African Business Journal - 07 JUL 2012

AfricAn Business
July 2012 Volume 3 Issue 7

www.tabj.co.za
The
Journal
IN THIS ISSUE
investment Chinese interests in Libya
business Employment laws in South Africa
Company foCus Greenbelt Fertilisers
SECTION Title
WeLcOMe
DynAMic MArkets July is the month of Leo and so it is apt for us to be talking at this time about the Lion Market and about how to trade oil on it. Markets are never simple at the best of times but measuring risk can help traders ensure that they are less likely to get caught out. Technology is moving forward to help with that problem and our cover story this issue examines this. Then we have a feature on labour laws in South Africa. The implementation of the Black Economic Empowerment (BEE) programme means South Africa has some unusual employment considerations in comparison with other countries. We speak to Lavery Modise from well-regarded law firm Eversheds to find out what foreign companies seeking to open up for business in South Africa need to know. We also look at one of my personal favourite African subjects Nollywood. We speak to a young British man of Nigerian descent who went on to set up one of the most successful Nigerian film and music distribution companies in the world.
And, of course, we have a large variety of company profiles from organisations around Africa who are examples of the best role models for their respective fields. Finally, I am afraid I have some bad news and some good news. The bad news is that I am leaving The African Business Journal and so will no longer be having those fantastic conversations that CEOs and MDs of African companies seem to be so good at holding. The good news is that Ill get to still read those brilliantly insightful interviews in The African Business Journal under the excellent editorship of my successor, Elamin Abdelmahmoud. Do make him welcome and do keep him abreast of all those positive business news stories that TABJ is here to bring to the world. Gods blessings upon you all. Tania Ahsan Editor
tABJ Team
Tania Ahsan| Editor | taniaa@tabj.co.za Elamin Abdelmahmoud | Editor |elamina@georgemedia.com Vladimir Lukic | Creative Director | vladimirl@georgemedia.ca Chris Moore | Sr. Advertising Designer | chrism@georgemedia.ca Margaret Ferris | Sr. Graphic Designer | margareto@georgemedia.ca Wincy Law | Sr. Graphic Designer | wincyl@georgemedia.ca Tanya George | Sr. Advertising Designer | tanyag@georgemedia.ca Marc Mauricio | IT/Production Support | marcm@georgemedia.ca Constantin Turtulea | Head of Research | constantint@tabj.co.za Natalie Edney | Head of Sales | nataliee@tabj.co.za Khayyam Darr | Research Director | khayyamd@tabj.co.za Andrew Miskin | Research Director | andrewm@tabj.co.za Jones Luke | Research Director | jonesl@tabj.co.za Dee Nazer | Research Director | deen@tabj.co.za Guy Tarditi | Research Director | guyd@tabj.co.za Cheyne Steven Foreman | Research Director | cheynesf@tabj.co.za Michael Alexander-Jones | President | michaelaj@georgemedia.ca Linda Neal | Chief Executive Officer | lindan@georgemedia.ca Naveed Yusuf | Chief Information Officer | naveedy@georgemedia.ca Gemma Parkins | Executive Assistant | gemmap@tabj.co.za Heather MacPherson | General Accountant | heatherm@georgemedia.ca Simon Curran | Vice-President/Publisher | simonc@irjonline.com Contributors | Eki Maria, Elamin Abdelmahmoud, Michal Majernik, Juliet Langton, Anna Reitman, Geoff Twibell, Belinda Yan, Michael Kan
South africa office GEoRGE MEDIA InC. 23 Wellington road Parktown, 2193 Johannesburg
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Table of cOntents
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neWs in fOcus cOVer feAture Business inVestMent cOLuMnist entertAinMent PrOPerty & cOnstructiOn
sOciety AnD Business neWs from all over africa

oil trading on the LiOn MArket
010 020 032 038 044 048 054 060 066 074
eVersheDs advice on employment laws in South africa snr DentOn on Chinese investment in libya, before and after the civil war eki MAriA on how to cope with a corporate sociopath irOkO The nollywood film and music distributors DeVcOr tell us about their bespoke building solutions for military missile testing shieLD hOMes a residential property developer with a big interest in luxury spas LAfArge gyPsuM bring quality plasterboard and cement solutions to the building trade PeBBLestOne PrOPerties on their exciting residential projects
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resOurces
MAJOr DriLLing Providers of varied drilling services around the world reDPAth Mining sOuth AfricA speak on their plans for increasing their market share WOrLD titAniuM resOurces on their operations in Madagascar sOuth BOuLDer Mines eritrean potash play greenBeLt fertiLizers on their new processing plant and their plans for the future uchuMi suPerMArkets reveal their corporate social responsibility projects trADe kings The ones to go to for your lollipops AgrAnA fruit Delicious fruit preparations for food manufacturers A h grOcers The family business supplying the specialist Indian food market cOntinentAL BrAnDs the tasty biscuits and wafers on everyones lips BreAD AheAD Moreish baked goods that are highly in demand
in the medical field
080 086 092 102 112 122 130 136 146 154 162
AgricuLture retAiL fOOD & Drink
MeDicine
internAtiOnAL hOsPitAL kAMPALA speak about their pioneering work
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PAn-AfricA: OrAnge AfricAn sOciAL Venture Prize Armed with the success of the previous edition in 2011, Orange has launched the second edition of its Orange African Social Venture Prize. The goal is to promote social innovation that supports development through Information and Communication Technology (ICT). With this prize, Orange will provide a financial endowment as well as expert support to the young companies that put forward innovative projects with a significant social impact. Last year, more than 600 candidates responded to the call for projects, reflecting the strong entrepreneurial spirit and the high potential of telecommunications services in Africa. The three prize-winners of the first edition, announced at the AfricaCom Awards in Cape Town in November 2011, proposed the following projects: Horticultural Tele-Irrigation: a Nigerian project that puts mobile technology in the hands of horticulturalists; Agasha Business Network: a Ugandan community-based e-commerce platform that promotes small African businesses to the global market; Kachile: an Ivory Coast e-commerce start-up for African craft products. The Orange African Social Venture Prize will be awarded once again this year to three entrepreneurs or start-ups offering solutions that use ICT in innovative ways to meet the needs of populations on the African continent. Projects proposed during the first edition covered a variety of fields, such as healthcare, agriculture, banking services and education. In addition to receiving an endowment of 10,000 to 25,000 euros, the three prizewinners will receive six months of support from entrepreneurial and ICT experts. In addition, a favourite project, selected by visitors to the Groups web portal www.starafrica.com, will be highlighted before the jury responsible for selecting the winning projects.
Who can enter?

Any entrepreneur or legal entity that has been in existence for fewer than three years at the time of the competition may participate at no cost and with no restriction on nationality. Submitted
projects must be designed to be deployed in at least one of the African countries in which Orange operates and must use information and communication technology in an innovative way to help improve the living conditions of the populations in these countries. Applications are accepted until 21st September 2012, with full details on Oranges panAfrican web portal www.starafrica.com.
companies, few companies have taken steps to meet this requirement. Professor Mervyn King, chair of the Global Reporting Initiative, in February claimed that only half of listed companies in the Republic have got to grips with the legislation. Karl Campbell, managing director, South Africa, at CarbonSystems (www. globalcarbonsystems.com), a global provider of environmental and energy management solutions, believes more attention on the issue is required: Today, most companies dont really have accurate non-financial data, which presents a real challenge not getting this right could hurt their brand. According to Karl, theres clear additional benefit if companies approach this requirement the right way because it could shine a light on whole areas of wasteful practice. The supply and cost of energy
sOuth AfricA: Businesses Missing Out On the efficiency Benefits Of integrAteD A year into the integrated reporting mandate that requires reporting on non-financial metrics such as sustainability by South African
is a big issue in South Africa, so the ability to collect detailed data about its use across an organisation is a very powerful enabler, allowing companies to target efficient measures and change behaviour to reduce wasteful consumption. In South Africa organisations as diverse as
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banking group Investec and car dealership chain Combined Motor Holdings have implemented the CarbonSystems solution to bring their corporate reporting in line.
from a world class bio-secure farm with state-of-theart climate controlled production facilities. Golden Lay sells eggs from its farm through a network of hundreds of small-scale traders who buy eggs for onward sale at a small mark-up. This has created hundreds of jobs in the local community. Uniquely, it also sells old but healthy hens to the local community as a source of meat protein at low prices. Local traders buy the spent hens for onward sale in much the same way they buy and sell eggs, providing an affordable alternative to Zambias usually expensive meat trade. By- products associated with the table egg production process include, manure for fertilizer and soya oil, and are marketed locally. Aureos exit forms part of the 100% sale of Golden Lay to the African Agriculture Fund, a private equity fund, managed by Phatisa, which invests in sustainable food production businesses across Africa. As part of the transaction, the existing management team will re-invest in the buy-out to retain a substantial share in the business going forward. Ron den Besten, Managing Partner of Aureos Southern Africa, comments: This marks a very successful investment and exit for Aureos. Golden Lay has made great strides in the last five years; since investment, production capacity has more than doubled as a result of our strategy of
RON DEN BESTEN, MANAGING PARTNER, AUREOS SOUTHERN AFRICA
zAMBiA: AureOs sOuthern AfricA funD cOMPLetes eXit in LeADing egg cOMPAny The Aureos Southern Africa Fund LLC (ASAF) has sold its 49% stake in Zambias foremost producer of table eggs, Golden Lay Limited (Golden Lay). Golden Lay is involved in the production, distribution and sale of chicken table eggs throughout the Copperbelt region of Zambia and the Democratic Republic of Congo. It has a strong presence in Zambia, accounting for approximately 15% of the total Zambian market for table eggs and operates
JULY 2012 The African Business Journal
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investment in new state of the art laying houses, providing the impetus for exponential financial growth during our investment period. In most African countries, demand for high quality, affordable protein simply outstrips local supply. Golden Lay services this need. We identified Golden Lay as an opportunity for profitable growth and worked closely with the management team to help them manage their production and market expansion throughout the region. Golden Lays commitment to sustainability and corporate social responsibility has made it a leader and an example in its region. Since Aureos investment, a third of all employees and their families have been provided with good quality on-site housing. A project for sanitation and the supply of running water to staff houses was completed early during ASAFs investment period through the installation of water pumps and a water reticulation system.Golden Lay works closely with the local community clinic and a local school providing eggs to pupils and staff. Aureos secured European Investment Bank grant funding to deliver an HIV/AIDS intervention programme in the work place as well as to pay for improvements to the local clinic that caters to the broader community. Golden Lay and other farmers in the area financially support the clinic through a capitation model that caters for employees and
their dependants. It is estimated that the HIV/AIDS programme could reduce Golden Lay healthcare costs by as much as 60% through HIV prevention and retention of infected staff. The company plans to roll out the programme to the wider community of around 18,000 people. ASAF is a US$50 million fund, established in 2003 as one of three regional funds set up by Aureos to invest in Africa. ASAF is fully invested and has successfully exited or partially exited from 5 of 10 of its partner companies. During 2008, Aureos raised the US$381 million Aureos Africa Fund, for investments across the continent, as a successor Fund to ASAF and Aureos East and West Africa regional funds. sOuth AfricA: first AfricAn BrAnD enters BrAnDz tOP 100 MOst VALuABLe gLOBAL BrAnDs After years of focus on BRICs and countries in the wider APAC and LatAm region, this years BrandZ Top 100 Most Valuable Global Brands study highlights the progress of Africas economic development with the arrival of the first African brand in the Top100 African mobile company MTN No 88 at $9.2 billion. Africas new story is about economic growth, and despite the turbulent global economic environment, the continent is moving robustly forward sub-
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Saharan Africa grew at 5.9% in 2011, making it one of the worlds fastest growing regions. MTNs position in the Top 100 is a reflection of the rise of technology and the growth of mobile, on a continent where half of the 1bn people now have a mobile phone. In fact mobile is at the heart of a revolution that encompasses many activities, from banking, where M-Pesa in Kenya has made such an impact, to agriculture and healthcare. This is a thriving continent and as people gain in prosperity they will increasingly want to buy branded goods as we have seen in other emerging economies. South African companies are responsible or have ownership of some major international brands such as SABMillers beer brands, Rembrandts ownership of Dunhill and other luxury brands such as DeBeers. But its not just African brands that are flourishing south of the Sahara. Around 40% of Guinnesss sales come from Africa, Airtels third quarter results showed a 16% increase in revenue in Africa. Similarly Orange enjoyed rapid growth in Africa in 2011, while Walmart invested there with the acquisition of Massmart. Chinese brands too are turning to Africa for growth. South African owned media conglomerate Naspers owns major shares in Chinese Internet service portal Tencent. Number 37 in the ranking, Tencent grew its brand
value by 19% and is valued at $17.9 billion. The rise of Africa is an indicator of the changing orientation of the global economy. Africas raw materials have attracted the attention of China, both as a lender and trade partner, and this investment has been a critical driver of current growth. MTN is very proud to be highlighted as the first African Brand to be included in the BrandZ Top 100 Most Valuable Global Brands. There are so many positive growth stories from Africa and emerging markets, and while the spotlight right now is on MTN, we hope that this will focus attention on the limitless potential of our markets. Our success is a testament to our employees, our loyal customers and the amazing spirit of our continent, which we have always endeavored to portray as the essence of the MTN brand, commented Jen Roberti, Group Executive, Group Marketing MTN. Meanwhile the worlds biggest brands have continued to grow in value during the current economic uncertainty, according to the BrandZTM Top 100 Most Valuable Global Brands study. The No1 brand for the second year, Apple, rose 19% in value and is now worth $182.9 billion. IBM grew 15% in value to $115.9 billion and overtook Google, which dropped to third place in the ranking and is now worth $107.8 billion. In advance of its IPO, eight year old Facebook rose
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74% in value, making it the fastest brand value riser in the ranking. Worth $33.2 billion the social network moved up to No.19 from No.35. The 2012 BrandZ Top 100 Most Valuable Global Brands ranking demonstrates the power of strong brands as both a driver of new business growth and a critical support in hard times. Between 2006 and 2012, the total value of the BrandZ Top 100 rose 66% and is now worth $2.4 trillion. The study, commissioned by WPP and conducted by Millward Brown Optimor identifies and ranks the worlds most valuable brands by their dollar value, an analysis based on financial data, market intelligence and consumer measures of brand equity. Brands are an insurance policy for businesses, said Eileen Campbell, Global CEO of brand research company Millward Brown. Despite a prolonged period of economic stress, political uncertainty and natural disasters that buffeted brands across many categories, the value of the worlds leading brands keeps rising across many categories, sustaining and nurturing businesses. sOuth AfricA: infrAstructure AfricA Business fOruM The annual Infrastructure Africa Business Forum will take place at the Sandton Convention Centre in Johannesburg from 10-11 July 2012 and will
present stakeholders with an opportunity to unpack the enormous growth potential in addressing Africas infrastructure needs. Africa, with a population exceeding 1 billion people is well placed as an emerging market, keen for investment & growth and has successfully maintained an average growth rate of 4% for the past few years as a continent. The two day Business forum will bring together business to explore new trading opportunities, establish new business networks, develop and form partnerships and plan a way forward to address some of the continents requirements. WWW.infrAstructure-AfricA.cOM
JEREMY STEVENS, STANDARD BANK ECONOMIST
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PAn-AfricA: hArD LAnDing Of chinAs ecOnOMy WOuLD hurt resOurce-DriVen AfricA A hard economic landing in China would have profound negative effects on the commoditiesdriven African economies, according to Standard Bank economist Jeremy Stevens, who argues that the continent should be equally concerned about developments in China as the sovereign debt fragilities in Europe. Mr Stevens, who is based in China and is in South Africa to address clients and investors on economic developments in the worlds secondbiggest economy, says since the previous global financial crisis in 2008 Chinas economy has been losing the momentum that once propelled it to record average annual growth rates of about 11% -- even as the crisis was at its worst. His comments come as fears of a downturn in the Chinese economy mount, with some analysts pointing to the strong possibility of a sub-7% GDP growth. In relative terms, most observers consider this figure to amount to a hard landing for Chinas economy. However, Mr Stevens estimates the likelihood of a hard landing scenario now stands at about 15%. While a sharp fall in Chinese growth would have a more widespread impact globally - not least of which by seriously denting investor confidence
and appetite for risk - Mr Stevens says Africa would be the hardest hit because of its dependence on commodity exports to China. He notes that Africas economic growth in the past five years has been closely tied to Chinas fortunes, and that as a result the continent should be watching economic developments in China closely. Right now, Africa should be very concerned because its economies are now more sensitive to any developments in China. China has become the biggest investor in Africa and the continents most significant trading partner, so whatever happens in China matters a lot to Africa. A deceleration in the Chinese economy would spell trouble for African economies. This would mean weaker commodity prices, and African economies have largely been dependant on strong Chinese demand for its resources. Whilst it is still a fat-tail risk, African countries need to start thinking seriously about how they will deal with the economic downturn in China. Since 2010, the Chinese economy has definitely been experiencing a softening in growth momentum. Systemic risks have been accumulating over the last five years and have been made worse by the stimulus albeit muchneeded at the time. Risks are sitting in the economic system, and they are now threatening to cause turmoil in the Chinese financial system.
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Africa definitely has to pay particular attention to these developments if it is be prepared for the bumpy ride, says Mr Stevens. Chinas economic growth has been gradually slowing down from the highs of 11% experienced a couple of years ago, and Mr Stevens projects that growth figures in the region of 5% are no longer out of the question. In fact, the Chinese authorities recognise the need to end the growth-at-all-cost model of yesteryear. He says the developments in China were an indication of an economy that has matured, but also become difficult to manage. The risks of a sharper fall in the Chinese economy are now more elevated. China could hit the speed bump much earlier than we all expected, and there is no doubt that this would hurt Africa and other emerging markets the most. What makes the hard landing scenario worse for Africa is that unlike during the last global financial crisis, this time around China will be unable roll out any stimulus packages because its investmentto-GDP ratio is already too high at 48%. This shows that the ability and desire of the Chinese officials to intervene to stimulate the economy has diminished, he says. Mr Stevens says the size of the Chinese economy at $8-trillion is 60% bigger than it was in 2007 before the onset of the global financial crisis. It is much more diverse, complex and regional
differences are more pronounced. This makes it much less possible for the Chinese authorities to take the same kind of bold action as previously for fear of causing major disruption, he says. And with South Africa being the most externalised economy on the continent, and because of its close trade ties with China, it could be hurt the most if the hard landing scenario occurs. A hard landing in China will be manifest much more concretely in South Africa because it is the most externalised of all African economies. Commodity export volumes will fall, which would affect the trade balance and our ability to finance the current account deficit. The rand can be expected to depreciate; investor sentiment would become negative, and equities markets would be feel the pinch. Mr Stevens concludes that African economies need to diversify more and stop being overly reliant on commodity exports in order to mitigate any cyclical and structural risks in the global economy. tAB
Doing business in africa has its own rewards and challenges; here Geoff Twibell looks at oil trading on the african markets and the importance of integrated risk management systems...
tO sAy thAt oil is big business in Africa would be an understatement. It is in every sense what keeps the wheels of the continents economy turning as Africas crude oil production capacity, particularly in North Africa, Nigeria and Angola, fuels over 10% of the worlds petroleum needs. However, what is often forgotten is that local demand for oil and oil-related products continues to parallel Africas phenomenal rate of economic growth, itself on track to expand by as much as 40% by 2020. Such predictions have in turn spawned a potential long-term investment boom in the downstream oil product supply business all the way from sea ports and tank farms through
to pipelines and rail cars. It is all seen as vital to securing the fuel supplies essential to driving Africas continued economic growth.
Dynamic Economy
Of all the continents of the world Africa is arguably the one with the biggest capacity to surprise. Once riven by conflict, famine and disease it is now one of the most dynamic and fastest growing economies in the world, outpacing even East Asia and Japan and earning it the label Lion Market. To the casual visitor the most obvious evidence of this new-found prosperity are the Mercedes and BMW dealerships that jostle for
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COVER FEATURE oil Trading in the lion Market
DOWNSTREAM. A CALTEx FILLING STATION IN NAMIBIA.
position alongside up-market shopping malls and designer clothing stores. Meanwhile the airports bustle with wealthy holiday-makers, businessmen and the new breed of African entrepreneurs. Among them are the oil men. But not just
the geologists, roustabouts and overalled engineers who are the bedrock of the industry. Increasingly they are the traders the dealers in crude oil, refined products, petrochemicals and gas whose uniform is a suit and tie and whose toolkit is a smartphone and a laptop.
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Above all else, trading in Africa is about managing risk. By turns traders avoid, embrace and value risk and seek to profit from its management. Its almost like they have risk in their DNA.
quickly filled by a combination of experienced international oil traders and a new generation of independent traders and marketers; smart enough to spot an opportunity, agile enough to capitalize on it, they have built up exciting new trading businesses. And unlike the now departed oil majors, they are more willing to take greater risks for smaller margins. But oil trading like trading in any commodity is a business that favours the brave, as David Bleasdale, executive director at specialist African oil industry consulting and training firm And there is a change amongst the traders themselves as international oil majors like Shell, BP and Chevron sold up and exited the African downstream market to concentrate their efforts on the upstream exploration and production sectors. The void left behind has been CITAC, explains. Above all else, trading in Africa is about managing risk. By turns traders avoid, embrace and value risk and seek to profit from its management. Its almost like they have risk in their DNA, he says. The most successful traders are those
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willing to invest in order to exploit risk structures. They do this by building efficient, best-in-class operations, by leveraging their detailed knowledge of market movements around the world and by keeping price risk to an absolute minimum. Today the trading companies working in the African downstream sector are a far cry from those of the early days. They are a highly professional, highly motivated group with companies ranging in size from big international firms with 1,000-strong trading teams through to independents with perhaps 10 or 20 people. Its a business that tends to be dominated by strong personalities, many of whom have had to be prepared to take some really big risks along the way, but have also quickly learnt how not to repeat mistakes and to control their operations and risk.
Financing
Unquestionably the biggest challenge for trading firms is financing. Traders need money to do business. And the bigger the business the bigger the pockets needed to finance it. At todays prices a cargo of crude might be worth on the open market upwards of 125 million US dollars. But a combination of the Eurozone crisis and the new Basel III legislation has impacted trade and project financing significantly. While larger trading firms have access to their own funding from retained profits or a corporate parent company, smaller trading houses are competing for letters of credit. And all the while those lines of credit are becoming more and more expensive. Those trading companies that can demon-
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UPSTREAM. AN OIL RIG UNDERGOES REPAIRS IN CAPE TOWN HARBOUR.
strate they have the right systems, procedures and compliance measures in place are the ones most likely to get the funding they need. There is little or no room any more for companies run on spreadsheets. Financial institutions expect to see fully integrated trade/risk and back office solutions, together with the right security and policies to oversee their correct use.
These days we recommend everyone in trading to have an integrated risk management system, says Bleasdale. But its not something to embark on lightly. It means total buy-in from the top down and it means proper user training and supervision. There are technology and implementation imperatives too. Those systems that are more
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MIDSTREAM. AN OIL TANKER TRANSFERS ITS CARGO IN THE PORT OF CAPE TOWN.
flexible and quicker and easier to install are always to be preferred. So are those that impose the least demands on computing hardware, infrastructure and local support. And of course theres the training overhead to consider as well. Any system must be easy to learn and then
easy to use once learned. The real mission for traders is one of managing risk. Its the old adage if you cant measure it, you cant manage it. Youve got to be able to identify risk, measure it and then do something about it.
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Today we have reached a point where it is only the strong, really professional players that remain: the companies that work well and perform. That includes everyone from the big international oil traders through to the smaller indigenous players who are trying to grow.
used by traders. With no real distribution infrastructure to speak of pipelines for example product is invariably offloaded from ships into harbour-side tank farms then transferred to road tankers for onward delivery to counterparties. The potential for demurrage the extra cost of offloading delays tying up expensive transport and for contractual penalties against delivery delays, cannot be underestimated. It is for this reason that many traders are using their trade/ risk management systems to also run their supply chains. These are the hidden costs of oil trading. And they are all part of the business of
Hidden Costs
The product market in West Africa in particular where the bulk of trade is in refined products coming into the region from Europe points up another crucial requirement for the systems
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managing risk and exposure, says Bleasdale. Its easy to forget that a ship may have to sit outside of Lagos for three months at a cost of $20,000 a day. Its all about managing and avoiding those issues with efficient supply planning, by ensuring an efficient port operation and by ensuring the counterparty you are dealing with is a strong and stable company. Some trade/risk management systems now include functionality for physical operations including storage, logistics, inventory management, transportation scheduling and demurrage management. Such facilities are key to minimizing and containing risk and maximizing profitability on trades.
DAVID BLEASDALE, ExECUTIVE DIRECTOR OF CITAC, AN INDEPENDENT CONSULTANCY COMPANY FOCUSING ON THE DOWNSTREAM AFRICAN ENERGY MARKET.
Infrastructure
Another challenge facing users in Africa is the availability of broadband and the Internet, not to mention the reliability of the connections that do exist. While infrastructure is slowly expanding, estimates are that only five and a half percent of the population has access to an internet connection, with the vast majority of those connections being in South and North Africa. Mobile networks, in contrast, have grown massively in the last five years and the country is forecast to have around 735 million subscribers by the end of 2012 65% of the total
population according to the GSM Association. Uptake of mobile data services is increasing steadily too. For traders in certain parts of the country a mobile data connection may be the only option, or potentially the most reliable option. To trade oil and petrochemicals in Africa it is also necessary to get to grips with unique and often complex trading conditions that are not encountered in any other part of the world. For example in Nigeria, a country heavily dependent on gasoline for transportation, gasoline prices are subsidized by the government. This has
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created a thriving market for product shipped mainly from European ports of Amsterdam and Rotterdam. Subsidies can skew market prices in neighbouring countries reliant on more expensive locally-produced and refined products. This causes traders to work extra hard to juggle pricing against safety, distribution and economic risk in the supply chain. Some manage this by creating multiple trading companies and transferring cargos between them, creating still more layers of complexity in the management of price and risk.
the back end computing and data from its own facilities, making it available to customers securely via the Cloud. Such solutions are also quick to install, configure and deploy, typically going from contract signing to fully up and running within a few days. This is in stark contrast to the weeks and months required by other systems. But one vendor in particular has earned something of a reputation in Africa for its deep understanding of the market and for the way it has created solutions finely attuned to the unique needs and challenges. That company is the London-based Aspect Enterprise Solutions and it has become the dominant CTRM player in Africa. Ghana and Nigeria alone account for some 16% of its customer base and it has users also in Angola, Republic Of Benin, Congo, Cameroon, Cote dIvoire, Kenya, Mali, Senegal and South Africa. African traders face a number of challenges unique to the continent, among them complex legislation and pricing structures together with the need to monitor exposure and value in real time throughout the trading day, explains Yagnesh Savania, the companys EMEA sales director. The flexibility of Aspects product architecture and its Cloud delivery mechanism means
Trade/Risk Management
Given the unique challenges of the African market some trade/risk management solutions more commonly known as Commodity Trade Risk Management (CTRM) solutions are more suited than others. Topping the list especially for the smaller independent traders and for some majors too are the Software-as-a-Service (SaaS) solutions. Unlike their desktop software or client/ server counterparts they require no upfront investment in computing hardware, infrastructure or support resources. Instead users access SaaS solutions through their regular Web browsers. It is the vendor company that provides all
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the company can easily customize and localize to accommodate these and other specific needs, then roll out the results for all customers immediately with no significant impact on live trading. Cloud delivery means trading companies need no in-house IT resources. We believe we understand the African market better than any other CTRM vendor and thats why were seeing the market polarizing around Aspects technology. Its a massive vote of confidence from what is a key trading community, adds Savania.
company with stepwise up selling opportunities. In turn, this has allowed the company to grow faster than the market, the CommodityPoint report concluded. David Bleasdale at CITAC, while harbouring some reservations about the SaaS software model in an environment of sparse internet availability, is also enthusiastic. Aspects system is flexible and quick. Its quick to learn and doesnt require intensive training. It shows there is a way to get people off spreadsheets. Yes, Excel is easy too but its very difficult to audit and can be prone to unaudited errors. But perhaps the best testament of all is from the traders themselves. Established in 2009, Ghanas Sage Petroleum is the countrys largest licensed oil trading firm importing a range of products including crude oil, gasoil, LPG and fuel oil for local fuel products distribution companies. With plans for significant growth in the year ahead, Sage has developed a robust risk management strategy to provide both security and value for its clients and partner organizations. CEO of Sage is Emmanuel Egyei-Mensah. We chose AspectCTRM to manage and support our activities. It gives us real-time insight into all aspects of our business including stocks, logistics, finance, profitability and risk exposure.
Recognition
Independent recognition of Aspects achievements in Africa has come from the influential CTRM research, analysis and consulting firm CommodityPoint. In a recent report the company said Aspect had achieved what it described as ...remarkable success, in West Africa in particular. Aspects unique combination of products and platform appears to enable the company to enter markets and territories where there is little in terms of competition, and provide workable solutions and a reasonable cost and without significant investment in hardware and infrastructure. One product builds on the other easily and relatively seamlessly providing the
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Our philosophy is to actively identify risks, obtain information about the risks and manage them effectively. That is our culture, which runs through everything we do. From the outset it was apparent that Aspect has put real thought into engineering a system thats right for the local market. We particularly like the way we can customize it ourselves to suit the way that we work, rather than having to fit in with someone elses idea of how we should be doing things. His comments are echoed by Mohamed Julien Ndao who is responsible for business development and trading of refined products on the West Africa desk at Addax Energy SA. I like the way I can customize pages the way I want, so I dont waste time with information I dont need. Aspect is very user friendly. Plus I travel 50% of the time, so the mobile service is important to me and my clients. Im able to see where the market is to make decisions all the time, he says. Casting an experienced and independent eye over the trading industry in Africa, CITACs David Bleasdale believes it is a business that has come on in leaps and bounds in recent years. There has certainly been a big improvement in professionalism and control throughout
the trading community. Today we have reached a point where it is only the strong, really professional players that remain: the companies that work well and perform. That includes everyone from the big international oil traders through to the smaller indigenous players who are trying to grow, he says. And there can be no doubt that properly executed trade and risk management systems have a vital role to play in the industrys development going forward. tAB WWW.AsPectenterPrise.cOM
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employing staff in South africa

For foreign companies looking to open a South african branch, there are a number of legal issues specific to the country that they must consider: TABJ speak to lavery Modise, chairman of eversheds law firms South african arm, about this issue
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and both countries want to keep this relationship and increase investment. Now, what is it that a UK company wanting to invest in South Africa has to be aware of? Firstly, a company may not be aware that in South Africa the labour law legal framework provides for fixed minimum wages, compulsory negotiation with industry worker unions and what is perceived to be inflexible termination processes and also what is known as the Black Economic Empowerment (BEE). The BEE was introduced by the democratic government in 1994, with a view that attempted to address the imbalances of the past. There were not many, if any, black people in executive positions. Certain positions were only open to white people and therefore this law and this legal framework was
LAVERY MODISE
meant to address this imbalance. Companies that come into South Africa are not aware of this.
TABJ: A lot of international companies dont understand that labour laws in South Africa are quite different. Can you perhaps explain a little about what they should be aware of? LM: The government is trying to make certain Lavery Modise: Let me kick off by saying that Africa is growing and so is, for instance, bi-lateral trade between South Africa and the UK. The information I have is that seven of the 12 fastest growing economies in the world are African. South Africa and the UK have had a long-standing bi-lateral relationship amendments to address the concerns of foreign investors. It is alleged or perceived that it is difficult to terminate the services of employees, be they blue collar employees or executives, and that the foreign investors say why should it be difficult to dismiss someone from work who TABJ: What is it that the government is doing to try and address the concerns of business?
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If I were to criticise Bees application, it would be that it has benefited too few people and it has not really cascaded down to the ordinary person.
earns a lot of money at an executive level? There is a deal before parliament that those who earn more than a million rand should not be allowed to refer their case to the Commission for Conciliation, Mediation and Arbitration (CCMA). The CCMA is a tribunal where disputes are heard after an employee has been dismissed from work. In order to address concerns of high paid employees, it is proposed that they would no longer refer to CCMA but receive three months notice with pay with no disciplinary enquiry necessary. If they and the company feel they can no longer continue working together then that would be it but they can still refer this to the labour court if they feel aggrieved. Having dealt with the issue of senior employees, then there is the issue of labour brokering. The unions have been very adamant and vocal that labour brokering (agency workers who dont have the benefits of permanent employees and are vulnerable to being dismissed at any time) amounts to slavery and they want labour brokering to be done away with. In order to deal with LM: They have to come to South Africa and have people on the ground, advisers who know South Africas legal framework. For instance Eversheds, our company, has many years of experience in Africa and we have helped a number of companies facing challenges in investing in the continent. When companies come to South Africa and want to invest here, they must come in on an informed basis. They should seek out experts, such as our firm, who will be able to assist and advise them. TABJ: What would you advise a company looking to invest in South Africa do? this, the proposed amendments say that, in order to secure a sufficient number of workers, the government is proposing to regulate labour brokering rather than getting rid of it. They dont want to get rid of it entirely because employers argue that labour brokering is a good source of employment. If you do away with labour brokering then this will impact on job creation.
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TABJ: Does the government have a measure for when the BEE will have been deemed to have worked or will that remain as an ongoing law? LM: It was intended to address the imbalances of the past. My interpretation is, and some ministers in government also believe, that it was never meant to be a long term thing. It was meant to level the playing field to an extent because the country needed to be integrated and fully transformed. So you can not in a democracy for a hundred years have a law of signature because then it means it is not working in practice so the intention could never have been for it to be there forever. It would mean 1994 never happened in that case. TABJ: With it now being in place for 18 years, has BEE made significant inroads into addressing inequality? LM: There have been some changes, some improvement, but its been very slow. If I were to criticise its application, it would be that it has benefited too few people and it has not really cascaded down to the ordinary person. It is not as broad-based it was intended to be. Very few individuals have benefited so far. Out of BEE we have produced a small number of black millionaires and billionaires, not many, a small number.
Now we face the challenge that is in every society where only a few people are extremely wealthy. Our society is one of the most unequal in the world therefore the challenge, which is recognised by everybody, is that this needs to be broadened so that ordinary people have the basic necessities of life: water, electricity, sanitation, good education. If that is achieved I would say we are going somewhere as a country. The challenge is to make it as broad-based as possible. TABJ: Is investing in South Africa more expensive than other countries? LM: It can be difficult operating from one African country to another so a well-crafted study is required to ensure that the right strategy is being used. You have to have an open mind and full knowledge of what to expect. It can be expensive if you come with your eyes closed. Statistics show this is one of the fastest growing regions of the world. It is not necessarily expensive as long as you have received the proper advice. tAB WWW.eVersheDs.cO.zA
s ent A in tM h s c Ve in LiByA in
libyas civil war affected Chinas considerable investment in that country; Michael Kan and Belinda yan assess what Chinese investors will now do in relation to libya
chinA hAs ALWAys been an avid supporter of infrastructure projects in developing countries, including Libya. Backed by immense economic resources, technical know-how and a relatively low cost labour force, Chinese state-owned enterprises and private contractors have penetrated and invested heavily in important industry sectors including real estate and construction, railroad, oil and telecommunications. Bilateral treaties and agreements were entered into between the Chinese and Libyan governments to facilitate this. The aggregate value of those investments exceeded US$20 billion. Thus, when political unrest and eventually civil war broke out in Libya in 2011, Chinese investors stood to suffer massive economic loss. At the time, the Ministry of Commerce of Peoples Republic of China (MOFCOM) announced that China would defer the making of further investments in Libya until the situation is stabilized. Ongoing projects were suspended. More than 35,000 Chinese labourers were evacuated from Libya. Thankfully, the civil war has now ended. With recovery efforts initiated under the new leader-
ship of the National Transitional Council (NTC), optimism lies ahead for Chinese investors.
Optimism lies ahead

NTC recently estimated that Libya would need to invest up to US$100 billion into local infrastructure projects over the course of the next five years. This is five times more than the aggregate value of Chinas investment into Libya. Demand lies not only in traditional industry sectors such as oil and gas and construction, but also in new sectors such as renewable solar and wind energy and tourism. Chinese investors collectively have the technical expertise and financial resources to meet Libyas demands in both traditional and new industry sectors. More importantly, at the 2012 third International Infrastructure Investment and Construction Forum of the China International Contractors Association (CHINCA), the message was very clear that Chinese investors have moved away from traditional EPC contracts and are now able to take up more lucrative, but complicated BOT and PPP projects that Libya may well need to offer in order to better manage its financing requirements. Given Chinas track record of investments and ongoing projects in Libya, it comes as no surprise that shortly after the NTC declared the liberation of Libya, the Chinese government
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Snr libyan challenges and Chinese investment
confirmed its support for the council and expressed its wish to maintain economic cooperation with the new government. In September 2011, China as a permanent member of the UN Security Council formally recognized the NTC as Libyas new leader. In return, NTC promised that it would honor past treaties and agreements entered into between Chinese investors and the old Libyan government or its constituents. The path has therefore been paved for Chinese investors to return to Libya, at least insofar as high level governmental policy is concerned. That is not to say that Chinese investors would flock in droves to Libya in the near future.
Far to the contrary, Shen Danyang of MOFCOM cautioned that it remains difficult to predict a clear time for the full return and resumption of work by the Chinese companies. Nonetheless, the distinct advantage that China has over its jurisdictional competitors is the prowess of its investors. They are able to strategize and prioritize investment opportunities, and willing to leverage on high levels of commercial risk, all with a conscious view to maximizing gain. These initiatives are then backed by an aggressive workforce committed to strive in strenuous and often unsafe working environments. A prime example is Chinas initiative and
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efforts to invest into Iraq after the fall of Saddam Husseins regime in 2003, notwithstanding the consensus at the time that ongoing, post-war political and economic turmoil made Iraq an unattractive place for business. Those efforts finally bore fruit in 2008. In 2008, PetroChina and China ZhenHua Oil entered into a US$3 billion contract with the Iraqi government for oil exploration rights that will last 23 years - this represented the first major contract awarded to a foreign investor. China is now the biggest investor in Iraqs oil and gas industry. Moreover, at the invitation of the Iraqi government, Chinese investors are also exploring investment opportunities in other industry sectors, in particular construction and services (including tourism). With careful strategic planning both on the part of the Chinese government and the Chinese investors, Chinas success in Iraq could well be replicated in Libya. positive steps are being taken in collaboration with the IMF and World Bank to strengthen public financial management and improved governance of the sovereign wealth fund. There are then the commercial challenges. Whilst the NTC has promised to honour pre-civil war contracts, the reality is that the terms of each contract would need to be re-negotiated with new government officials, in light of changed circumstances. The changes in the legal system also pose challenges. The NTC has announced that Shariah law would form the basis of its legal system. It has also promised independence of the judiciary from the executive arm of the government (a feature widely known as lacking at best in the old Libyan government) and that international law would be respected. Whilst these are welcome messages, there is no certainty that they would be observed in practice. The problem is particularly prevalent to Chinese investors who are, as
China did not offer any support to the revolution, in line with its established foreign policy of non-intervention in a countrys domestic affairs.
Challenges?
As one would expect, the nature of these opportunities is such that potential challenges are inevitable. Challenges common in post-civil war jurisdictions include the need to ensure security and safety of the expatriate workforce amidst militia action and a smooth and credible banking and finance system. Libya is no exception, albeit
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Snr libyan challenges and Chinese investment
PHOTO CREDIT: PARKISLAND / SHUTTERSTOCK.COM
SHANGHAI ExPO FEATURING THE LIBYA PAVILION. SEPT 1, 2010 IN SHANGHAI CHINA.
mentioned, prepared to assume high levels of commercial risk in return for business opportunities. As a consequence, their contracts with the government or its constituents would likely have omitted provisions offering performance guarantees such as payment in advance or security deposit. In the event of a contractual dispute, Chinese investors may well experience difficulty in pursuing a claim against the Libyan government or its constituents. Whilst the Chinese approach to dispute resolution has consistently been through amicable discussion of mutually acceptable solutions, legal recourse may be inevitable.
The judiciary may however be reluctant to accept a claim against the Libyan government or its constituents, on the ground of sovereign immunity or otherwise. Even if a judgment or an arbitration award could be obtained against Libya, problems of enforcement would arise. In particular, Libya is currently not a contracting state to the New York Convention. Presumably, the best (and possibly only) short-term solution lies in bilateral treaties to be signed between the Chinese and the new Libyan governments confirming their mutual intention to honour respective contractual obligations and, importantly, judgments and awards
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add insult to the injury, the press reported that at the outbreak of civil war, Chinese companies were negotiating the sale of arms to the old Libyan government which would in itself be, in violation of UN sanctions. No doubt the Chinese government has recognized the need to now take steps to mend any harm done, including sending a high-level trade delegation to Libya to rekindle trade. The process of resuming full trade and commercial relations between China and Libya will take time. Challenges and difficulties will arise along the way. The fact remains, however, that China has all the resources and technical capabilities it takes to resume its role as an important investor in Libya. Likewise, Libya has the wealth and natural resources, is geographically well-positioned, and requires arising from breach of those obligations. Above all, the main challenge is one of political nature - to ensure that the new Libyan governments intention to maintain close economic cooperation with China is genuinely kept. The NTC once indicated that those countries which supported the revolution would be given preferential treatment in future projects. China did not offer any support to the revolution, in line with its established foreign policy of non-intervention in a countrys domestic affairs. In fact, China was the last of the five permanent members of the UN Security Council to recognize the NTC. To WWW.snrDentOn.cOM Michael Kan is an Associate and Belinda Yan is a Solicitor at Brandt Chan & Partners in association with SNR Denton HK LLP technical assistance on its infrastructure projects to complement Chinas efforts. Careful strategic planning on both sides is required, but a long-term genuine collaboration admits of only one outcome: a win-win outcome. tAB
044 I ever everything

hOW tO WOrk With A cOrPOrAte sOciOPAth
learned about Business
cOLuMnists
Some of the people you come into contact with at work fall into the category of corporate sociopath. our regular columnist, eki Maria, explains how to deal with people who are likely to stab you in the back...
the AMericAn PsychiAtric Association defines sociopathy as ...a pervasive pattern of disregard for, and violation of, the rights of others that begins in childhood and continues into adulthood. Corporate sociopaths are typically characterised by a subtle ruthlessness that sees their authority created through sustained manipulation of others in the work place. Corporate sociopaths will lack conscience, never experience guilt and as your colleague take deep personal pleasure in seeing you fail at tasks. Their outward demeanour will often be highly charismatic and contagiously high energy. Naturally people in their working environment, including leaders, will be drawn to this personable way and thus provide the sociopath with a wide pool of people to manipulate. It is essential to make early identification of workers with this personality disorder as failure to do so could see them wreaking havoc within your organisation and with your personal and professional development. Beware, they will
smile warmly at you while simultaneously pushing that metaphorical knife firmly between your shoulder blades. The moral compass of the corporate sociopath is non-existent. Notice those in the workplace who appear to be prepared to do anything for success. They will ensure they win every negotiation and every promotion from under your feet, stalling your progress. Workers with this personality disorder will chase leadership roles and responsibility, regardless of whether they are able or qualified to do the job. Many corporate sociopaths will do well in organisations and in jobs where such personality traits can be advantageous. You do actually want your surgeon to be an emotionless machine while performing surgery. As you do from an investment banker when he or she is executing your deals. However, in most work environments, this person will be an undetected parasite making alliances based on how much information and favour they can extract while giving the minimum back. If you find yourself in a work relationship with someone who continuously demands help, advice and support but is never around when you need assistance, the alarm bells should sound. Apply the rule of three. If you feel that someone at work has misdirected you in some way
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COLUMNISTS eki Maria
conceal their suspicious activities - yours will be the first name they call when the investigation team comes knocking.
Typical characteristics:
Behaviour will show an innate sense of superiority involving talking down to or humiliating others. Will superficially compliment an individual then subsequently attack or criticise them in greater detail to managers. Can have micro-focus on issues of interest to them that are unrelated to organEKI MARIA isational issues. Often stagnates progress by creating drama and disruption within the organisaonce, you can probably let it go. Twice and you need to make an assessment as to the ethics and trustworthiness of this person. Three times and you do need to begin the process of separating your work life from theirs in order to protect your working relationships and progress. Create your own direct lines of communication to those in power that can work as an antidote to any negative actions they may orchestrate against you. Suspect flattery. If a colleague is consistently harming or humiliating others while campaigning for your sympathy you are almost certainly dealing with a sociopath. Never agree to help them tion for their own personal reasons. Appears to live in a fictional world where their behaviour and actions have little relation to reality. Contradictory or cruel behaviour lacking any apparent rhyme or reason. Deceptiveness for no obvious reason when it doesnt seem to directly benefit them. Mimicking personal attachment with no actual regard. How do you deal with this type of office behaviour? It can be difficult to watch an unscrupulous person climb the ranks particularly
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if you have been a casualty of their cold charisma. There are many subtle tricks you can use to ensure you always win the office games this brand of sociopath loves to play. Remember, its not about you, its about the personality disorder and the win at any cost mentality. You may never be able to uncover the true motivations behind their behaviour but to stay ahead of their manipulative efforts you should: 1)Manoeuvre them away from important initiatives or decision-making regarding your projects or development 2) Make it a policy to not believe anything they put forward without it being independently corroborated. 3) Use one-on-one conversations as opportunities for small talk to find out more about the person without divulging any of your personal ambitions or weaknesses. 4) If you have to work together any decisions should be made with witnesses present who can confirm the details. 5) Skilfully avoid or work around them at all times - this person can be dangerous. The corporate sociopath will not be concerned with building positive work relationships. They will be investing that effort into thinking strategically to stay one step ahead . It will be imperative that you plan ahead and anticipate upcoming scenarios. Your strategy should be to avoid all direct contact especially
if you suspect you have become a target. Confrontations can be fruitless as you only encounter one of their many faces. If you have a corporate sociopath working under you aim to keep them placated and occupied. Cover your bases by minimizing any dependencies on them. If they are working on a task, ensure there is another person also reporting back. Unfortunately this person will only have their own and not the organisations best interests at heart. Best policy will see you cut this person out of your working life completely. However if this is not possible dont be tempted to beat them at their own game. Unless you too have no remorse, they will have won before youve even started. tAB fOLLOW eki MAriA On tWitter @ekiMAriA
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Iroko
rOcking nOLLyWOOD
nigerian movies have attained cult status around the world: Tania ahsan caught up with Jason njoku, founder of iroKo Partners, distributors of nigerian film and music
heres sOMe fuLL disclosure: I am a huge fan of Nigerian movies. I have no idea why: I have no links to Nigeria, I dont really know all that much about the culture and Im not a big world film buff anyway but there is something compulsive about the movies: the low-fi sets, the storylines that always have a moral attached to them and the wonderful acting from amateurs, professionals and young and old alike. The Indian film industry has always been quite slick and not far behind Hollywood but Nollywood is a lot like the early Indian drama industry, a sort of two hour soap where you invest in the plotline enough to care about the journey the protagonist is taking.
entertAinMent
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ENTERTAINMENT Iroko
When Jason Njoku, at the age of 29, returned home to London to live with his mother after five years of trying to make a media business work in Manchester, he was surprised to see how her viewing habits had changed. She used to watch Eastenders all the time and then she started watching Nollywood movies all the time, Jason tells me. This was a dramatic change in my mums viewing habits. Then, with my aunts and uncles, on a Sunday, when everyone got together, everyone was talking about Nollywood movies or watching them in the background. On my return, I reconnected with the African community in London and they were on about these movies which I had no idea about. When he tried to locate movies for his mother, he found it very hard to find the titles she wanted to watch. There didnt appear to be a good, wide distribution network for Nigerian films. with no preconceptions. He saw that the strength of the industry was its massive output with most films only taking around 10 days to shoot. The lack of a monetizing model meant that only people with a passion for films, rather than for business, were getting into Nollywood. With 300-400 production houses, it is possible with anyone with a bit of capital and a desire to be a film-maker to make a Nollywood film but to get a return on your investment is very hard. Thats why I created iROKO partners, says Jason. The more and more I looked for a main distribution house, I increasingly realised there wasnt one main one. So I went to Lagos and I
Making contacts
While youd expect to need a great deal of contacts in the film industry to begin a distribution company, this chemistry graduate decided he would simply jump on a plane to Lagos and in April 2010, that is exactly what he did. I am a big fan of creating your own contacts, explains Jason, confidently. That first time in Lagos, I knew nobody and nobody knew me. I was able to see the industry in its purity,
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spoke to the production houses and found that there was a huge volume of content that was just hitting a distribution wall. So Ive spent the last two years focusing on this. He now has an impressive set-up, employing around 90 staff worldwide and distributing worldwide through their own dedicated internet platform, iROKOtv.com. He initially just set up a Youtube channel called NollywoodLove but now, with his own platform, he provides largely free content from a library of almost 5000 films.
Germany and Italy. Interestingly enough we have more people watching in London than we do in the whole of Nigeria. Nigerians are a very engaged Diaspora. But Nigerians arent the only ones watching the movies. Like me, people with no connection to Nigeria have noted the joy of Nollywood. Great content will be discovered. We package it in a beautiful way and we put it out there. I had always thought it was just Nigerian until I realised the audience was much wider. We have African-Americans watching, Caribbean viewers and many other nationalities. Its gone beyond just being a Nigerian thing. He isnt too bothered by file sharing sites,
Worldwide audience
Our largest markets are the US, the UK, Canada,
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ENTERTAINMENT Iroko
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as long as they take pains to ensure that money goes back to the stakeholders who have made the movies. The industry has been financed primarily with private money. Investors dont touch Nollywood, the government doesnt support Nollywood. It has survived the last 15 years through self-financing. If there is no money coming back to the film-makers, then what does that spell for the industry? Some of the great producers have left the industry because return on their investments just wasnt there.
process of developing a Blackberry app. We are catering for people who love Nigerian music, we want to build a community and the figure out a way to monetize it. IROKING has not seen the same growth as iROKOtv but it has only been going for six months whereas the movie distribution arm has had two years to bed in. Jason Njoku is in New York when we speak. He is about to set up a New York base for his business. He is being heralded as the founder of Africas answer to Netflix but if he has plans for greater world domination, he is keeping them close to his chest. We dont plan too far ahead, he says, We found an amazing opportunity to monetize the Nigerian movie and music industries. We have staff and investor support so we want to figure out this aspect of the business first and explore other avenues later. He wants to remain reactive to developments in the industry and in technology. From what he has achieved so far, his is a name to watch with the same fervour as the movies themselves. tAB irOkOtV.cOM / irOking.cOM
An African Spotify?
About six months ago Jason realised that, along with Nigerian movies, Nigerian music needed a platform for artists. I realised there might be an opportunity there for us to support the music industry and monetize it for the artists. The vast majority of Nigerian artists made no money online. Considering that their music is super-popular and being viewed on Youtube, it seemed a shame that there was no distribution partner for the music industry. We launched iROKING for that. The site now powers around 80 musicians on Youtube channels and generates 12-15 million views a month. Their video streams have been monetized and money is getting back to the artists. They have developed mobile phone apps for the ipad, iphone, Windows 7 and Nokia. They are currently in the
From proje Devcor are into their p
ProPerty & ConstruCtion
Devcor
Rocket Men
ects as diverse as fire stations, schools and rocket testing facilities, e property developers and builders with a difference: TABJ delves portfolio
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PROPERTY & CONSTRUCTION Devcor
JOhAnn LBBe, MAnAging director of Devco Property Development Corporation (Pty) Ltd (commonly known as Devcor), is talking about one of their projects and it is fantastic enough to widen anyones eyes: We built a concrete tunnel lined with 12mm steel plates linked to a control room at the back. Laxan, which is tempered Perspex panels, were fitted in the control room so that operators could visually control the weapons and see the 40mm grenades explode 50 or 100 metres away at, what they call, the bullet-catcher, i.e. where the grenade hits a target and explodes. Not the description of your average residential build, Lbbe is describing the build that his company, in a joint venture with Khapukha Buiding and Civils, did for Rheinmetal Denel Munition, a grenade testing facility that is jointly owned by Rheinmetall Waffe Munition and Denel.
This build was so successful, despite being on a very tight schedule, that the German owned company is holding it up as an example of world class test facility construction. A further tender to modify more than 30 buildings for pyrotechnical operations on the compound was subsequently also awarded to the Joint Venture but Devcor are no strangers to undertaking challenging builds.
Residential to municipal
The company started life in 1999 as Cape Devco Building (Pty) Ltd with an emphasis on residential builds. Up to three years ago they were undertaking projects to build around 2000 apartments but when the global economy went to pot, they diversified into more municipal projects as well. Johann and Averal Fortuin began a company called Khapukha Building &
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10 Rectangle Street, Triangle Park, Paarl, 7646 T 021 - 862 1120/21 F 021 - 862 1122 E-mail - lohbauer@xsinet.co.za
ENGINEERING & STEEL CONSTRUCTIONS - Established in 1991
Structural Steel and Metal Work Contracting
Steel frame buildings Steel staircases Balustrades in Mild steel as well as stainless steel Galvanised and stainless steel gutters Palisade fencing and gates Mobile Cranes for hire
Civils, in which several of their employees have shares, to tender jointly with Devcor for government and municipal projects. Among the ones they landed was Cloetesville primary school, a construction project worth 23 million rand and the new Melkbosstrand fire station, at a value of around eight million rand. The school is almost finished now and the fire station is on target to finish in September or October of this year. Such contracts are likely to represent a bulk of work for them in the coming years, given the South African governments commitment to building infrastructure through budget allocation for schools, hospitals and roads etc.
Devcor does still have its own residential projects as well as work they do for other developers. There is likely to be an upturn in demand for residential builds in the next couple of years as well, Lbbe says. If you had asked me a year ago, Id have been very pessimistic but things are definitely picking up. The banks are not as strict on lending criteria as they were. That was one of the biggest problems after the world economic collapse and recessions. Those created certain perceptions for the man on the street and everyone was too scared to get into further debt. They would rather rent than become home owners and the banks didnt make it much easier.
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PROPERTY & CONSTRUCTION Devcor
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The banks are much more lenient when it comes to issuing bonds to end users now. There was a time that, on selected applications, they would give 80% bonds and the owners would have to come up with 20% themselves and it wasnt possible in the private sector to get a residential development off the ground. As it stands now, were really positive. Its not going to be fast but perceptions are definitely changing. In 2013 and 2014, it will pick up hopefully and well be back where we were five or six years ago. At that time the company enjoyed a turnover approximately 300% higher than what it is currently but Lbbe is confident that this will return to a more normal, higher figure next year.
water, with light treatment, for use in gardens. This aspect of the market will never be like it was before, thats changed for life, and people are looking at conserving energy much more. Devcor, apart from responding to the changing needs of end users, are keen to maintain their reputation for integrity, honesty and good workmanship. After-sales service is extremely important to us, says Lbbe, if a complaint is made after a build, in the vast majority of cases, we would rather go fix it than say it is a maintenance problem. The construction industry in the Cape Town region is very small, everyone knows everyone else. Lots of fly-by-nights came into this business and then quickly disappeared because of bad workmanship and bad after-sales service. While their business has thus far focused primarily on the Western Cape, they are definitely interested in projects further afield when looking at their long term strategy. While a rocket testing facility may be an unusual build, this is one company with plenty of ammunition for successful residential and municipal builds. tAB WWW.DeVcOr.cO.zA
Reputation building
Lbbe says that the housing market in the R350R700,000 range is still lively but that R1.5 million and above has pretty much stagnated for now. People who may have previously bought houses at this level now prefer to rent rather than get themselves into large amounts of debt. Those who are buying homes are now much more energy and cost conscious. They are more and more looking into proper insulation to keep heat in and cold out. They are exploring solar energy and are even looking at reusing water so that they can use bath water and washing
060
Shiel
sPA h
PrOPerty & cOnstructiOn
hAVen
ld homes
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PROPERTY & CONSTRUCTION Shield homes
Shield homes provide residential developments in Port elizabeth and Durban: TaBJ spoke to Ian Christie, one of the directors, about their plans for new builds, including a new spa...
shieLD hOMes MAke diversification look a doddle having a 20 year plus successful residential development business operating out of Port Elizabeth and Durban, a mortgage origination business and a real estate agency called Ibanga (the name means Look how far weve come). The group are also a presence in the South African spa business under their Shambala brand: with a day
spa operating for the last six years in Port Elizabeth and a second one planned, with a boutique hotel attached, for the Hillcrest area of Durban.
Inkanyezi City
Shield Homes have seen much success with developments like Applewood Gardens in Port Elizabeth, where Ian Christie, one of their directors, tells me prices start at around R495,000. We launched that last weekend and sold 18 out of the 29 garden units in the first week already. This stands them in good stead for the more ambitious 2000 units they have coming up in the Inkanyezi City development in Tongaat, Durban.
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There will be 10,000 people living there by the time were done. There will be two schools, a shopping centre, neighbourhood relaxation areas and parks, says Christie. Prices will be from a R350,000 starting point to R750,000 at the top end, but most of it will be in the R350450,000 range as thats where the demand really sits and that is where the banks in South Africa like to lend, in terms of end user finance. Inkanyezi, which means Morning Star in Zulu, is aimed mostly at first time buyers although there is a small section of more upmarket units in the development that will be built up on the hill with distant sea views. However, even these are more
for middle income buyers rather than anything more expensive.
Shambala Spas
Six years ago, in response to a personal interest in the spa market, the directors of Shield Homes set up the first Shambala spa in Port Elizabeth, a 500sqm facility with 12 treatment rooms. This spa has recently had a revamp following a buying and research trip to Bali by the directors. Its probably the only five star spa in the Port Elizabeth area so what weve done, having paid all the school fees which go with trying to learn about a spa, is to decide to build a similar one in
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PROPERTY & CONSTRUCTION Shield homes
Durban which will have a 10 room boutique hotel attached to it. So this will be a combination of a day spa and also where people can come for a weekend and get the benefit of an extended period of time for their treatments, detox or antiageing program. Christie, along with co-director Belinda Schoeman, has lots of enthusiasm for the venture and Shambala Spas are clearly built with the client in mind, by a company that understands the value of spa retreats for the mind, body and spirit. As a result of their research into the most cutting edge spa treatments available, they will be installing a special aquatonic salt water pool
in the Durban Shambala. This is a pool in which you move from station to station in which underwater jets give you a massage on everything from the soles of your feet to the back of your neck. In the middle is a hot tub in which you can sit and relax. This is going to be the show piece of the spa, reveals Christie.
Green and serene

South Africas building codes ensure that you have to consider the environment when planning any building and the plans for the new Shambala spa adhere to these considerations and beyond. They will be using the hot water in the
65
spa to heat the building in winter through running pipes below the floors. Apart from windows that are thermally insulated and an insulated roof, they will be pumping all the water used into tanks and then treating it in that facility and re-using it to irrigate the gardens. Thereby ensuring water and energy use is at a minimum. Shield Homes plans for the future include looking at the anti-ageing market for the spa part of the business. They purchased a number of machines at an anti-ageing conference in Jakarta and are now trialling them for efficacy. We guinea pig everything ourselves, says Christie. We make sure before we turn anything on clients that it is completely safe and effective. We are moving away from the concept of spas just being where you go for pampering and looking at things a bit more holistically. Part of this move toward creating a holistic spa is also trialling DNA analysis for nutritional and health purposes. The company they are working with claim they can map out your ideal diet and exercise regime with lifestyle pointers after analysing swabs of your DNA. It is fascinating stuff but, again, something that the directors will ensure is tried out first for its effectiveness before clients are offered it at the spas. Ultimately we want to open five more spas within the next six to seven years. Not all are
planned for Africa with sights firmly set on opening a spa within one of the hotels in the Seychelles. We want to internationalise ourselves and were also looking at getting therapists over from Bali to work in our Port Elizabeth spa, and more when we get Shambala 1000 Hills off the ground. Christie says the spa industry is set to grow in South Africa and although he admits that the individual practitioner offering a massage at around 60% of Shambalas price does chew away at our pie, he points out that the difference is that a client gets the whole spa experience and can stay the whole day relaxing and rejuvenating, should they wish. It is an attractive proposition that South Africans are taking to very well indeed. tAB WWW.shieLDhOMes.cO.zA WWW.shAMBALA.cO.zA
Shearcut processing capabilities comprise of the following:

Our slitting operation offers light to medium gauge coil slitting within the strip thickness range of 0.4mm to 3.0mm. Maximum incoming coil width is 1550mm and a coil mass up to 26tons. The line is kitted with two interchangeable slitter heads for quick changeovers.
Coil Slitting
In-Line Multi-Blanking
Our American built Red Bud Cut To Length Line features an in-line CNC slitterhead for high speed precision blanking. The machine con guration allows for precision leveling of coil, slitting to multiple widths and shearing to length all in one ef cient operation.
Batch Blanking BSi Steel Ltd. Branches - Shearcut Processing

A processing center that offers an in-house processing facility to BSi Steel. Shearcut is a fast growing processing center that offers an in-house processing facility to the BSi Steel Group. Based at the Kliprivier site in Gauteng, the standalone operation of Shearcut offers the added exibility to deal with a wide range of COM (Customer Own Material) customers and associated processing requirements. Shearcut prides itself on ef cient customer service and accessible technical expertise to both its internal and external customers.
We are able to offer multi-size precision blanks off our CNC Optishear blanking machine. This operation provides for cut to length sheet to be individually blanked to customer speci cations with no web scrap losses. Unlike multi-blanking multiple blank sizes can be obtained from a single sheet.
Sheet Cut to Length
The sheet Cut To Length operations cover a thickness cutting range from 0.5mm to 6mm and a maximum strip width up to 2000mm. Our latest Cut To Length line is tted with an internationally renowned German built Schnutz precision leveler that features interchangeable leveler cassettes.
Plate Cut To Length
The Plate Cut to Length line is the latest high tech installation for Shearcut offering heavy gauge decoiling and plate cutting with exceptional atness control. Fitted with a state of the art precision Schnutz leveler from Germany, the new CTL will offer plate leveling with exceptional atness tolerances. The leveler features dual leveler roller cassettes that are interchangeable thus offering the unique option for precision leveling down to 0.5mm thick material.
Plate Guillotine and Heavy Plate Cutting
We offer guillotining of sheet from 1mm to 12mm up to a maximum strip width of 3200mm.
Tel: +27 (0) 11 8617608 Fax: +27 (0) 86 6752803 Email: jerry.govender@bsisteel.com OR letitia.basiak@bsisteel.com Jerry Govender - Shearcut
LAFARGE 12MM PLASTERBOARD THROUGHOUT THE CEILING OF THE WHOLE HOUSE AND LAFARGE 6.4MM PLASTERBOARD FOR THE BULKHEADS CURVES.
Building beauty
lafarge South africa manufactures and markets cement, readymix concrete, aggregates and Gypsum products: TaBJ discovers the green credentials of this pioneering company
thOse WhO think that one slab of concrete or plaster is much like another are in for a surprise: Jean-Paul Croze, managing director of Lafarge Gypsum South Africa, explains to me the complexity of these building materials. Building regulations vary and are specific to each country in the world. What we call the residential market has quite different requirements to that of the commercial market so if you have a shopping mall or something like that, the ceilings will naturally be much higher as will the requirements of the insulation system. There are specific requirements governing sound and air quality for a hospital, for example, and again for a hotel which needs strong acoustic insulation between rooms that are close together. A good example is a cinema, what you might call a multiplex with 10-20 cinema rooms. The plasterboard system works well here as you need a high level of sound insulation so that you can have screens back to back without the sound coming through to the other room.
LAfArge
066
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PROPERTY & CONSTRUCTION lafarge
JEAN-PAUL CROZE, MANAGING DIRECTOR OF LAFARGE GYPSUM SOUTH AFRICA
LAFARGE MOISTURE CHECK BOARD WAS USED FOR THE WALLS.
Energy efficiency
Being a wholly-owned subsidiary of Lafarge, a French company that is a world leader in construction materials, Lafarge SA is in a great position to provide those different solutions to developers and contractors. One of the most popular solutions for interiors has been plasterboard and last year Lafarge became the first company to locally produce 15mm standard plasterboard. This is in addition to their more standard range of 6.4mm, 9mm and 12mm plasterboard. The thicker board offers greater resistance to impact and better acoustic and insulation properties, thereby making it perfect for high traffic areas like shopping malls. In fact it
was initially developed for a retail project in Sandton and proved so effective that it joined the range of plasterboards offered by the company. The entire Lafarge plasterboard range has been labelled green. In South Africa specifically, explains Croze, we are moving from a period where there was no insulation at all and now we have new regulations coming in around energy efficiency which will change the way we build in the coming years. This is opening up big avenues for plasterboard systems.
Green label
At the time of the launch of the new plasterboard,
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Shearcut processing capabilities comprise of the following:

Our slitting operation offers light to medium gauge coil slitting within the strip thickness range of 0.4mm to 3.0mm. Maximum incoming coil width is 1550mm and a coil mass up to 26tons. The line is kitted with two interchangeable slitter heads for quick changeovers.
Coil Slitting
BSi Steel Ltd. Branches - Shearcut Processing

A processing center that offers an in-house processing facility to BSi Steel. Shearcut is a fast growing processing center that offers an in-house processing facility to the BSi Steel Group. Based at the Kliprivier site in Gauteng, the standalone operation of Shearcut offers the added exibility to deal with a wide range of COM (Customer Own Material) customers and associated processing requirements. Shearcut prides itself on ef cient customer service and accessible technical expertise to both its internal and external customers. Shearcut is an accredited ISO 9001:2008 company.
Sheet Cut to Length
Our robust American built Red Bud Cut to Length line offers an exceptional cutting and levelling capability to process HR, CR and Galv. Coils within the thickness range of 0.5mm to 3.0mm. The line is tted with a six high Bradbury leveller for precision sheet levelling. Standard and custom packing options are offered off this line.
Plate Cut To Length
The Plate Cut to Length line is the latest high tech installation for Shearcut offering heavy gauge decoiling and plate cutting with exceptional atness control. Fitted with a state of the art precision Schnutz leveler from Germany, the new CTL will offer plate leveling with exceptional atness tolerances. The leveler features dual leveler roller cassettes that are interchangeable thus offering the unique option for precision leveling down to 0.5mm thick material. The thickness cutting range is from 0.5mm to 6mm and a maximum sheet width of 2000mm.
In-Line Multi-Blanking
Our American built Red Bud Cut To Length Line features an in-line CNC slitterhead for high speed precision blanking. The machine con guration allows for precision leveling of coil, slitting to multiple widths and shearing to length all in one ef cient operation.
Jerry Govender - Shearcut - Tel: +27 (0) 11 8617608 Fax: +27 (0) 86 6752803 Email: jerry.govender@bsisteel.com OR letitia.basiak@bsisteel.com
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When reliability is everything

A truck made for Africa- robust, reliable, simple to service. 36 month/5000 hour Powertrain warranty. Best Fuel consumption in the industry. For example the 2.5 Ton diesel forklift runs at 2.1 litres per hour. Easy operation, driver comfort, industry leading IPS safety features. Service intervals: every 500 hours. Committed to quality and service excellence.
Jean-Paul Croze was quoted as saying: We want to provide solutions as close to specification requirements as possible to allow architects and interior designers the flexibility to adapt design concepts without compromising the environment. While Croze admits that the customer is king and they can ask for a build without the green features but new building regulations in force since 2011 (and the fact that South Africa is struggling to maintain its electricity supply) mean that most developers now accept the need to consider the environment when planning their projects. We are starting to have more and more commercial buildings where they want to have a green rating, says Croze, and so the architect wants to have a green solution and that is why they come to us because we are labelled with Ecospecifier. All our range of products have a green label from Ecospecifier who are independent and they monitor how you use materials, how much carbon emissions you have, how much water you use, to produce your products. They provide a green label on the basis of that. Says Croze, Our sustainability initiatives are not just restricted to green products but extends to our transportation as well. We have recently launched the new teardrop trailer that will set new standards for transportation in Africa. Gypsum SA has become the first organization
Go green with Mitsubishi Greenest forklift on the market.

Visit www.mitsubishiforklifts.co.za for our monthly specials.
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LAFARGE 15MM PLASTERBOARD AND STUD AND TRACK FOR THE WALLS AND LAFARGE VINYL TILES AND LAFARGE CEILING GRID ON THE CEILING.
in South Africa to use such trailers which have the perfect aerodynamic lines of a natural teardrop. This step is delivering more than 10% fuel consumption reduction and more than 10% loading capacity on the trucks. The new transportation specifications of Lafarge Gypsum work on innovation and technology in order to reduce the environmental impact of the business. Technical developments have embraced creativity to meet the business core objectives of: Introducing one of the safest vehicles operating on South African roads;
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Designing a vehicle specification that would inherently reduce the companies carbon footprint; Increasing payloads to enable fewer vehicle trips The ethos of Lafarge is that of sustainable construction, sustainable communities.
processes also comes from South Africa but we have to import the paper that is put on the side of the plasterboard, mostly from Europe or Asia, because we cannot yet find the quality of paper we require at a price that is affordable locally. Having produced their quality products locally, they then have an ability to export either directly or through subsidiaries to almost all of sub-Saharan Africa. Croze says he is not looking too proactively for business outside this area as there is plenty of scope for growth in South Africa itself, with a number of new big building projects about to happen. While the construction business saw a lull after
Local source
They also try to source as many of their products and raw materials locally as they can. Most of our raw material, for example Gypsum, comes from South Africa. Most of the additives we put in our
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the residential market and they now have more than 20% of that market, in addition to their commercial building successes. While Jean-Paul Croze does admit that the market is now very competitive with cheaper products often coming in from countries like China, there is less pressure on Lafarges business that you would expect because the quality of the products is so high. We offer a 10 year guarantee on our products and systems and that makes us a lot more competitive against cheaper
LAFARGE 15MM PLASTERBOARD AND STUD AND TRACK FOR THE WALLS AND LAFARGE 9MM PLASTERBOARD FOR THE CEILINGS.
products. Certainly at any time whether in a downturn or an upturn you cant afford the false economy of building badly. Lafarge are there to ensure their clients get the most costeffective, environmentally sound, and superb quality building product solutions. tAB WWW.LAfArge.cO.zA
the banking collapse of 2008 with a big contraction in sales of building materials in early 2009, Croze says that they were well placed to deal with the problems there because they had just spent a year rationalising the way the business was run. We had begun to make the business more organised and professional a year before, to ensure everyone was well-trained and that everything was working well. This meant that when the market began to be buoyant again, we were in a position to take the market share we expected to have. They also didnt spend the downturn twiddling their thumbs as they launched a number of products at the start of 2010 to reach
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PeBBLestOn PrOPerties
ne
Green living
Proving that developments dont have to be ugly sprawls in a concrete jungle, Pebblestone Properties aims to bring green, serene living to Johannesburg.
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PROPERTY & CONSTRUCTION Pebblestone Properties
the sOuth AfricAn electricity supplier Eskom recently warned of possible power cuts as it upgrades and maintains the power-grid infrastructure. These ongoing issues of power usage mean that South Africa suffers from a shortage of electricity. Youd think there isnt much that can be done about this but Johannesburg-
based developers, Pebblestone Properties have already incorporated an answer into their new developments. Nick Constas, Director of Pebblestone Properties explains how the greenness of their build at Parkville Place Eco Estate contributes to greater energy efficiency. Weve installed solar geysers throughout
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managed to reduce that to about 280 kVA by introducing green measures into our build, so weve cut it by more than half. I think that is one of the real benefits weve provided here.
Green mindset
The electricity savings are not the only green aspects of Parkville Place. Weve introduced communal laundromats fitted out with low voltage wash machines, which contributes to the overall energy saving, says Constas. Weve tried to instil in our tenants an awareness for energy conservation, informing them of the energy drain that using an electric heater provides, for example. So when they do come in and rent a unit, well take the time to explain the cost benefits of using gas for heating their living space, as well as the use of gas to heat water using a stove-top kettle. For owners and tenants the introduction of green measures is attractive, ultimately meaning a saving for them as well as a saving for the country. Its important our new developments, and replaced electrical stoves with gas hob and ovens. Lighting is LED throughout, including passageways and outside spotlights. In the past, a complex like Parkville Place would have required an electrical supply from Escom of approximately 600-700 kVA. Weve to assist in changing peoples mind-set and breaking old habits - I think thats the way forward. This attention to energy saving has a dramatic impact in cost savings for residents. Constas explains that while an ordinary two-bedroom apartment is likely to have
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PROPERTY & CONSTRUCTION Pebblestone Properties
an electricity bill of around R700 a month, their builds typically attract bills of around R200-R240 per month. You can see why their properties are so popular.
mographic, there is a demand for these kinds of developments going forward. Parkville Place is very conveniently positioned on the outskirts of Sandton but without Sandtons exorbitant prices. It is also convenient for good local schools and highway links. This could explain why 70% of the units are already sold.
Younger markets
A two-bedroom unit of approximately 86sq metres goes for around R830,000 and includes two bathrooms, a large balcony and pre-paid electrical meters. The rental price for this size of apartment is approximately R6000.00 a month. Constas says that around 30-40% of buyers buy to live in the property and another 30-40% buy as an investment for rental purposes. Interestingly, Pebblestone Properties holds onto 20-30% of the units in any development theyre involved for themselves and rent them out so that they stay involved in the development and can ensure long term maintenance. While the electricity shortages may have been the reason for going for the green options, Constas says that younger buyers are much more receptive to the idea of eco living than the older generation who are more accustomed to electric kettles and hairdryers and other electrical mod-cons. Younger people are a bit more interested in energy conservation, says Constas. That is the market we are targeting and within this de-
Student residents
Pebblestone Properties are also involved in student accommodation and they are currently looking to develop another student site in Bloemfontein, near the University there. These are eco units too, with solar geysers and energy efficient measures but are built with student lifestyle in mind. Students are often hard on an interior. laughs Constas, They really utilise the unit! We use hardwearing tiles and leave certain sections of the unit as exposed brick. We find that if the units are plastered throughout, in six months wed have to fix up plaster damage. So we leave about 40-60% of the unit as exposed original brick and we dont paint the doors, we seal them, to avoid the paint chipping. We use mixer taps to keep fittings at a minimum. Basically it all has to be as low maintenance as possible, while still keeping a modern aesthetic. Fortunately it is the parents of students who
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sign the lease with the owner so that if there is any damage a responsible adult is liable for repair. Nick Constas believes that their model, which provides running costs that are as low as possible, is the way forward in the current property development market. One aspect that is underplayed in the market at the moment is that the banks have really tightened up with lending, especially at the lower end of the market. They are particularly reluctant to approve buyers with bad credit ratings or court judgements. As a result of this we have seen an increase demand for rental, which we expect to continue into the future until
the banks start relaxing their loan criteria. In the interim, Pebblestone Properties offer affordable units with eco measures that are designed not only to save the planet, but are also kind to the bank balance. tAB WWW.MOnOLithestAtes.cO.zA
080 DriLLing MAJOr

internAtiOnAL
Providers of varied drilling
resOurces
g grOuP inc.
g services around the world
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RESOURCES Major Drilling Group International
Major Drilling Group International Inc. (MDGI) is one of the worlds largest specialty drilling service companies. headquartered in Moncton, Canada, the company has offices in Canada, the united States, South america, Central america, asia, africa, and australia. Founded in 1980, the company started as a small drilling operation and has grown into a drilling services company that supports mining operations around the world.
the cOMPAny OWes its success to the natural historical developments in the mining industry.
Most near-surface mines were developed in the 1980s thanks to the introduction of aerial-survey technology. However, those mines aged fast and with the growing global demand for ore and metals, the industry started developing technology that would allow access to these reserves. The company chose to work and develop technology in the areas with barriers to entry. This created a unique service company that has a little competition in the market and continues to build its reputation on staying ahead of the curve in the drilling technology. The company technology and experience supports drilling operations that require a use of various drilling methodologies
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RESOURCES Major Drilling Group International
such as underground core drilling, reverse circulation drilling, geotechnical drilling and environmental drilling. The specialized drilling segment only takes up some 10 per cent of all the drilling done worldwide, but Major Drilling services and technology covers more than 80 per cent of that segment. Major Drilling professionals coined the term specialized drilling. To the companys specialty portfolio belong projects such as highaltitude drilling in the Andes, Arctic drilling in Canada, and deep-hole drilling across the globe.
pleted the largest acquisition in its history with the purchase of the Bradley Group operations in September 2011. This acquisition added 124 rigs and 841 employees to Major Drillings base of 571 rigs and 4,362 employees. The acquisition of Bradley Group is a unique opportunity to further Major Drillings corporate strategy of focusing on specialized drilling, expanding our geographic footprint in areas of high growth and of maintaining a balance in our mix of drilling services. The operations of both companies are very complimentary in terms of geography, personnel and strategies, Francis McGuire, President and CEO of Major Drilling, said in a statement.
Drilling for Growth

While the company focuses on this specialty field, as part of the corporate strategy Major Drilling continues to acquire drilling companies worldwide to expand across global markets. The company always seeks to acquire specialized drillers, however also opts to purchase a conventional drilling company to get a foothold in a market. One of the examples of this expansion was a recent purchase of drilling company in Mozambique. Major Drilling has a simple motto: You Dominate or You Die. To maintain its dominance, the company works to remain the biggest specialized drilling provider in the world. To serve this expansionary corporate strategy in specialized drilling, Major Drilling com-
On the Ground
Specialized drilling is a skills-intensive business, and it takes three to five years to train a person to become an experienced driller. At the same time, drilling is an on-demand business, and requirements for the labour force can change instantaneously. Finding experienced people becomes a challenge as Major Drilling ramps up production worldwide. While the company services mining operations worldwide, the market strength comes from Asia, with China and its growth being the most important client in the commodity markets and part of the equation in the drilling and mining industries,
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OUR SERVICES
Civil - Construction Engineering Diesel & Mechanic - Plumbing System Solution - General Purpose
WE ARE HERE TO SERVE YOU!

Contact: Cell: 071 365 8556 E-mail: chooks2011@gmail.com Physical: 3095 Phandamadhango Street, Extension 11, Chiawelo, 1818
currently operating on an economic base that was 70 per cent smaller five years ago. Looking forward, the company expects the demand for drilling services from the senior mining houses to continue to be strong, particularly in Latin America and Africa, where customers need to replace their reserves. One example, in the fourth quarter (ending April 30, 2012), the companys Australian, Asian, and African operations reached revenues of $57.3 million, a 65 per cent increase from the same period last year, with the revenue increase coming primarily from new operations in Mozambique, Burkina Faso, Democratic Republic of the Congo (DRC), and Australia.
With its gargantuan market share in specialized drilling, Major Drilling continues to supply these specialty services to mining companies worldwide. As the demand for mining commodities in Asia and worldwide grows, the company works to remain the largest provider of specialty drilling in the world via organic growth and strategic acquisitions. tAB WWW.MAJOrDriLLing.cOM
resOurces
reDPAth
Mining solutions for africa
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RESOURCES redpath
The Canadian mining group redpath has an impressive international reach; TABJ caught up with their South african arm to find out their plans in the companys anniversary year
this yeAr reDPAth are celebrating their 50th year in business. The company has come a long way from when 26 year old Jim Redpath incorporated J.S. Redpath Limited, in October 1962, in order to achieve his dream of having his own mine contracting company. Since those heady early days, the company has to date sunk more than 75 shafts worldwide. They have also achieved an admirably high level of worker safety, a concern and a philosophy to which Redpath South Africa also adheres. Dirk Strachan, general manager for Technical Service and Marketing at Redpath South Africa, tells me that the ongoing project they have to refurbish one of the shafts at the South Deep mine in Gauteng has enjoyed 400 accident free days thus far. That shaft is 50 years old and so it has started to degrade and rust, were doing ad hoc work as required there. They carry out regular assessments to see if they need to improve their working practices with regard to health and safety.
says, are due to court major growth in the next year or two. Weve got a very small market share at the moment, less than 10% of the South African market in terms of monetary value, but were striving to increase that to 20% by the end of 2013. While ambitious, this is still achievable as the company do a mix of refurbishing existing decaying shafts and, the core of their business, building new infrastructure for new mines. Part of our strategy is to diversify in as many commodities as possible due to the fluctuation of commodity prices. We need to ensure that if there is a slump in the price of one commodity, that this does not affect our business. If we diversify our service offering to as many commodity mines as possible, the impact is lessened if one of them takes a dive, explains Strachan. They currently serve platinum, gold, diamond and copper mines so the strategy is operating well.
New avenues
The group has experience of operating in Botswana, Namibia, Tanzania, Zambia and, of course, South Africa. They are seeking to expand more in Zambia and the Democratic Republic of Congo. Zambia already has a decent mining structure and it is difficult but not impossible to get supplies into Zambia; it has international airports, it is accessible. DRC, on the other hand, is very rich
Doubling market share

Redpath South Africa is currently a minor player in the South African contracting game but, Strachan
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in minerals with lots of opportunities but largely unexplored to date. So, as a result of that, many big mining companies are undertaking extensive exploration and are putting together projects with a view to explore and mine those resources. However, the mining infrastructure is not available in DRC and needs to be established. We are setting ourselves up to take some of that business. With an international parent group, Redpath are able to access the latest knowledge, infrastructure input, and best practice in the mining industry from around the world. This knowledge base means that the company is often called
upon to consult on mining projects, even if the work is to be carried out by the company themselves. It is not very often that were called upon to do that, admits Strachan, but it does happens and we do provide that service as well. Their expertise means that they can judge the best equipment and staffing levels for a job and react according to their clients individual requirements. With exploration still big business in Africa, Redpath South Africa is set to make the next half century celebration their own. tAB WWW.reDPAthMining.cOM
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RESOURCES World Titanium Resources
WOrLD titAniu
Madagascar in motion
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resOurces
uM resOurces
092
94
hot on the heels o Titanium resourc Madagascar to de
if there is one cer
agascar, its that it
messages that chi
to get across abou
cent owned asset.
95
of its aSX listing in January, World ces has secured a mining licence in evelop its world class mineral sands resource.
rtainty about the Toliara Sands Project in Mad-
t has a great deposit. That is one of the priority
ief executive Bruce Griffin wants to make sure
ut World Titanium Resources (WTR) 100 per
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BMT JFA Consultants (BMT JFA), provides specialised services for port and maritime developments. The services offered by BMT JFA include full project management, from conception to completion of marine/port, harbour and coastal projects. The company can act either as part of a team or can lead a team managing all aspects of a project from initial site investigations through to project design, construction, commissioning and maintenance. BMT JFA is part of the BMT Group, a leading international multi-disciplinary maritime engineering, science and technology consultancy providing a broad range of products and services across the energy and environment, defence, transport and risk and insurance sectors.
BMT JFA are proud to be associated with World Titanium Resources development plans associated with the Toliara Mineral Sands project, where BMT JFA are providing port engineering services for the development of a marine export facility to support WTRs heavy metals mining and export operations. Following port concept engineering, BMT JFA are currently assisting with the collection of on-site data (including survey, geotechnical and wave and current data) to support the detailed design of the facility, as well as vessel simulation and value engineering studies. For further details, please see our website at: www.bmtjfaconsultants.com.au where you can learn more about our projects, key people and capabilities as well as client testimonials. If you have any current or future requirements for our services, please feel free to contact us.
www.bmtjfaconsultants.com.au
Phase 1 of the companys flagship Ranobe mine contains a JORC resource of 145 million tonnes (Mt) at an average grade of 8.1 per cent total heavy mineral (THM). Phase I is estimated to produce some 400,000t of ilmenite and 43,000 tonnes per year (t/y) of rutile/zircon concentrate over an initial 20-year mine life. But Griffin notes that the initial development phase represents a mere 20 per cent of the JORC resource at Ranobe, which is estimated at 707Mt with average grade at 6.5 per cent THM. Ranobe is one of those assets that it is quite hard to overplay how good it is in terms of resource quality, the total resource is in one
deposit, it is not a whole series of deposits that we are calling one project. From a mining perspective, that is extremely attractive, says Griffin. In late April, the Madagascan government boosted the companys status by granting renewable 40-year mining licences for Phase I of the Ranobe mine development and for the area immediately south as well as a three-year renewal of the remainder of the exploration licence. The second permit covers an additional 140Mt of 7.1 per cent grade THM while the exploration licence references the remainder of the resource at Ranobe. Though the documents had been in the
97
works for some two years, approvals still came in earlier than expected notes Griffin. Thats to the credit of the new mines minister, Tolotrandry Rajo Daniella Randriafeno, who has established a process within the Ministry of Mines to ensure that paperwork is both moving forward and is presented by legitimate parties. In a country recently exiting from political turmoil like Madagascar, the task is a tall order. The company has been in the country for nearly 20 years now, so it has dealt with all that comes and goes and we have been working very closely with the new government, Griffin adds. The approvals also mean that WTR is on track for next steps such as raising development capital in the second half of the year followed by engineering, construction and commissioning before first production in 2014.
COASTAL& ENVIRONMENTAL SERVICES

LEADERS IN HEAVY MINERAL MINING ENVIRONMENTAL STUDIES
Product placement
The companys products are going to be a standard sulphate and chloride ilmenites as well as a non-magnetic zircon/rutile concentrate. The decision to wait and see on a zircon/rutile separation plant is part of an operational philosophy to keep things simple at the start, a philosophy that extends to product marketing. The titanium dioxide and feedstock market has behaved a bit like iron ores in that buyers for
is a world leader in the assessment of environmental and social impacts, and the provision of environmental & social management (E&S) services to the minerals industry in Africa and Madagascar. We have completed twenty environmental assessments and have been involved in nine mineral mining projects in Africa. Our services range from pre-feasibility environmental assessments to on-site E&S management services.
67 African Street P.O. Box 934 Grahamstown, 6140 Tel: + 27 46 - 622 2364 Fax: + 27 46 - 622 6564 info@cesnet.co.za www.cesnet.co.za
CES
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years had been able to dictate terms in a stable slow growing market. Suddenly, you had China emerge as a major buyer and now consumers are motivated to sign long-term contracts without fixed prices with companies that have long term assets because they want stability of supply, Griffin explains. China is a definite player in the market but around half of the market for ilmenite is in the rest of the world, for example, WTRs second largest shareholder, Mineral Deposits has a 50 per cent interest in a smelter in Norway, Cristal Global is building a new smelter in the Kingdom of Saudi Arabia and DuPont in the US continues
to be a force in the industry. We are hesitant to be too aggressive with offtake agreements too soon. The industry used to be characterised by a need to secure fixed price offtake agreements in the early days of a project but with the shift in the market it is less risky to go closer to production without a contract in place, Griffin says, adding that WTR is considering initial cornerstone customers to prepay for product in order to secure capital but are comfortable with marketing parallel to construction. Preparations for the drilling and pitting programmes planned for the second half this year are well advanced. The camp at Ranobe has
99
been refurbished and trial mining equipment, such as front end loaders, was successfully sourced from within Madagascar. Meanwhile, applications for the environmental permit for the program and for the import permits for the pilot plant and drilling rigs have been submitted. The pitting program will focus on the mining area at Ranobe and will be used primarily for a confirmatory trial of the mining method selected in the engineering study. A bulk sample will also be collected and processed to confirm the selected flow sheet and to provide additional product samples for customer testing. And, if the engineering study shows it
as a requirement, Ranobes programme will incorporate in-fill drilling. A further exploration programme is planned in the northern Morombe deposit later in the year, which will follow-up on earlier sample results to determine economic mineralisation potential.
Mine placement
Ranobe has some inherent advantages for getting product out of the ground, namely that the mineral sands are unconsolidated, there is a low slimes content and no strip. At the same time Ranobe mine will be close to existing infrastructure. In ground values have been estimated at
100 RESOURCES World Titanium Resources
JULY 2012 The African Business Journal 101
$19/t, compared to an average of between $12 and $13/t across the industry. Griffin emphasises however that these values will not be diminished as a result of strip ratio. Basically if we pick it up, its got value in it, there is no inefficiency of moving barren material, Griffin says. And being close to existing infrastructure allows for simple mining and processing, though a definitive feasibility study (DFS) is yet to be completed. The DFS is anticipated mid this year and will detail best options for building the 50km road and plant placement as well as other optimal design factors. Still, some things wont change. The Ranobe site is just 50km from Toliara city, which has a port, airport, as well as a nascent tourism industry up the coast. And sourcing some construction materials and personnel locally and within Madagascar for WTRs building requirements is a distinct possibility. We have assessed local capabilities and have been quite encouraged, we have a natural source of building material in a limestone cliff near us and Malagasy contractors are used to building structures in the region with limestone, they know how to design and build a road using limestone, the best thing we can do is use construction materials that are available locally as much as we can, Griffin says.
Other ways WTR is engaging locals is through its CSR programme. The company has supported Australian Doctors for Africa for about 10 years and installed foot pump water wells for several of the villages impacted by its operations. Our level of commitment and investment will increase as we get closer to a production decision but we have a strong relationship with the community we have had different leaders in those communities write to the minister of mines and prime minister in support of our licence, Griffin says. And the recent granting of those mining licences has been a major step towards derisking the project overall. What we have always been emphasising is that it is a large deposit, it is high grade, it is long life and we are taking the first steps in proving the value contained in all four deposits. That story remains true[the mining licences] are not the last approval we need, but it is a question of when, not if, Griffin says. tAB WWW.WOrLDtitAniuMresOurces.cOM
102 RESOURCES South Boulder Mines
102
sOuth B
eritrean pota
resOurces
BOuLDer Mines
ash play
South Boulder Mines is firmly focused on starting production at its open pit potash resource in eritrea while continuing to explore projects in Western australias Duketon Greenstone belt
ALL the resuLts coming out of South Boulder Mines Colluli potash project reaffirm the high potential of the resource. Its JORC/NI43-101 compliant mineral resource estimate increased to 1,079 million tonnes (Mt) and contained potash is now estimated at 194Mt, an 85 per cent increase. Current potash prices are about US$475 per tonne. A definitive feasibility study (DFS) is expected for completion in 2013 and production has been set for no later than 2016. If you just look at value in the ground, it has enormous potential and the resource starts at 16m below the surface, so in terms of a resource project it is huge, certainly a tier 1 asset in the world, says Lorry Hughes, chief executive and managing director at South Boulder since 2008. Hughes is a geologist with 20 years of industry experience and he has held senior management positions on exploration and operational mining projects with experience in the north east goldfields of Western Australia as well as overseas including Malaysia, Indonesia and Eritrea. It is Eritrea that has been the focus of his undivided attention since the shallow resource was discovered in mid-2010. The team assembled for the DFS represents a cross-section of some of the best global experts, he notes. Ercosplan, an internationally renowned
German-based consultancy, will take on the role of lead consultant and will be responsible for the key areas of mineral processing, solar evaporation and geological resources. Ercosplan has been involved with the Colluli potash project since its inception in 2009 and was responsible for completing the scoping study in 2011. Australian company AMC Mining Consultants will oversee the geotechnical aspects of the operation and provide input to mine planning and water management and Canadian-based Knight Pisold has been engaged to complete the environmental social impact assessment. In addition, South African Senet Engineering has been appointed as DFS infrastructure development consultants. The infrastructure package includes supply of water and power to both mine and export terminal sites, tailings disposal systems, design and costing of a road connection the two sites, buildings, product storage, conveyors, fuel systems, jetty and ship loaders. One of the best aspects about our project is its excellent infrastructure location. Our total CAPEx for the port and road is going to be about $125 million because it is initially not a big bulk transport operation, we are talking about exporting 1Mt/y from this port, says Hughes. Senet comes in with some important past successes. It not only has extensive experience
in Africa it was also the provider of engineering procurement contract management (EPCM) services for Eritreas only operating mine, Nevsun Resources Bisha Mine, which was completed on time and on budget. In addition, the project is close to the coast and near major shipping routes to carry product to Asia, the biggest growth market for potash in the world. We are the closest new supplier of potash to India and then youve got China, Malaysia, which are the regional customers that make sense in our development phase, but also, heading up north, we are straight into Europe so we can compete there as well, he says. Other companies with projects in Eritrea have
yet to find potash while those with resources across the border in Ethiopia do not have low cost access to the coast, a reality that gives South Boulder a distinct advantage. It doesnt seem like South Boulder will be sharing that leading position any time soon. Right now there is no commercial reason to provide access to any infrastructure we build to other companies, it is possible that one day there will be but there are no economic plans to do so now, says Hughes. Though the company is based in Australia, its reach is truly global, which is one of the reasons for classifying resources in compliance to both Canadian and Australian requirements.
major local community meeting at the coastal town of Mersa Fatma. Our project is going to have a huge impact. There is very little industry in Eritrea and most people that live around the coast are subsistence fishermen and goat herders. It is still a sparsely populated area, but the people that do live there are going to be impacted because we are going to have a major operation happening at their doorstep, he says. The local communities have been very supportive of our development plans and our ability to provide jobs for them. In addition, negotiations have started with the Eritrean government for its purchase of a It gives us options. The North American markets for example are very familiar with potash and there are a lot of people in the northern hemisphere watching our development progress. If you look around the world and which regions have investment communities that best understand potash, it is Canada, the US, Europe and Asia, says Hughes, adding that the companys largest shareholder is Canadian-based Sprott Asset Management and though Europe represents a small portion of the shareholder base, Germany, Holland and London have been supportive. Aside from investment community support, the first quarter of 2012 saw the companys first paid participating interest in the project as a precursor to the formation of a joint venture agreement and ultimately the grant of a mining exploitation licence. Hughes is keen to dispel myths associated with doing business in the country, saying that it is an attractive African jurisdiction. Eritrea has developed an attractive mining law and it encourages foreign investment. Already there are 20 foreign companies mining and exploring projects with enormous growth potential, he says. He also points out that the mining law provides for Eritrea to purchase a 30 per cent paid participating interest in all its resource projects,
which has the effect of creating wealth for all stakeholders. Hughes admits that Eritrea has had regional stability issues in the past and political complications from within the geopolitical region that extend back to early African colonisation. He sees these past issues as resolved and believes the governments in the region are committed to development and sustainable growth. We are here to work with the government, which is committed to nation building and has no tolerance of corruption and open for commercial business. They want to develop this mine and we are going to help them and the people of Eritrea, he says. South Boulder anticipates that the bulk of the development cost of $500 million will be raised with offtake partners and strategic investors. Discussions with potential development partners from the Middle East, Asia and the global fertiliser industry commenced immediately after the potash was discovered two years ago. Though the big news is the exploration success at the Colluli project, other properties are still highly regarded by management, he adds. The Duketon project in Western Australia covers 1,500km2 and is highly prospective for gold, nickel sulphide and base metals. During the quarter, resource extension and delineation drilling was restarted at the Duketon nickel JV (with
Independence Group earning 70 per cent of the nickel rights to selected tenure) to follow-up the maiden JORC resource of 1.7Mt of 1.7 per cent nickel, 0.4 per cent copper and 1.9 grams per tonne of platinum group elements. Hughes explains that for the benefit of both projects, the gold and nickel assets are being separated from the potash assets in order to establish dedicated funding streams. Colluli is very tangible, there is a mining project going into production and that means a very different set of fundamental project funding - it would be better served if it is in a separate dedicated potash company. Nickel and gold are very different commodities and we are in a different region in the world, nickel and gold is very much standard fare for Australian investors in general and that has its own unique skills and funding requirements, he says, adding that a separate potash company is expected to be created by the end of this year. tAB WWW.sOuthBOuLDerMines.cOM.Au
greenB
112
AgricuLture
BeLt fertiLisers
recipe for Growth
114 AGRICULTURE Greenbelt Fertilisers
agriculture needs good fertiliser for crops to thrive and Greenbelt have the technical skills and expertise to help farmers achieve that aim
greenBeLt fertiLisers (gBf), a 100% subsidiary of CHC Commodities, began life in 2004 as a fertiliser blending and marketing company. With an initial blending plant in Kabwe, Zambia, the company focuses on producing crop and soil specific fertilisers, primarily for the commercial
farming sector. In 2006, they relocated their blending plant to Mazabuka, at the heart of the sugar industry in Zambia. This reflected the fact that their biggest business segment was sales into the sugar industry. Rob Coventry, CEO of GBF, is proud of their record in giving farmers a higher yield with minimal costs. Weve had some great results. We sample the soil for our clients and get it analysed by qualified laboratories. We use
agencies with some cutting edge technologies and, with their input, we have done trials with an improved ingredient mix and this has given around a 10-15% increase in yields for our clients. While GBF traditionally focused on the commercial sector (defined as farmers who grow approximately 100 hectares or more of crop and larger corporate farming operations), they are now also targeting smaller farms. With a small scale farmer, their interest in
yields will be much, much higher, says Coventry, they currently use one fertilizer for any crop and in any soil. The potential in this sector is high and there is also a benefit to the country. From our blending plants in Tanzania we can reach out to Rwanda and Burundi as well.
Agronomic know-how
Having experience of blending fertilizer for crops as diverse as sugar, maize, soya beans, wheat,
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barley, tobacco and bananas, GBF have attained a level of knowledge about crop fertilisation that is unsurpassed. They regularly travel to conferences worldwide to ensure what they are doing is at the forefront of agronomic practice. They also have qualified agronomists from America, South Africa, Zimbabwe and Zambia working for them. The wide variety of nutrient combinations they can produce means that they provide farmers with a bespoke blend based on individual factors such as soil, crop and yield expectations. This ability to respond to the needs of a variety of farming operations means that GBF are currently
the second largest player in the commercial agricultural sector in Zambia with a 30% share of the overall commercial agricultural sector and an impressive 80% share of the Zambian sugar sector, driven by Zambia Sugar (Illovo Sugar Ltd) and its commercial out growers.
Wide reach
Being the only blending company in Zambia now has meant the opening of a second blending plant in Mkushi in the north of Zambia. Their third, in Beira, Mozambique opened last year. And now they are expecting the arrival this sum-
mer of another plant for Tanzania. All their plant equipment is supplied by the well known and trusted US company Ranco. While all these plants mean that GBF has a wide range of countries they can operate in and market their fertiliser solutions to, it hasnt always been as easy as it was in Zambia. We found the Zambian business relatively easy because we were all born here and all come from an agricultural background. We also have a very stable politics and a pro-investment government, explains Coventry. In Mozambique, we found it very challenging because it is a former Portuguese colony and so they speak Portuguese rather than English and there is a lot of red tape so it took an extra four months from when we expected to open the plant there. However, those teething problems have been overcome and the GBF are in a great position to capitalise on the huge potential of the under-used arable land in Mozambique. The company also intends to market to large corporate agribusinesses in Malawi, Zimbabwe and Mozambique from the Beira blending plant. They will begin supplying Malawi within this month.
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Future avenues
Coventry admits that from a raw materials point of view, it isnt impossible to think of sourcing all their fertiliser materials more locally than internationally.
They are looking into sourcing their nitrogen and phosphates from Tanzania, Zambia and Mozambique but this is a long term plan that isnt currently possible to do. Another long term project is for the company to get into crop protection. Pests account for serious problems within agribusinesses and it makes sense for fertiliser companies to try and produce products that make crops resilient to attack. For the time being, Greenbelt Fertilisers are preparing for the expansion their new Tanzanian
plant will afford. They intend to expand into the Kenyan market in the next 18 months and, given the proven increase in crop yields for farmers using GBF products in Zambia, this can only be a good thing for farmers in Kenya. tAB WWW.greenBeLt.cO.zM
122
PRESIDENT KIBAKI WITH THE BOARDS OF UCHUMI, CMA AND NSE
uchuMi s
Value at its cor
fOOD & Drink
re
suPerMArkets
124 FOOD & DRINK uchumi Supermarkets
KOINANGE BRANCH SUPPORT ST. THERESAS HURUMA
Built upon a foundation of corporate social responsibility, Kenyan supermarket chain uchumi strives to share the benefits of its success and growth with its local community
uchuMi MAy Be the oldest supermarket chain in Kenya but its loyalty to local suppliers, humanitarian values and socially progressive aims make it a forward-thinking company with its eyes on the future. It employs more than 1,000 people and has 21 branches overall: 18 in Kenya (12 of them in Nairobi), two in Kampala, Uganda and one in Dar Es Salaam, Tanzania. The retailer was set up in 1976 to ensure two things, says
marketing manager Francis Kiragu: equitable affordable distribution of essential goods to the Kenyan public and a local sales outlet for the local manufacturer. Despite having a bumpy ride along the way the supermarket chain was declared insolvent in 2007, before making a comeback in 2008 Uchumi has stayed true to its roots and remains very much dedicated to developing the country and its people. We believe that by empowering the Kenyan businessmen and women we are all playing our role in growing the national GDP and improving the living standards of our countrymen, Kiragu says.
MUTHOKOI
Fresh
P.O BOX 15197-00509, HARDY, KAREN, NAIROBI, KENYA.
Email: freshmuthokoi@gmail.com Phone Number: +254723165018
WE WORK HARD TO MAKE SURE THAT WE PROVIDE ONLY THE FRESHEST FOOD; from the farm straight to your home.
We are a humble family business that began in our back yard in 2007. FM has grown steadily over the past 4 years seeing our products grow from 4 different varieties to 9. Our food has traversed Kenya in a short amount of time, starting with 4 branches of Uchumi and now- countrywide supply- all 17 branches. We have been sourced by Red Cross from 2009 for food aid and have been recommended for corporate orders through Uchumi.
Our entry into Uganda and Tanzania has seen these general guidelines followed we offer native suppliers first priority to provide essential goods at competitive prices, he adds, stressing that its support for suppliers in the region is very important to Uchumi, as well as a defining quality. Another thing that differentiates the retailer is its listing on the stock exchange, meaning it is partly owned and governed by the Kenyan public.
what happened in the past. This new attitude has changed our operations, relationships with key stakeholders and indeed our fortunes. We work with our values in mind; we work harder and watch our environment more closely to ensure that we are effective and efficient. The team at Uchumi has shown its commitment and loyalty to turning the company around. One element of Uchumis new attitude is embracing partnerships with its suppliers, media, agencies, investment experts and others. Partnerships have enabled us to focus on what we are good at and that is retail business, Kiragu says. Since our partners are experts in their lines of business, this allows us to be experts in our own. Another is its pursuit of advanced technology, which certain expert partners have helped Uchumi implement. We support most major payment modes, including Visa cards and mobile payments, Kiragu says. We are in the process of upgrading our website to be more integrative. Weve also introduced major payments into our system, including electricity bill payments, equity bank cash-back services and insurance brokerage services.
Fresh start
Uchumi was only relisted on the Nairobi Stock Exchange last year, five years after it was suspended. In those five years the supermarket chain has progressed in leaps and bounds. In 2008, a year after being declared insolvent, Uchumi returned a profit of 106 million Kenyan shillings (KSh) against a loss of 257 million the previous year, amounting to a turnaround of KSh 356 million. The last recorded profit prior to this was back in 2001. Kiragu says the companys past misfortune has made Uchumi more fierce in ensuring past events never happen again, and now serves as a lesson on what to avoid. Uchumi Supermarkets Ltd is a new company, governed by new management and a new board, Kiragu explains. Were geared towards improving our circumstances, not dwelling on
Social responsibility
Other new ideas concern something quite different:
MR. OWINO HANDS OVER UCHUMI CONTRIBUTION TO DR. MAILU, CEO NAROBI HOSPITAL.
corporate social responsibility (CSR). Over the last few years, Uchumi has set aside two per cent of its total marketing budget towards activities targeted to address environmental, health and education issues in its local community. As a retail chain owned by the public, we strive to give back to our community, Kiragu says. We encourage all branches to support causes around them that uphold development, sustainability and equality, and which generally improve the living standards of people around them. Uchumi has raised money through events such as marathons for treating children at Nairobi Hospital; funding educational centres, including
the University of Nairobi, Kenya Methodist University and Kenya Institute of Management; and assisting with school fees for bright students. The supermarket chain is currently making the final preparations to its CSR policy 2012/13, ensuring no issue has been overlooked. A sense of social responsibility can also be found within the company. Our policy is to employ all races, backgrounds and gender in the country of operations. We do not discriminate, Kiragu says. Staff are encouraged to seek out training in their own areas of interest, in addition to the mandatory company training they receive in areas such as first aid and customer service.
uchuMis LOcAL suPPLiers:

Kensalt Ltd Salt Highlands Mineral Water Water and Juice concentrates KETEPA Ltd Tea products Kenya Meat Commission East African Breweries Kenya Wine Agencies Limited alcoholic beverages and fruit juices Keroche Industries alcoholic beverages Kevian Kenya Limited fruit juices Maisha Flour Mills maize and wheat flour Mjengo Limited rice and other food supplies Nairobi Bottlers Limited Coca Cola products Premier Foods Limited jams, juices and sauces Sony Sugar Mumias Sugar Weetabix East Africa - Cereals Haco Tiger Brands Foods and non-foods suppliers
PRESIDENT KIBAKI RINGS BELL ANNOUNCING COMMENCEMENT O
Future vision
Bolstered by recent success and new initiatives, Uchumi is preparing for major growth over the coming years. It is building two further shops in Uganda that are expected to open in this fiscal years final quarter, as well as one in Ongata Rongai, Kenya, which is near completion. Uchumi also wants to establish additional branches in Tanzania and Kiragu says the company is confident in growing its presence in this country and in the region as a whole. In 10 years time, Uchumi wishes to have made its vision, to be
uchuMi ALsO suPPOrts:

East West Fashions Clothing store One to One Clothing store Neo Furnishers Furniture Visual Vanity Cosmetic and jewellery supplier Faith Foods Hot kitchen and catering partner Mercy Stores Grains and flours
and errors easier to detect and eliminate, Kiragu says. We have attracted, retained and grown talent by staying the course. In the rapidly changing business environment, massive organic growth and cut-throat competition, our core values have helped us to stay grounded to what is truly important to us our stakeholders, he adds. It is Uchumis stakeholders whom Kiragu credits for the companys triumphant comeback and growing success and he sees this as the perfect time to thank them. We are grateful to all our stakeholders: governments (Kenya, Uganda and Tanzania); shareholders; bankers; investment experts; security exchange; customers; suppliers; employees; board and management; and the media for the unwavering support they have shown us, he says. the supermarket of choice in the Eastern African Region the Home of Value, a reality. To get there, says Kiragu, the company will follow its core values: integrity and transparency; networking (sharing effective communication at all levels of the business); teamwork; commitment and accountability (particularly to its stakeholders); quality service; professionalism; and the aforementioned social responsibility. Through our core values, our service and quality standards have stayed uniform across board; performance easily rated and appreciated; WWW.uchuMi.cOM The 31 May 2012 marks exactly one year since we were relisted on the stock exchange and the share price is showing gradual steady growth. We could not have done this without them. tAB
OF TRADING
fOOD & Drink
Trade Kings
sWeet success
By putting quality first, Trade Kings has found the sweet spot in the african confectionary market. on the verge of becoming the largest lollipop manufacturers in africa, the company has already set its sights on europe.
132 FOOD & DRINK Trade Kings
The impetus for moving production to South Africa was getting closer to the markets. We saw synergies in distribution and it reduced the costs we incur pertaining to logistics. Maximizing efficiency paid off in a big way. Just a year later, Trade Kings boasted the largest lollipop line in the southern hemisphere. And since then, demand has only increased. Devraj tells us that the company just ordered another line, and he could not contain his excitement about it. This will make
ALAN DEVRAJ, THE MANAGING DIRECTOR OF TRADE KINGS SOUTH AFRICA
us the largest lollipop manufacturers in Africa!
Up to the challenge
since OPening its doors in 1994, Trade Kings has come a long away. Back then, it launched in Zambia with a single product: Boom washing powder. By 2005, the company experienced tremendous growth. Trade Kings expanded into the soya and confectionary business. It had penetrated five major export markets: Malawi, Zimbabwe, Botswana, Congo and South Africa. Today it is the maker of some of the most recognizable lollipops and hard candies on the African market, and its still growing. In 2009, Trade Kings heavily invested in its South African arm to launch a plant in Johannesburg for the production of chews and hard candies. Alan Devraj, the Managing Director of Trade Kings South Africa explains this decision: Being at the mercy of the price of raw ingredients in volatile markets has been a challenge for Trade Kings. The price of raw materials fluctuates, says Devraj. At this particular time, there is a deflation in raw material prices. The company deals with this challenge in an effective way, though. We have synergies in buying - Particularly, group buying. Our parent company has been manufacturing confectionary since 1994, and as such we have experience in procurement locally, regionally, and internationally. We draw from this experience. As an example, we consolidate our purchases with Trade Kings Zambia and purchase quality flavours from Europe at cost-effective prices. The company relies on collaboration between its sales and marketing staff to develop
134 FOOD & DRINK Trade Kings
new product ideas. Though doing extremely well, Devraj sees a lot of space for growth. And while Trade Kings is growing, they are also learning. Weve learned that some markets prefer milkbased lollipops, other markets prefer straight fruity flavours, while others lean heavily towards a chocolate preference. The company relies on collaboration between its sales and marketing staff to develop new products.
Trade Kings has been able to focus on producing top-of-the-line products. Innovation is very crucial in this industry and we tie up with European flavour houses to produce high quality products. We are also involved in their cyclical process of research whereby we remain aware of latest global trends in the confectionary industry. In addition, we use highly automated and advanced machinery sourced from Europe.
A focus on quality
The secret to success has been what Devraj calls an emphasis on quality. We offer premium quality on our brands and surprisingly, African clients will pay a higher price to ensure that this quality is preserved. Guided by this philosophy,
Excited for the future

So whats next for a company on the rise? After Trade Kings increases its capacity with the launch of the new plant, the plan is to move into the European markets. We have a lot of inquiries to supply our product in European markets.
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These markets are serviced by manufacturers out of Turkey and South America who do not offer quality products and their prices are very high, says Devraj. At the moment, we are tying up an agreement with large European retail supermarket chains who will list our products. The agreements will be concluded within the next few weeks and as soon as we have increased capacity from our second line. As Trade Kings gets ready for scaling up and serving more markets, it continues to diversify the range of products it offers. The locally manufactured goodies include Super Sweets, Amazon
Chews, and Soccer Chews. They have recently launched Amazon Monsta Pops, which became an instant hit. The near future undoubtedly holds challenges for Trade Kings. However, Devraj and the rest of the company are excited to confront these challenges and turn them into opportunities. tAB WWW.trADekings.cO.zA
fOOD & Drink
AgrAnA fruit
Delicious taste of success
138 FOOD & DRINK agrana Fruit
agrana Fruit South africa provides fruit preparations, fruit juice concentrates and dairy milk blends for suppliers to the foodservice industry and to manufacturers of food products
When yOure in South Africa and you decide to have a healthy yoghurt, sumptuous cake or a tasty tart, filled with flavoursome fruits, you may very well be tucking into a treat that Agrana Fruit has had a hand in. The company, which is part of the Agrana Group, concentrates on fruit-based preparations, providing everything from fruit compotes, sauces and pieces to be used in dairy-based applications, desserts to toppings and fillings for baked goods. They also have dairy milk blends and fruit juice concentrates to complete the range.
While they are selling products at a rate in line with their expectations for the local market, Philippe Gomez, managing director of Agrana Fruit South Africa, tells me that they use quality, innovation and diversification to grow the business. There is very little that they cant offer their customers by way of fruit preparations. The economy has been up and down and that does create difficulties in the market, explains Gomez. The market for our products is not very big because the consumption of these types of products is not as high as in Europe so it is challeng-
ing but we focus on quality of service and the confidence that we generate within our customers means we are able to meet this challenge. We champion innovation in the products we release onto the market. Any product our customer sees on another market can be reproduced here, that is no problem for us.
ingredients or fruits. We are a global supply organisation so any ingredient our customer needs, we can find it quickly. In some countries, we have our own fruit as well so it is a big advantage to be part of a group that can do this. Gomez says that over the last decade, as consumers have become more used to a greater choice, there has been a greater demand for the products that you can get in Europe and in America. With the Agrana Fruit set-up, that demand can be met with consistently high quality preparations. In order to produce a high quality standard that is stable, says Gomez, we need to be very careful in sourcing the raw material. We
Ethical products
This isnt just an empty boast as the company invests in research and development locally and with the support of the Agrana central research and development centres in Austria and France. The international nature of the group is also a distinct advantage when sourcing particular
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need to ensure what we buy is a perfect fit for our customers. Considerations such as whether raw material conforms to international and local regulations such as pesticide residue, heavy metal, micro biological standards and that it hasnt used child labour, for example; there are a lot of different criteria to the sourcing of the ingredients but this is our job and so we do it.
Johannesburg plant
The company has been operating from its base in Cape Town for 15 years but last year it opened a second plant in Johannesburg. The
new Johannesburg operation gives us the ability to serve both the north and the south of the country and to respond to demand from our customers, says Gomez. The new plant has made the company more competitive as it provides two bases to ship from, making it quicker to get products to market. There are also benefits in the form of reduced transportation and carbon emissions. It is ambitious but we believed it was time to make this investment, says Gomez. We believe this market will be growing and increased demand will come from food manufacturing.
We are now prepared to meet this demand. We can offer a greater diversification of products now. With room for expansion at this new plant, it appears that Agrana Fruit SAs plans for growing along with market demand will soon come to fruition. tAB WWW.AgrAnA.cO.zA
146
Ah
a fam
fOOD & Drink
h grOcers
mily affair
148 FOOD & DRINK a h Grocers
With three generations of the Badat family in the business, a h Grocers are a wholesaling operation that put much store by personal relationships
the ethnic inDiAn population of South Africa number more than a million and their specialty food requirements include basmati rice, spices, lentils, grains and special items such as incense. These requirements have been fulfilled by companies such as A H Grocers for decades but rarely by a company so committed to building personal relationships.
A H GROCERS STOCK ALL THE INDIAN SPICES YOU COULD EVER WANT.
Muhammed Badat tells me that the company was started by his grandfather, Cassim Badat, under the name of Badat Wholesalers and then was registered as A H Grocers on 30th September 1963, after it was passed down to Muhammeds father, Abdul Haq. Abdul Haq Badat developed the business with his brother, Ismail, who left his teaching profession to be in partnership with him until Ismails retirement in 1994. Now they also operate from a cash & carry run by Mohammeds brother, Saleem, as well as the headquarters where Abdul Haq and Muhammed are based.
Growing popularity
When the business began, they were predominantly supplying the Indian ethnic market. However Muhammed explains that the growth in popularity of products such as basmati rice (their largest volume import line in which they have their own brands as well as distributing South Africas most popular brand ASHOKA) and nuts means that they no longer supply just to the Indian market. We have a much more diverse group of people buying from us now. With approximately 110 employees, the company despatches nationally from their warehouse
and supply to a variety of businesses through their cash & carry. Evocatively, Muhammed says the business is one that smells of spices and is always dynamic with people coming and going out of the depot; a busy, bustling hub of business. Our reputation is built on our strong relationships with our customers, says Muhammed. Of course, you have competitors but our customers prefer to work with us: they will naturally negotiate for a better price but, over the years, we have developed a strong business relationship with them.
PROUD TO BE IN ASSOCIATION WITH AH GROCERS
Sasko Grain is an operating division within Pioneer Foods (Pty) Ltd and manufactures a diversi ed portfolio of grain-based, quality staple foods. The company's operational structure consists of seven wheat and three maize mills, packing plants and distribution depots. The wheat and maize mills are strategically located in the maize and wheat producing regions of the country, as well as near the coastal ports for easy accessibility for importing grain in the event of a shortage. Sasko Grain also trades in rice, beans, lentils and dried vegetables that are procured internationally and locally, and packed into consumer units at packing plants situated in Epping, Malmesbury and Durban. Sasko Grain is committed to manufacturing affordable food products of a consistently high quality - constantly taking into consideration food safety and nutritional ethics.
Trust in supply
They also have strong relationships with their suppliers. It is very rare for us to sign up with a new supplier, especially those from overseas. We have been doing business for many years with our overseas suppliers and through brokers as well. We would look at dealing with a new supplier very cautiously because sometimes they might show you a sample and then send you something else. The existing suppliers with whom they have built up trust are based all around the world. As well as suppliers in India, Pakistan, Singapore and a few in China, they also import pulses and lentils from Canada and nuts from the USA. They have recently begun importing products from Turkey and Egypt.
www.saskograin.co.za | T 031-469 0451
THEIR LARGEST VOLUME IMPORT LINE IS BASMATI RICE.
Our business is very seasonal and very dependent on what nature dictates. Its all about what is happening with the crops. Not enough rain, too much rain, this all affects the price of goods and what is on the market, explains Muhammed. I take care of a lot of buying and I have to keep my ear to the ground because prices fluctuate all the time. You have to monitor the situation and forward plan. It becomes quite difficult as sometimes you expect the price to drop and they go up. The exchange rate is also a big influence on our pricing.
not in the near future, as his sons are currently too young, with the eldest still at high school. The younger generation is soon set to have a hand in the business though as a new website is currently in development by Muhammeds young, computer-savvy nephew. Were looking into that, we are changing the way we think to move with the times, he says. With such trans-generational talent and such a personable connection with South Africas specialist food providers, there is no doubt that this is one family business that is set to grow and expand. tAB
Festival peak times

Thankfully there are some certainties in the business, such as when peak periods will be: because they continue to primarily serve the Indian ethnic market, Ramadan (the Muslim month of fasting and therefore also feasting) is the busiest time of year, closely followed by Diwali (the Hindu festival). Their expansion plans are tied into the growth of the family. We prefer that when we expand, there is a family member running any new branches or units. So, for now, were happy with what we have but there is scope for expansion with the next generation, explains Muhammed. Both my brother and I have three sons each so there is scope for that. However, Ahg@eAstcOAst.cO.zA
Continental Brand
fOOD & Drink
ds A tAsty treAt
156 FOOD & DRINK Continental Brands
relatively small expense of cheering up teatime with a biscuit treat. The largest player in the South African biscuit market is National Brands, with a 65% share; however Continental Brands are doing very well and are probably the second largest in terms of volume sales when their entire range, from house brands to own brands, is considered. Luis Murillo Gomez Cuetara, managing director of Continental Brands South Africa, says that they can offer what our main competitor offers but at a much more competitive price without compromising on quality. In fact Luis says they try to stay in the region of 15-20% cheaper than the market leader on their brand pricing.
Recent revamp
We have three brands, explains Luis, the main brand is Tasty Treats which basically is all the bis-
Theres nothing quite like a cup of tea and a biscuit treat; Continental Brands Tasty Treats range ensure that you get the best product on the table for your tea break
the Biscuit MArket is one that hasnt seen a huge downturn in relation to the global economic woes. This may be because while consumers might cut back on luxuries in a time of recession, they will usually still fork out the
cuits with creams, wafers and crackers. Then we have a brand Risi and that is all the sweet plain biscuits, Marie biscuits, lemon creams and glucose biscuits etc and De Vries with the home style cookies and assorted biscuits. The whole range has recently been revamped with new packaging and the introduction of new products, as well as positioning of the brands in the right places. Initially we were catering to different markets: with Tasty Treats we were catering to the top end
We aim toward convenience and we also recognise a need in africa to sell smaller packets because these are attainable at a better price and are more affordable for the average consumer.
of the market and with Risi we were catering to bottom end of the market. However, that gap has now closed for us and now all our brands compete in both markets. They also have a Mini Pocket wafer rolls range within the Tasty Treats brand. These include little packets of 18g aimed at children for lunchboxes and impulse buys. They just introduced their Petit Marie and Six Love line which competes with Bakers Mini Packs. These innovations and developments ensure that Continental Brands stay ahead of the game and that their range remains as wide as possible.
Product development
The company, a family business with international concerns including an independent operation in Mexico, keeps expanding its production facilities to meet market demands from a development angle. They do their own product development and one recent innovation has been to produce a glucose biscuit with different fruit flavours such as orange or banana. It is more appealing than just a plain glucose biscuit, says Luis. It is more fruity and fresh.
Staying affordable
Many of their ranges come in 45g packs as well as the larger 100g. We aim toward convenience and we also recognise a need
Thinking about the box

Specialising in printing and packaging
Our mission is to provide customers with the best service, quality and price. We also strive to develop partnership with customers and improve skills and lifestyle of our employees.
Tel: +27 11 474 5160 Fax +27 11 474 0712 Email: allan@magnumpackaging.co.za Email: kobus@magnumpackaging.co.za Website: www.magnumpackaging.co.za
Flavours Ad (African Buss Journal)2.pdf 1 2012/05/18 12:10 PM
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in Africa to sell smaller packets because these are attainable at a better price and are more affordable for the average consumer. Luis sees the market as being very stable in its tastes and habits without any great push towards becoming too fancy. However, Continental Biscuit Pty Ltd, established in 1990 by founders Maximilliano Murillo and Eduardo Diez-Rabago, has been through a few changes over the years. It all started in 1935, when Juan Gomez-Cuetara founded the Cuetara Group, one of the largest biscuit companies in Spain and Portugal.
The family expanded their business to other parts of the world with factories in Mexico, Costa Rica, Portugal and South Africa and began exporting their products to more than 60 countries around the world. The family then sold Cuetara and it has since changed hands again. Some businesses within the group such as Mexico and South Africa remained independent and continue to capitalise on the familys long history and association with quality, affordable biscuits. TAB www.conTinenTAlBrAnds.co.zA
BA
fOOD & Drink
Bread ahead
From pies to sandwiches, donuts and cakes, Bread ahead is the delicious business that is exciting franchisees the world over: TABJ speak to owner David Tedder about his bakery group
162
AkeD tO PerfectiOn
164 FOOD & DRINK Bread ahead
DAVID TEDDER, OWNER OF BREAD AHEAD
At the tiMe David and I speak, the UK government has just made a U-turn on their so-called pasty tax a small bit of legislation that had the country up in arms over the cost of their beloved pies and pasties. Thankfully since South African either has 14% VAT or zero VAT rate on goods, David Tedder, owner of Bread Ahead, is not worried about complex pasty tax changes. The things that do affect his sales are public holidays and cold days, when people want more pies, and so his shop managers keep an eye on the weather and factors like this and adjust their daily order accordingly. Were in the major malls and we have a central bakery that makes and delivers to every shop every morning, he explains. Each store places an order and has a budget and we have a computer program in the store that will suggest an order for each line, based on the budget and according to what sells in that store. But the final order is a management decision.
Tedder says that the difficulty with letting go of control of the bakeries and handing them over as franchises is getting managers to understand the short shelf life of baked goods. The difficulty with baked goods is that it is not like ordering grocery that if you dont sell it today, you can sell tomorrow. Everything we bake has a one day or two day shelf life, at the most. It can be hard to get people to understand that. We give any unsold goods to a charity that comes and picks them up each day. The problem is, if you have outside people running your business, they have to understand that you have to give those products away. It is a bit of an issue: bakeries are a lot more difficult to manage than other franchises.
Overseas interest
Bread Aheads bestselling product line is its pies which account for 35% of the business and then donuts and cake slices and miscellaneous confectionery makes up another significant proportion. About 5% is given over to special occasion cakes such as wedding or birthday cakes. Tedder tells me that they appeal to a wide cross section of the demographic and are popular with all manner of different income groups. This means that rather than consider the tastes of a particular demographic when doing product development, they have a completely blank canvas.
Managing excellence
Bread Ahead currently have eight stores, one of which is a franchise store and two more are about to come online. Weve done it that way because of management issues: we prefer to have an owner-manager at the shop and then we can concentrate on production.
166 FOOD & DRINK Bread ahead
Were in the major malls and we have a central bakery that makes and delivers to every shop every morning,

Bread Ahead half p ad repro.ai 1 2012/05/13 5:59 PM
Bread Ahead uses Snowflake Wheat Flour for best baking results
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For more info visit: www.premierfoods.com or contact our customer care on 0860123300 or email CustomerCare@Premierfoods.com
Our original bakery, which is stand-alone and not in a mall, tests new products for us and sees how they go. Then we roll it out to the other stores, if it proves popular. That one bakery is a guinea pig for the rest. Interestingly, apart from the franchise opportunities for South Africans (at an investment of around R 700,000), Bread Ahead has an eye to the UK market and have been approached by people wanting a franchise there. One of the interesting things with our website is that were able to see where people are coming to the site from and 18% of our visitors are from the UK.
We were gobsmacked to see that. I dont know if thats because of the South Africans who live there or what but it is interesting. And where do they hope to be in the future? Tedder laughs and returns to the UK theme with: We would love to be the size of Greggs one day! tAB WWW.BreADAheAD.cO.zA
168 hO internAtiOnAL
Progression through philanth
MeDicine
hropy
OsPitAL kAMPALA
170 MEDICINE Kampala International hospital
International hospital Kampala uses a selfsufficient and sustainable business model to bring medical expertise and high-quality care to the people of uganda
internAtiOnAL hOsPitAL kAMPALA isnt any ordinary private healthcare facility. As part of the International Medical Group (IMG) which includes a health sciences university, medical insurance company, charitable foundation, construction division and outpatient clinics it is the central hub of a complete package designed to address the local communitys health issues. Behind it all is IMG founder Dr Ian Clarke and his vision for developing Ugandas medical sector. I want to develop medical expertise and healthcare quality so that Uganda can stand on its own two feet and be leading in the region as far as healthcare is concerned, he says. There is an interesting story behind Clarkes philanthropic aspiration. Before moving to Uganda almost 25 years ago, he worked as a general practitioner (GP) in Northern Ireland, UK. That was until news of Ugandas HIV endemic in the mid-80s shook up his priorities. I was really keen to get involved medically and felt that Id be a lot more useful working in Uganda than in the UK, he explains. So thats why I went to work with the Church Mission Society in rural Uganda for six years. After
that I didnt see much point in going back to the UK where there wasnt much HIV or tropical disease, in which I was experienced. However it was a realisation he made while working at the mission that primarily persuaded him to stick around. In terms of sustainability, Id realised that the problem with the mission hospital and aid side is that it requires donor support, Clarke says. So I wanted to create something that was self-standing. At the IMG we train nurses, clinical officers and technicians at the university and generate a lot of cash from medical insurance or fees. Its a socially responsible entity that seeks to be self-sustaining in terms of commercial viability.
Gaining ground
Clarkes first foray into Ugandas private healthcare sector was a clinic he started around 15 years ago. Under his sole governance this grew into a 30-bed hospital and, with the employment of many more staff, IMG eventually built and transferred to its own 200-bed-capacity hospital six years ago. This was Ugandas first hospital to have ISO certification, in terms of both management and environmental sensitivity. Having its own in-house construction division for building and refurbishment enables IMG to sustain and expand itself independently. Already
it has built 10 clinics in Uganda and one in South Sudan, and Clarke says theres always new developments and construction going on. Recently IMG Construction expanded the companys community clinic in Lira to have a theatre block and new laboratory. This clinic forms part of IMGs charitable International Medical Foundation (IMF) division and aims to provide vital free healthcare to a region ravaged by 20 years of conflict between the Lords Resistance Army (LRA) and the Ugandan Government Forces. More than increasing capacity, however, IMG wants to expand its capabilities. At the moment were good at primary care and secondary
care, Clarke says. He explains that primary care comprises the kind received at a general practice, while secondary includes treatment for people involved in road accidents, requiring emergency appendectomy or giving birth. We also provide a certain level of tertiary care, including intensive care and minimally invasive surgery, he adds. We are aiming to improve on our level of tertiary care so that we can become the regional health centre for people coming from outside Uganda as well. We would also be like to be very affordable, offering very good hospital facilities at prices adapted for the region.
On a mission
The hospital hopes to achieve these goals with support from a couple of new partnerships it has forged. One is a management contract with Indian group Fortis Hospitals, which owns 76 hospitals including ones in Singapore, Australia and Canada. Theyve sent over a general manager for our hospital and the idea is that, because were selftaught and self-grown, we can draw on their expertise to improve and perfect our hospital systems, Clarke says. Uganda is not known for quality of medical care so to reach a quality thats nationally recognised we still have work to do. We have an interest in developing local capacity we want to train nurses so that they can improve the quality of care they give. Hopefully tapping into Fortiss expertise will allow us to fill gaps here in Uganda. A number of IMG nurses and clinical officers are trained at the hospitals university facility. Clarke hopes that IMGs link with Fortis will enable it to train doctors in the future. Our strategic plan for the university is to develop a medical school, he says. We havent quite got there yet but hope we will soon. Minority shareholders in the medical group have brought in the cash required to buy a 40-slice CT scanner for the hospital, which Clarke claims will be the biggest in Uganda. Were also
going to upgrade our intensive care facilities with more monitoring and other equipment; upgrade our theatre for keyhole surgery; and expand and upgrade our maternity service with a prenatal intensive care unit, he says.
growing middle-class population, he says. Having a baby delivered at the hospital costs around $200 and a years health insurance, including access to free drugs, ambulances and care up to a value of $30,000, is also $200. Offering expensive procedures to everyone in poverty-stricken Uganda, Clarke says, is unfortunately impossible. We have a population of 32 million here and at the bottom of the pyramid, no matter what price something is, its not affordable and you have to be subsidised, he explains. Were trying to be in the economic middle, where we can reach up because if we can get some of that business its good commercially and reach down as well, through our social programmes such as that at Lira. It seems incredible what Clarke has achieved so far and theres far more on the horizon yet in his eyes, all it takes is passion. My perspective is that you can be an individual you dont have to be a big organisation or government to make an impact, he says. And its possible to earn a living by doing something sustainable, which results in real benefits for a country such as this. tAB WWW.iMg.cO.ug
Making a difference
For Clarke its not just about boosting standards at his own medical facilities, but improving healthcare across the country. My aim with this private sector development is really to demonstrate that you can be sustainable while offering value for money and good standards of care, he says. Because what I see in the public sector is that they fail to deliver healthcare. Theres a lot of disease and need here. But when it comes to the implementation, even the delivery of basic services, the public sector fails. I would like to see a different way of financing healthcare, whereby you have more publicprivate partnerships through which the private sector, which is more efficient in delivering healthcare and more focused on results, joins forces with the public sector to make a greater impact on the health sector, he continues. Clarke says IMG strives to provide its customers with the best possible value for money. If youre coming in for normal secondary care, such as having a baby, its very affordable for Ugandas
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AfricAn Business

July 2012 Volume 3 Issue 7

investment Chinese interests in Libya

business Employment laws in South Africa

Company foCus Greenbelt Fertilisers

uK office 2 Sheen road richmond Surrey uK TW9 1ae

sOciety AnD Business neWs from all over africa

AgricuLture retAiL fOOD & Drink

internAtiOnAL hOsPitAL kAMPALA speak about their pioneering work

Who can enter?

RON DEN BESTEN, MANAGING PARTNER, AUREOS SOUTHERN AFRICA

JULY 2012 The African Business Journal

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JEREMY STEVENS, STANDARD BANK ECONOMIST

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COVER FEATURE oil Trading in the lion Market

DOWNSTREAM. A CALTEx FILLING STATION IN NAMIBIA.

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COVER FEATURE oil Trading in the lion Market

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UPSTREAM. AN OIL RIG UNDERGOES REPAIRS IN CAPE TOWN HARBOUR.

COVER FEATURE oil Trading in the lion Market

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COVER FEATURE oil Trading in the lion Market

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COVER FEATURE oil Trading in the lion Market

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employing staff in South africa

employing staff in South africa

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employing staff in South africa

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Optimism lies ahead

Snr libyan challenges and Chinese investment

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Snr libyan challenges and Chinese investment

PHOTO CREDIT: PARKISLAND / SHUTTERSTOCK.COM

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044 I ever everything

learned about Business

COLUMNISTS eki Maria

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From proje Devcor are into their p

ProPerty & ConstruCtion

PROPERTY & CONSTRUCTION Devcor

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ENGINEERING & STEEL CONSTRUCTIONS - Established in 1991

Structural Steel and Metal Work Contracting

PROPERTY & CONSTRUCTION Devcor

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PrOPerty & cOnstructiOn

PROPERTY & CONSTRUCTION Shield homes

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for middle income buyers rather than anything more expensive.

PROPERTY & CONSTRUCTION Shield homes

Green and serene

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Shearcut processing capabilities comprise of the following:

Batch Blanking BSi Steel Ltd. Branches - Shearcut Processing

Sheet Cut to Length