AfricAn Business

march 2012 Volume 3 Issue 3




Business Secret diary of a small business

LiFesTYLe SA Wines

CompanY FoCus Solenta Aviation
















BLUE 316




BLUE 229

How SAPMA is helping to colour the new South Africa



Proudly serving Africa
How do we serve Africa? By delivering on time.
If you look at what Maersk Line has achieved in schedule reliability over the past years, you could almost say we’ve invented modern on-time delivery – in West Africa and around the world. Why does on-time delivery matter so much? Because it enables you to plan with greater certainty and to serve your customers more reliably. Now that is something everyone can benefit from. At Maersk Line, nothing would please us more than to help take your business to the next level of consistent on-time delivery.

West Africa services – New & improved! • 22 custom-built ships, the largest in West Africa • The market’s best network • Unmatched schedule reliability • Personalised service and strong local presence


HOwDy fOlkS, Welcome to another moving, shaking, bodypopping, mind-bending, triple espresso-consuming, flag-waving, peacefully-demonstrating, friendly neighbourhood edition of TABJ. All your wildest business-related dreams in one electronic and digitally enhanced thoroughbred. What could be more virtually exhilarating? The answer is nothing (not within this context, at any rate). This issue starts—as any worthwhile publication should—with tea, biscuits and a chat with South African Paint Manufacturers Association luminary Deryck Spence. If you’ve ever wondered how the myriad shades of paint currently decorating the abundance of new buildings across the continent are regulated, ponder no longer—you’re about to find out. After that decorative aperitif, your stimulation will continue with the second instalment of our secret diary of a small business. This month Jen—

our intrepid entrepreneurial first timer—gains the confidence to reveal her idea to friends and gets inspiration from Mark Twain (the ground-breaking writer, not one of her friends). The next desert island of knowledge and curiosity will invite you on a whistle-stop tour of South Africa’s diverse wine landscape. Then and only then, dear reader, will you swim ashore to the mainland of company features. This month the raft of enlightening shanties come from the mining, food production, services, engineering, energy and, of course, haulage industries. Until next time, goodnight and, above all, thank you, John PS. Catch me on Twitter @africanbjournal

An extraordinary firm, with extraordinary people, on an extraordinary continent.
Africa is complex. It is multi-cultural, multi-lingual, geographically vast and steeped in political history. At the same time, the modern business world is increasingly less interested in Africa’s past and primarily interested in working in a unified, seamless context. KPMG’s organisational structure allows us to manage our operations in a way that makes the most sense in terms of the efficiency and effectiveness of our operations. Our business model, common tools and methodologies, as well as shared values allow us to work with our clients seamlessly across borders.
© 2010 KPMG Africa Limited, a Cayman Islands company and and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in South Africa. mc6332

John Pinching | Editor | Ben Watts | Staff Writer | Laura Hedges | Editorial Assistant | Vladimir Lukic | Creative Director | Chris Moore | Sr. Advertising Designer | Margaret Oldham | Sr. Graphic Designer | Wincy Law | Sr. Graphic Designer | Tanya George | Sr. Advertising Designer | Marc Mauricio | IT/Production Support | Constantin Turtulea | Head of Research | Natalie Edney | Head of Sales | Khayyam Darr | Research Director | Andrew Miskin | Research Director | Hugh Braithwaite | Research Director | Dee Nazer | Research Director | Guy D’Angelo | Research Director | Thomas Eros | Research Director | Michael Alexander-Jones | President | Linda Neal | Chief Executive Officer | Naveed Yusuf | Chief Information Officer | Gemma Parkins | Executive Assistant | Heather MacPherson | General Accountant | Simon Curran | Vice-President/Publisher | Contributors | Jen Smit, Nuala Gallagher
South africa office GEoRGE MEDIA InC. 23 Wellington road Parktown, 2193 Johannesburg uK office 2 Sheen road richmond Surrey uK TW9 1ae


Table of Contents














018 028 036 044 050 054 062 078 084 090


BUsIness BLUE 316

sAPMA Brush with the PORT ELIZABETH law CAPE TOWN MUse news coming out of Africa


010 229 BLUE

sMALL BUsIness LIFestYLe seRVICes

IGnoRAnCe Is BLIss Secret diary of a small business: the trials
and tribulations of our resident entrepreneur continue

soUth AFRICAn wIne ReVIew By the glass eLeGAnt LIne RoAd PAInteRs Drawing the line AFRICAn MoBILe CRUsheRs Developing a crush LoesChe sA The milling masters AUReCon Encouraging education, featuring an exclusive interview
with MEC Donald Grant



JohAnnesBURG PRoPeRtY CoMPAnY Structurally sound the Motheo ConstRUCtIon GRoUP Empowered building Cse Running like a dream



Table of cOnTenTs
march 2012 | Volume 3 | ISSue 3

TrAnsPOrT fOOD & Drink

sOlenTA Super fly guys reD cresT fArMs Top billing AMATHOle Berries Fruit of our labour cic enerGy cOrPOrATiOn life and coal
underground success: ferMel MininG

096 102 110 120 128 136 144 154 166 174

enerGy MininG

fOskOr The phosphate potentate cOnTinenTAl cOAl another coal mine in 2012 & onwards
to plus-10 mtpa rom coal in 2015

equATOriAl resOurces Pioneering africa as the world’s
next iron ore province HAulAGe

Access freiGHT AfricA access all areas sekO wOrlDwiDe logical logistics



Brush with the law
TABJ Editor and paint enthusiast, John Pinching, talks Duck Egg Blue, Magnolia and Forsythia Blossom, with South African Paint Manufacturing Association (SAPMA) chief Deryck Spence







BLUE 316


LOW 001B




NGE 121C














When Was saPMa first established? SAPMA is now approaching its seventh decade. From its early development in Durban, where the majority of the manufacturers were located during that period, the association grew exponentially in terms of membership, as did its role in promoting the interests of its members and the industry in general. In harmony with the growth of the industry and the individual manufacturers during the ensuing years, SAPMA joined the migration north, and the Johannesburg office subsequently opened in 1997. In 2001 a director of SAPMA was appointed and membership at that time was 34 manufacturing members and 35 suppliers.

i elopment r ev its early dmanufacture “From of the w majority he association gree period, t ship, as did its roldu member mbers and the in of its me
companies, and these are known to us. There are 100 SAPMA manufacturing members, representing approximately 100 per cent of the products manufactured and marketed in South Africa. are neW coMPanies eMerging all the tiMe

What are saPMa’s resPonsibilities? Representing the coatings industry and incorporating manufacturing, suppliers, retailers and contractors in promoting the uplifting of the Industry in terms of quality and technology. We also passionately monitor fair trade, ethical values, environmental, health and safety issues and protection of the consumer. hoW Many Paint Manufacturers are there in sa? Market research indicates the existence of 300350 paint manufacturers in South Africa. We believe that a more accurate number is 200-250

or does it tend to be businesses With a long tradition? Many of the smaller companies are transient, whereas the medium to large companies have trading traditions over a number of years and decades. What are the Main rules to Which coMPanies need to adhere? SAPMA has a code of conduct on which membership is based, and includes the following:• We will be honest with our customers and the public.

MARCH 2012 • The African Business Journal


he , where tring that n in Durbaocated du rs were lntially in terms of w exponeoting the interests in prom eneral” ustry in g
• We will recognise our responsibilities to our customers and the public and will serve them with integrity by providing products and services beneficial to them and by issuing only accurate and fair statements about our respective companies and products • We will be honest about our company and our products. • We agree to represent our products truthfully in advertising and labelling and to avoid false, misleading or exaggerated statements about our position in the industry, our own products or those of other members companies. • We will compete fairly and not be critical of our competitors. • We pledge to compete fairly and honestly and to refrain from false or derogatory references about other members or their products.

• We will be lawful and environmentally responsible and we will represent the Paint Industry in an efficient manner. • We commit ourselves to lawful practices and environmental responsibility and to increasing the good reputation, efficiency and service capability of both our own organisations and the industry as a whole. • Members of the association who find themselves in conflict should take all necessary steps to resolve their differences between themselves before referring such differences to the association, the media or any outside body. • This code of conduct includes new clauses or “codes of practice” added from time to time • All members agree to conform to the Lead in Paint Legislation as per the Hazardous Substances Act DO yOu HAVe TO cOnTenD wiTH A lOT Of cOrruPTiOn in THe inDusTry? No, we do not have to cope with corruption within the industry. Only area of concern is occasional failure of paint due to lack of proper surface preparation and incorrect specifying of products.



“In 2009 the strategy was changed in line with the Strategic Statement of Intent to ‘Uplift the Industry’. This led to small and medium sized manufacturers joining SAPMA, as well as extending membership to the retail and contractors market”

How Has saPMa reMit cHanged in tHe last 20 years? Significantly, since 2009. SAPMA has traditionally supported the larger companies and membership reflected this policy. In 2009 the strategy was changed in line with the Strategic Statement of Intent to ‘Uplift the Industry’. This led to small and medium sized manufacturers joining SAPMA, as well as extending membership to the retail and contractors market sectors. Has tHe ProPerty booM in soutH africa Had a draMatic iMPact on tHe organisation? South Africa enjoyed the benefits of the infrastructural development that occurred in the run up to the 2010 World Cup, but thereafter has been influenced by the world economic recession.

How MucH will tHe organisation be exPanding in tHe next few years? Expansion over the next few years will be slower than before and in line with forecasted GDP growth for RSA. Although turnover will increase by approximately 10 per cent in terms of price increases, volumes are expected to increase at 2 per cent every year. How MucH Paint is generated every year? Expectations for 2012 are 250 million litres. wHat do Modern, HigH-PerforMance Paints consist of? Suffice to say that the movement is towards environmental friendly paints in terms of low or zero VOC content as well as lead free and water based.

MARCH 2012 • The African Business Journal


COATINgs fOr AfrICA 2013 LAuNCh
The prestigious 2013 Coatings for Africa (CFA) takes place at Gallagher Estate, Midrand, from Tuesday 21 May 2013 to Thursday 23 May 2013. Previously staged at Champagne Sports Resort in KZN, the event has outgrown itself and now needs a bigger home. By bringing an exhibition and symposium closer to the Coatings Sector in Gauteng, more day visitors and delegates will be able to attend; and, for many, without the added cost of overnight accommodation. Located close to the Midrand Gautrain station, the designated venue will assure easier access for locals; and, for more distant visitors, the proximity of OR Tambo International Airport will facilitate travelling arrangements. The event will focus on a “Greener” future for the Coatings Industry in Africa and will be a market place for companies that wish to extend their business activities beyond their national borders. CFA 2013 is an initiative organised by the Coatings for Africa Conference Company – a Section 21 Company jointly funded by the South African Paint Manufacturing Association (SAPMA) and the Oil & Colour Chemists’ Association (OCCA).



“We have expanded the me in terms of retail and paint and, with the manufacture eliminated the use of lead

What are the most popular paints? Decorative paints are the most popular, amounting to approximately 75 to 80 per cent of production, and are primarily water based. are south africans quite tasteful in their use of paint? Many South African paint manufacturers have technology partnerships with overseas companies and are at the cutting edge regarding technology and colour. The level of expertise, sophistication, colour design and interior decoration match British and European standards.

Do you knoW What the most popular shaDes are? Observations in the market place range between pastel shades in upper priced residential properties to the more “earthy” African colours at lower priced and resort end of the market. What has been the most reWarDing aspect for you personally, of Working in the inDustry? My personal enjoyment and sense of achievement has been the expansion and increase of membership of the association in all sectors of the coatings market. We have expanded the membership significantly in terms of retail and paint contractor admissions and, with the manu-

MARCH 2012 • The African Business Journal


embership significantly t contractor admissions ers’ cooperation, almost in paint”

facturers’ cooperation, almost eliminated the use of lead in paint from the market place. We have, at the same time extended the benefits of membership to all our members. DO yOu exPecT 2012 TO Be A Busy yeAr? 2012 has started with a bang. We are busy with organising associated members-sponsored evenings on a monthly basis to enable raw material suppliers the opportunity of presenting their products directly to small and medium sized manufacturers and introduced a Retail Committee. We are also busy with the organisation of the Coatings for Africa Conference 2013, scheduled

for May 2013, where we will be inviting manufactures from Sub Saharan countries to visit South Africa (see pull out box for more details). We are also optimistic regarding the development of the Centre of Excellence training academy for the continued training of paint technologists and chemists. This is being developed with the cooperation of the Chemical Industries Education & Training Authority CHIETA. TAB


Muse news coming out o
Glencore already owns 34 percent of Xstrata


GlencOre AnD xsTrATA in x-TrAVAGAnT MerGer Mining giants Xstrata Plc. and Glencore International Plc. have signed a US$90 billion agreement which will place them in joint fourth in the race for the world’s largest mining house. and will pay roughly $41 billion for the remaining stake, bringing the value of the mining company in at nearly $62 billion. Both mining companies are run by South Africans; Ivan Glasenberg as CEO and largest shareholder of Glencore, and Mick Davis as chief executive and founder of Xstrata. The combined body of the two firms in South Africa will highlight the presence of a big Western investor at a time when many larger miners in the country are disinvesting or shutting down, and create a stronger presence in the South African mineral market. “A merger between Glencore and Xstrata offers a unique opportunity to create a new business model in our industry to respond to a changing environment,” Davis said. “Increased sale and diversity will improve our kenyA AirwAys cOPs OuT in nAirOBi TrADinG Kenya Airways Ltd., sub-Saharan Africa’s thirdlargest airline by passenger numbers, has hit its lowest level in two months in the Nairobi trading market, prior to a planned rights offer. According to Bloomburg, the airline dropped risk profile, enhance access to capital markets and allow us to participate in industry consolidation.”

SEPTEMBER 2011 • The African Business Journal OCTOBER


of africa
number from 34 to107, and more than double its fly-to destinations from 56 to 115 by 2020. KQ wants to fund expansion in Africa and plans to raise the equivalent of $276 million in order to do so. “KQ wants to grow too, but the rights issue to kick start a new round of aircraft purchases is tough to place,” said spokesperson for Renaissance Capital. “Even if successful, the risks are high, as competition for travel in Africa is getting stronger and we believe the state of Nairobi airport does not make an obvious hub.” BlAck enTerPrise On THe BOx 1.3 per cent to 18.65 shillings; the lowest level since 6th December last year. “It appears people think a rights issue is going to be dilutive and are reducing their positions ahead of the announcement and maybe buy back when they know the level of dilution,” said Eric Musau, research analyst at Nairobi-based Standard Investment Bank Ltd. Kenya Airways (KQ) plans to increase its aircraft The Black Enterprise Business Report is set to add five new NBC digital broadcast stations to its affiliate list as of 12th February this year. The new stations will consist of the NBC Nonstop Network (including KNSD-DT) in San Diego, KNTV-DT in San Francisco, KXAS-DT in Dallas-Fort Worth, WNBC-DT in New York and WTVJ-DT in Miami. “We are delighted to partner with NBC-owned


Muse news coming out o
Olam International Ltd. in a $167 million deal. Titanium owns Nigeria’s second largest confectionary franchise and recorded a turnover of nearly $162 million in 2011. According to Singaporean-based Olam International, Titanium has an 18 per cent share of the Nigerian market in biscuits, and a 28 per cent share in sugar candy. The Nigerian company owns three biscuitmaking factories and a logistics infrastructure which consists of a fleet of trucks and a variety of other distribution vehicles. A statement said that the acquisition was funded through internal accrual and borrowings and is immediately cash flow accretive to Olam. ADesinA fOr AGriculTure in AfricA Nigerian Minister of Agriculture, Akinwumi Ayo Adesina, said in Geneva at a meeting organised by Economist Conferences that African farming needs a take a more business-like approach to its operations. “The potential is there, but you can’t eat it,” he commented. “The addition of our program to their digital


stations across the country in carrying Black Enterprise Business Report,” said Earl Graves Jr., CEO and President of Black Enterprise. Nonstop line-up is a decisive move to reach the nearly 38 million African Americans in this country who are vastly underserved by current mass media. “The NBC-owned stations understand this dynamic, growing population is hungry for original programming and targeting this demographic will diversify their audience and expand their overall appeal to both audiences and advertisers alike.” Black Enterprise Business Report, hosted by Caroline Clarke, reaches 99 per cent of U.S. black households and airs in 210 cable network markets and 64 broadcast stations nationwide. Meredith McGinn, Vice President of Local Programming for NBC-owned Stations, said: “We are excited to enhance our line-up with such an interesting program.” sinGAPOre TAkes THe BiscuiT Titanium Holding Company, the Nigerian biscuit and candy making firm, has been bought by

SEPTEMBER 2011 • The African Business Journal OCTOBER


of africa

“Agriculture is not a social sector. Agriculture is a business, and we must begin to take agriculture in Africa as a business.” Adesina stressed that the country must look at agriculture as an investment and it is the private sector that must be responsible for this change. “We have a lot of money sitting on the balance sheets of banks in Africa; we have to get smart about leveraging that. We need to get smart about new instruments to finance agriculture.”

“There’s a huge infrastructure gap in Africa. Investment in all those things would lower the cost of transport, and also the transactional costs for traders involved,” he added. TecnoleOngy Montreal-based Technology Evaluation Centres (TEC) has partnered with EON Consulting to bring their software and technology services to a new market in South Africa.


Muse news coming out o
The partnership program will offer consulting firms the opportunity to use the extensive research carried out by TEC to bring in new business and improve levels of service to its existing customers. “We are very excited about this new partnership with TEC,” said Wim Terblanche, founding partner of EON. “Their impressive technology will really help to streamline the projects we have and add a great deal of value for the clients we serve.” EON was founded in 1988 and provides professional business consulting to clients wishing to maximise the strength and overall performance of their organisations. TEC is a world leader in software advisory services and has already formed strategic partnerships with consulting firms across Africa, giving the company widespread coverage with the advantage of local consultants to provide optimal service. “This partnership with EON is very special for TEC as it is the first in South Africa,” said the Vice President of Selection Services at TEC, Lorne Goloff.


SEPTEMBER 2011 • The African Business Journal OCTOBER


of africa
“With our consulting partner programs developing worldwide, we’ll be able to offer local representation for our best in class technology assessment and software selection services to companies around the globe.” AfricA new ‘BOOMTOwn’ fOr GelDOf 8 Miles LLP, Bob Geldof’s private-equity firm, has raised $200 million for African investment projects with a final target of $450 million. The fund has pledged to invest in the World Bank, the African Development Bank and the CDC Group Plc. amongst other institutional and private investors. “Africa is now a continent of extraordinary business and investment opportunity,” said Geldof, executive chairman of 8 Miles. “Private equity is one way to support the enterprise and dynamism of the people of the continent and help provide the jobs and skills that are needed.” 8 Miles, coincidentally the shortest distance between Africa and Europe, will collaborate with Washington-based Carlyle Group and ZAMBiA TOO Busy fOr Business Business in Zambia has come to a standstill as the country celebrates Chipolopolo’s first ever African Nations Cup win. Yesterday evening, Chipolopolo beat Ivory Coast 8-7 on penalties after a goal-less game that went into extra time. Today, commercial banks have only opened for a half day and Miriam Zimba, medical practitioner in the Zambian capital, said that many businesses have not opened for business at all. “Most people are still drinking since last night. They are still celebrating the victory,” said an undisclosed source. 13 million Zambian citizens are expected to descend upon Lusaka this afternoon as the team arrive from Gabon. London-based Helios Investment Partners to raise further funds to invest in the continent. Africa has a population of 1 billion and a growing middle class and the firm intends to focus on agribusiness, telecommunications, health and financial services.


Muse news coming out o
“Zambia is a Christian nation,” Zimba said. “God is a Zambian and he has showered his preventing them from maturing and washing away fertilisers, he added. Ivory Coast, Ghana and Indonesia are ahead of Nigeria in the global cocoa production ranks according to the International Cocoa Organisation. HiTAcHi finAlises sHODen DeAl Hitachi Data Systems Corporation (HDS), subsidiary of the Hitachi brand, has completed its purchase of Shoden Data Systems in South Africa. Last year, HDS announced it would buy the South African firm for an undisclosed amount in an attempt to grow its presence in Africa, but the deal was subject to a variety of regulatory approvals. Shoden, based in Johannesburg, has partnered with the Japanese company for 11 years, providing data centre technology solutions for South Africa and sub-Saharan Africa, and employs 140 people. HDS will now be able to offer its services “in a market with huge growth potential,” said Niels Svenningsen, senior Vice President and General Manager of HDS’ Europe, Middle East and Africa region. The Zambian national team reached the


blessings upon this country.” finals of the African Nations cup in 1974 and 1994 but this victory is particularly significant as Zambia lost its entire national team squad in a plane crash in 1993 in Gabon; where they this year were victorious. cOcOA cATAsTrOPHe fOr niGeriA Nigeria, the fourth-biggest producer of cocoa, may see a 20 per cent reduction in its output of the crop due to rain-induced losses at the start of the growing period. Olam International Ltd. announced that cocoa bean purchases from Oct. 1 to Feb. 7, the main-crop season, fell 29 per cent to 110,000 metric tons compared to the 155,000 tons from the same period in the previous year. “Cocoa is coming out slowly, so I think that the crop is not as much as last year’s,” said Anant Patil, business development manager at Olam. Rain had damaged flowers on trees, thus

SEPTEMBER 2011 • The African Business Journal OCTOBER


of africa

HDS identified South Africa as a key focus area for Social Innovation Business and believes that buying Shoden, who have subsidiaries in Nigeria, Kenya, Tanzania, Ghana and Uganda, as well as a presence in the UK, will bolster its capabilities across the region. Hitachi was founded in 1910 and the HDS subsidiary employs 5,400 of the 360,000 staff members of Hitachi globally, across 900 subsidiaries. BT DOuBle AcT British Telecommunications (BT) has launched a series of new initiatives as it kick-starts plans

to double the size of the business across Africa, Turkey and the Middle East. BT plans to hire 170 new staff across the three regions and invest more in the infrastructure and network operations. Last year the UK operator generated revenues of £20 billion but despite revealing they would continue to work with Emirates, Etihad Airways and Jumeirah, the company did not disclosure the value of the planned investment. “This is a growing region where we see great opportunities in terms of growth,” said Luis Alvarez Satorre, President of Global Services for


Muse news coming out o


SEPTEMBER 2011 • The African Business Journal OCTOBER


of africa
EMEA and Latin America at BT. “We are looking to expand our network capability, increase our portfolio and hire more people with a view to doubling the size of our business in the regions.” In 2011, research by BT showed that the addressable market across Africa, Turkey and the Middle East amounted to £5.4 billion; IT spending growth across the regions is expected to top 10 per cent in 2012. cyBercriMe crAckDOwn A major banking cyber security conference is to be held next month in Kigali, Rwanda, in attempt to crack down on the increased cybercrime within Africa’s financial institutions. Scheduled for March.23, the one-day conference will be run by a partnership between Secure Payment Solutions (SPS) and IBM. Information Technology (IT) security threats, fraud, risk and regulatory issues affecting financial institutions, government agencies and public and private organisations will be addressed at the conference. “The Banking and Cyber Security workshop will bring together key stakeholders from the governments, law enforcement agencies, finance institutions and leading ICT security experts to help in finding a lasting solution to address cybercrime,” said Sammy Kioko, African manager for Cyber SecAfrica. Targeted participants include bank managers, IT managers, compliance personnel and security personnel within firms and organisations across the continent. Banks are among those most affected by cybercrime with records of hacking, malicious activity, card-skimming, electronic file manipulation, and unauthorised penetration in banks across Kenya, Rwanda, Uganda, Tanzania and Zambia. “(The conference) will deliver ideas to help stakeholders articulate and implement appropriate risk management strategies, optimise internal processes and ensure that systems and hardware infrastructures are robust enough to mitigate risk, assure consumer confidence and maximise revenues,” Kioko added. TAB

028 iGnOrAnce Secret diary of a small

trials and tribulations entrepreneur continue

sMAll Business sPeciAl

e is Bliss

l business: the s of our resident e


SMALL BUSINESS SPECIAL • Diary of a small business

Deciding to start a business is easy. The hard part comes when you actually have to make it happen. Since having my flash of inspiration a few months ago, I have mostly pirouetted in the warm glow of the idea itself—concluding that action could wait until the new year.
in THe MeAnTiMe, I blabbed to anyone who would listen that I had an idea, without actually telling them exactly what it was. There is a slightly irrational fear, you see, that someone, somewhere could pounce on my brainwave and run for the hills, making a fortune in the process.

MARCH 2012 • The African Business Journal


Jennifer Smit, Internal Communications Manager, Barclays Bank


SMALL BUSINESS SPECIAL • Diary of a small business

“There is a slightly irrational fear, you see, that someone, somewhere could pounce on my brainwave and run for the hills, making a fortune in the process” After a few weeks of bouncing the thought around in my brain, I decided to get cracking, channeling my inner Fraulein Maria and throwing myself into the research stage. I was quite surprised at how many business books and entrepreneurial guides have been gathering dust on my bookshelf but with 2012 being my self-proclaimed ‘Year of Living Bravely’, I started reading some of these imposing tomes. In between chapters, I consulted the mighty ‘tinterwebs’ for yet more information.

No pain, no Twain
The more I learned, the more I realised that Mark Twain was bang on the money when he said, “to succeed in life, you need two things: ignorance and confidence.” Do you know how much is involved in setting up a business?! Seriously, if I had known half of what was required, I would probably have discarded the thought instantly. “Do you know how much is involved in setting up a business?! Seriously, if I had known half of what was required, I would probably have discarded the thought instantly” I’m still here, though, and have a third element to add to Mr Twain’s essentials for success: other people. Books are brilliant, the internet is a marvel,

MARCH 2012 • The African Business Journal


recOMMenDeD reADinG
Anyone Can Do It: Building Coffee Republic From Our Kitchen Table: 57 Real-life Laws on Entrepreneurship, by Sahar and Bobby Hashemi The most readable book I’ve come across on entrepreneurship— especially if you’ve never done anything like this before.

but at some point you realise that what you really need is to speak to people - and not only in code. Ignorance, I had, confidence, check, but my initial fear of sharing my idea with the right people meant that I was missing a great untapped resource of wisdom, experience, knowledge and skills. Until, that is, a book I was reading pointed out the obvious: that very few ideas are unique, and that talking about your treasured idea is actually a positive move. Halleluia! It’s true! You only have to think of the number of successful coffee chains and hair salons in existence to know that the idea itself is not necessarily the clinching factor. It helps if your product or service is entirely original, but more important than

what you’re going to do, is how you’re going to do it. “It helps if your product or service is entirely original, but more important than what you’re going to do, is how you’re going to do it”

Share in the community
I decided, therefore, to share a bit more information with people I trusted and I found that every time I opened up, I learned something new. I learned about online payment processing, found out about market trends, and discovered potential future synergies (believe me, they’re more interesting than they sound). It turns out I know people: people who know stuff, do stuff and provide stuff that I need. Getting stuffed was proving useful.


SMALL BUSINESS SPECIAL • Diary of a small business

Mark Twain, Writer, Lecturer

MARCH 2012 • The African Business Journal


The best part is, they all, without fail, seemed to be as positive about my idea as I am and, in many cases, would benefit from my business being around. I’ve been touched by the genuine interest people have shown in my little venture, and my confidence has soared. Suddenly friends and family are sending me useful links on the internet and popping over with helpful books and magazines. Even my mom is in on the act and will be representing me—complete with a brand new set of business cards—at a trade fair in March. Still slightly overwhelmed by the task at hand, but buoyed by the expertise and support around me, I dedicated a couple of days of a whirlwind trip back to South Africa in January in order to familiarise myself with marketing and scouting for potential suppliers. Which raised a seemingly silly question. How does one actually go about sourcing suppliers? “I dedicated a couple of days of a whirlwind trip back to South Africa in January in order to familiarise myself with marketing and scouting for potential suppliers. Which raised a seemingly silly question. How does one actually go about sourcing suppliers?” Is it literally a case of picking up the phone or popping in to the offices of people/companies you have earmarked and saying “Hi, I’m Jen, this is what I’m planning, would you like to be a part

of it?” With no evidence to the contrary, I decided it was, so that’s what I did. Armed with a notebook and an idea, I drove Cape Town ‘stukkend’. I introduced myself to potential suppliers, took photos, scribbled notes and generally felt good about finally doing something tangible. Jen returns next month with more extraordinary musings from the unpredictable precipice of starting a business. TAB

THinGs i HAVe leArneD sO fAr
There’s a good chance someone is already doing what you want to do - and that’s okay. The digital world makes deciding on a name pretty darn tricky (what if you can’t get your preferred domain and email address?) You don’t necessarily have to tell people everything about your idea, but talking to people can really help—they know stuff. Ignorance is bliss Time management is critical, especially if, like me, you still have a day job that needs—and deserves—attention.

By the

The popularity of win and bounds in recent offering apart from its


e glass

nes from the southern tip of the continent has grown by leaps t years. TABJ takes a look at what is setting South africa’s wine s competition.


WINE • By the glass

sOuTH AfricA wines are enjoyed by diners and drinkers across the world. The country has become the seventh largest producer of wine in the world and its 2010 wine grape harvest was estimated to total 1,231,405 tonnes by industry organisation Wines of South Africa (WOSA). With more than 112,700 hectares of vineyard in South Africa, it is perhaps no surprise that the country exports close to 400 million litres of wine a year. Since the fall of the apartheid-era government and the birth of the Rainbow Nation in 1994, the opening up of the country’s economy has helped the wine industry blossom into a truly international player.

WOSA chief executive officer Su Birch says: “The recognition by foreign trade and consumers of the value South African wines offer across price ranges and the rise in South African wine tourism have contributed to the aggressive growth [of the industry].”

“Positive international media coverage has also played a key role. South africa has the advantage of being able to supply foreign markets with regionally diverse wine styles that highlight the cape’s biodiversity,” Su adds.

MARCH 2012 • The African Business Journal


As the gateway to South African’s wine growing regions, Cape Town is recognised as one of the world’s great wine capitals. Although the majority of the country’s wine regions lie in the Western Cape, other regions noted for their viticulture are located in KwaZuluNatal, the Eastern Cape and the Northern Cape. As with all successful industries, a range of not-for-profit organisations have sprung up to support the South African wine sector, with the aim of increasing export exposure in key markets and supporting growers and their agricultural requirements. These associations range from the exportThe industry is helped by South Africa’s Mediterranean-style climate, which is marked by its plentiful sunlight and its warm and dry conditions. The country’s grape growing season is long, sometimes lasting from November through to April of the following year. focused WOSA, to the Biodiversity and Wine Initiative (BWI), a partnership between the South African wine industry and the conservation sector. Other non-gain organisations include WIETA, an agricultural ethical trade initiative, and SAWIS (South Africa Wine Industry Information and

fAcT BOx:
As of 2010, the leading export market for South African wine was the UK which accounted for 28 per cent of the total exports. According the figures from trade organisation WOSA, Germany accounted for 19 per cent of the exports, followed by Sweden—the destination for 10 per cent of the country’s wine exports.


WINE • By the glass

MARCH 2012 • The African Business Journal


Systems), which collects and processes industry information, and administers the industry’s Wine of Origin system.

With the South African economy opening up to foreign markets in the 1990s, there has been a rapid increase in the amount of wines the country sells abroad. By the middle of the last decade the sector was growing at a rate of around five per cent a year. All of the country’s wines must be granted an export licence if they wish to make their mark abroad. In order to ensure that the country’s winegrowers are only selling the best possible products to wine lovers across the globe, samples of each batch of wine destined for foreign countries are sent to the Wine and Spirit Board (WSB) in Nietvoorbij, Stellenbosch. Each batch undergoes detailed tasting tests and chemical analysis before a licence can be granted. An official seal is given to each bottle by the WSB, which verifies the truth behind

Backing the sector
The South African wine industry is also backed by state research body, the Nietvoorbij Institute for Viticulture and Oenology. This organisation employs close to 250 staff and brings together experts from the departments of viniculture and viticulture at the University of Stellenbosch and the Elsenburg Agricultural College, which offers cellar technology. To ensure that South African wines are reaching customers across the country, there is an extensive distribution network of wholesalers and retailers in place, who are supported by producer cellars, estates and other organisations that directly market the wines.

fAcT BOx:
The South African wine industry can trace its roots back to the fight against scurvy among sailors. Viticulture was first introduced to the Cape by Dutch surgeon Jan van Riebeeck. Ahead of the first harvest and crushing in 1659, van Riebeeck was given the task of planting vineyards to produce wines and grapes that would ward off scurvy among sailors during their voyages along the spice route.


WINE • By the glass

MARCH 2012 • The African Business Journal


claims made on the label regarding origin, vintage and grape variety.

Red and white
The most widely planted variety in South Africa is the Chenin Blanc, but with close to 40 per cent of vineyards being replanted in recent years, there has been a notable shift from 80 per cent white grapes to a split that equates to a near 50/50 split between red and white. South Africa’s top five grape varieties consist of Chenin Blanc, Cabernet Sauvignon, Colombard, Shiraz and Sauvignon Blanc and, according to the experts, the country’s winemakers utilise a healthy mixture of Old World traditions and New World techniques. Since the relaxing of trade laws in the early 1990s, South African wines have been produced to cater for an international market, with winemaking techniques and styles being brought to the country by winemakers from Spain, California and France. Once noted for being coarse in texture, South African red wines have become increasingly popular abroad in recent years thanks to the introduction of modern winemaking technologies and the resulting creation of softer, fleshier wines. TAB


ele rO



eGAnT line OAD PAinTers

wing the line


SERVICES • elegant line road Painters

as an ambitious company it is essential to get noticed. no one can deny that elegant line road Painters leave a good impression wherever they go.
we All liVe in increasingly expansive and aweinspiring surroundings. Cities, towns, villages and even streets are getting bigger all the time. When human beings make their intrepid journeys through these impressive landscapes, it always makes it that little bit more pleasurable if their chosen paths are kept smart. One of the most important features is the painted lines and road markings that keep us all on track.

Adrenaline brush
The year 1981 was memorable for many things— men started wearing make-up, John McEnroe tore up the rule book at the All England Tennis Club and Bob Marley chilled out, permanently. For Andy Keil it marked—quite literally—the beginning of a thirtyyear magical mystery tour of line painting. Armed with the most rudimentary equipment imaginable he started building an empire in a way that only the young can. “I started with a paint roller on the end of a broomstick handle,” explains Keil. “I sold my car, bought a little pick-up truck and looked for anywhere that needed car park lines painted”.

Yep, readers, this was the original humble beginning. Indeed, Keil also had a very simple system for accounting. “I had an invoice book and I’d walk into reception, and hand it over with a paint-splattered pen. I invariably got paid very quickly because they could see that I was just this little chap doing a little job! The entire company administrative system was in one briefcase.” he reflects. Over the years the company flourished and Keil began to gain lucrative contracts and assemble a formidable work force—including his own father. Meanwhile, the old equipment was replaced with sophisticated mechanised systems. The

MARCH 2012 • The African Business Journal


business became one of the most accomplished and reliable line painters in the region, continuing to grow and expand every year.

Keil looked at his options. “One thing I do know how to do is run a road-marking company, so we started again, from scratch; no people, no equipment. Just like ‘81, it was liberating,” he enthuses. With decades of knowledge behind him, Keil began Elegant Line Road Painters by standardising equipment and building it in-house. An eyecatching logo—which was promptly designed and emblazoned across the growing fleet of 14 LDVs, six two-tonne and two four-tonne trucks—has become an instantly recognisable symbol of quality. The experience gained in the restaurant business was also applied to the new model and has been pivotal to the rapid rise of the new

Turning the tables
After well over quarter of a century of hard graft on the roads, Andy Keil decided to draw the line and start a new chapter of his career. His father had retired and he fancied a change. The line painting company was sold and he set up an upmarket restaurant and coffee shop. Following a good first year, the recession struck a ferocious blow and it was clear that the new business would struggle.


SERVICES • elegant line road Painters

company. “Customer satisfaction has been a top priority. If you buy a meal or a drink, it has be perfect; we’ve learnt a lot about having to make sure things are done correctly. If we get it wrong, we correct it immediately,” Keil explains.

developed its own academy, where all new recruits receive exclusive training. This policy creates a vast pool of skills and enables the company to carry out all its own servicing, repairs and maintenance on vehicles. It has also meant that the business can take on projects outside South Africa, in the knowledge that equipment will be able to withstand the inhospitable terrain of places like Angola. The company has also helped people set up line painting businesses in places such as Namibia and Botswana. By training the staff and producing the equipment to Elegant Line standards it has given the small enterprises the best possible

Painting the future
Since the World Cup in 2010, which proved to be a very lucrative occasion, the company has continued to flourish as South Africa becomes more organised, and the demand for professionally finished painted lines becomes higher. In order to establish a guaranteed level of staff performance, Elegant Line has even

MARCH 2012 • The African Business Journal


chance of succeeding in the market place. Creating a legacy and developing a fine reputation has always been at the heart of everything the business works towards. “Our philosophy is to solve problems; if it needs painting we will handle it, whether it’s one bay at a shopping centre, a large municipal road or an airport.” says Keil. “I get a feeling of great pride that we’re a family business and we’ve worked on all the major shopping centres and airports around Johannesburg.” For over three decades Andy Keil has helped to safely navigating humans, cars, bicycles and planes. Needless to say, he’ll also be driving

Elegant Line in the right direction, for many years to come. After all, in business, it’s all about how you make your mark. TAB www.rOADPAinT.cO.ZA

050 DeVelOP


PinG A crusH
For customers looking for mobile crushing equipment, look no further than Bloemfontein-based specialists african mobile crushers, who is able to provide high-quality heavy equipment to clients across the continent.


SERVICES • african mobile crushers

wiTH iTs ABiliTy to tackle any technically-challenging project in the crushing and mining sectors, and its commitment to providing a professional and reliable service, African Mobile Crushers has become a much-welcomed addition to its industry. From its base in Bloemfontein, South Africa, the company is able to reach across a wide geographical area, and can service customers from the snow-covered mountains of Lesotho to the tropical jungles of West Africa. It is also considered an expert in remote cross-border projects and highly-specialised harbour developments.

ensure its customers the goods, and provides adequate quality control testing facilities on each machine. Its ability to establish itself in remote areas in minimal time is one of its key competitive edges over its rival, and with a management team that has been exposed to various and differing projects, its customer can be assured of quality and care. When it comes to its ore offering the firm can supply a range of aggregates from road and ballast, to riprap and concrete, to gabion and filter stone. Its grading technicians have been trained to perform tests according to project specifications, and in maintaining and growing its fleet of plant and equipment, it ensures the highest possible reliability and availability, providing optimum production and quality to achieve and maximise budgeted profit.

Professional service
Through its trained technicians, African Mobile Crushers can provide sieve analysis and PSD testing on site, and it has put in place a quality control programme to ensure excellent delivery. Investing into each member of its professional team has resulted in a healthy mix of integrity, commitment, reliability and honesty. The company provides crushing services for mine infrastructure development and prospecting, samples for feasibility and prospecting purposes, and is even available for short-term contracts during maintenance or shutdown periods. With each one of its mobile aggregate crushing plants, African Mobile Crushers is able to

Strong relationships
African Mobile Crushers assesses each of its clients according to their specific needs in order to provide them with the most cost-effective solutions and processes. “Our customers have a history of valuing relationships with sub-contractors and we aim to be their first choice in crushing and screening operations,” the company states on its website. “We want to establish long-term relationships

MARCH 2012 • The African Business Journal



based on integrity, quality and meeting our clients’ expectations.” African Mobile Crushers also believes in the vital role its suppliers play in the successful operation of its business. As an integral part of the business, the company has ensured that it has well established and mutually beneficial relationships with suppliers in place, so that it is able to provide exceptional services and the best possible product to its clients. The can-do attitude of its workforce has enabled the company to grow expediently as its enthusiastic team players maintain and ensure its future growth.

On its detailed website, the company proclaims: “We want a reputation of being a contractor that always works safely and does not compromise on following the best safety practices.” By asking each and every one of its employees to abide by the Mines Health and Safety Act the company has demonstrated this commitment towards safety. But its reputation has been growing and the company is known not just for its safe approach to its work, but also for the high levels of quality and care that it provides all of its customers. TAB www.AfricAnMOBilecrusHers.cO.ZA



The milling m



e sA


ENGINEERING • loesche Sa

MARCH 2012 • The African Business Journal


With a range of milling solutions and technologies to offer its customers, loesche South africa has been busy in recent years revealing its most recent additions and upgrades, as it provides the machinery required for many markets across the southern part of the african continent to develop.
enGineerinG sPeciAlisTs lOescHe South Africa Pty (Ltd) has been introducing game-changing milling technology to southern African markets since the mid-1970s.


ENGINEERING • loesche Sa

As a leading supplier of drying and grinding technology, Loesche SA offers its customers full manufacture, installation, spares, maintenance and technical service back-up for a variety of innovative and powerful machines. Loesche SA is a subsidiary company of Loesche GmbH, a privately-owned firm founded in the German capital of Berlin in 1906, which has become known across global industry for the design of its vertical roller mills, its complete grinding preparation and drying plants, and its turn-key plant units. From its base in Johannesburg, Loesche SA has been in operation since 1975 and services

all industries in the southern African region. It has placed a great amount of emphasis on its customer service offering and is strongly commitment to its aftersales service. The firm is able to provide clients with new project feasibility studies and investigation, new project engineering and implementation from single machine to turn-key capacity, and full aftersales services. Despite often finding itself working in infrastructure-poor environments, Loesche SA will continue to provide its more remote clientele with ongoing support, long after the equipment has been installed. It is flexibly in respect to its client

MARCH 2012 • The African Business Journal


requirements and can structure maintenance or spare parts supply agreements to suit their needs. Among its repertoire of services, the firm offers specialised plant and facility maintenance, onsite repairs and supervision services, plant optimisation, feasibility studies, specialised programming and control system updates, as well as project management assistance.

An historical innovator
For more than 100 years, the company has been constructing vertical roller grinding mills with the ability to grind a wide range of materials, from coal to raw cement material, to granulated sand, minerals and ores. It has designed and constructed some of the world’s largest grinding plants, as well developing some of the most efficient technologies within its market. In recent months Loesche has introduced the world’s first containerised Coal Grinding Plant. This brand new solution, which has now been made available to the African market, reduces operating costs by substituting coal instead of oil or gas in various thermal applications. The Coal Grinding Plant is mobile due to its integration into ISO sea containers, which allows for lower transport charges for worldwide operation.


ENGINEERING • loesche Sa

The plant has been designed to grind all types of coal, from dried, lignite to anthracite, with a grain feed size from five to 30 millimetres. It has also been designed to withstand temperatures ranging from 40°C to -30°C. Its standardised and simplified design means it can be delivered within a period of six months, and installed and commissioned within just three weeks. Additional service features provided by Loesche include weather protection for plant components, a full factory trial run prior to delivery, and short supply times for spare parts. Another machine that has helped Loesche stay ahead of the competition is the LMMaster. This machine provides the client with fully-automated control of the grinding process and continuous optimisation of operating vertical roller mills. It has a low maintenance cost, requires no subsequent programming, and is easy to install. The new Loesche Dynamic Classifier (LDC) Series with the patented swirl rectifier above the blade rotor and the adapted housing geometry has been characterised by greater efficiency with lower flow resistance and a reduced energy demand on a machine that can separate particles sizes down to one micrometre. The swirl-free gas flow from the classifier outlet with optimised dust distribution gives rise to fundamentally more uniform dust distribution to the filter.

MARCH 2012 • The African Business Journal


Improved accessibility in the classifier upper housing enables the wear protection to be serviced more easily and replaced in the case of abrasive products.

Ore is more
The dry milling of ores in Loesche vertical roller mills has shown significant process as well as economic and ecological advantages in recent years. To demonstrate these advantages the company has developed a mobile ore plant. The OGPmobile gives customer the option of testing the effectiveness of Loesche grinding technology and the influence on the total material flow of the existing processing plant. The first OGPmobile is currently being used in the Middle East, where the operation of the facility and testing programme are underway in close cooperation between Loesche specialists and its customer. When completed, a further series of tests and deployments are planned, that will no doubt enable the company to launch the product on the global market. With such innovative engineering solutions on offer, it is no surprise that Loesche SA is continuing to grow, not just in size and statue, but in importance to the fast-developing and resource hungry economies across southern Africa. TAB


encOurAGinG eDucATiOn


In providing infrastructure and development services to schools across the Western cape, management firm aurecon has found itself at the forefront of improving the province’s educational facilities.



wHAT is yOur OrGAnisATiOn’s funDAMenTAl eTHOs? The Western Cape Government’s philosophy supports the vision of an open, opportunity-driven society for all, in which everyone should be afforded the opportunity to realise his or her full potential, through access to a quality education. With every step taken towards fulfilling this vision, we are creating the Western Cape of our

dreams, where every child will be literate, numerate and able to compete in an increasingly competitive regional, national and international economic environment.

THe scHOOls Of enGAGeMenT
In partnership with the government aurecon has many exciting on going ventures. Before proceeding with the main company feature, John Pinching chats exclusively to Western cape minister of education, Donald Grant.

HOw iMPOrTAnT is THe PrOGressiOn AnD MODernisinG Of eDucATiOn in sOuTH AfricA? The advent of democracy in South Africa necessitated a radical transformation in education. This change was based on the constitutionally enshrined right to a ‘basic education’ for all, and the removal of a raft of racially based legislative policy. There was also a need for modernisation of the curriculum, in line with new discoveries, technological advances and increasing globalisation. After 17 years we can definitely say that in the Western Cape these rights are being met. Every child is afforded the opportunity to attend school and receive a basic education, but where

MARCH 2012 • The African Business Journal


“In the Western cape of our dreams, every child will be literate, numerate and able to compete in an increasingly competitive regional, national and international economic environment”

we have been failing is in the ‘quality’ of that education. The right to a ‘basic education’ is simply not enough if we are to compete in an ever competitive global environment. It is absolutely right, therefore, that every policy, action and strategy is guided by the desire to help future generations get the highest standard of education we can provide. wHAT HAs Been THe effecT Of THe cHAnGes On lOcAl cOMMuniTies? New schools, in the majority of cases, are built because the population increases in the area. New housing developments often pop up in certain areas of South Africa, due to inward migration into the province and the creation of new informal settlements. To cater for the children that arrive in these areas, new schools need to be built. In many instances, a school is rapidly created, using mobile units as classrooms. This is a temporary solution to meet the demands. We then build a new

permanent brick and mortar structure—creating a better learning environment for the children of that local community. In other instances, the Department needs to make alternative arrangements for students, such as providing transport to schools in other areas. A new school in the immediate vicinity and closer to home is always more appropriate for everyone concerned. In the past replacement schools have been built with inappropriate materials such as chipboard and are a legacy of the apartheid era. Our plan is to update these schools with brick and mortar structures. Some of the old structures are a safety hazard and are prone to burglary and

“The right to a ‘basic education’ is simply not enough if we are to compete in an ever competitive global environment”



“In the past replacement schools have been built with inappropriate materials such as chipboard and are a legacy of the apartheid era. our plan is to update these schools with brick and mortar structures”

vandalism. The impact of change will be a more safe and secure learning environment for the children of traditionally poor communities. wHAT iMPAcT will THe new insTiTuTiOns HAVe On THe cOunTry As A wHOle? Investing in education is the best move the government can make in this country. While these schools provide a safe and secure learning environment, however, they don’t necessarily mean that ‘quality education’ will exist within the classrooms of that new school. This is where we, as a department, and the school management, educators, governing bodies and parents, need to work together to ensure that the best possible learning environment exists. Our strategic plan for education addresses some of the needs that we face in both our new and old schools.

wHAT fAciliTies cAn sTuDenTs exPecT in THe new scHOOls? The schools’ new facilities will include new classrooms, specialist rooms, laboratories, libraries, media centres, computer rooms, school halls, sports facilities, storerooms and offices. The technical schools will have the above, but also specialist workshops, for technical subjects, such as mechanical, electrical and civil engineering. wHicH AGe GrOuPs will sTAnD TO BenefiT MOsT frOM THe TrAnsfOrMATiOns? The majority of new facilities are high schools, which will benefit ages 13 -18. Replacement schools are mainly primary schools, benefitting ages 6-13. There are currently fewer high schools than primary schools in the province and the main


The new portfolio of schools includes:

schools, there are nineteen additional ‘comprehensive technical schools’.

TecHnicAl scHOOls
Technical schools are extremely valuable to the Government. They provide important educational opportunities for pupils who want to study in fields such as mechanical technology and engineering, and are key to developing skills in Western Cape. In January 2012, two new technical high schools—Delft Technical High School and the Northpine Technical High—will open their doors in the province. The three others are Oude Molen, Belville and Drostdy Technical High Schools. Each of these schools specialise in technical subjects, such as mechanical technology, electrical technology, civil technology, engineering, graphics and design, as well as, mathematics and science. In addition to the five technical high

sTeM scHOOls
This year the WCED opened its third Science, Technology, Engineering and Maths (STEM) facility in the province. Claremont High School was opened as part of this government’s on-going expansion of access to the focused teaching of science and mathematics. The other two facilities are COSAT in Khayelitsha and Tokai’s Cape Academy. COSAT was recently relocated to a new school building and the Cape Academy is currently being expanded to increase enrolment at the school. All of these projects are part of the infrastructure plan, which, among other things, allows for increased access to quality learning.



“This Government wants to avoid, at all costs, the kind of yo-yo effect that is sometimes experienced in other provinces, and instead build on the momentum achieved in the last two years”


MARCH 2012 • The African Business Journal


reason for this is the retention rate of pupils has historically been low. One of our central priorities is to improve this situation—ultimately increasing the need for further high schools. In just two years, we have already made significant headway in this objective. Overall retention has improved by 16 per cent in the last two years. will HisTOry reMeMBer THis TiMe As A reVOluTiOn in sOuTH AfricAn eDucATiOn? Yes and No. The advent of democracy in South Africa necessitated a radical transformation in education. This change was based on the constitutionally enshrined right to a ‘basic education’ for all. After 17 years we can definitely say that in Western Cape these rights are being met. Every child is afforded the opportunity to attend school and receive an education. Where we are failing is in the ‘quality’ of that education. History will also show that despite significant advances, the response to the qualitative challenge has been too slow. The strategies we have in place now will at least ensure that every child receives a better education than previous generations.

fOr yOu PersOnAlly, wHAT is THe MOsT rewArDinG PArT Of THese VenTures? The most rewarding part is that more young people in Western Cape are passing the exams and achieving access to higher education. Furthermore, we have raised the pass rate in mathematics and science, witnessed more distinctions, increased the number of schools with a 90 per cent and above pass rate, while multiplying the number of underperforming schools. We are confident that these increases are sustainable and reflective of an overall improvement in the state of education in Western Cape. This Government wants to avoid, at all costs, the kind of yo-yo effect that is sometimes experienced in other provinces, and instead build on the momentum achieved in the last two years. This turnaround in the pass rate and the increases in various indicators underscores that we are making significant progress towards achieving our overriding objectives, namely to retain greater numbers of pupils in the system and improve outcomes. TAB




in recenT yeArs, Aurecon has been involved in a programme to bring schools across the Western Cape up to scratch, which has led to huge improvements to the province’s educational infrastructure. Working closely with the Provincial Government of the Western Cape (PGWC) and Western Cape Education Department (WCED), Aurecon is responsible for the management of close to a quarter of the whole programme. The firm, which provides management and specialist technical services to government and private-sector clients, has been heavily involved in the programme since 2006 where it has

operated alongside the public side of the project. “In the past, the educational department would turn to the services of the Department of Transport and Public Works (DTPW) to deliver the projects,” says Aurecon technical director Jonathan Webb. “A number of years ago, however, the department explored the option of bringing in a secondary implementation agent to work parallel to the DTPW and we were successful in tendering for that role.” The programme involves the building of schools, extension of existing schools and providing maintenance at educational facilities across the province.

MARCH 2012 • The African Business Journal





“When we talk about extending the schools it can range from adding classroom space, to adding facilities like admin blocks and mobile classrooms, to laying out new sports fields,” Webb notes. “We also run projects where we upgrade or provide the water supply and sanitation facilities to schools that don’t have adequate water supply or sanitation.”

“We make all the professional appointments, such as the architects, engineers, quantity surveyors, and health and safety agents,” explains Webb. “The contractors are procured through open tenders and approved by the Department but are ultimately contracted by us, and there is a huge amount of interaction with a large number of educational organisations, school-based bodies and local government authorities.” The company also works with the WCED in undertaking risk management mitigation for the project sites. Originally a four-year agreement, thanks in part to its successful handling of the publicprivate partnership, Aurecon won back the

In for the long run
As the management implementation agent for the province-wide programme, Aurecon has to interact with a range of different people and different groups.

MARCH 2012 • The African Business Journal




rights to the contact after it was put up for tender in 2009. “Although we are only one of two implementing agents, and the minor of the two, I think we have demonstrated that we can mobilise very quickly and we can get expenditure underway very quickly in regards to procurement and regulatory requirements,” boasts Webb. “That’s certainly a benefit for the WCED in terms of how it is spending its budget.” Webb says Aurecon works very closely with the educational department on a day-to-day basis so it is able to target its skills and services to where they are next required. The company’s project office is even based within the Department’s provincial offices. The firm’s programme manager for the projects, and its administrative support, are permanently based at the department’s office where it is able to interact on a daily basis with government officials and the Infrastructure Planning and Management Directorate.

Jumping over the hurdles
Aurecon has had to overcome a multitude of problems across the programme, which range from management issues to working with a variety of different communities. As a result of dealing with such issues the

MARCH 2012 • The African Business Journal


company has ended up making a large amount of new contacts across the Western Cape through its targeting of local companies to provide the required construction work. “We have provided work for local labourers, as well as training on separate projects,” notes Webb. “Last year we tackled a scheme called the Foundation Phase Relief Classroom Project, which provided additional classrooms for younger grades at schools that had inadequate space.” The company would end up delivering each individual project within a short time-frame. “We were able to look at the geographical spacing of the schools, where they were situated and what their particular needs were,” says Webb. “We then clustered the schools together and put out contracts based on geographical groupings of between three and five schools.” By doing this, Webb says Aurecon was able to achieve better economies of scale and large cost savings for the department in terms of construction cost, capital costs and professional fees. “Through the overall management of the work we were able to add value to the department by clustering the projects and this proved to be quite a successful project costing around R42 million for 120 classrooms,” notes Webb. “We built all of the classrooms using




conventional construction methods. A key requirement was to match the existing appearance of the schools so that the new work would blend in with the existing structure. “Through such geographical clustering we sometimes ended up with five schools under just one contract, which meant that there were five different communities that we needed to interact with,” he adds. “In each community, a community representative would be appointed to answer community

concerns and bring local sub-contractors and labourers on board.”

Extending excellence
Aurecon has also worked on the WCED’s Expansion Programme that targets schools that are generating good results, but which are at capacity. “The aim of this expansion programme is to provide an additional class per grade, so typically this means seven additional classrooms

MARCH 2012 • The African Business Journal


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at primary school level or five additional classrooms for high schools,” remarks Webb. “If the school is already generating good results it can attract more learners and expose more children to that level of quality education. “It’s a very positive initiative by the department and we’ve implemented it at close to 20 different schools across Cape Town,” he adds. Webb says the community aspect is important on all of the projects it is involved in and one of the more important roles its plays as implementation agent is to act as a go-between the department and the professional team, and the contractors and school community.

“We make sure that the different needs of all stakeholders are understood, included and covered in each project design,” he notes. By working so closely with the local community, as well as the wider state authorities, Aurecon has found itself playing an important role in not only developing the Western Cape’s ability to school the younger members of its population, but also in ensuring that future generations have access to the best possible educational facilities. TAB

JOHAnnesBurG PrOPerTy cOMP
Structurally sound





CONSTRUCTION • Johannesburg Property company

Photo credit: jbor /

The Johannesburg Property company (JPc) is passionate about managing structures that transform the landscape of a nation and make Johannesburg a global metropolis. While bricks, glass and steel are vital, it is heart, soul and passion that have always been the company’s most important materials.
in THe lAsT 18 years South Africa has become one of the most rapidly developed places on planet earth. In a competitive industry JPC has emerged as an innovator with impressive ideas and an increasingly formidable reputation. As

well as overseeing some of the most eye-catching building projects in the city the company has also brought a refreshing and positive approach social responsibility.

Building bricks
In the current climate it is essential for a property developer to be a streetwise—quite literally. Knowledge of the area and aspirations of its residents have always been an integral part of the JPC style. Its dynamic philosophy from the inception has been to manage and develop the City of Johannesburg’s property portfolio, valued at a whopping R8.6 billion.

MARCH 2012 • The African Business Journal


Developing Property Solutions
Whether your requirements are for a new retail centre, an industrial warehouse or office accommodation on the African continent, Crowie Projects can provide you with a turnkey development solution. Operating as a full service Property Development Organisation, Crowie Projects offers its clients turnkey solutions for all their property needs. We are a Level 2 BBBEE Contributor.
Johannesburg Office: T: +27 11 - 803 7000 F: +27 11 - 803 7111

The core responsibilities of JPC are built around professionally leasing the premises, collecting the rentals, overseeing building maintenance, paying service providers, managing tenant relationships, running the accounts and providing reports. Its smooth systems rely on the ability to communicate effectively with all personal in an approachable and informative way. ‘Facility Management’ is vital cog in the company’s machinery and refers to building planning, design and management of occupied buildings and their associated building systems. It also ensures the provision of equipment and furniture, enhancing the organisation’s ability to meet its business

objectives. It has been this resourcefulness and willingness to fulfil many separate elements of the property processes that has seen JPC become one of the most trusted outfits in the industry.

Big society
Media Officer Brian Mahlangu explains how the company’s ambitions have led to stability and continued success. “We are proud to rise to the exciting challenges of contemporary Johannesburg, utilising council-owned land assets to leverage private sector investment in public infrastructure,” he explains. “The company has been instrumental in galvanising areas of the


CONSTRUCTION • Johannesburg Property company

Photo credit: Sean Nel /

MARCH 2012 • The African Business Journal


city, developing modern processes and making a positive impact on the lives of thousands.” One of the company’s most impressive facilities—The JPC Transformation Unit—aims to harness the City of Johannesburg’s (COJ) property portfolio transactions to increase economic growth and implement Broad-Based Black Economic Empowerment (BBBEE). These vital initiatives create hundreds of jobs and economic opportunities for the disadvantaged groups and businesses. The unit has also fostered transformation in JPC’s business focus, by ensuring that all transactions include social elevation, economic development and community cohesion. The objectives have been achieved through programmes such as the Youth Property Programme, Entrepreneurship Programme, Facilities Management Programme, Internship and Learnership Programme, Environmental Programme and SMME and Community Support Programme.

investments of R4.7 billion in marginalised areas, particularly the South of Johannesburg and the Inner City, representing a 188 per cent achievement above the set target of R2.5 billion. These statistics have been consolidated in the last couple of years with reassuringly solid returns and the forecast for the next five years is also very promising. During this period of productivity nearly 3000 jobs have been created through construction on Council-owned land. In addition, many people have been trained and qualified in construction and property skills, through the company’s implementation of the ‘Property Boomshare Strategy’. JPC has also been instrumental in supporting the COJ’s Housing Master Plan, through the acquisition of land parcels to support housing delivery. Over 24000 units can now be provided in the Doornkop region and 5000 units in the Princess Plots area. With further government endorsed projects on the horizon JPC is looking to the future with great optimism, proving that, when it comes to property, it’s all about the people. TAB www.JHBPrOPerTy.cO.ZA

Greatest hits
The last few years—even within the context of a global recession—JPC leveraged R8.6 billion private sector property construction investments within the 2008/09 financial year. This remarkable figure is a 171 per cent achievement against the targeted sum of R3.5 billion. JPC has also successfully secured



THe MOTHeO cOnsTrucTiOn GrOuP
empowered building


CONSTRUCTION • The motheo construction Group

With its strong moral compass and a commitment to social development, motheo construction Group has been delivering a range of South african construction projects on time and under budget, since the latter part of the 1990s.
sOuTH AfricA’s MOTHeO Construction Group (Pty) Ltd has grown into one of the country’s leading predominantly black-owned construction companies and has become one of the country’s foremost providers of social housing. Established by Dr Cynthia Thandi Ndlovu in 1997, the company embraces strong moral and social values, and offers its clients a broad array

of services that encompass housing, property development, civil engineering, and turnkey design and construct solutions. Motheo has worked on a wide range of projects from public facilities such as train stations and governmental departments to a selection of slum clearance and housing projects across the country. Its head office is based in Randburg, Johannesburg, and the company has bases across South Africa’s nine provinces bar the Western Cape, with branch offices in Pretoria, Durban, Witbank, East London and Port Elizabeth.

A partnership is born
Despite having a background in medicine, the com-

MARCH 2012 • The African Business Journal


into applying for housing projects with a team of people she had found. “When she was awarded these projects she found that the guys she had relied on from a technical perspective were not adequate for the job and via a contact she managed to get hold of Chris Cudmore and myself.” Cudmore and Potter had previously worked for Murray and Roberts, a large construction company in South Africa, which had been working in the low-income housing arena. When this company decided to exit this market, Cudmore and Potter opted to remain within the housing sector. pany’s founder and current chairmen Thandi Ndlovu started up the construction firm after spending many years in Zambia during the years of the ANC ‘s struggle against the apartheid government. Upon her return to South Africa she completed an internship at a local hospital before becoming one of only a handful of doctors in a town to the south of Johannesburg. “She started her practice and in the course of running the practice she basically discovered that 70 per cent of her clientele were there because of hygiene issues related to their living conditions,” says Motheo director Tim Potter. “As a result, she realised the problem should be stopped at its source, so as a side line she got In 1997, just one year after Thandi Ndlovu had initiated her venture into housing, the pair found themselves working with Motheo in bringing housing projects to fruition. “By October 1998, Thandi Ndlovu had entered the process of looking for other partners, and as result of having formally exited Murray and Roberts, we linked up and began traded as a joint venture,” remarks Potter. A few years later, in 2001, Motheo Construction and Cudmore and Potter collapsed its successful operation into a formal company, creating a firm known as Motheo, Cudmore and Potter (Pty) Ltd., which over the years mutated into Motheo Construction Group (Pty) Ltd.


CONSTRUCTION • The motheo construction Group

A broad service platform
Motheo’s core skills lie in its ability to bring to market turnkey construction projects. “Whether we enter into a development project depends really on whether the economic climate at the time is right for us,” says Potter. “Development doesn’t drive our business,” he remarks. “What drives our business is general construction, because we know how to build, we know how to project manage and we know how to manage construction.” Close to two thirds of Motheo’s business comes from the housing sector, but the company has also brought to market a range of public service projects such as schools, clinics and hospitals. “We will look at anything below five storeys from a structural point of view,” notes Potter. With projects taking place in the residential, rail-refurbishment and new construction sectors, the business is continuing to find new challenges to undertake. These include housing project of between 1,000 to 5,000 units, which involve town planning, land surveying, civil engineering, civil services infrastructure, property selling and construction. “We have been involved in projects to relocate people and move them out of shacks and into new starter homes,” says Potter. “Typically our sector is government-subsidy

run, meaning that we won’t get involved in creditlinked arrangements, mortgage finance or anything like that. “We focus on housing projects created for people that have been battling to afford their own accommodation,” he adds. The firm has also worked on the construction of new railway stations and station upgrades, including a major project on Orlando Station in Soweto. “This was a new-build, 18-month exercise, which involved getting the environmental approvals, undertaking the design work, and working out where all the existing services were, because obviously an existing railway line is full signalling, electrical, water and sewer services,” explains Potter.

Power to its people
Empowerment is a significant social and economic issue across South Africa, and it has been a key policy driven through by an ANC Government working to transform the business arena by providing previously disadvantaged individuals with the chance to undertake decision making roles. With empowerment at the heart of its operation Motheo has been rated as a level 3 BEE Contributor for its efforts in this regard. “Thandi Ndlovu is a very independent and free thinking person, and when Chris [Cudmore]

MARCH 2012 • The African Business Journal


and myself came on board, we understood that she would implement empowerment as she defined it,” says Potter. “That involved creating a company that provides advancement for individuals, but at the same time delivers on outputs that are required by any business.” Potter says that the firm’s approach to empowerment is grounded in fulfilling business outcomes, ensuring it provides quality products on time and within budget, rather than putting people in positions of responsibility simply for the sake of it. “The results of this approach over the past 14 years, has been that we have two black fe-

male directors in place, six black female shareholders, and an organisation with aspiring young black entrepreneurs on board,” remarks Potter. “We provide young black workers with the experience, and the technical and commercial understanding of the business, allowing them to hold their positions in their own right,” he adds. Over the years, Motheo has grown into a confident player within the South African construction market, and in passing on its own experiences to its employees it is ensuring young black construction workers are developing into the assertive and skilled assets that will drive the company forward into a multicultural future. TAB

cse 0
running like a dream





The geography, character and destiny of South africa changes everyday as more property developers apply their signature to the landscape. cSe is one of the premier suppliers of equipment, and has helped to fuel creativity for over half a century.
THere is An old adage about a good workman never blaming his tools (as anyone who has ever ‘blamed a computer’ will verify). If you look carefully at the small print, however, it states that anyone using this proverb should ensure that their tools are trustworthy in the first place.

With all its experience, innovation and ingenuity CSE is certainly proud to supply the industry with an array of cutting edge machinery. When it comes to tools of the trade, it’s the business.

Rise of the machines
CSE is a trusted and passionate distributor of construction equipment, earthmoving paraphernalia, golf carts and turf-related machinery. Well established in the local market, the company has an extensive distribution network of branches and dealers which cover all the major centres of South Africa.

MARCH 2012 • The African Business Journal


Over the years the company’s dedicated and finely-tuned workforce has risen to 189, all of whom relish the opportunity to work with such an impressive compendium of equipment. It’s not an industry for the feint-hearted and you have to get your hands dirty but, hey, that’s exactly how this team likes it. Each and every item of equipment is specifically selected to excel at specific jobs, based on highly detailed requirements. Whether the assignment involves heavy duty landscaping or decorative touches on a golf course, CSE is helping companies to transform the landscape of South Africa, making it an ever more desirable place to live, visit and do business.

Customer satisfaction form
The company embarked on its remarkable journey back in 1949 and, since those halcyon days, has carefully built the business on a bedrock of honour and reliability. Its early operation was based in Johannesburg—where it still has an office—and now boasts operations in Isando, Cape Town, Pinetown and Port Elizabeth. There are also a range of dealers across the country including in Bloemfontein, Hopetown, Kimberley, Marble Hall, Middleburg, Pietersburg, Swaziland and Ventersdorp. Naturally, all the equipment reaches the high standards established by the main CSE outlets. Alex Akron has seen the company continue to flourish for five years and has no doubt that its unique combination of knowledge, service and a modern, technology-aware approach has been instrumental in developing further. “We are always looking to offer new product lines, improve efficiency for customers and increase productivity,” says National Manager Alex Akron. “Our strength has always been to move with the times. We’re extremely focused on customer service.” The company has a unique and proud tradition of bespoke services to its clients. Rather



GreATesT HiTs: than having a blanket approach to dealing with issues—like most of its rivals—CSE prefers to focus on individuals and advise based on the merits of every project. “All our relationships have been developed over numerous years and it’s not like some of the big organisations where you end up talking to a service manager who has never spoken to you. In contrast, we consider ourselves to be an approachable family business,” adds Akron. Such a long and distinguished history has enabled the company to witness the radical evolution of South Africa. It’s positive attitude and progressive outlook has also epitomised the country’s incredible progress since 1994. Indeed, with a spectacular legacy, style that is second to none and future that shines as resonantly as its equipment, CSE have proved that the combination of man and machine has never been so harmonious. TAB www.cse.cO.ZA

MARCH 2012 • The African Business Journal


sOMe Of cse’s MOsT POPulAr GADGeTs
Backhoe Loaders New generation models with a highly innovative offering and new Backhoe Loader design. Increased fuel efficiency, assuring top level productivity. It is labelled, ‘The construction King of versatility’. Skid Steer Loaders World top class power and digging capability. The Skid Steer Loaders has a robust design and continuous product improvements that ensure high performance and reliability. Club Car Golf Carts Club Car has manufactured the #1 rated golf carts and utility vehicles, year after year. Since our origination in 1978, our product portfolio has grown to include more than golf carts. Wheel Loaders The CASE Wheel Loader provides the best in class comfort and productivity in all available applications: spacious cab with all round visibility that matches your machine with adjustable control, three power curves and four work modes to allow to match power to the specific application. Crawler Excavators The Crawler Excavators, defined as the “thinking machine” due to advanced working mode selector that allows full exploitation of the engine and hydraulic power. All this with a high level of controllability linked to a fast cycle time. Turf Maintenance Equipment Jacobsen combines great ergonomics, power and manoeuvrability to provide superior productivity. This is where performance matters!



Super fly guys


TRANSPORT • Solenta aviation

Solenta combine modern technology with traditional values, ensuring that customers have an experience that will leave them walking on air—literally.
in THe MODern world it is often essential for companies to utilise the services of all modes of transport. If the company is really flying, it’ll need a plane. Solenta offer a vast array of aviation options to the business community.

be an inspired time to start and the company has soared to new heights ever since it first took off. Originally, this unique and specialised commercial aviation company had a vision to service the African continent by providing flexible aircraft leasing solutions. In those early days, at the turn of a new millennium, it began by offering freight work in West Africa. For the first couple of years, while establishing the business, it dealt exclusively with HR contracts. After a gradual expansion programme the company started flying 200 aircraft for the prestigious U.S. world tour programme in Afghanistan and this proved to be the catalyst for further expansion

Movers and shakers
Solenta Aviation embarked on its journey—the first of many—in the year 2000. It turned out to

MARCH 2012 • The African Business Journal


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It was the early optimism and youthful brio of a start-up company that Rudi Van Schalkwyk believes has been pivotal in the company’s good fortune. “Over the years we have kept on adding to the fleet, and explored several different ventures in other African countries,” he explains. “Our focus has mainly been on the oil and aid industries, and today we operate 39 aircraft.” Since then it has developed extensively as a leader in aviation leasing solutions, forming relationships with clients and providing comprehensive support, exquisitely presented aircraft and devoted crews. Indeed, the company has become a truly global and hugely respected enterprise.

Blue sky thinking
Although the concept of leasing differs from conventional airline businesses, Solenta’s philosophy is, in many ways, modelled along similar lines to premier commercial airlines. Maintenance, training, crewing and operations all concentrate on world-class service levels of availability, safety and dispatch. Consequently, Solenta Aviation has become a clear market leader in the niche of specialised all-inclusive aviation leasing solution. Providing a first-class service is the primary focus of the people at Solenta and the multi-faceted staff have a wealth of experience in aviation, and are

100 TRANSPORT • Solenta aviation

hand-selected for their excellent track records in the industry. The different skill sets and histories among the employees ensures that all the attributes required for the managing and maintaining of a variety of aircraft are in place. Even with the backdrop of a global economic crisis the company has been able to gain stability. The reliability and trust that the company has engendered over the years means that its main blue-chip clients have remained loyal. “Our success, even during turbulent times, is the result of two major factors; our incredibly experienced and resourceful staff and the lucrative partnerships that we have established,”

says Van Schalkwyk. During the last decade Solenta has built up an enviable portfolio of clients. Notably DHL and the Red Cross from Geneva. It also boasts an impressive list of oil company partnerships such as Anadarko, BP and BHP Billiton.

Safe bet
In the aviation industry technology changes rapidly and Solenta is always waiting in the wings ready to embrace change. “The main priority when your business is located at 30,000 ft, is safety. A lot of technology has been introduced into aircraft to make them

MARCH 2012 • The African Business Journal 101

entities) is part of our drive to become fully autonomous in our clients’ environments, thereby satisfying the requirement of local aviation authorities. Satellite operations in Africa are well-supported by Solenta’s head office personnel, who have control of several bases. Each base within the operation is equipped to provide aircraft, flight crew and maintenance personnel. The company continues to pride itself on providing a high quality service throughout Africa, the Middle East or anywhere in the world at very high standards, with the main focus continuing to be the customers. The expansion programme will continue as safer, like call systems, upgrades on aircraft equipment and the increasingly sophisticated training of pilots,” adds Van Schalkwyk. Solenta is prepared to operate anywhere in Africa or the sub-continent, having conducted business in Libreville, Gabon, Abidjan, Cote D’Ivoire, Lome, Togo, Dakar, Senegal, Nairobi and Lokichoggio, Kenya, Harare, Zimbabwe, Monrovia, Liberia, Khartoum, Sudan, Hassi Messaoud, Algeria, Peshawar, Pakistan, Abeche and N’djamena, Chad, Amman, Jordan, Kabul and Afghanistan. The establishment of Solenta companies in African counties (inclusive of AOC and AMO www.sOlenTA.cOM this formidable company continues to build on the solid foundations of the last few years. “We’ll be looking at world economies, and then secondly, at the demands of new customers and existing clients, to ensure progress continues,” concludes Van Schalkwyk. With business still soaring and regular additions made to its impressive fleet, it’s fair to say that for Solenta, the sky really is the limit. TAB


reD c

Top billi

fOOD & Drink

cresT fArMs


104 FOOD & DRINK • red crest Farm

red crest Farms provide South the best poultry in the land. Wit excellent conditions, it’s no won proposing a roast

wHicH cAMe firsT, the chicken or th

Crest Farms loses any sleep over. Th

duce the most irresistible chickens f

MARCH 2012 • The African Business Journal 105

africa’s dining tables with th chickens that are reared in nder customers are so often

he egg? It’s not a question that Red

he company’s aim is simply to pro-

for the community it serves.

106 FOOD & DRINK • red crest Farm

Taking flight
In 1992 Red Crest Farms was formed by Anthony Isemonger—who now has an 80 per cent in the company—and his family. It began by providing quality livestock to the marketplace and forming fruitful relationships with several major clients. It began by selling 2,000 live chickens every week to rural areas and, as word spread, the company very quickly gained ground in a competitive industry. As the business began to broaden, so did the company’s horizons and the team decided to branch into processing the chickens, building an Abattoir in 1995. The new operation started by producing small quantities of about 500 chickens per day, serving the Eastern Cape area, and soon it was dealing with processed chicken exclusively. Since then it has gradually increased its output and it is currently producing 100,000 units every week, on 300 hectares of land.

one supplier of fresh poultry in the region, and by some considerable distance. The company mainly sends out its chickens out under the popular and ubiquitous Anca brand. Meanwhile, for Spar Group they create bespoke packaging that reflects the company’s ‘Tender and Tasty’ branding. It also offers a no-name brand packaging for clients, such as Checkers. These options reinforce Red Crest’s insistence on flexibility, innovation and quality. In addition, the passionate adherence to environmental standards and the conditions of its livestock has also been pivotal to the success and reputation of the business. “We have predominantly open-sided convection houses with a curtain-wall side and wood shavings on the floor. The density is about 17 birds per square metre,” says Isemonger. “We grow them through the 35 days, at which time they are ready to be processed.” Chickens on the farm are also provided with a healthy vegetarian diet, consisting of all the nutrients required to form a healthy bird, while avoiding meat products or bones. The focus on ethics extends to a range of other health-related practices. The company has a vastly experienced and dedicated veterinarian—Herman Bosman—who has been a long-term consultant and frequently provides essential advice to staff.

Pecking order
All the processed poultry are delivered fresh into the main supermarkets, including stores in East London, Port Elizabeth and Queenstown. It also has a long term agreement with Spar Group (featured in last month’s TABJ). The farm’s reliability and productivity has seen it become the number

MARCH 2012 • The African Business Journal 107

Epol has ome long Epol has come a long way since 1916 in its quest to bring you success. o sin ince 916 n uest bring you success. brin n cces W th ad Wiith leadiing nutriitiionist by our side and passion for animals in our heart, we have utri on s i a p ssio for animals so imal m ur eart rt, t ave continually s r ve continuallly striived to delliver a perfectly ballanced diet every time. ontinuall rive n e ive v rfect a ance d t very ime. ectly ce y e Whethe your e d a m Whether your breed of animal is poulltr y, ruminant, horses or pigs our goal has been and her u p u r m n nt rs pig u go g een and a ways alwa s will be to br ng yo succ o brin you s ccess in whate er yo do ateve you do. Look out for the new look Epol packs.
For more information about Epol specific feeds and services: WEBSITE: EMAIL: WORCESTER Epol Worcester 19 Smith St., Industria, Worcester 6850 PO Box 105, Worcester 6849 Tel: 023 342 0180 Fax: 023 347 3620 BERLIN Epol Berlin 57 Hans Coetzee St, Berlin 5660 PO Box 17, Berlin Industrial Area, Berlin 5660 Tel: 043 685 2111 Fax: 043 685 2114


108 FOOD & DRINK • red crest Farm

Standard bearers
One of the company’s most resonant philosophies is preserving the integrity of poultry by exclusively supplying entire birds as opposed to individual portions. “In South Africa, based on some fairly sound research, we find that separate pieces are increasingly rejected, right across the income groups, mainly because they’re not as well regulated,” says Isemonger. “Injection rates of what they call marinade [often water] are anything between 10 and 40 per cent. People appreciate the fact that we don’t inject at all. That’s a company policy.” Although the business could be forgiven for

consolidating its position, it still has an ambitious five-year plan and is currently conducting a big upgrade on the abattoir, where sophisticated ammonia refrigeration equipment is being incorporated. There will also be a hike in the number of chickens provided, from 100 thousand, up to 150 thousand in the next couple of years. The company is also keen to further its domination of the market by clipping the wings of the frozen sector, through the increased offering of affordable fresh produce, which is increasingly the preference of consumers as they opt for a healthier lifestyle.

MARCH 2012 • The African Business Journal 109

Anca-ing the future
For companies that have big ideas and steady growth, there probably isn’t a better example than the professionalism and zeal demonstrated by Red Crest Farms. Its two decades of savvy business acumen have been a master class in product knowledge and service delivery. “It’s actually been quite an amazing story,” reflects Isemonger. “I employ 450 people, and we turn over about 12 million rand per month. The company is probably worth somewhere between 80 million and 100 million, and we started off with a 100 rand overdraft!” With an impressive legacy and almost unin-

terrupted triumphs it is no wonder that the it has entered the New Year with the same optimism that has defined the company since its inception. It is perhaps apt that 2012 marks its 20th anniversary and appropriate that, with all its experience and ambition, running the business has never been more enjoyable. Indeed, Red Crest Farms have ensured that the company is a great ‘nest egg’ for the future—quite literally. TAB www.reDcresTfArMs.cO.ZA

Fruit of our labour

fOOD & Drink



112 FOOD & DRINK • amathole Berries

MARCH 2012 • The African Business Journal 113

each and every one of amathole’s berries provides the colour, flavour and love that only passion can provide. For this berry determined business, the seed of an idea, planted nearly 20 years ago, has come to fruition—quite literally

114 FOOD & DRINK • amathole Berries

wiTH eVery new government message, the human race is expected to consume more fruit. The task of getting the correct quota becomes much more of a pleasure when the fruit you are eating is a dazzling little hand-held marvel—like a blueberry. Amathole Berries’ job is to make sure you keep getting them.

shortage of knowledge. Nearly 20 years ago Philip Howes dreamt of vines cascading across land and plentiful fruit to show for his labour. After the years of preparation required, the orchards of Amathole Berries are now a signature across the landscape. “Amathole Berries is the realisation of a dream. I’d been trying to do a large blueberry project for years and had been breaking down the doors of most development funders and producers,” he explains. “Eventually the planets aligned and the IDC (Industrial Development Corporation) in this country decided to focus on berries as one of their strategic crops.”

Realisation of a dream
The seasons come and the seasons go—to a good fruit provider, it is the reality they live by. For four years Amathole Berries has been supplying delicious blueberries to a grateful public, but to get this far has taken time, dedication and no

MARCH 2012 • The African Business Journal 115

Over 65 years of providing “Ingrained Quality” products & service to our valued customers.

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Equipped with this endorsement Howes—who is not only a fruit farmer but also a keen horticulturalist—has put his plan into action and sought to become a leader in the fledgling industry, as well as creating meaningful rural employment, particularly for women. His central passion has been to create a sustainable, higher-value product and, so far, it’s paying off. Furthermore, because the art of blueberry growth is a fairly straight forward science, enthusiastic staff are very easily trained. Currently the company picks its fruit and takes it directly to on-site cold stores on a halfhourly basis. The batches are then delivered to

local markets or exported. Also, the class 2 fruit goes into the frozen range, which is flown to Johannesburg or Cape Town, primarily for muffin and pie related projects.

Society’s ties
Amathole’s inseparable link to the local community is something that is very close to Howes’s heart and he takes social responsibility as seriously as profits. “I’m an African, I believe in South Africa and I think the one way we’re going right, is to empower people. It stabilises the business and galvanises the region,” he reflects. Many of the employees are also significant

116 FOOD & DRINK • amathole Berries

MARCH 2012 • The African Business Journal 117

shareholders of the business, and will eventually end up owning 52 per cent of the business (at the moment the figure stands at 40). “For this company, we are not obsessed by the corporate bottom line. Our pro-people philosophy forces us to get down to grass roots, incorporate training programmes and provide people with positive education.” Teaching its staff does not involve how to farm blueberries either, it’s also about how to open a bank account, and even teach people how to write their names for the first time. The theory being that if you train them to be good citizens, they’ll end up being good blueberry farmers.

Growing the company
Amathole also has ‘associated growers’ or ‘outgrowers’—primarily black farmers—who the company assists with the planting blueberries on their own farms. These are standalone businesses, with part of the agreement being that Amathole can farm on the land. “Our plan is to farm on 1,000 hectares, of which 225 will be owned by ourselves, and the other 800, or 775 hectares will be owned, exclusively and 100 per cent, by farm owners,” says Howes. The out-growers land was planted last year and again this year, so they will start to receive crops next year. The first business is only ten

118 FOOD & DRINK • amathole Berries

MARCH 2012 • The African Business Journal 119

minutes away from the Amathole headquarters, enabling the fruit to be brought in fresh. This increase in production will be vital as the appetite for blueberries increases and more people opt for a healthy lifestyle. Indeed, focusing on low-chill, early varieties has been essential, as the market continues to grow 25-30 per cent every year. Amathole will plant 15 and 20 hectares a year until it has achieved the vision of 225 hectare by 2021. There are also other expansions planned for a processing plant, which will concentrate on jam and the yoghurt bases. In addition, the company will be venturing into cold-weather berry ranges, such as cranberries, loganberries and cranberries. Amatole and Philip Howes have certainly proved that a small fruit can produce very big results, breathing life into the business landscape, promoting optimism and transforming the lives of the people living on it. Success has never tasted so sweet. TAB www.AMATHOleBerries.cO.ZA



cic enerGy cOrPOrATiOn
life and coal

122 ENERGY • cIc energy corporation

MARCH 2012 • The African Business Journal 123

Aurecon Group

Your partner of choice in engineering excellence

Aurecon provides engineering, management and specialist technical services for government and private sector clients globally. The group has been involved in projects that span multiple markets across Africa, Asia Pacific and the Middle East. Our global team of highly skilled engineers and specialists provides a wide range of services throughout the project lifecycle, while our broad expertise in the resources market includes mine infrastructure design and bulk material handling, encompassing rail, stockpiles, stackers/reclaimers, shiploaders and ports. Our successful track record of service delivery for large-scale, integrated resources projects guarantees our clients peace of mind, making Aurecon the partner of choice for your next project. For more information, contact us at tel: +27 12 427 2000 or email:

Environmental services Civil and structural engineering Mine infrastructure design Electrical and instrumentation EPCM projects Bulk material handling and transport Development of mining villages Geotechnical engineering Mechanical engineering Transport

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The first half decade for a new mining venture often determines whether a company is in it for the long haul. For the cIc energy corporation having a licence to drill is beginning to reap rewards
THis HuGely AMBiTiOus company has successfully embarked on the vital early stages of exploration. It’s a brave move to try and establish a business in an industry with such history but this company is certainly enjoying life at the rock face.

ideas and industry experience. It has been listed on the Toronto Stock Exchange (ELC:TSX) and on the Botswana Stock Exchange (CIC Energy: BSE) since 2006. President Greg Kinross is one of the cofounders. “Our project is a 2.4 billion tonne coal deposit, and the key objective or strategy of the company has been to develop microbial products,” he explains. “There are two power plant projects in development, subject to completing all site agreements, one in South Africa, and the other Botswana.” These projects—which will supply vital electricity throughout both regions—will be at the core

Leap of faith
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124 ENERGY • cIc energy corporation

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of the company’s output and will be the main source of products and services in what it hopes will be a very prosperous future. Contract negotiations with clients, based on the current engineering and exploration stages, have proved very promising so far. The commitment to a fast, meticulous strategy has seen the company achieve many significant milestones. Various studies of the site have been highly accelerated and very successful during these early, formative years. The right side of the tracks Pivotal to the triumphant planning and endeavour has been the highly experienced

MARCH 2012 • The African Business Journal 125

management team, backed up by a streetwise group of consultants. This network of support has ensured that everything has run smoothly and all eventualities have been covered. “There have been many challenges over the last few years, but the fundamental power requirement and the need for infrastructure in this region, has been very compelling,” reflects Kinross. “We’re in the region of major power shortages, so there is demand for energy from major industrial users who want to develop big industrial plants.” One of the major challenges along the way has been changes in government legislation and,

although at times inconvenient Kinross believes that it will have a positive impact. “In the long-term it helps, and these changes weren’t aimed at us specifically, they were made for good reasons, such as quality, action, and implementation.” Another galvanising effect of the projects will be the inevitable creation of jobs in the local community. In the construction phase it is just short of ten thousand people, while in the occupational stage one and a half thousand. The real extended benefit will come through the secondary economic impact, for example, in South Africa, where a town of 50,000 people where they’ve got industries, schools, retail and

126 ENERGY • cIc energy corporation

With continuing demand from power stations around the world for thermal coal, CIC Energy is pursuing the opportunity to export seaborne traded steam coal from the M2 (lower) coal seams of its Mmamabula Coal Field in Botswana.

key eleMenTs Of THe exPOrT cOAl PrOJecT incluDe:
Dedicated mines with multi-product (double stage) beneficiation plants, as well as a rapid rail loadout, envisaged to be built at the Mmamabula site to accommodate the production of 24 million tonnes per year for 35 years. An approximately 1,500 kilometer Trans Kalahari Rail line (“TKR”), constructed by a transportation consortium. Currently, the preferred rail route is to the west coast of southern Africa, through Botswana to a Namibian port. At the Namibian coast, a coal terminal and loading facility is envisaged to be built to be able to load large ocean going vessels at a high rate to minimize demurrage cost.

commerce, which will be powered by the station and the coal mine.

Taking a concept of developing a coal-fired power plant in Botswana, for export delivery to South Africa, and taking it to the cusp of delivery has been another notable achievement The project has been well-supported and promoted by financial institutions and stakeholders all over the world. “We are now eagerly awaiting the opening of the plant. The real reward will come with opening the doors and the realisation that all the combine effort has been worth it. This is what we

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work towards every day,” enthused Kincross. Even the economic downturn has failed to derail CIC’s ambitions and, perhaps its story is a good indication of when ambition can do when faced with potential adversity. There has been very good security underpinning the financial side, and the best form of lending is against the project with incredible potential and a healthy forecast, both of which have defined CIC from the beginning of the journey. With the most rewarding chapter of the company’s story still to come, the next few years will set the stage for a business that will operate for decades, create work, deliver power

and genuinely transform lives and communities throughout the African continent. This is a company with boundless energy and there is plenty more where that came from. TAB





nD success


130 MINING • Fermel mining

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mechanised mining solutions supplier Fermel mining has been at the forefront of the South african resources boom and has in recent years spread it wings into markets across the continent and beyond.
OriGinAlly fOrMeD As a small engineering company working out of a small shop in Johannesburg, Fermel Mining has grown into a leading provider of mining machinery and equipment, which can boast of close to half a century of engineering excellence. The supplier of mechanised mining solutions for underground trackless operations currently targets markets across Africa and in resourcerich parts of South America. Fermel Mining has a broad portfolio of clients from across the resources sector, and produces machines and provides solutions for a number of mineral markets, which include platinum, precious metals, gold, diamonds, copper, zinc, manganese and coal. Along with its underground mechanised machinery offering, the firm also integrate its product supply and aftersales support into one seamless package.

132 MINING • Fermel mining

A changing focus
Fermel Mining started operating in the early 1960s as a family-owned small engineering workshop that provided services to larger engineering entities. As the years passed the company’s focus began to shift away from the service industry and towards design; a change that operations director Angelo Iovino says coincided with a boom in South Africa’s underground coalmining industry. “Coalmining was the bulk of our business up until the late 1990s and we began to look at other markets,” remarks Iovino. “Working with South Africa’s Department Of Trade And Industry we embarked on many overseas missions in North and South America with a specific focus on hard-rock markets and the

mechanisation requirements of the mines within these particular markets.” In the Americas the company found itself developing technology for the fast-growing platinum mining market, which would later provide the company with a sturdy platform from which it was able to enter South Africa’s very own booming platinum production sector. “Either by good fortune or by the foresight of our management at the time we found that we were in a good position having developed new products specifically for the platinum industry at the very start of the boom,” Iovino remarks.

Underside support
The company supplies utility support vehicles for underground mining operations—specifically

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vehicles that are able to cater for tasks outside of primary mining tasks. More recently it has been manufacturing its own range of production machines and has become more involved in the primary functions side of mining by providing machines for tasks such as loading and drilling. “The dimensional constraints of an underground operation determine the dimensions of the machines, and therefore the operational capability of the machines, so we package solutions to fit within these particular constraints,” explains Iovino.

“We understand that our business is based on our ability to produce the intellectual property that meets the market’s requirements. “The market is always looking for ways to reduce costs, increase productivity, and reduce the extent of manual labour by introducing mechanisation underground,” he adds. “Our machines are also able to improve the safety of underground mines, but there are always new challenges in this respect and these must be met, creating the opportunity for our engineers to design equipment that meet changing requirements.”

134 MINING • Fermel mining

Iovino says that 50 per cent of the company’s staff is dedicated to its after-market operations. “We have a keen understanding that selling a piece of equipment is only a portion of the relationship one needs to create with the client,” he notes. “After the machine has been sold it is probably more important than the sale itself, because without this service you would not be able to generate further sales. “It is therefore critical to have the right logistics in place with regards to being able to supply and support our clients with replacement parts, which is why we have strategically

placed warehouses in many of the countries that we operate in,” Iovino adds.

Assistance abroad
Fermel Mining supplies machinery for both local mines and export markets. “We export to neighbouring countries and we have set up Fermel Mining Botswana to develop our interests in Botswana and to act as our agent and product distributor within the country,” says Iovino. The company has also set up a separate entity in Zambia from where the growing market in the Republic of Congo is managed.

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“You’ll find our machines in Namibia, Botswana, Zimbabwe, Zambia, Tanzania and even as far as Ghana,” states Iovino. “More recently we’ve started talking to potential partners in South America, as we’ve sold equipment into Peru and currently looking to expand into the Chilean market.” With growing global responsibilities the company has found itself exposed to the risks of foreign markets. “We witness all the upturns and glitches that our financial partners in Europe experience and being based in South Africa means that we have

not been excluded from that,” notes Iovino. “But with the continued demand for resources, there can be no doubt that we believe we are working in the right space, and there is certainly potential for growth.” As it aims to become more of a global player, rather than national entity, Fermel Mining is actively looking for opportunities to grow outside of its traditional markets and put in place the infrastructure to serve underground mining customers across the world. TAB www.ferMel.cO.ZA




From its base in South africa the phosphate and phosphoric acid producer Foskor is bringing much needed minerals to a global marketplace.

138 MINING • Foskor (Pty) ltd

PrOuD sOuTH AfricAn company Foskor (Pty) Limited is one of the planet’s largest producers of phosphate and phosphoric acid and through its international focus is playing a vital role in spreading the growing reputation of South African businesses abroad. The company unlocks its shareholder value through the profitable, responsible and sustainable beneficiation of phosphate rock into either phosphoric acid or phosphate-based granular fertilisers, which are sold across the globe.

Foskor has in place a set of deeply imbedded values that the Foskor family promises to adhere to. These values include a commitment to ensure all its deals are ‘resolved’ as per its competitive advantage. They also consists of safeguarding the ‘responsibility’ it takes in each and every deal it makes to ensure they are handled and followed through with impeccable execution, as well as a promise to act in a ‘respected’ manner and ensuring its customers are duly ‘rewarded’.

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140 MINING • Foskor (Pty) ltd

Committed to its workforce
Foskor has shown a commitment to its workforce and, based on independent research by the CRF Institute, has been certified as a Best Employer South Africa 2011/12 for its outstanding HR policies and excellent working conditions. The company maintains two separate operations that between them employee more than 1,700 people. Its Phalaborwa mining operation employs some 1,133 workers and has been recognised with a DEKRA Five Shields award. At Phalaborwa the company mines and processes phosphate rock concentrate, which is

crucial for stimulating and raising crop yields. Its Richards Bay acid and fertiliser operation employs some 602 works and has also been awarded the DEKRA Five Shields accolade. The Richards Bay plant manufactures sulphuric acid, phosphoric acid and phosphatebased granular fertilisers by using phosphate rock as a raw material. Both sites have been certified ISO 9001 (Quality Management), ISO 14001 (Environmental Management), OHSAS 18001 (Occupational Health and Safety Management) and SANS 16001 (HIV/AIDS Management).

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142 MINING • Foskor (Pty) ltd

Close to 84 per cent of Phalaborwa’s phosphate rock concentrate is railed to Richards Bay and the rest is sold externally. Phosphoric acid has agricultural, industrial, medical and retail applications, and it is used in a range of products from catalysts and rust proofing materials, to chemical reagents, latex, dental cements, tooth whiteners, toothpaste, disinfectants, food supplements, carbonated beverages, waxes, polishes and animal feeds.

Since that time it has blossomed into an international operation that plays a broad across a variety of industries. Today it is the only vertically-integrated producer of phosphate rock, phosphoric acid and granular fertiliser in the country. Foskor is a leading supplier of granular fertilisers such as diammonium phosphate and monoammonium phosphate, and core ingredients in final fertiliser products comprising nitrogen, phosphates and potassium. It has exported products to India, Japan, the Netherlands, Bangladesh and Dubai, and also sells a small quantity of products locally.

A fertile future
Foskor was founded by the IDC in 1951 to produce phosphates for South Africa’s agricultural sector.

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The company is planning on growing its distribution networks through a market diversification strategy and will focus on product diversification through both acquisitive and organic growth to balance its portfolio, steady sales volumes and protect cash flow during economic downturns. It is committed to implementing financial and managerial discipline, while raising output and containing input costs, but is keen to strengthen its brand by implementing productivity enhancing growth strategies. With a proud history and strong focus on the countries it is targeting, Foskor is finding

it is playing an ever more important role in the international market for phosphate and phosphoric acid. TAB www.fOskOr.cO.ZA

144 MINING • Continental Coal Limited


another coal mine i to plus-10 mtpa ro


o co m vi to Th

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nTAl cOAl

in 2012 & onwards om coal in 2015

on track to commence 2012 production at its third operating oal mine to enter play in under two years in South africa’s major coal fields surrounded by existing producing mines and ital infrastructure, can continental coal hit its 10 million onnes per annum rom coal production goal in 2015? The answer is a resounding yes.

146 MINING • Continental Coal Limited

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in MAy 2010, Continental Coal Limited (ASX: CCC) (“Continental”) began cementing itself as a coal producer for the export and domestic markets, and a regular face in South Africa’s major coal fields, by commencing production at its Vlakvarkfontein mine. Now less than two years on—targeting production from its portfolio of predominantly export thermal coal mines of 10 million tonnes per annum (and higher) run-of-mine (ROM) by 2015—“Contie,” as the company’s executive types affectionately put it, stands strong with two mines in production (Vlakvarkfontein and Ferreira), two development mines where production is imminent

(Penumbra and Wittekrans) more to come from longer-term projects Vlakplaats, Mooifontein, Wesselton II, and Leiden. Characterising Continental is simple: This is a group that pans the full gauntlet of exploration and development with multiple mines well-located to existing infrastructure in active coal producing regions. Furthermore, once the Penumbra (in the third quarter of 2012) and Wittekrans (2013) mines commence output, Continental will surpass six million tonnes annual production; the next big step towards its impressive yet achievable 2015 vision.

148 MINING • Continental Coal Limited

lOcATinG cOnTinenTAl
Up & rUnnInG CoaL Vlakvarkfontein - Commenced production in May 2010, delivering 432,565 tonnes ROM (2010) and 1,200,000 tonnes ROM (2011). The mine has 17 million tonnes of resource sufficient for a 10-plus year mine life, and with three offtake agreements inked, Continental targets output of 100,000 tonnes of domestic quality thermal coal per month. “Getting to a rail line in most cases is a few hundred metres, and the rail and port allocation is there so that’s the uniqueness about the Continental assets,” Continental’s executive chairman Peter Landau told IRJ in May 2010. “As a junior, the market edge for us is that our assets are all adjacent to existing mining operations, so we’re mining the same coal seams as our peers.” Ferreira – Acquired by Continental in November 2010—producing 942,950 tonnes ROM and generating sales of 389,680 tonnes (export) for that same year—Ferreira is enviably well-placed just two kilometres from Continental’s 150,000tpm Delta Processing Operations and the adjacent 1.2 million tonne per annum Anthra railway siding on the coal-line to the Richards Bay coal terminal. The company states that production of 136,514 tonnes of a primary export thermal coal product during the quarter ended 30 June 2011 from the Delta Processing Operations; a 72 per cent increase on the March 2011 quarter and a 119 per cent increase on the December quarter. Production from this project will be gradually replaced by Penumbra following the commencement of underground operations at this near-term development project in 2012.

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aBoUT To EnTEr pLay penumbra - Production from the Penumbra coal project is forecast to achieve a targeted rate of 750,000 tonnes per annum ROM in the third quarter of 2012, Continental states. As outlined by the project’s Bankable Feasibility Study (BFS), its development capital cost is forecast at ZAR284m (approximately A$40 million), with the majority of 2011-2012 expenditure focused on the development and infrastructure of the underground mine. In line with plans to move from beneficiating production from Ferreira to beneficiating production from Penumbra at the company’s Delta Processing Operations, and to use the Anthra Rail Siding for transport to the Richards Bay coal terminal in the same manner, existing offtake agreements will also be sustained across project transition. De Wittekrans Complex - Home to total proven and probable saleable reserves of 43.77 million tonnes and JORC compliant resources of 167 million tonnes, the Wittekrans coal project will become the company’s “largest new mine development in the coming years,” says Continental, noting plans for initial production of 3.6 million tonnes per annum ROM from conventional opencast and underground mining operations at Wittekrans over a 30-year mine life. Within the Complex there are four projects— De Wittekrans, Knapdaar, Vaalbank and Project X—and reports state that project development is on track to begin in the second half of 2012 with full production from the proposed initial open cast operation expected in 2013. Approximately 27 per cent of the total saleable reserves are to be mined from the proposed open cast operation, the company says, with 73 per cent to be mined from proposed underground mine development.

150 MINING • Continental Coal Limited

2012 production at Penumbra
It goes without saying that Continental’s successes at Vlakvarkfontein and Ferreira are well known, as is the breakneck speed at which both coal projects saw development through to fruition. Aided in part by the company’s smart moves to secure projects in existing coal-producing provinces surrounded by the bulk commodity infrastructure necessary to make-or-break a mine, and in equal measure by the team’s steadfast motivation to bring its projects along, the past couple of years have delivered a litany of triumphs from both operations.

Vlakvarkfontein’s 17 million tonnes of resource and 10-plus year mine life is backed by three offtake agreements—confirming somewhat unsurprisingly that parties are keen to get their hands on the 100,000 tonnes of thermal coal that Continental targets per monthly output. And at just two kilometres from Continental’s 150,000tpm Delta Processing Operations, adjacent to the 1.2 million tonne per annum Anthra railway siding which provides swift and sizable passage direct to the Richards Bay coal terminal, Ferreira’s infrastructure setup is about as good as it gets.

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Both operating mines suggest that Continental’s plans to take Penumbra to first coal in 2012, leading to 750,000 tonnes of run of mine production per year, are in the right hands. In fact, rumour has it that the team was a little ahead of schedule in January, having sent in the underground contractors and started work on the concrete ramp down into the boxcut. Drawing similarities between up-and-running Ferreira and incoming Penumbra is easily done and with good reason. As production mounts from Penumbra’s underground operations it will gradually replace that of Ferreira, utilising both Continental’s

Delta Processing Operations and the Anthra railway siding just like its predecessor, and also assuming the company’s existing offtake agreements in what looks to be a smooth transition, sustaining plans to grow the overall production profile of the company portfolio. In addition, the commencement of production at Wittekrans will, by all accounts, prove pivotal as Continental continues towards the 10 million-plus tonnes per annum ROM 2015 goal.

Stepping up with Wittekrans in 2013
Slated to deliver another 3.6 million tonnes of production and housing a current resource capable of

152 MINING • Continental Coal Limited

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sustaining a 30-plus year mine life, Wittekrans will be the next mine to come online after Penumbra. In line with company aims to hit full production from Wittekrans’ proposed initial open cast operation in 2013, optimisation works are underway ahead of plans for debt financing to fund project development. And given that the company aims to develop one new mine every twelve months, there’s every reason to suppose that, permits depending, construction at Wittekrans could be underway by the second half of 2012. Penumbra’s debt financing agreement may offer some indication of the kind of arrangement

Continental envisages for Wittekrans as well. Both Barclays and ABSA have agreed to stump up an aggregate debt facility of US$65 million for Penumbra’s development, and given that the project remains on track (if not a little ahead) it is quite possible that the reflection it has on Continental will prove attractive to would-be Wittekrans debt financing participants. Equally so, according to the September 2011 completed BFS, Wittekrans looks set for export coal operating costs of around US$55 per tonne; a comfortable operating margin for what remains on course to be a large, welllinked, well-mastered near-term coal play.

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Time to wake up the markets
While today Continental’s cashflow, project and annual output all remain on the up-and-up, a glance back to five years ago delivers less favourable market memories of when coal was far from a standout investment option in terms of commodities. Continental’s efforts in scouting out advantageously priced opportunities in prime South African producing coal ground back in 2008—prior to export coal prices rising significantly—have and continue to pay off, and the company’s move to secure key assets ahead of the crowd is not one to forget now that its portfolio and production profile continues to grow. The 2015 plus-10 million tonnes per annum ROM coal production target edges ever closer and it’s likely that by the time Penumbra and Wittekrans take current output over six million tonnes per year, the markets will have fully caught on. Production at Penumbra in 2012 is on track. Plans for Wittekrans are as well, backed by past operational and financing successes. For any coal investor keen to gain exposure to the full ambit of exploration-through-to-output, it goes without saying that Continental obviously a stock worth grabbing. TAB www.cOnTicOAl.cOM

154 MINING • Equatorial Resources

equATOriAl res

PiOneerinG AfricA As nexT irOn Ore PrOVinc

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THe wOrlD’s ce



156 MINING • Equatorial Resources

africa continues to transform into iron ore’s next major frontier with plans in place for the development of several new multibillion tonne projects. and as the reality of african iron ore production unfolds, which mining companies will traverse the many issues surrounding infrastructure, generate lasting value, and satisfy environmental and social concerns en-route?
wHicH AsseTs HAVe the capacity to provide nearterm production backed by iron mineralisation of a scale and quality that warrants world-class mines, coupled with management who possess the drive and motivation to meet the many challenges of building an operating iron ore mine and pioneering the world’s next iron ore province? With two 100 per cent-owned large scale iron projects in the Republic of Congo (ROC), Equatorial Resources (ASX: EqX) (“Equatorial”) has already attracted investment from the lion’s share of London’s blue chip natural resources institutions. Equatorial’s Mayoko-Moussondji Iron Project (“Mayoko”) has access to existing bulk commodity infrastructure and an exploration target of almost four billion tonnes of iron mineralisation, and the company’s confirmed geological model supports the potential to fast-track high grade hematite production to generate early cashflow.

“I see the West of africa as the world’s third great frontier for iron ore. The value that has been created out of the Pilbara and South america is going to be matched in the next 20 years by an incredible ramp up in iron ore production along the west coast of africa,” John Welborn, managing director and chief executive says.

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“The challenge is the development of infrastructure, and at Mayoko we have the opportunity to rapidly advance to production given the existence of operational rail and port facilities which service the project.” Equatorial is also developing its 100 per cent-owned Badondo Iron Project in the ROC’s northwest—similar in geophysical scale to neighbour Sundance’s Mbalam project, with haematite samples collected from surface bearing grades as high as 68 per cent iron. The project’s

158 MINING • Equatorial Resources







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exploration target weighs in at between 1.3-2.2 billion tonnes (at 30 per cent to 65 per cent iron) and combined with Mayoko, Equatorial could be sitting on up to six billion tonnes of iron across its wholly owned ground; potentially the largest iron footprint in the region. “Badondo is an extremely exciting project,” Welborn says. “Our team of very experienced geologists continue to maintain that the ground is the best they’ve seen and we are looking forward to the current drilling program confirming the extremely high grade potential of this asset.” Mayoko’s maiden JORC resource is on course for release during the second half of 2012, and the company will continue to fasttrack its feasibility work to capitalise on the benefit of having existing rail and port infrastructure. Welborn says that Equatorial is going to be “a big contributor” in the opening up of Africa as the world’s next iron ore province, and given the

explorer-developer’s unique potential to generate early cashflow and subsequent scalable production, it seems a fitting observation to make.

Early DSO & infrastructure at Mayoko
Having secured its wholly-owned 1,000 squarekilometre permit at Mayoko in June 2010, Equatorial’s belief in the area’s potential was demonstrated in December 2011 by the addition of two new 100 per cent-owned prospecting permits contiguous to its existing tenement, increasing the company landholding to more than 3,700 square kilometres. The past 18 months have been extraordinarily productive, Welborn says, adding that Equatorial was able to hit the ground running at Mayoko thanks to the bulk commodity railway line that runs through its permits to the deepwater port of Pointe-Noire. “We have three drill rigs working to define a maiden JORC resource there in the second half of this year,” he explains.

160 MINING • Equatorial Resources


“Expanding our footprint by continuing along that railway west towards the Gabon border, adding around 3,000 more square-kilometres, is important given how globally significant the resource looks to be.” The rail and access to port are pivotal in Equatorial’s plans to reach production quickly.

Likening Mayoko to the Tonkolili Iron Project— from which London-listed African Minerals Limited (L:AMI) loaded the first shipment to leave Sierra Leone’s shores for 30 years in 2011— Welborn notes that projects triggering the start of West Africa’s globally significant production profile are those with the infrastructure edge.

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generating a sufficient sized JORC resource

“at mayoko, with our huge exploration target made up of more than 500 million tonnes of haematite potential overlaying a large body of magnetite, there is the very real opportunity to commence production using existing infrastructure and to then develop a much higher capacity production profile in due course,” he says.
“That’s why we have a particular approach. It’s unusual to be doing the detailed feasibility work we’re doing on the rail and port at our relatively early stage. We’re drilling out our exploration targets to define a maiden resource and at the same time preparing for a ramp up to production.” Mayoko’s iron mineralisation consists of a large magnetite banded iron formation (BIF) capped by weathered haematite. At the Makengui Prospect, from which surface haematite samples graded as high as 62 per cent iron, initial drilling in 2011 contained intersections such as ~20 metres from surface at 60 per cent iron as part of a 40 metre intersection showing 55 per cent iron. The haematite cap is the focus for the current 33,000 metre drilling programme focused on

of haematite mineralisation to justify initial production. “The current drilling programme will give us the opportunity to delineate an initial resource of between 50 and 100 million tonnes of iron ore,” Welborn says. “This will come from an area which represents a small fraction of the 46 kilometres of iron strike on the tenement. “The initial JORC resource will enable us to identify the high quality, high grade material that we can ship immediately using existing infrastructure to start generating cashflow. The resource base will continue to grow as we work on our longer-term goal to convert our large exploration targets into resources.” Equatorial has a systematic approach to the work on rail and port requirements seldom seen at this stage of play. A second stage rail agreement with the ROC rail authority has been inked, which will allow the company to fund rail refurbishment works confident in the knowledge that its expenditures will be offset as pre-payments against future transport charges. Negotiations on similar agreements for building ship loading facilities to cater to the first production profile are well advanced, and inland—where the team has an extensive heavy equipment fleet—Equatorial

162 MINING • Equatorial Resources

ing facilities which were broken before we arrived, providing power and establishing the local medical clinic to service our workers and provide a previously non-existent service to the local population.”
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Equipped with the landholding, high grades, infrastructure, funding, government accords and local presence to take Mayoko into quick and longterm production, and working with world leading consultants to get ahead in environmental impact works, Equatorial continues to attract the attention of investors by delivering on Mayoko’s potential.

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In CMEC’s Belinga project, Core Mining’s Avima project (note Glencore International AG’s April 2011 investment in the company) and Sundance’s Mbalam project (and Sichuan Hanlong Group’s A$1.65 takeover bid for the company), the ROC’s northwest houses a knot of heavy duty iron-focused residents with multibillion dollar values. These groups affirm investor appetite for the locale, and also enable Equatorial to draw synergies for Badondo with some of its more advanced neighbours. SRK Consulting completed detailed mapping and sampling across the Badondo’s targets during 2011, Welborn says. These results are in the pipeline, and given that rock chip assays confirm high grade surface haematite of up to 68 per cent iron,

has already built an air strip, exploration base camp housing 40 staff, sample lab and satellite telecommunications and internet facilities. In taking up residence at Mayoko, Welborn adds, Equatorial has chosen to integrate its facilities within the project’s namesake village and hired over 100 local people in the process. “We have more than 100 locals as staff onsite training with us and there are various programmes in relation to up-skilling the local population with a view to having them work with us for the long-term,” he explains. “We’ve also invested in facilities for the village, not just our camp: Water purification and pump-

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anticipation is mounting ahead of the scout drilling set to commence in the first quarter of 2012. “This campaign will see us put down a series of scout holes to illustrate the potential. The best way of describing what we’re looking to achieve from this is to look at Mbalam when Sundance first purchased the project,” Welborn explains. “They had a limited amount of historical drill results which demonstrated the potential and they’ve now defined a JORC reserve of 352 million tonnes at 62 per cent iron. At Badondo, our scout drilling programme is designed to achieve a similar start point and give an early indication of the scale and quality of future resources.” Equatorial’s first pass drilling will identify the depth and consistency of the high grade haematite found at Badondo and, noting that the only downside of having so much iron is that it can be tough to drill, Welborn says that the team eagerly awaits the arrival of its specially built, heavy duty yet highly portable diamond drill rig currently on its way from Perth. While perhaps overshadowed by Mayoko—and Equatorial’s break-neck speed progress at the flagship project—Badondo’s potential hasn’t gone amiss with the multinationals. It might not have fairly impacted the company’s market cap just yet, but if Sundance’s reception with Mbalam offers any indication, it’s possible that the scout campaign could pose massive re-rating implications for the company.
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Interest swirls in Africa’s iron ore frontier

During 2011 a swell of multinational miners clamoured to get into the roc, not least Xstrata, Glencore, hanlong, and most recently exxaro resources with a a$338-million cash takeover bid for african Iron; a company in which equatorial holds a crucial 20 per cent interest.

164 MINING • Equatorial Resources


“I am convinced that in 20-30 years’ time people will say that it was obvious Africa would become a major iron ore producer. Currently we have almost one billion tonnes of seaborne iron ore hitting the market every year. In the future this will grow and a significant percentage of that growth will come out of Africa,” Welborn says.

“The Congo has had strong and stable oil production for more than 30 years. The new mining code of 2005 was a direct response to the government’s desire to diversify the economy and reduce the reliance on the oil industry. Mining has a huge future in the ROC and iron ore will lead the way.”

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and its early positioning of Mayoko towards fast production have gained the good opinion of international investors, and moves to carry out detailed feasibility studies and work with the government on port and rail reflect an ability to think outside the box and maximise competitive advantages. Welborn has even mastered French—a product of a professional rugby career in France— which has been another important factor when coupled with Equatorial’s commitment to be a positive economic force in the country; resulting in strong support from the ROC government for the company’s agenda. 2012 will be a monumental year for Equatorial with a maiden JORC resource at Mayoko underpinning plans to fast-track production and move the company from an ambitious, successful explorer-developer to a first stage producer. In the longer term, the expansion of Mayoko’s capacity and realising potential from Badondo will form steps in what promises to be a fasciEquatorial is emerging as one of the few companies blessed with both large projects and infrastructure advantages, and has a genuine local-level commitment to lead Africa’s emergence as the next iron ore frontier. The prior successes of its board and management (think Mantra Resources and Coalspur Mines) www.equATOriAlresOurces.cOM.Au nating story. All told, Equatorial’s goal to become a large iron miner and a pioneer of Africa as the world’s next iron ore province is a mere matter of time from fruition. TAB


Access All AreA



as part of a multi-discipline logistics group access Freight africa has been providing Sub-Saharan businesses with a fast service they can rely on.

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wiTH BrAncHes in the regional hub of Johannesburg and the busy South African port of Durban, as well as representation in Zambia, Malawi and the Democratic Republic of Congo, Access Freight Africa (AFA) has a truly regional reach across Sub-Saharan African. Since its formation in 2001, the company has been involved in the movement of high-volume bulk products into and out of the Africa continent, and has enabled its many clients the benefits of a fast and reliable service. AFA’s team of competent and efficient staff utilise extensive knowledge and experience of the logistics industry to bring the best possible service to its many customers who hail from an assortment of different backgrounds.

Its customers range from those working in the region’s fast-growing resources sector, to companies involved in commodity trading and the agricultural sectors. Through its use of the extensive road transport and warehousing infrastructure South Africa has to offer, AFA has become a national leader in the movement of bulk products across large distances and has found itself playing a key role in helping many regional resource players develop their very own trade networks. AFA’s chief operating officer Jeremy Carr joined the Access Freight Group in January 2007 having worked within the logistics industry since completing his Bachelor of Commerce degree back in 1995.

MARCH 2012 • The African Business Journal 169

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Carr’s previous senior managerial experience has helped bring a professional edge to the business’s operation.

AFL has been in operation for more than 20 years and in that time has developed a strong reputation for reliability among its clients, while also continuing to tune its capabilities into the changing demands of customers. The company’s world-class container freight station is located just five kilometres from the busiest container depot in Africa. From out-of-gauge and abnormal cargo, to the handling and movement of bulk minerals, fresh produce, automotives and palletised goods, AFL has developed into one of South Africa’s leading transport and distribution companies.

Across Africa
As part of the wider Access Freight Group, AFA has been able to utilise the abilities of its sister companies to move product to and from destinations across the planet. One such firm is Access Freight Logistics (AFL), which specialises in the handling and movement of any type of containerised cargo through Durban’s bustling port.

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Both AFL and AFA are closely related to Access Freight International (AFI), a fully-fledged global freight forwarding and clearing company. This entity’s is able to provide multimodal freight forwarding and clearing services, which includes forwarding, seafreight, airfreight, customs clearing, warehousing and transport. Its global network of agents cover the globe and ensure the cargo of its clients is transported in the most economical and intelligent way possible. AFI operates the Access Business Park, a 12,000 metre square warehouse facility, and the

company has representation across South Africa with bases in in Gauteng, Western Cape and KwaZulu Natal. Access Freight Group is committed to making a meaningful contribution to the empowerment of all South Africans and had a focus on real empowerment by utilising a broad-based approach. Due to the expansion of the Chinese economy, it also operates the Project Cargo scheme, which ensures that while its freight forwarding imports have a worldwide focus, China remains the key target market.

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MARCH 2012 • The African Business Journal 173

For 165 years our pulse has been beating for shipping.
Cargoes, ports and ships’ technology change; our approach to shipping does not. For us it is linked with our commitment to innovation, reliability, safety and sustainability. Our service network connects the major ports of South and West Africa with the market places around the world.

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Alongside AFL and AFI, AFA has two other sister companies in Access Freight Projects—a specialist division of the Access Group that deals exclusively with project cargo—and Access Transport, which deals in local cartage and transport throughout South Africa, as well as all aspects of cross-border transportation. Being in such good company is definite bonus for AFA, which has already made its individual mark by carving out a reliable and respectable reputation within Africa’s hectic logistics market. TAB www.Access.cO.ZA/Access-freiGHT-AfricA.PHP


sekO w

logical log




176 HAULAGE • Seko Worldwide

Since it started operating back in 2008, supply chain specialist SeKo South africa has been utilising its access to a global logistical network to bring a high level of service to the local market.
As PArT Of a global logistics giant, SEKO South Africa has brought to market a professional, organised and trustworthy service that has enjoyed steady growth throughout its four short years. Having built a career working in big business the firm’s managing director, Richard Mallabone, left behind his corporate background to introduce the SEKO franchise to the South Africa.

Set up in 2008, SEKO South Africa has gone from strength to strength since starting its operations. “The focus of our business is inclinational forwarding and clearing, and we make sure that we take a very hands-on approach to our business,” says Mallabone. Mallabone likens SEKO’s global model to the famous Starbucks brand of coffee houses. “There was another forwarder using the same network, but who hadn’t done anything with it, so upon leaving my old role a couple of shareholders and I brought the SEKO brand to South Africa,” he notes.

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Despite its access to a worldwide corporation’s framework and system, Mallabone contends that SEKO South Africa was not about what was inherited, but what could be made out of becoming the latest in a long line of SEKO franchises. “What we get as a franchisee are the systems that drive our model, such as the global SEkO network, but we also had to get the equipment, the people and the money in place as well,” says Mallabone. From its base in the USA, SEKO Logistics has become a global leader in supply chain technology, goods transportation and logistics execution best practices.

It has more than 120 offices spread across 40 countries and offers support to those companies looking to move up to the next level of growth. By leveraging and integrating its smart logistics solutions, experience and global distribution capabilities and assets, its customers reduce the risks generally associated with growth.

Local firm, global approach
Mallabone says that it would be impossible to operate a global forwarding and clearing operation without a solid network, and that is why SEKO’s network and global footprint is so essential to the South African entity.

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operations,” remarks Mallabone. “We don’t sit in separate offices and leave teams of people to do their thing—we’re involved in the day-to-day operations. “We are both operational people as well as and we’re the ones selling the solutions, which we always deliver on. “I am aware of every shipment that comes in and I make it my business to know what my customers want, so that we are able to react when things go wrong,” he adds.

Youth, experience and quality service
In establishing a professional workforce, SEKO South Africa has utilised a combination of experiBeing part of an established international brand may have made it easier to attract customers to the new business, but Mallabone says that it was still important to create awareness within South Africa’s busy logistics market. “Obviously we have the network in place and the global infrastructure, but it is very much about building our own business and developing our South Africa model,” he says. This fast growing company now has 20 people on its books thanks in part to the hands-on approach taken by its management team. “I, along with my partner who’s a shareholder and director, work on the floor level of our enced workers and youthful employees. “We have the experience that we need on a day-to-day, but we have also employed some youngsters straight from university who have degrees in logistics,” says Mallabone. “We try to teach them our expectations and our ways of doing business as entrepreneurs with that corporate discipline,” he adds. Working in freight means that shipments sometimes miss their carrier vessels, but with its international and local experience SEKO has been able to demonstrate how to recover from such setbacks, and has also been keen in communicating messages with its customers.

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“I worked for the best international group, in my opinion, so I believe I learnt from the best and I’ve bought a lot of those disciplines and practices with me,” says Mallabone. “We run a small business but with a corporate governance and corporate disciplines in place that have really helped us. “I can make decisions quickly, but still ensure that certain controls are in place.” While the company is able to service the needs of customers across South Africa, its core focus is on markets in and around Johannesburg where its head office is located. “The biggest market for us is in the Gauteng region, which accounts for a large percentage of South Africa’s economy in general, but we also have an office in Durban that is very much an operational and support base for the inland Johannesburg market,” says Mallabone. Moving forward the company is looking to maintain its steady and controlled growth. “Our biggest challenge in this market comes with being a financier and collecting the money we are owed on time, every time,” notes Mallabone. “We have to make sure we sign up the right customers with whom we will build long-term partnerships. “I’m a long-term builder, so for me it’s all www.sekOlOGisTics.cOM about steady growth, but we are definitely looking to build our business base in Durban and Cape Town, while continuing to support our current customer base in Johannesburg,” he adds. With its long-term attitude, and a healthy business approach that mixes the ethos of a corporate entity and a small business, Mallabone and co. are well on the way to becoming the latest in a chain of successful franchises carrying the SEKO name. TAB

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