app can integrate with other app services. For example, if we want
to show the consumer the weather forecast where they are – we don’t build a weather app, we integrate with another weather services and other risk services while all the while sharing information.” With much more change on the way, and companies being encouraged to get involved in the interests of longevity, now more than ever it pays to partner with a company like MIP Holdings, with the relevant experience and ambition to help take business to the next level. “The advent of the app has been one of the biggest changes in the industry over the years. Communication has fundamentally changed the way we can operate. The insurance industry was completely broker focussed whereas now it’s completely consumer focussed. The way we interact, the way the systems
interact and the way legislation is going, it’s all to protect the consumer,” says Firth. Insurance is an industry being disrupted by technology and this revolutionary means of changing the way business is being conducted is something which all businesses are soon going to need to take note of, if they haven’t already. Fortunately, MIP Holdings can help give you the first step and become a reliable partner in the journey towards a tech and customer centric future.
MIP HOLDINGS 0861 647 647 sales@mip.co.za www.mip.co.za
proudly Helping Mip deliver affordable business and iT soluTions for over 20 years. At AIGS, we understand customer loyalty is about so much more than features and benefits. It’s about having the ‘right’ attitude to customers and staff, with a key focus on providing delightful experiences across every touchpoint.
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BANKING ASSOCIATION SOUTH AFRICA
Maintaining and Raising African
Banking Standards PRODUCTION: Timothy Reeder
No matter the business, individual or situation, one thing does not change: money is key, which makes keeping it secure all the more important. The Banking Association South Africa is an industry body representing all registered banks in South Africa, and encompasses both South African and international banks.
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The origins of The Banking Association South Africa were in its previous incarnation as the Council of South African Banks (COSAB). This was formed in March 1992, when four separate associations addressing specific areas of activity in the banking sector were merged. Among these were the Association of Mortgage Lenders, Merchant Bankers Association, the Clearing Bankers Association and the Association of General Banks. While relevant and effective at
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the time, COSAB’s committee-driven structure proved to be ineffective as an industry body as the industry itself continued to evolve, and in March 1998 the leadership of the banking sector elected to establish The Banking Council South Africa, an executive driven body structured to address the challenges prevalent in the banking sector at the time. In March 2005, it was decided that the name of the body would be changed to The Banking Association South Africa, to reflect a more appropriate description
of its representative role. Today, the Banking Association is charged with the responsibility of lobbying, influencing policy, guiding transformation, sparking constructive and sustainable change and engaging with stakeholders. The organisation exists, at its root, to contribute to the enablement of a conducive banking environment, and so a large part of this responsibility ensuring that it participates at the highest level of decision making in the
CAS COOVADIA, MANAGING DIRECTOR OF THE BANKING ASSOCIATION
INDUSTRY FOCUS: FINANCE
country. To achieve this the Banking Association has structured and organised itself to allow effective participation in cabinet, due to the calibre of both the people and the leadership that interact with Government at various levels and through various structures. The South African banking sector is still very competitive, despite its very concentrated nature, and it continues to diversify its products and broaden its services within the context of international best practice. Currently, the sector is made up of 17 registered banks, two mutual banks, 14 local branches of foreign banks, two co-operative banks and 43 foreign banks which have
approved local representative offices. The Banking Association South Africa represents all banks registered and operating in South Africa, currently equating to 32 member banks. All licensed banks are members of The Banking Association. South Africa is renowned for having a well-developed and proactively regulated banking system, and one which continues to compare favourably with those of industrialised countries. The South African banking sector has, as a result, attracted a lot of interest from abroad, seeing a number of top foreign banks establishing offices in the country, with others acquiring stakes in major
South African banks. Indeed, the 2015/2016 World Economic Forum Global Competitiveness Survey placed South Africa at 8th spot in Financial Sector Development, out of the 140 countries analysed. The Banking Association last year welcomed the outcome of Standard and Poor’s (S&P) ratings review, resulting in a sovereign rating for the country. It put this down to the credibility and strength of its various institutions, amidst a climate in which challenging domestic, economic and political circumstances prevail. Cas Coovadia, Managing Director of the Banking Association, described the positive affirmation of the confidence that international
//THE NEW N3K CASH VAULT: SECURING CASH FOR RETAILERS Cash Connect Management Solutions, the leader in automated cash management and payment solutions, recently launched the N3K - the first compact cash vault for the retail market for a secure cash management solution. “The rising cost of commercial property, forces many retailers to display as much product as RICHARD PHILLIPS, possible in a limited retail floor JOINT CEO space to increase revenue. New age store designs therefore pose a great security risk by limiting the space for proper cash management systems to be installed”, says Richard Phillips, joint CEO of Cash Connect. The N3K, although compact, is a robust under-counter cash vault that is built to SABS Category 4 standards, ensuring an effective crime deterrent for retailers. “In pursuing a new design approach, the aim should be to provide one’s target market with a relevant alternative to an already successful product range, without compromising quality, security or effectiveness. Cash Connect has successfully changed the design of cash acceptance devices and at the same time set the benchmark for future cash vault design,” says Pierre Liebenberg, General Manager of Production and Manufacturing at Cash Connect.
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The N3K cash vault addresses multiple needs for various requirements because it’s compact, aesthetically improved, and boasts new technical features. Current trends indicate a need for smaller devices that adequately protect against traditional and sophisticated blunt-force attacks. With pressure mounting on retailers to generate maximum revenue from available floor-space, there is a greater need for a cash acceptance device that will fit under counters and in small cash offices,” says Liebenberg. Liebenberg further adds that the design of the N3K provides a solution for varied environments where the cash volume to be processed matches the product’s specifications. The features of the N3k include: •
A contemporary touch-screen based user interface;
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A sliding drawer/door design for efficient use of undercounter and adjacent-wall space;
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A disposable heat-sealed bag system;
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A guaranteed volume of up to 3000 banknotes;
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A user-friendly, electronically-controlled bill-validator access for self-servicing;
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A proprietary, prompt-assisted bag-loading system which prevents incorrect loading of disposable heat-sealed bags
With the knowledge that more than 90% of business robberies occur with insider participation, it is important to know that the kind of deterrent/s you have in place will determine the chances of your store being identified as a target for criminals.
www.cashconnect.co.za
BANKING ASSOCIATION SOUTH AFRICA
investors and institutions clearly have in the leadership at the helm of its economy in both the public and private sectors. “We will still have a long way to go in order to prove that we are firmly on a sound financial footing and economic trajectory. However, under the leadership of Finance Minister Pravin Gordhan, there are positive signs that we are beginning to chip away at the implementation of budget consolidation and structure economic reforms to boost the economy. “We are cognisant that this has happened under difficult and trying personal and political circumstances for Minister Gordhan. We commend him for his singlemindedness, in placing the interests of our democracy, country and
economy ahead of his own,” added Coovadia. The Banking Association was keen to point out the implication of S&P’s decision. It saw it to be a reaffirmation of the importance of the collective effort by Government, business and labour to implement various concrete initiatives to avert a ratings downgrade, an outcome it remains resolutely determined to avoid. Additionally, it would help control and further improve public expenditure and debt level, achieve higher levels of economic growth, attract and retain investment, create jobs and reduce unemployment. “Our collective efforts continue to pay dividends,” Coovadia said. “Junk status or not, we must sustain and intensify our joint initiatives to address the binding
SPECIFICALLY DESIGNED FOR RETAILERS
NEW We supply retailers with automated cash management solutions that give an instant guarantee of value, removes the cash risk and ensures fast cash settlements, and more importantly, creates a safer and more efficient trading space for retailers, their staff and customers. Our brand promise is ‘We take the risk’, from the moment you deposit the cash in our retail cash vaults, whilst in transit and until it reflects in your bank account.
info@cashconnect.co.za www.cashconnect.co.za
we take the risk
constraints and challenges we face. With S&P placing the country on a negative outlook citing concerns about economic growth and the implications of policy implementation does not result in an economic turnaround.” The investment grade credit rating affirmation demonstrated the resilience of the country and the determination of key role players to steer the economy in a positive direction, but the Banking Association hammered home the importance of continuing to work to avoid a ratings downgrade, with ratings agencies such as S&P liable to choose to revise their outlook in either direction. Coovadia described as much when, just weeks earlier, ratings agency Moody’s had made the decision to maintain the country’s sovereign rating, some two notches above sub-investment grade. “Whilst, at this stage, we have done enough to avoid a downgrade by Moody’s, we cannot afford to be complacent,” The he expressed. “Moody’s has cited that the country is approaching a turning point after years of falling growth, but it has also placed South Africa on a negative outlook. This requires Government, business and labour to continue to work together with even greater determination to ensure the implementation of plans, to place the economy on a stronger trajectory in the near term.” Marking nearly 15 years of collaboration, the Banking Association South Africa last year became the first Banking Industry Association in Africa, and only the third globally, to join the United Nations Environment Programme Finance Initiative (UNEP FI) as a supporting partner. BASA achieved a Supporting Institution Status through the partnership, which dates back to 2002 and the World Summit on Sustainable
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INDUSTRY FOCUS: FINANCE
Development which took place in Johannesburg. Since this time, the Banking Association has played an important role in setting up and supporting the Initiative’s Africa Task Force, in a bid to strategically promote sustainable finance in the South African banking sector. In 2015, the Banking Association implemented its ‘Principles for Managing Environmental & Social Risks’, which recognise the role that financial institutions can play in the protection, promotion and fulfilment of social, economic and environmental rights in South Africa. In essence, they can be instrumental in setting the standards for conducting and reporting on their operations, business, lending and investing practices in a sustainable manner. As responsible corporate citizens, members thus commit themselves to following the Principles as set out in their creation. A key area of emphasis under the new partnership is expected to be UNEP FI’s new Positive Impact Initiative, focused on increasing the availability of finance for the purposes of environmental, social and development goals. this will be sought through the development of impact-based business and financing solutions. “South African banks have played a pioneering role in the region and the renewed partnership between BASA and UNEP FI confirms the country’s stewardship in relation to sustainable finance, opening up new possibilities towards achieving sustainability goals not only locally but also regionally and globally,” explained Careen Abb, Banking Commission Coordinator for UNEP FI. According to the General Manager for Human Settlements at the Banking Association, Pierre Venter: “The sustainable
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finance market is evolving rapidly. Adopting UNEP FI’s new Supporting Institution status is a strategic decision, which will support the banking sector in South Africa to keep abreast of global thoughtleadership in this field, while maintaining a unique focus on how these matters impact the banks in the South African context.” The Banking Association South Africa and UNEP FI have partnered in order to continue building on the relationship already established to date, all while leveraging this new status in the interests of pursuing mutually beneficial objectives in African sustainable finance.
BANKING ASSOCIATION SOUTH AFRICA +27 11 645 6700 www.banking.org.za
BANKING ASSOCIATION SOUTH AFRICA
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OMEGA RISK SOLUTIONS
Omega to Expand
in West and North Africa PRODUCTION: Karl Pietersen
Daniel Lengosane, Vice Chairman and Acting MD of Omega Risk Solutions, tells Enterprise Africa about how the company’s experience has seen it grow to become one of the continent’s most trusted security industry names, and how it is gearing up for further geographic and technological expansion.
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Sub-Saharan Africa is a thriving region for the security industry. As we learned back in September 2016 after speaking to G4S, there’s major opportunities for companies that are able to offer first class service. There are many drivers of demand in the security business including ever-increasing numbers of imported goods (in 2010, the UK exported more goods to SubSaharan Africa than to China and India combined), many of the world’s fastest growing economies
are located in Sub-Saharan Africa, many African Governments are looking to diversify their economies away from commodity reliance, and a rapidly growing African middle class with disposable income has created huge demand for consumer goods. Combine these drivers with the diversity of potential threats (terrorism, political conflict, theft at lucrative mining operations) and you find that the challenges for the security market are substantial. However, where challenges exist, so do opportunities for progressive,
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INDUSTRY FOCUS: SECURITY
VICE CHAIRMAN DANIEL LENGOSANE
forward-thinking companies expanding into developing regions. Omega Risk Solutions is the perfect example of a company that has shown innovation and skill on its journey to the top of the industry. Headquartered in Pretoria, Omega Risk Solutions is a truly South African company with operations in 11 countries around the continent, whereas many competitors who operate on a similar scale are international businesses headquartered in Europe or the USA. From Director-level down to front line employees, Omega Risk Solutions has uniquely African experience sourced from military, police, political and closeprotection backgrounds. Take Vice Chairman and Acting MD, Daniel Lengosane for example. He tells
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Enterprise Africa more about his background in the security industry and how his experience has been beneficial in growing the business. “I was trained by the ANC as a security practitioner,” he says. “I trained in Germany as a bodyguard, learning advanced driving and close-protection. In 1994, I worked for Nelson Mandela as a bodyguard for four years and I then moved to work with then-Deputy President Thabo Mbeki as Head of Security. Eventually, I became Director of Internal Security in the Presidency. This demonstrates the experience we have at Omega Risk Solutions. I joined the company in 2005 and today I use my experience to source new opportunities while contributing in a decision-making capacity. “Omega Risk Solution was
established by a consortium of risk management experts who are passionate about providing advanced, integrated security solutions to clients. These people came from a military background with the South African National Defence Force (SANDF) and also worked for G4S and other firms before later deciding to form their own company in South Africa in 2003. The management team now offers traditional security management experience gained in Africa, Australia, Europe, the Middle East, UK and the USA. We’ve been successful in Africa because of our footprint, and because of our understanding of the market on the continent, starting from South Africa.” The company’s core offering includes: Security surveys, protection (manned guarding, monitoring and response), technology (providing a one stop turn-key solution), loss control, occupational and environmental safety, fire risk management, and first aid. AFRICAN SECURITY In the past 14 years, Omega Risk Solutions has grown from a rudimentary manned security operation to become a supplier of integrated security solutions. Utilising the most modern, advanced and highly technical equipment available, the company provides a best-in-class offering. “We offer integrated security solutions,” explains Lengosane. “We integrate physical security and electronic security under one umbrella. Most clients now want to see integrated security solutions where you mix man-guarding with technology.” In terms of video surveillance, cyber security and the use of digital technology for security purposes, industry commentators agree that
OMEGA RISK SOLUTIONS
the market in sub-Saharan Africa is still hugely underdeveloped. Nevertheless, Omega Risk Solutions does not adopt a ‘one glove fits all’ approach. The company is aware that every client has unique requirements and, as such, every project is approached holistically yet individually. Considering the potential of the market for technological advancement and the general trends in the industry towards electronic solutions, Omega Risk Solutions remains aggressive in its approach to R&D. “We do have Directors who are very strong in the electronic field and who assist with research and development. Electronic security is a growing market across the world so we remain at the forefront of the industry as we know this is important when trying
to be competitive. Research and development is a part of us and we are linked to other companies who are very active in this space so we are always pushing ourselves with these relationships so that we have the latest equipment, the latest technology and the most advanced units available,” says Lengosane. As a man with so much experience in this industry, and as a company with such a robust reputation, Lengosane and Omega Risk Solutions know that you cannot afford to remain stationary in this business – there’s always new opportunities to be explored and there’s always new ideas being developed. In the future, the company has ideals on becoming a global company, establishing a presence in the Middle East and further afield, but the immediate
focus is bolstering business in Africa, especially in the mining and automotive sectors. “We have been deeply involved in the automotive industry in South Africa. We are trying to establish ourselves as the provider of choice for the automotive industry and we’re beginning to make successful inroads,” details Lengosane. “We currently have contracts with the three major companies in the industry and we are also moving quickly into the mining industry where we are working with most of the major mining houses of South Africa. “The biggest diamond mining business in South Africa looks to us for security solutions and that industry is highly sensitive all over the world but in South Africa they look to us because of the
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INDUSTRY FOCUS: SECURITY
Omega Risk Solutions offers specialist security services including: •
Risk surveys and audits
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Forensic and other specialised investigations
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Information technology security
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Integrity assessments and profiling
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Security training programmes
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VIP protection, protocol and safe transport services
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De-mining and explosive ordnance disposal services
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Drugs, explosives and firearm detection
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Business intelligence
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Cash management services
experience and skill that we have as a company. We are active all over the continent in the diamond industry.” One technological advancement in particular is becoming more attractive in the mining business, thanks to the sheer size of the sites which require security solutions and Omega Risk Solutions has recognised this and is investigating potential for clients. That advancement is drones and Lengosane explains that they could provide a helpful link in the security chain. “Drones are becoming the most preferred method of video camera recording as they can cover a range of different areas,” he says. “They are easy to operate but there are serious restrictions in some countries because of air traffic, so there are advantages and disadvantages. I think the world is moving towards increased use of
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drones, especially in the mining sector where one site takes a massive piece of land. Using drones, with an aerial view, becomes more efficient but we will certainly still need integrated security solutions; we’ll still need bodies on the ground and cameras in other areas. Technology is certainly helping us but we will always need integrated solutions.” SECURING INDUSTRY STATUS The security industry in South Africa is rife with competition. However, the competitive nature of the industry brings about innovation and invention as companies vie for market share. Lengosane says that Omega Risk Solutions has managed to remain at the forefront of the industry because of its relentless focus on delivering results for the client. “You must always think about how you can become a better
service provider to your clients and potential clients,” he says. “It’s a major challenge to stay at the front of this business in South Africa. We currently have around 9000 registered security companies in the country. We have almost two million registered security officers, we have around 500,000 active security officers and it is a serious challenge to remain on top. It’s all about how you manage your resources. “We believe that where there are challenges there are always opportunities. It’s a R50 billion industry and there will always be competition. We have survived because of the way we have delivered for our clients and that is the biggest testament to our business.” The company’s next growth strategy involves gaining business in regions that have been under serviced in the past, namely West and North Africa, but this takes time and patience, and strong partnerships with reputable local organisations. “We’ve been talking to potential partners about expansion,” says Lengosane. “West Africa is a target market for us. We have a presence in Nigeria, Ghana and Gabon but we still need to enter Cameroon, Senegal and many other countries in that region. North Africa is another area we would like to get involved with. “It is now a requirement to partner with local entities. Security is a highly sensitive industry – you deal with weaponry, you arrest people etc and most governments want to see their own people getting involved with this type of industry so we partner with locals and ensure everyone is taken care of,” he adds. SECURE ECONOMY? “We have seen challenges and we know there are issues with the economy,” admits Lengosane. “South
OMEGA RISK SOLUTIONS
Africa is part of the global economy and is linked to the rest of the world through our multinational companies. Whatever happens in Europe has an impact here in South Africa. Let’s say the price of gold or diamonds drops and mines have to close their operations, that affects us directly. “However, we see opportunities. Manufacturing holds opportunities for us. Construction has many opportunities and, as a growing economy, we will likely always have those opportunities. There are things that make us worry but there are things that we are excited about. “If you are a company with a clear, sound strategy you are always able to source new opportunities,” he says. PEOPLE MAKE SOLUTIONS Of course, training and development is important and Omega Risk Solutions management team places a large emphasis on effective upskilling, but Lengosane says that this is aided by a robust selection process. “People are the engine of the organisation as without them there’s no partnership between you
and your clients. “We currently have around 11,000 employees across Africa. Outside of South Africa, the biggest number of employees sits in Mozambique where we have 4000 people. We also have a strong presence in Angola, Nigeria, Ghana, Tanzania, Lesotho, Zambia and other countries.” Membership to several of the continent’s most prominent security industry associations makes for a working environment that is cutting edge. Omega Risk Solutions ensures employees are given access to the latest knowledge and developments, making them the perfect link between the company and its customers. “We belong to SIA (Security Industry Alliance) and 85% of security companies in South Africa are members. We are SECUREX members and we attend SECUREX exhibitions to see all the latest gadgets from all over the world. Through initiatives like this, we expose our people to the latest technology and we ensure they are happy,” says Lengosane.
+27 41 365 1125
+27 41 365 3829
In the future, the Vice Chairman and Acting MD expects the company to increase its staff count, especially outside of South Africa, in its target growth regions of West and North Africa. Now one third of the way through 2017, Omega Risk Solutions has started the year strongly and continues on the growth path that has seen it become recognised as a true industry leader. With expansion plans in the pipeline for the future, experience that is unmatched and an unwavering commitment to providing quality, integrated security solutions that effectively meet and exceed the needs of clients, this is a company to watch, one which could hold the key for your security needs.
OMEGA RISK SOLUTIONS +27 12 541 0480 mail@omegasol.com www.omegasol.com
sales@guardsecure.co.za
www.guardsecure.co.za
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GEARHOUSE
The Show
Must Go On PRODUCTION:
Emily Ayson
When it comes to event planning in South Africa, the name on many people’s lips is Gearhouse South Africa. Gearhouse is a leading business in the events industry, supplying lighting, audio, electrical, stage, sets and much more, to large and small functions across the continent. It offers a truly comprehensive package from start to finish, from design and installation to maintenance and removal. Building a world class reputation for quality, innovation, affordability and reliability, it has been involved in some of the country’s most renowned occasions including Cape Town Fashion week, the 2004 Presidential Inauguration and also Strictly Come Dancing and the X-Factor. Comprised of several specific divisions, Gearhouse never compromises on service and never lets a client down even in the most difficult situations, making the company the experts in its field. 72 / www.enterprise-africa.net
INDUSTRY FOCUS: EVENTS
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Beginning life in 1991 as a simple lighting company based in Johannesburg, Gearhouse Founder and Managing Director, Ofer Lapid has grown the businesses from a small operation ‘with a little equipment and a lot of imagination’ into an international affair. Now with sister branches in Durban and Cape Town, a dedicated fleet of vehicles, highly trained staff and the most comprehensive catalogue of state-of-the-art equipment of any supplier in South Africa, Gearhouse is always primed and ready to serve and impress its loyal client base with ‘vision, passion, teamwork and a commitment to excellent service’. As South Africa’s only representative in the illustrious AV Alliance,
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Gearhouse is regarded as one of the best in the industry, a reputation that the company embraces. A shining example of this can be seen in its recent involvement with a large-scale production of Annie in 2016, for which the company’s theatre equipment division, Gearhouse Splitbeam, supplied all of the lighting and rigging. In this case, it lacked a specific piece of technical equipment which was deemed vital to Annie’s iconic visuals, but without any hesitation, Gearhouse went ahead and purchased the item for use in this and other future productions, cementing status as a business utterly devout to its cause. As such, it is no wonder that Gearhouse Splitbeam
Managing Director Alistair Kilbee believes that the company is one of only a handful of true theatre specialists able to meet the stringent schedules and needs of international touring productions. Similarly, lighting extraordinaire Tim Dunn has stated that Gearhouse will always go above and beyond and that they ‘never take the easy option’. However, it is not just at home where Gearhouse pulls out all the stops. An installation that the company helped with in the UK needed a very complex lighting system and once again, Splitbeam was called upon. IN LIGHT: Illuminating Capability Brown’s Landscape was a revitalisation of Compton Verney Art Gallery and
GEARHOUSE SOUTH AFRICA
Park, which used an interactive light display to mark the 300th anniversary of British Landscape Architect, Lancelot ‘Capability’ Brown. Knowing of the excellence of Gearhouse, 450 South African designed and manufactured ‘jar lamps’, linked by specialised DMX-type technology were commissioned. Each lamp was controlled individually to create a stunning visual experience and such a display had never been attempted before in either the UK or South Africa. With great pride about his involvement in this radical project, Gearhouse’s Michael Inglis says that ‘for anyone with a passion for innovation; being involved in a technologically pioneering event like this, provides a fresh thrill every time. New challenges and new solutions…it’s what we thrive on at Splitbeam’. Similarly, Gearhouse is constantly striving to upgrade its stock and keep abreast of both technological developments and the complex changing needs of clients. The company recently purchased four grandMA dot 2 XL-F consoles which will be used equally between the Johannesburg and Durban branches. Not only will this piece of kit help create that extra ‘wow-factor’ at events, but as Lighting Operations Manager Stuart Andrews comments, the latest addition ‘fills a gap we felt existed in our inventory of consoles, for desks suited to the smaller and medium sized corporate work’. Such attention to the needs of their smaller clients has not gone unnoticed, and for Gearhouse, no problem or request is too big, impossible or insignificant; as Roddy Quinn, head of Real Concerts says, ‘even the small jobs are dealt with the same level of pride as the big jobs’. In maintaining such a stellar reputation, Gearhouse also has a
//FOR ANYONE WITH A PASSION FOR INNOVATION; BEING INVOLVED IN A TECHNOLOGICALLY PIONEERING EVENT LIKE THIS, PROVIDES A FRESH THRILL EVERY TIME. NEW CHALLENGES AND NEW SOLUTIONS…IT’S WHAT WE THRIVE ON// proven dedication to green business practices, something that may come as a surprise considering that its very existence relies on electricity and transporting goods in heavy diesel-powered vehicles. For one, as many batteries, vats of generator oil and other consumers are recycled and digital signage is preferred rather than traditional paper posters and banners. Gearhouse also prefers to use compact, folding
trusses and rigs to take up less space and thus reduce the number of vehicles required on the road. However, what makes Gearhouse great is not only its impressive and comprehensive stock of equipment and business ethics, but also its staff who form the whole backbone of the operation and are proclaimed as ‘the greatest asset’ of the business. All employees receive ongoing
PROUD CORPORATE AND LEAD LEGAL ADVISOR TO THE GEARHOUSE GROUP FOR OVER 25 YEARS
22 Fredman Drive Sandton, 2146 PO Box 78333, Sandton, 2196 Tel: +27 11 775 6388 Fax: +27 86 686 2548 Email: dhr@rabin.co.za
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INDUSTRY FOCUS: EVENTS
training and developmental support, ensuring that they possess unrivalled expertise about their trade. Gearhouse also actively encourages creative contributions from personnel at all levels, and if an employee has a bright spark of an idea, this is nurtured and worked upon – a far cry from the stereotypical power imbalances
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that are seemingly rife within other grand-scale companies. In 2006, the company also received its official Black Economic Empowerment certificate and furthermore, it openly welcomes job applicants from any and all walks of life. Yet it is not just current employees that Gearhouse support. It also has a teaching academy
which provides a yearlong industry learnership for prospective field entrants. The core aim is to produce industry ready entrants that are trained to the incredibly high standard that Gearhouse expects, with lessons in both safety and methodology on offer. Students are enabled to learn at their own pace with certified experts, receive
GEARHOUSE SOUTH AFRICA
//EVEN THE SMALL JOBS ARE DEALT WITH THE SAME LEVEL OF PRIDE AS THE BIG JOBS// a small stipend and pay during work experience placements and they also have to take two final exams at the end of the course. On average, the academy has around 35 graduates per year. Furthermore, Gearhouse is extending its reach into schools, with the hope of inspiring youths to enter into the exciting world of Live Event Production. Recognising that socioeconomic conditions may make it difficult for many young South Africans to find the drive or indeed resources to take on such a career, Gearhouse has begun working with Hyde Park High School to introduce a technical programme into the
everyday curriculum. It is under the tutelage of Splitbeam’s Clement Makama and Jeff Thomson and dramatics teacher Danielle Bentel that pupils are becoming experts in their own right, for they are often given complete responsibility for the sound, lighting and audio for the school’s ceremonies, parent information evenings, assemblies and sporting events. In conclusion, whether it’s a small corporate luncheon, a stadium event or a theatrical extravaganza, clients of Gearhouse both in South Africa and further afield can be completely safe in the knowledge that they will be
taken care of. With an astounding reputation for world class service, an unparalleled range of stock and a devotion to ensuring that current and future events technicians are knowledgeable and passionate, the company is like no other. Tirelessly working to adhere to tight budgets, equipment specifics and the trials and tribulations involved in the events field, Gearhouse is always there to ensure that the show must go on.
GEARHOUSE SOUTH AFRICA +27 (0)11-216-3000 www.gearhouse.co.za
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WOOLWORTHS
The Leading Lights in
South African Retail
PRODUCTION: Timothy Reeder
Woolworths has been setting the standard in retail right from the outset, when it first opened its doors to the public in Cape Town in October 1931. Founder Max Sonnenberg won over the public with his dynamic store policies that sought to set Woolworths apart from its competitors, foundations which have placed it among the largest chain stores in South Africa today.
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Assisted by son Richard and right-hand man Fred Kossuth, Max Sonnenberg quickly added to his flagship store in The Old Royal Hotel in Cape Town, opened in what had previously been its stately dining room. Three years later, a second branch of Woolworths opened in Durban, while another two followed in both Port Elizabeth and Johannesburg a year down the line. Since then, Woolworths has prided itself on continuously building upon a hard-earned reputation for superior quality, exciting innovation and excellent value. Woolworths was originally modelled on the major British
multinational retailer Marks & Spencer brand, a relationship forged after the Second World War and a pivotal point in Woolworths’ history, when Sonnenberg and Sir Simon Marks, son of the Marks & Spencer founder, became good friends and saw M&S buying all unissued share capital of Woolworths in 1947. Although M&S ultimately sold its shares of Woolworths, the two companies have always maintained close personal ties as well as a formal technology agreement, which binds them to this day. Alongside its sizeable retail offerings, the Woolworths brand also comprises a series of food
stores, either directly attached to department stores or standalone offerings, with some even found in Engen petrol stations in urban areas. Woolworths goods are today sold at 149 corporate stores, 51 international franchise stores throughout the rest of Africa and the Middle East and 69 South African franchise stores nationwide. Throughout its history, Woolworths has almost made it unwritten policy to be the first to introduce in its operations what we now consider industry standard practices. Taking care of its employees first has always been at the forefront of its thinking,
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INDUSTRY FOCUS: RETAIL
as well as being understandably keen to attract and retain the best retail professionals, and as a result Woolworths was among the first local retailers to offer employees a pension fund, medical aid and maternity leave. A forward-thinking employer, Woolworths was also an early adopter of technology. A lease agreement for its first computer was agreed with National Cash Registers (NCR) in the late 60s, and Woolworths was already using a computerised merchandising system by the turn of the 1970s. This dynamic thinking extends further to Woolworths product offering. Consumers today would simply be lost without sell-by dates adorning food packaging; in 1974, Woolworths became the first South African retailer to introduce the concept on its wares. In April 2007 it launched what it termed its ‘Good Business Journey’, which outlined a bold plan to make a difference in eight key areas across its business as it continued its journey towards sustainability: Energy, Water, Waste, Sustainable Farming, Ethical Sourcing, Transformation, Social Development and Health and Wellness were the focus areas.
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This desire to be at the forefront of the retail industry is something which has never left Woolworths, and continues to be in evidence today. The company made an unparalleled start to 2017 as the Woolworths Palmyra store in Claremont, Cape Town became the first retail outlet in South Africa to achieve a 5-star rating certified by the Green Building Council South Africa (GBCSA). Now ratified by the GBCSA, the Woolworths Palmyra store stands as South Africa’s greenest retail tenant environment. Making it worthy of such a label is a long list of environmentallyfriendly features. These include automated doors to maintain the interior temperature, reclaimed heat from the refrigeration system and air conditioning that is the used in its under-floor heating and harvested rainwater, used to flush the toilets of the complex. “GBCSA congratulates Woolworths on embracing green building practices and leading the way in creating more sustainable retail outlets in the country such as this one,” stated Manfred Braune, Chief Technical Officer of the GBCSA.
“This is not just about doing the right thing, although that is, of course vital in the face of our local and global environmental challenges. It also makes good business sense to be investing in renewable energy, water harvesting and using innovative energy and water saving practices. “Going forward, we look forward to seeing more green transformation in the retail industry in South Africa.” Justin Smith, Woolworths’ Group Head of Sustainability echoed this sentiment: “We’re delighted by this recognition of Woolies Palmyra’s green credentials. The store has become an important blueprint, and we use it as a model in our ongoing efforts to develop greener retail environments across the Group. We will continue to reduce our climate change impact by adopting and implementing green building practices across our business.” Woolworths is forever seeking to expand its footprint, and in October 2016, Woolworths Holdings Limited announced that its wholly owned subsidiary, Country Road Group, had entered into an agreement to acquire Politix. With a 40-year heritage, this is an iconic Australian
WOOLWORTHS
men’s fashion brand and a marketleading retailer in Australian designer menswear, boasting 75 stores across Australia and sales of A$56 million. The acquisition is in line with WHL’s southern hemisphere strategy of building a strong and diversified portfolio of iconic brands, adding to WHL’s existing Australian stable comprising David Jones, Country Road, Witchery, Trenery and Mimco. WHL’s Chief Executive Officer, Ian Moir said: “The acquisition of Politix is a logical acquisition that will deliver value for WHL’s shareholders. Politix will extend WHL’s menswear offering in Australia and in time we expect to roll out the brand in David Jones and into New Zealand. We are delighted to welcome the Politix team to our business. Politix CEO, Peter Sitch and his team have done a fantastic job over the past 10 years growing
the company to become the success story it is today and we look forward to Peter and his management team driving the next phase of the brand’s growth.” Peter Sitch said: “This is a tremendous result for our people and our customers. WHL is a world class retailer and will provide the best possible platform for further domestic growth and future international expansion of our brand.” Despite difficult trading conditions in both South Africa and Australia, Woolworths was able to report in February noteworthy financial results for the previous year. These took the form of an increase in Group sales by 6.7% to R37.8 billion, and profit before tax increases of 37.9%. Woolworths Food sales also grew by 9.5%, with comparable sales up by 5.6%. Of the results, Ian
Moir commente: “This is a good set of results in challenging trading conditions, and we have continued to grow the top line in a very competitive pricing environment. “With the ongoing transformation of David Jones, some encouraging signs in Country Road and the continued success of our food and clothing offer in South Africa, we are confident of maintaining our position as the leading Southern Hemisphere retailer.”
WOOLWORTHS +27 21 407 6137 shop@woolworths.co.za www.woolworths.co.za
//S.PELLEGRINO AND ACQUA PANNA S.Pellegrino and Acqua Panna are two historical Italian classics that are known worldwide as the fine dining water on tables, both in elegant restaurants and at home. A celebration of high-quality food and lifestyle that are widely appreciated by leading figures of the culinary scene.
Sanpellegrino Sparkling Fruit beverages are a delicious mix of Sicilian citrus fruit and lightly carbonated water which originates from the Mediterranean tradition of preparing a thirst quenching drink. The high quality ingredients and attention paid to preserving the natural flavours is what distinguishes it. They contain up to 18% real fruit juice, with the absence of preservatives. Their eco-cap, the exclusive foil coverlid, protects and preserves the quality of the product. Sanpellegrino Sparkling Fruit beverages are the premium and healthy alternative to carbonated soft drinks.
“Whatever language you speak, Live in Italian”
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FALCONGATE LOGISTICS
First For Freight Into Africa PRODUCTION: David Napier
As the logistics industry in sub-Saharan Africa becomes more and more complicated thanks to rising fuel price, security and infrastructure concerns, it pays to partner with a reliable and experienced company that can deliver quality service, whatever the situation. This is where Falcongate Logistics comes into its own.
INDUSTRY FOCUS: LOGISTICS
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South Africa’s road network is more than 900,000 km long, and continues to grow and improve each year. The country’s road network is amongst the top ten longest in the world but moving goods from A to B is no easy feat. There’s a whole host of issues to contend with on the road – tolls, poor surfacing, rough rural conditions, ongoing repair work,
increasing fuel costs, environmental concerns, and a shortage of skilled labour in the cargo logistics sector make for a challenging environment but the industry remains the backbone of the economy and, like any other global economy, will continue to drive growth. In February, President Zuma announced, during his State of the Nation Address, a major road upgrade project costing around R4.5 billion and the National Treasury said road infrastructure expenditure is expected to increase from R40.8 billion in 2016/17 to R47 billion in 2019/20. This is good news for the country’s road haulage companies; those road warriors who travel up and down the country, and up into Africa, to bring us goods from all over the world. In the next two decades, demand for freight transportation is expected to grow significantly with some reports suggesting it could increase by more than 200% (and busy corridors, such as the route between Cape Town and Jo’burg growing even faster). One of the companies that will enjoy the growth that the industry is expecting is Falcongate Logistics. The Johannesburg-based logistics specialist has been trading since 2003 and concentrates on the movement of goods between South Africa and sub-Saharan African nations. The company was founded by John Wheadon, a transport industry veteran boasting careers with Tri-Continental Trucking and other logistics companies in the UK and Europe, and its key focus is moving steel, fertiliser, maize, general cargo, groceries and other commodities from South Africa into Malawi, Zimbabwe and Zambia. On the return journey, Falcongate brings cotton, tobacco, timber, pulses, grains and other exports to South Africa. This is a company at the heart of transportation, providing vital links between South Africa and its
FALCONGATE LOGISTICS
neighbours. John Wheadon himself is actively involved in the industry and regularly takes part in discussions regarding logistical issues in the region providing possible expansion and refinement suggestions. One of the issues he’ll have to think about, from an industry perspective and for the sake of his own business, is the constant fluctuation in fuel pricing. Since the beginning of the year, prices at the pumps have been on the rise as the price of oil begins to recover. A further increase of 39 cents is expected to be absorbed by an overall decrease, and net prices are expected to fall by around 24 cents in April but the constant fluctuations in price, even small changes, need to be closely monitored. The 2000km journey from Johannesburg to Malawi could be effected greatly by even the smallest changes in petrol pricing. Fortunately, the experience of the Falcongate Logistics staff is vast and navigating fuel pricing is something which the company has been through before. “The Falcongate staff members are professional, dynamic and challenge driven. There is an expanse of knowledge, with over 60 years’ experience collectively in the transport and logistics industry,” the company says. “This enables Falcongate to distribute its customer’s products more efficiently and cost effectively than its competitors.” Falcongate’s strong fleet complements its employee base. Made up of brokered trucks from reputable transporters, all vehicles are monitored by satellite technology offering peace of mind to customers. “All our vehicles have state of the art satellite tracking devices allowing us to control the fleet efficiently and offer our customers up to date reports on the position of their cargo,” the company says. “The system also has many added features to ensure the security of our customer’s cargo.” Security is an important issue for truckers and clients alike. Smallholder
farmers in the SADAC region cannot afford to lose produce and their customers cannot afford to go without food, agricultural chemicals and farming implements that Falcongate delivers. Since 2000, hijacking of trucks and theft from vehicles has become an increasing concern for SAPS. Truck jacking is more common close to major metropolitan areas. 2015/16 saw more than 1000 cases of truck jacking, and although this was a decrease on the previous year, it indicates that the problem still exists. Safe in the knowledge that the vehicle carrying their produce is under constant tracking, anywhere from Malawi down to Cape Town, Falcongate’s customers know that they have made a wise choice when selecting the logistics company that claims it is ‘First For Freight Into Africa’. Bolstering its already sterling reputation and quality service offering,
Falcongate Logistics now offers refrigerated transport. Both chilled and frozen goods can be moved across the SADAC region and customers can improve access to the main export hubs through Durban, Maputo, and others. Combine this service with the growing network of Falcongate depots, and you have a complete and convenient service offering from a growing company with 14 years’ experience. There isn’t a challenge that Falcongate haven’t faced before, and there isn’t a customer that the company can’t service – Falcongate is truly a one stop logistics shop.
FALCONGATE LOGISTICS +27 11 396 3148 operations@falcongate.co.za www.falcongate.co.za
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EXHIBITION CALENDAR
KEY UPCOMING EVENTS ACROSS THE COUNTRY Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors. RAND SHOW APR 14 | JOHANNESBURG From its humble beginnings in 1894 the Rand Show continues to be one of the main consumer events on the annual calendar. It remains One of Africa’s largest expos and continues to evolve and innovate. The expo currently takes place at one of South Africa’s most impressive venues, Expo Centre Johannesburg alongside the world famous Soccer City at Nasrec. The Rand Show remains the launch pad for many exciting brands and businesses and caters to the entire family. Categories include fashion, wellness, outdoor living, science, technology, government departments, trends, design and home living, and the world class exhibits by the SANDF a unique feature not seen anywhere else. WORLD TRAVEL MARKET AFRICA APR 19 | CAPE TOWN World Travel Market delivers the leading global events for the travel industry. One of six shows in the WTM portfolio, the Africa show was launched in 2014 to bring the benefits and opportunities of our global industry expertise to travel professionals in this region. Taking place in Cape Town, South Africa, nearly 5000 travel industry professionals attend Africa’s leading and only business to business (B2B) exhibition for inbound and
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outbound Africa travel and tourism markets. Mirrored on WTM flagship events WTM London and Arabian Travel Market in Dubai, WTM Africa delivers a proven mix of hosted buyers, media, pre-scheduled appointments, on-site networking, evening functions and invited travel trade visitors. Through its industry networks, global reach and regional focus, WTM Africa creates personal and business opportunities providing customers with quality contacts, content and communities. ZITF - ZIMBABWE INTERNATIONAL TRADE FAIR APR 25 | BULAWAYO The Zimbabwe International Trade Fair is one of the largest intraregional trade fairs South of the Sahara. An annual exhibition which offers exposure to both trade and public visitors, the multi-sectoral, multi-national expo provides a convenient trade hub for the region. Its location in Bulawayo, the centre of Southern Africa, is at the crossroads of the regional trade and transportation routes. ZITF and the specialised exhibitions hosted annually at the Zimbabwe International Exhibition Centre provide ideal venues at which to meet the deal-makers and the new industrialists first-hand.
ZAMBIA INTERNATIONAL MINING & ENERGY CONFERENCE & EXHIBITION New Government Complex Conference Centre, Lusaka APR 05 - 06 AUTOEXPO KENYA Kenyatta International Conference Center APR 11 - 13 RAND SHOW Expo Centre Nasrec, Johannesburg APR 14 - 23 WORLD TRAVEL MARKET AFRICA Cape Town International Convention Centre APR 19 – 21 SOUTH AFRICAN CHEESE FESTIVAL Sandringham Farm APR 28 - 30 ZITF - ZIMBABWE INTERNATIONAL TRADE FAIR Zimbabwe International Exhibition Centre (ZIEC) APR 25 – 29
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Sharing. It’s the most powerful form of humanity. It is something we are taught before we can even walk. Because in sharing lies positive growth for all. The chance to prosper. To give and receive. It holds the promise of a strengthened society. It connects us and evolves us. From learning to getting people ready to work. From dreaming of careers to studying for them. From having fun to meeting responsibilities. From being born free to living free. It stimulates the innovators and inspires future leaders. Sharing is something we practice everyday. We listen, we care, we design, we add value, to your life and that of others. We empower small businesses to think big and big businesses to remember the small. There is a beginning to Shared Growth. But there is no end. And each time we share we know that some day, in some way, it will be shared again. When we share, we grow. When we grow, we all prosper.
Share. Grow. Prosper.
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