south africa magazine issue 35

PEoPLE CuLtuRE tRAvEL PRoPERty BuSinESS WinE SPoRt EntERtAinMEnt

iSSuE 35 R40.00

Th e Extreme 19thAfrica’s most talked about golf hole

Investment profi le: nigeriaNigeria is Africa’s foremost business destination, second only to south Africa

zico eyeing pan-African growthZico Group was established by prominent business activist sandile Zungu

loving JoziInterview with artist-turned-entrepreneur Bradley Kirshenbaum

B i g E n ’ S

Exclusive: Bigen Africa CEo Dr Snowy Khoza talks targets,

goals and African growth

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3www.southafricamag.com

Investing in Nigeria, Bigen’s African expansion and the Extreme 19th... this edition of South Africa Magazine has it all

Over the past decade Africa has been the second-fastest

growing economy in the world, with GDP accelerating

more than fi ve percent a year on average.

The continent is increasingly being taken more

seriously as an investment and business destination,

but in many sectors, a window of opportunity does still

remain open for establishing an early mover advantage.

This month we look at investment opportunities

in oil-rich Nigeria, Africa’s most populous country

and second-largest economy. You can read more on

page 36.

This month we also talk to graphic artist-turned-

entrepreneur Bradley Kirshenbaum who’s behind the

now iconic Love Jozi brand, bring you all the latest

news from around the country, and of course we

continue to bring you all the things you have come to

expect from one of the region’s leading business titles.

We look at Bigen’s African expansion, Zico’s plans

to go pan-African and the bidding war taking place

for Fountainhead Property. On top of that we look at

why Cape Town is miles ahead of other South African

metros when it comes to quality of governance and

fi nancial management, and we have a look around

Africa’s most talked about golf hole – the Extreme 19th.

As always, continue to watch this space. Since the

turn of the year and we’ve been

working hard to ensure that the

magazine, our digital platform

and content is enhanced and

made even more interactive -

and we’ve much more planned

for the coming months.

Enjoy the magazine.

Ian ArmitageEditor

working hard to ensure that the

and we’ve much more planned

EDIToRIAL Editor ian Armitage

sub editor Marie toms

Editorial AssistantClare Durrant

WriterSusan Miller

BusINEssAdvertising sales Manager Matt Syder

salesDonovan SmithEddie Clinton

Research ManagerStuart Shirra

Researchers Elle WatsonStuart Platttom Lloyd

sales administrator Daniel george

AccouNTsfinancial Administrator Suzanne Welsh

PRoDucTIoN & DEsIGNMagazine design optic Juice

Production manager Jon Cooke Images: getty, thinkstockNews: nZPA, AAP, SAPA

DIGITAL & ITHead of digital marketing & development Hammit Saka

TNT MuLTIMEDIAcEo David Alstin

chairman Kevin Ellis

Publisher tnt Multimedia Ltd

tnt Multimedia Limited, unit 209, 16 Brune Street, London E1 7nJ

tntmagazine.com

ENQuIRIEstelephone: +44 (0) 207 989 0491 Fax: +44 (0) 1603 [email protected]

suBscRIPTIoNs Call: +44 (0) 1603 [email protected]

www.southafricamag.com

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747474747474 4040404040404 www.southafricamag.com

News

coLuMN

Could you qualify for a British passport?

LIfEsTYLE

Love JoziInterview with artist-turned-entrepreneur Bradley Kirshenbaum

focus EAStERn CAPE

Investing in the Eastern CapeTh e Eastern Cape is the southern African base for some of the world’s major companies

Sky’s the limit for East London Airportmichael Kernekamp joined East london Airport as a junior fi reman in 1983

Coega IDZ Investment in the Coega industrial development zone is “driving regional development” says Christopher mashigo

focus nigERiA

Investment pro� le: Nigerianigeria is Africa’s foremost business destination second only to south Africa

Continental ReinsuranceBecoming the premier pan-African insurer

Zico eyeing pan-African growthzico group, established by prominent business activist sandile zungu, is going pan African says CEo tshego sefolo

focus inFRAStRuCtuRE DEvELoPMEnt

Q&A with Dr Snowy Khoza, CEO of Bigen AfricaBigen Africa CEo dr snowy Khoza talks targets, goals and African growth

focus inSuRAnCE

Aon seeks Tanzania expansionoil and gas discoveries make East Africa a rich hunting ground says Khamis suleiman, the gm of Aon tanzania

iWZYE: Mass market appealmass market segments are increasingly important and the battle is being won by smaller, agile players, who off er cost- and technically-leading products and services

focus tRAvEL

Africa’s most talked about golf holesouth Africa magazine talks to pete richardson corporate sales manager at legend lodges, Hotels & resort, a unique, world-class resort that is home to the world famous Extreme 19th

focus CAPE toWn MuniCiPALity

� e ‘city that works for you’Cape town is miles ahead of the other south African metros when it comes to quality of governance and fi nancial management

focus PRoPERty

Bidding war for Fountainhead continuesfountainhead property trust is the subject of a bidding war between growthpoint, the JsE’s biggest property company, and redefi ne, the JsE’s second biggest

focus EvEntS

Events calendar Highly recommended events


Contentsfocus06

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6 www.southafricamag.com

Business

Anglogold results reflect ‘difficult’ yeArSouth African gold producer AngloGold Ashanti Ltd has announced annual results reflecting a “difficult year” following a month-long unprotected strike in South Africa, where the strike shut all of the company’s mines.

Its international assets, however, performed strongly.

AngloGold swung to a fourth-quarter net loss.

“We’ve moved decisively to ensure that we continue a strong recovery from a difficult end to last year,” Joint Interim CEO Tony O’Neill, who shares the role with Srinivasan Venkatakrishnan, said in a statement.

The South Africa-based miner said fourth-quarter adjusted headline earnings were 2 US cents compared with 61 US cents in the previous quarter.

Production dropped to 859,000 ounces in the quarter.

Full-year production was 3.9 million ounces, off from the company’s target of between 4.3 and 4.4 million ounces.

Geita, in Tanzania, was the group’s largest production contributor, improving annual production by seven percent to 531,000oz at a total cash cost of $660/oz.

AngloGold said it continues seek to “improve the quality and diversity of its portfolio”.

“The main greenfield projects at Tropicana, in Australia, and the Kibali joint venture, in the Democratic Republic of Congo, remain on track to produce gold within a year,” it said in a statement. “The expansion of Cripple Creek & Victor, in the US, also remains on track.”

Production in 2013 is anticipated to grow to between 4.1Moz and 4.4Moz at an improved total cash

cost of $815/oz to $845/oz. During October,

AngloGold took a decision to terminate its underground development contract with Mining and Building Contractors Limited at its Obuasi mine in Ghana in an effort to improve production and costs.

Chief executive Mark Cutifani said all of the South African mines were now at pre-strike levels.

“AngloGold Ashanti continues to deliver the best returns on capital amongst the gold majors, which reflects strict discipline in capital deployment over the past five years,” he said. “That’s been core to our strategy since early 2008, when we outlined our vision for the company.”

Cutifani is stepping down to join Anglo American as its CEO in April.

All the latest news from South Africa


BHP Profits slide, Boss to retireMarius Kloppers, the boss of BHP Billiton is to retire, it has been announced. He will be replaced 56-year-old Scotsman Andrew Mackenzie.

Kloppers will retire as Chief Executive Officer and a Director of the company on 10 May 2013. He will retire from the Group on 1 October 2013.

In making the announcement BHP Billiton Chairman Jac Nasser acknowledged the outstanding contribution Mr Kloppers made to the growth of BHP Billiton: “Marius was appointed Chief Executive just prior to the global financial crisis. Despite an exceptionally difficult economic environment during his tenure, Marius and his team have delivered for shareholders, significantly outperforming our peers in terms of total shareholder returns. He drove new investments into next generation opportunities including US onshore gas and liquids and created one of the most valuable companies in the world.

“He leaves BHP Billiton a safer and stronger company.”

The new boss insisted he would not change much about the world’s biggest miner’s current strategy.

“I look forward to working closely with Marius during the transition and building on his legacy including continuing the focus on our strategy of owning and safely operating large, low cost, long life assets diversified by commodity, geography and market,” Mackenzie said.

However, Kloppers said BHP could no longer “rely on the tailwind of prices” and he did not think the recent spikes in iron ore prices - which it is already committed to expanding - would be sustained.

BHP also reported a worse-than-expected 58 percent fall in first half profit, driven by lower iron ore, coking coal and oil and gas prices, cost increases and a weak US dollar.

BHP’s net profit fell to $4.24 billion in the six months to December 31 from $9.94 billion in the previous corresponding period.

The result included $1.4 billion in one-off costs from asset sales and write-downs.

Excluding one-off items, the underlying profit was $5.7 billion, down 43 percent but in line with analysts’ expectations.

cHrysler/fiAt sA ceo

sHot in MidrAndTrent Barcroft, the CEO of Chrysler/Fiat South Africa, is in hospital after being shot at during a robbery in Midrand, Gauteng police said.

“He was with his wife, who was unharmed. He was shot in the stomach... the attackers took jewellery, cellphones and the wife’s handbag,” spokeswoman Captain Kym Cloete told the Sapa news agency.

According to reports the pair were on their way home from a shopping trip when the attack happened.

No arrests had been made.

Mr Barcroft is being treated in the Intensive Care Unit of Sunninghill Hospital, Johannesburg. He is expected to make a full recovery, according to Eyewitness News.

Business


Business

eMPowerMent firM to Buy indePendent news And MediA’s sA unit Empowerment firm Sekunjalo will buy the South African operation of Irish publishing group Independent News and Media (INM) in a deal said to be worth R2 billion.

Debt-laden INM said detailed heads of terms had been drawn up with the Sekunjalo Independent Media Consortium.

In a statement it said it has “agreed detailed heads of terms with Sekunjalo Independent Media Consortium for the sale of INM South Africa”.

The Sekunjalo consortium is led by Iqbal Survé, executive chairman of Sekunjalo Holdings, which has investments in more than 70 private and public companies in Africa ranging from healthcare to telecoms.

Surve told Business Day the group would consider expansion plans into Mozambique, Angola and other southern African countries once the deal was finalised.

“I also see a lot of opportunity on the African east coast, particularly Kenya,” he said.

Plans by INM to sell its South African business first surfaced in July last year, when the company appointed an investment company to advice on the sale.

Independent Newspapers is South Africa’s largest English newspaper company, with more than 30 daily and weekly titles.

The deal is subject to approval by INM shareholders and the South African competition authorities.

Mining tAxes to Be reviewed sAys ZuMA President Jacob Zuma says mining taxes will be reviewed, a move likely to renew uncertainty in a sector hit by wildcat strikes and nationalisation threats.

“Later this year, the minister of finance will be commissioning a study of our current tax policies, to make sure that we have an appropriate revenue base to support public spending,” Zuma said.

“Part of this study will evaluate the current mining royalties regime, with regard to its ability to suitably serve our people.”

Zuma’s announcement is the first clear indication that royalties are up for review in the mining sector and has been welcomed by the Chamber of Mines with CEO Bheki Sibiya saying that the chamber hoped to be invited to contribute to the study “to ensure that its outcomes are fully informed’’.

“The mining industry is already making significant contributions in taxes and makes further contributions through royalties on super profits,” Sibiya said in the statement.

The prospect of increased taxes will likely worry miners who have been hit by strikes, uncertainty and a sharp fall in global commodity prices.

In December the ANC ruled out possible nationalisation of the country’s mines, but the party said the government must capture “an equitable share of mineral resources through the tax system”.

South Africa is home to the world’s biggest platinum miners and is Africa’s top gold producer.


sA Businesses ‘Putting off’ future decisions And exPAnsion PlAnsA wave of nationwide strikes and instability in the local mining sector, political insecurity, regulatory concerns and public policy issues are adding further pressure to South Africa’s business environment, which are ‘putting off’ expansion plans, advisory firm Grant Thornton says.

The organisation’s quarterly tracker data for the fourth quarter of 2012 revealed that South African business leaders felt uncertainty about the future political direction of the country was impacting on longer-term business decisions.

Business owners also admitted to delaying expansion plans.

Core constraints to business expansion included socioeconomic factors, such as crime and corruption, the lack of available skills in the current workforce and poor service delivery by government.

“The economy is forecast to have expanded by 2.6 percent in 2012, with the exposure of key sectors such as mining and manufacturing to global trade headwinds weighing on growth. Growth is expected to accelerate to 3.1 percent in 2013 and 3.8 percent in 2014 in line with a modest global recovery, although further strikes represent a major downside

risk,” said Grant Thornton South Africa national chairperson Deepak Nagar. “A number of challenges, including skills shortages, high unemployment, crime and corruption remain and could prove to be key battlegrounds in the run up to the 2014 election.

“Growth is expected to pick up in 2015-17 as the ranks of the middle class swell, boosting consumer spending on durable goods and services such as telecommunications and banking, global conditions improve and new transport and power networks come online.”

Grant Thornton ranks South Africa as the leading emerging economy in Africa and it is the only country on the continent to be ranked in the top 15 worldwide according to its Emerging Markets Opportunity Index.

Business


Food

findus reAssures sA consuMers

Frozen-food brand Findus has moved to reassure South African consumers following the discovery of horsemeat in its packaged frozen lasagnas, among other companies’ products, in UK supermarkets.

Findus sells 17 products via retail outlets in South Africa.

All its products in South Africa are supplied by Findus Sweden and produced in its own factories in that country.

Horsemeat has been found in its Lasagna.In a statement, Henrik Hjalmarsson,

Commercial Director of Findus Sweden, said: “This is to confirm that the recent incident with horsemeat in Lasagna only relates to a very limited number of Lasagna products across the Findus Group, all produced by Comigel in Luxembourg. These products are not sold in the South Africa market and therefore this incident has no implication for the Findus business in South Africa.”

Of the 17 Findus products sold in South Africa, 10 are vegetable. Of the seven ready-made meals, only its teriyaki meal contains beef.

nAMPAk invests r1.6Bn in Bottle, cAn ProductionAfrica’s largest packaging company, Nampak, has announced that it is investing R1.6 billion in two businesses which produce bottles and cans for the “growing” beverage market.

In a statement the firm said that the first investment - worth nearly R1 billion – will be in a third furnace at its Germiston-based glass bottle business to improve overall manufacturing efficiency and enable it to supply a broader range of bottles. Commissioning of this furnace is expected by the end of this year.

The second is an investment - nearly R600 million – will boost aluminium beverage can capacity and convert existing lines from tin-plate to aluminium production, it said.

Nampak’s chairman Mr Tito Mboweni explained, “These two projects strengthen our position in the beverage can and glass packaging sectors in South Africa and show our commitment to growing the South African economy.”

Nampak also provided a trading update for Q1, ended December 2012, and noted that there had been “mixed demand” for packaged products.

“Hot weather in most parts of South Africa during the festive season resulted in good demand for beverage packaging but demand for packaging for many other fast moving consumer goods was subdued and selling prices remained under pressure in a very competitive environment,” Nampak said.

Operations in the rest of Africa and the United Kingdom performed to expectations, it said.

Mr Mboweni added, “Despite the challenging economic conditions in South Africa where we generate some 70 percent of our revenue we remain confident of a further improvement in performance in 2013.”


Afcon 2013 “exceeded exPectAtions” sAys cAfThe governing body of African football - The Confederation of African Football (CAF) - has congratulated South Africa for hosting a “largely successful” Africa Cup of Nations (Afcon), which “exceeded expectations”.

“We are tremendously happy with the outcome. We had certain expectations and the LOC [Local Organising Committee] exceeded those expectations,” said Confederation of African Football (CAF) secretary general Hicham El Amrani.

The tournament came to a close following Nigeria’s 1-0 win over Burkina Faso in Soweto’s Soccer City stadium.

South Africa organised the Afcon in just a few months - after political upheaval forced Libya to pull out - and the event had record ticket sales.

“Having in total 857,000 tickets given or sold is a tremendous achievement,” El Amrani said. “South Africa has set a benchmark in the history of the tournament since it started.”

Afcon 2015 will be hosted by Morocco. Qualification matches for the competition will be played from September to November in 2014.

SportEmployment

uneMPloyMent eAses sligHtly in fourtH quArterSouth Africa’s unemployment rate fell to 24.9 percent of the labour force in the last quarter of 2012 from 25.5 percent in the third quarter, according to Statistics South Africa’s Quarterly Labour Force Survey.

It means 4.5 million people were without work in the fourth quarter, down from 4.67 million jobless in the previous three months.

It is the first time since the inception of the quarterly labour force survey that there was a decrease in employment in the fourth quarter of a year.

Stats SA said a decrease in employment was attributable to job losses in the formal sector (down by 52‚000) and private households (down by 8‚000).

Employment in agriculture and in the informal sectors increased, the agency said.

The number of ‘non economically active people’‚ representing individuals who are not in the labour force‚ increased by 345‚000 quarter on quarter and by 121‚000 on an annual basis. The number of discouraged work seekers increased by 87‚000.

The expanded definition of unemployment declined by 0.4 percent to 35.9 percent in the fourth quarter of last year.


Lifestyle

Pistorius denies Murdering His girlfriendOscar Pistorius has denied murdering his girlfriend and told a bail hearing that he loved her and never intended to kill her. He said he thought he was firing at an intruder when he shot her at his home.

“I deny the allegation in the strongest terms. Nothing can be further from the truth,” an affidavit read out to the Pretoria Magistrate’s Court by Pistorius’s lawyer advocate Barry Roux said.

Pistorius is accused of murdering his girlfriend Reeva Steenkamp on the morning of Valentine’s Day.

Prosecutors accuse the athletics star of premeditated murder and told the court that he shot Ms Steenkamp dead by firing through a bathroom door.

Prosecutor Gerrie Nel told the court that Mr Pistorius had got up from bed, put on his prostheses, and fired his gun through the door of the small bathroom.

He shot four times and hit Ms Steenkamp three times.

Mr Nel added that the defendant later broke down the bathroom door and carried the body downstairs.

Pistorius responded by saying the couple had decided to spend that evening at home. They were in the bedroom when at one point Mr Pistorius went to the balcony and heard a noise.

“It was pitch-dark in the bedroom,” the affidavit said. “I did not have my prosthetic legs on and felt extremely vulnerable.”

Mr Pistorius thought Ms Steenkamp was still in bed and he fired through the bathroom door believing he was shooting at an intruder.

When he realised Ms Steenkamp was not in the bed, “it filled me with horror and fear”, the affidavit said.

Mr Pistorius broke the door down with a cricket bat to find his girlfriend shot inside.

BlAde runner oscAr “sAd” After sHooting: fAtHer

Henke Pistorius, the father of Paralympics star Oscar Pistorius, says his son is “sad” after allegedly shooting his girlfriend dead.

“I don’t know nothing. It will be extremely obnoxious and rude to speculate. I don’t know the facts,” he told SABC radio news.

“If anyone makes a statement, it will have to be Oscar. He’s sad at the moment.”

Gauteng Police had earlier arrested Pistorius and opened up a murder investigation.

29-year-old Reeva Steenkamp was allegedly shot dead in the early hours of Valentine’s Day morning at the sprinter’s home at Silver Woods Country Estate in Pretoria.

Pistorius was being held at Boschkop police station but has since left.

According to the Sapa news agency, he left the station with a jacket over his head and was bundled into a car that sped off.

The double amputee is one of South Africa’s national icons and was born without a fibula in both legs.


Lifestyle

Pistorius officer on criMinAl cHArges The detective leading the Oscar Pistorius inquiry is facing seven charges of attempted murder, police have confirmed.

Detective Hilton Botha, who has faced fierce questioning at Mr Pistorius’s bail hearing, was allegedly involved in a shooting two years ago.

Mr Pistorius denies the premeditated murder of his girlfriend Reeva Steenkamp, 29.

Police spokesman Neville Malila said that Det Botha and two other officers were due to appear in court in May.

It is alleged that while driving a state-owned vehicle the three had opened fire on a minibus taxi loaded with passengers.

The three were arrested in 2011, Eyewitness News says.

Mr Malila said the charges against Det Botha had originally been dropped

but were reinstated.It is unclear when this

took place or whether Det Botha will continue working on the case.

Medupe Simasiku, a spokesman for the Pistorius prosecutors, told Associated Press they were unaware of the charges and would now investigate whether the detective should remain.

Mr Pistorius says he shot Ms Steenkamp in the bathroom of his home after mistaking her for an intruder.

If denied bail, Mr Pistorius could face months in prison before a full trial begins.

uk’s sun newsPAPer coMes under fire for Printing reevA steenkAMP Bikini sHotsTwitter users in the UK have reacted angrily to The Sun newspaper’s decision to publish pages of model Reeva Steenkamp from bikini glamour shoots.

Splashed across their front cover was an image of Steenkamp, who was killed yesterday in South Africa, spilling out of a hot pink bikini with her name mentioned nowhere on the page.

The hash tag #HerNameWasReevaSteenkamp quickly began trending on Twitter.

Steenkamp’s boyfriend Paralympics star Oscar Pistorious has been charged with her murder.

A petition calling for an apology has been signed by over 2,000 people, with an open letter to The Sun stating: “The complete disregard you have shown for Reeva by plastering a picture of her in a bikini, whilst

reporting her death, is inhuman”.


Lifestyle

Pistorius in court on Murder cHArgeOscar Pistorius has appeared in court, formally charged with murder after allegedly shooting dead his girlfriend Reeva Steenkamp at his Pretoria home.

The athletics star was wearing a black suit as he was led by police officers into a packed courthouse.

Murder accused Pistorius, 26, was moved in the morning from a police station where he spent the night in a cell to the Pretoria Magistrate’s Court.

The once media-friendly sprinter covered his face with a jacket as the police transferred him.

Pistorius broke down in tears in court as he faced the charges.

Some details on the shooting have emerged in court. Judge Desmond Nair has used the phrase “a person charged with premeditated murder”.

Pistorius’ defence team requested that they be given time to prepare their case. The court heard that Steenkamp had been shot four times.

“I accede to the request by the defence for a postponement until next Tuesday.” said Judge Nair, who then dismissed Pistorius who walked out of court.

He will be held at Brooklyn

police station in Pretoria.Neighbours said they heard loud

noises from Pistorius’ apartment in a secure upmarket complex in the early hours of Valentine’s Day morning.

Police arrived to find Steenkamp shot four times, and paramedics declared her dead at the scene.

NPA spokesman Medupe Simasiku said Pistorius would not be getting any special treatment behind bars.

“We believe that it is fair for the accused (Pistorius) so that he can meet with his defence (lawyers). It is noted that when the accused is kept at a prison there is no after hours visit, whether from the legal team or the family,” said Simasiku.

“There is no celebrity status (at play) here. It’s not a common practice, but it is a decision of the court. We can’t argue regarding why the court made that decision (to keep Pistorius at the police station).”


Lifestyle

oscAr Pistorius

‘sHoots’ girlfriendBlade runner Oscar Pistorius has been arrested for allegedly shooting his girlfriend dead.

Gauteng Police said that a 26-year-old-man had been arrested and was being questioned.

South African media have named the 29-year-old victim as Pistorius’ girlfriend Reeva Steenkamp. She was allegedly shot dead in the early hours of Valentine’s Day morning at the sprinter’s home in Pretoria.

The precise circumstances surrounding the incident are unclear but Beeld newspaper reported on its website that Pistorius accidentally shot Steenkamp after mistaking her for a robber.

“Paramedics declared the woman dead on the scene and police proceeded with their investigation. The woman sustained wounds to her head and the upper body,” spokeswoman Lt-Col Katlego Mogale said.

Mogale would not confirm that Pistorius was the shooter.

“When police arrived they found the paramedics attending to the woman. The paramedics declared the woman dead on the scene and police proceeded with their investigation of the scene.”

The incident is said to have taken place between 4am and 5am local time.

“I can confirm to you that a 26-year-old suspect will be appearing in the Pretoria Magistrate’s Court this afternoon following a shooting at Oscar Pistorius’ house,” Mogale said.

A 9mm pistol was recovered was recovered from the scene.

MiniMuM fArM wAge rAised to r105 A dAyThe new minimum wage for South African farmworkers is R105 a day, labour minister Mildred Oliphant has announced.

Oliphant said the new salary - R36 more than the current minimum wage of R69 a day – would come into effect on March 1 and would rise by inflation plus 1.5 percent in subsequent years.

It is a response to a wave of violent strikes that hit the industry over the last three months.

“The new minimum wage... is R105 per day for employees who work nine hours a day, or R11.66 per hour, R525 weekly, or R2274.82 per month,” Oliphant told reporters in Pretoria.

Farms however say they cannot afford to pay their workers more than the current R69 a day because of the cost of fuel and electricity.

They believe higher wages may put jobs at risk.

The wage review follows numerous clashes between police and striking farm workers in fruit-growing regions of the Western Cape province in December and January.

The protesters had demanded their daily pay more than double to R150.

Money


Money

ABsA BAnk eArnings fAll, ceo forgoes BonusAbsa Bank posted a worse-than-expected nine percent fall in diluted headline earnings per share to 1‚224.6c for the period ended December 2012 from 1‚350c a year earlier.

It ascribed the fall to higher credit impairments in retail mortgages and commercial property finance. Headline earnings were down nine percent to R8.807 billion.

The group’s return on equity fell to 13.6 percent from 2011’s 16.4 percent - marginally above its internal cost of equity.

Group CEO Maria Ramos, who is to forgo her bonus due to the group’s “disappointing” results, said: “We expect mid-single digit loan growth in 2013. Improved momentum in our revenue growth and continued focus on efficiency should reduce our cost to income ratio again, while our credit loss ratio is expected to improve materially from 2012’s elevated levels. We are building momentum in our business and this should become evident in our top line growth this year, which should improve from last year’s modest levels, and should underpin a noticeable improvement in our Return on Equity.”

Ms Ramos added: “We are reporting disappointing results ... our numbers reflect a difficult year.”

Absa’s results were hit by credit impairments in home loans and commercial property.

Absa’s home loans swung to a headline loss of R992 million versus a profit of R516 million in 2011.

BillionAire PAtrice MotsePe Pledges to donAte HAlf of

His fortuneSouth African billionaire Patrice Motsepe has pledged to donate half of his fortune, following in the steps of the likes of Bill Gates and Warren Buffet.

Motsepe, the founder and executive chairman of African Rainbow Minerals, announced that he will give away half of his fortune to improve the lives of the poor and marginalised. He is the first African to join Bill Gates and Warren Buffet’s Giving Pledge, which encourages billionaires to donate at least half of their wealth to philanthropic causes of their choice.

Motsepe said he drew inspiration from the African humanist philosophy of “Ubuntu,” which translates to “I am because you are.”

“South Africans are caring, compassionate and loving people,” Motsepe said. “It has always been part of our culture and tradition to assist and care for less fortunate and marginalised members of our communities. This culture is also embodied in the spirit and tradition of ubuntu/botho.”

The Giving Pledge was launched two years ago by American billionaires Bill Gates and Warren Buffet and challenges the world’s wealthiest to give 50 percent or more of their fortune to charity.

Motsepe has a net worth of $2.65 billion, Forbes estimates.


A s anyone who has ever tried to research their rights to

British citizenship knows, British Nationality law is extremely complex, largely due to the UK’s former status as an imperial power. But this shouldn’t stop you from investigating the possibility of becoming a British Citizen – after all, there are thousands of cases where people are eligible and simply don’t know it yet.

Certain citizenship claims can be fairly straightforward. Some examples:- if you were born in the UK before 1983, if either of your biological parents was born in the UK before 1983, or if a parent was naturalised in the UK before your birth.

If you’re a citizen of a commonwealth country (like South Africa or Australia), you may also be able to claim UK nationality, even if you weren’t born in the UK. This depends on a combination

of factors including dates of marriages and births, past relationships between the countries, old nationality law and the Independence Day arrangements (and Constitutions) of the relevant country.

There are many anomalies and loopholes, which is why it’s worthwhile fi nding out if your situation qualifi es you to apply. As an example, you might be eligible, if:

you were born before 1983, your father was born in Northern Rhodesia and you have a UK-born Grandparent;

you were born between 1949 and 1983, your parents married before 1949 and you have a UK-born Paternal Grandparent.

One of the best and most effective ways of fi nding out what your chances are at securing a British passport is by attending a free Philip Gamble British Nationality Seminar.

Philip Gamble is now widely regarded as the world’s leading authority on British Nationality, and has discovered several loopholes and anomalies during the course of his research. He will be sharing this information at the Nationality Seminars held in South Africa, Botswana, Egypt, Kenya, Malawi, Namibia, Tanzania, the UAE, Zambia and Zimbabwe, during the course of the year.

These sessions are aimed at informing and assisting people who may be unaware of their rights to British nationality and a British passport. Attendees receive a free British Passport Review (normally charged at GBP30), which answers the question “What is the probability of me having a valid claim to British Nationality?”

If you would like to attend and take advantage of a free British Passport Review, then have a look at www.philipgamble.co.uk/seminars. END

By nikki van Coller

Could you qualify for a British passport?

coLuMN


South Africa Magazine chats to graphic artist-turned-entrepreneur

Bradley Kirshenbaum, the man behind the now iconic Love Jozi brand.

By Susan Miller

L o v i n g

E very city has its day. New York City’s reputation wasn’t the best

before the then mayor Rudy Giuliani introduced his ‘zero tolerance’ policies in the mid-1990s. The Big Apple has flourished ever since.

Jozi, long at the heart of our economy, has had plenty of dark days but while no-one is pretending that crime levels are anywhere near acceptable yet, it’s definitely dusting itself off. Everywhere you look you see new markets, new ventures and funky, cutting-edge fashion and design outlets.

Just a few years ago, this scenario was still hard to imagine as the inner city seemed likely to crumble under endemic crime levels and fleeing businesses.

One of those taking part in the renewal is graphic artist-turned-entrepreneur Bradley Kirshenbaum who’s behind the now iconic Love Jozi brand and also co-runs one of the city’s most exciting markets - the Market on Main - on Sundays at the Arts on Main complex.

Nowadays it’s his signature graphic design of the Johannesburg skyline – incorporating its two towers and the Nelson Mandela Bridge – that is pretty much synonymous with the image of the city. So much so that Bradley’s had to remind


now you can go to bars, you can go to a market on Saturday and you can go to another market on

Sunday

Loving Jozi LiFEStyLE


some organisations that it’s a copyrighted graphic image.

While he knows you can’t own the skyline, you can own the rights to the graphic. “No-one really represented the skyline in that format before, so that was new.”

He’s excited about the changes in Johannesburg.

“There has been so much development in the inner city and regeneration and people just aren’t so fearful anymore. Now you can go to bars, you can go to a market on Saturday and you can go to another market on Sunday,” he says.

Where did Love Jozi start? In 2005 while working at a senior level at creative agency Blue Moon, a friend saw his homemade t-shirt with the Love Jozi skyline on it and asked for one.

“I made a few t-shirts and sold them and it became popular and I ended up doing it on the side of my job,” he said.

A born entrepreneur, his sideline was ‘an open secret’ at Blue Moon. Eventually Love Jozi took off to the extent that Bradley could leave in 2008 in order to grow the brand.

Part of this success came from what can only be described as a genius marketing idea. After coming across a whole lot of cheap t-shirts he could use to print on, Bradley set up an alleged ‘fake range of imitation Love Jozi’ shirts – these Luv Jozi shirts were purportedly made in China and generated a whole lot of publicity.

“People were getting upset on my behalf. It was quite funny because I got a guy on one of the street corners near Blue Moon to sell them for me. And often at lunch someone would say ‘aw that guy’s still there’.”

With such excellent marketing skills, it’s no wonder that Bradley was able to grow the brand with a fairly limited budget. “I did have a low budget but I think if the idea is good you don’t need a fortune to execute it,” he said.

He believes the timing was excellent. “There was so much controversy in Joburg

– about the city. Now, all these years later, everyone loves Jozi, then it was more like a fantasy” he says.

In business partnership with his real life partner fashion designer Jacques van der Watt of fashion label Black Coffee, Bradley sells his products alongside Black Coffee creations in two shops – in Melville and at Arts on Main where the Market on Main is also held.

He sees the market and the brand tying together. “It’s about promoting city life and local products,” he said.

And Arts on Main is all about the new Johannesburg. It is part of the Maboneng Precinct, the brainchild of intrepid local Jonathan Liebmann. In 2008 his property company Propertuity bought the warehouses and offices on the city’s eastern side and re-opened the city’s abandoned warehouse district, reclaiming it for artists and creatives.

Bradley is proud to be part of the community and is pleased that Market on Main attracts crowds. Clever use of social media promotes the market and Bradley is a big fan. “For the market we only use Facebook. Most people are on Facebook and Twitter and it is so immediate. We’ve

now, all these years later, everyone loves Jozi, then it

was more like a fantasy


never had budgets for big advertising campaigns,” he says.

He feels the two brands work well together. “Black Coffee is a high-end fashion ladies label and Love Jozi is more commercial with something for the husbands or boyfriends.

“I think people in Joburg identify the two together. It’s not unusual to fi nd two brands living together in one store – it’s like Mini and BMW”.

While he laughs that people might think his is the Mini he points out that Love Jozi has broadened its customer base.

“It used to be mostly male because mostly guys wear t-shirts but now that we’ve translated the skyline into products like the key racks, book ends and the key rings I would say it includes

lots of women as well. People in their late 20s to early 40s are typical.”

The Sunday Market on Main has been a great success for them and they’re extending the idea to Saturdays too. “It’s called Classic Saturdays and we’re getting antique stallholders and vintage stallholders and hopefully we’re going to have classical music. We’re trying to attract an older crowd,” he says.

So is it all rosy as Johannesburg attempts to attract tourists and persuade visitors to leave OR Tambo and venture out?

It’s still going slowly if Bradley’s experience is anything to go by. “What’s weird about our website is that there are often orders from people who live in Johannesburg, in Bryanston

or whatever. They’d rather order online than come to Arts on Main”.

But with a new t-shirt range planned for this year, Bradley is looking ahead – to the Hillbrow Tower, often used as the city’s icon.

“This year I want to do something about the icon as in I CON and EYE CON. It’s a bit of a con because it’s not really a touristy icon like the Eiffel Tower is in Paris. Most people don’t know where it is or how to get there and Hillbrow is still quite a dangerous place to go.

“The next step for Joburg is Hillbrow,” he says.

Somehow it’s hard not to take him seriously. END

www.lovejozi.co.zamarketonmain.co.zawww.mabonengprecinct.comwww.blackcoffee.co.za

now, all these years later, everyone loves Jozi, then it

Loving Jozi LiFEStyLE

d espite the strikes and political uncertainty that defi ned 2012, and the slow start to 2013, there is a general feeling that this

could be the year of opportunity and the best time to invest - as long you choose the right investments, in the right locations.

Indeed, there is a general worldwide feeling of gradual and hesitant recovery and it is this cautious optimism that is set to fuel growth and create rewards for those who invest in the right areas.

But where should you invest?Many have already chosen the Eastern

Cape. It is a compelling option.

The Eastern Cape Development Corporation (ECDC) describes the province as a land of opportunity, where “a highly-developed fi rst-world economy meets the huge potential of an emerging economy, and creates a dynamic investment environment”.

The province - which lies equidistant from South Africa’s major market centres, to which it is linked by a modern network of airways, roads and railways - is already the southern African base for some of the world’s major companies.

“The Eastern Cape’s positioning affords it easy access to African and global markets through its sea, road, rail and air networks,


the Eastern Cape is the southern African base for some of the world’s major companies.

By ian Armitage

Investing in the EAstErn CApE

Investing

the Eastern Cape is the southern African base for some of the world’s major companies.

EAstErn CApE

base for some of the world’s major companies.

EAstErn

and it has world-class commercial and industrial infrastructure. Apart from these advantages, the Eastern Cape also boasts more than 300 days of sunshine a year and an unsurpassed quality of life,” ECDC says.

Another big draw for would-be-investors is that total provincial personal disposable income is estimated to be an annual R50 billion, representing a major consumer market for producers both inside and outside the Eastern Cape.

The Eastern Cape really is a land of opportunity and both the South African national government and the Eastern Cape provincial government have adopted a wide range of policies to realise the potential of the country’s economy and provide an environment for growth.

“The Eastern Cape offers very effi cient harbours, both for imports and exports, low input costs and access to major markets in the world,” one investor told South Africa Magazine.

The Industrial Development Corporation (IDC) has pumped a massive R7.8 billion into the Eastern Cape since 2002, creating some 27,332 jobs as a result.

Areas in which the IDC has invested in the Eastern Cape are green industries, advanced manufacturing, electronics, automotive components and fabricated metals.

In November, African Oxygen (Afrox) announced it would invest R250 million in a new air separation unit in the Coega Industrial Development Zone near Port Elizabeth.

The investment is the fi rst tranche of a R1.5 billion programme to boost customer service levels and support the group’s growth strategy in South Africa while capturing more business in sub-Saharan Africa.

Caltex Eastern Cape Marketer (CECM) is another fi rm that is investing in the Eastern Cape. It recently unveiled plans to invest R120 million through the purchase of 41 Caltex service station sites from Chevron.

The deal includes 10 sites in East London and surrounding areas and 31 sites in Nelson Mandela Bay, Jeffreys Bay, Cape St Francis and Kareedouw.

“We have already built and completed nine new

focus EAStERn CAPE


the Eastern Cape’s

positioning affords it easy

access to African and

global markets through its sea, road, rail and air networks


service stations and two are under construction. The others will be renovated,” CECM chief executive officer Clive Berlyn said.

Transnet is also investing, recognising that the Eastern Cape is an important trading hub. Exports from the province through the harbours of Port Elizabeth and East London amount to a reported R8 billion.

“Transnet will create some 87,774 direct and indirect jobs in the Eastern Cape to 2018/19 in terms of its Market Demand Strategy,” says Mboniso Sigonyela, spokesman for Transnet SOC Ltd.

South Africa Magazine understands the number of jobs created in the province would peak in the 2015/16 and 2016/17 financial years.

In the 2015/16 financial year 15.9 percent or 19,557 of the 123,000 direct and indirect jobs created by the transport parastatal would be in the Eastern Cape, while the following year 16.1 percent or 21,760 of the 136 000 employment opportunities would be created in the province.

The bulk of those jobs will be in Nelson Mandela Bay where Transnet will spend R7.3 billion on the Port of Ngqura expansion as part of the initiative to position South Africa as the “leading manganese exporter globally”.

“In the Eastern Cape, Transnet plans to spend R25.9 billion on expansion projects, new equipment and maintenance of assets,” Sigonyela adds. “Transnet operates three commercial ports - Port of Ngqura, Port of Port Elizabeth and Port of East London - in the province as well as railway lines connecting to KwaZulu-Natal, the Free State, Northern Cape and Western Cape. Major expansionary work is currently taking place at

the Ngqura container terminal and we’re improving road access and other infrastructure. The bulk of the project includes the development of a further two-berth container terminal to a total of four berths as well as the development of a liquefied natural gas terminal. The benefits of this project include increased capacity in the national ports system and the broader economy.”

According to Sigonyela, Transnet is “committed” to investing in the Eastern Cape.

“Over and above the current investments, Transnet and the Province of the Eastern Cape have an ongoing planning interface formalised in a Collaboration Agreement. The objective of the collaboration is to engage effectively on strategic issues of mutual significance. Current planning issues on the agenda include central rail corridor capacity upgrades, integrated port–rail–Industrial Development Zone planning, and a manganese export channel.”

Transnet’s investment in the Eastern Cape is part of the company’s commitment to the country’s infrastructure development efforts and regional economic development.


“South Africa needs strong, globally competitive and globally connected port operations capabilities to integrate the regional container system and capture a larger share of international container traffic,” says Sigonyela. “A container hub through the Port of Ngqura can bring substantial benefits to regional economies and cargo owners by reducing total supply chain costs through improved connectivity, improved service levels and, by attracting more shipping lines, lead to increased competition in the shipping industry.”

When designing the Port of Ngqura, Transnet integrated its plans with the Coega Industrial Development Zone in order to maximise efficiencies and economic benefits to businesses located in the area.

“The relocation of the manganese export facility to Ngqura from the Port Elizabeth harbour will allow the latter to focus on clean cargo in line with the Nelson Mandela Bay Metro’s (Port Elizabeth) strategy to focus on clean cargo – automotive and containerised cargo,” says Sigonyela. “In terms of the Port of Ngqura’s capacity and use as a transhipment hub, the global surge in larger ships being deployed to major

trade routes creates a demand for better equipped ports with faster handling capability and deeper drafts which Ngqura has the means to deliver. Transhipments to and from the Ngqura hub can be serviced by smaller vessels able to call at ports that are not able to effectively accommodate larger vessel call sizes.”

The Port of Ngqura is “best placed” to act as a hub for east-west and north-south trade, Sigonyela says.

“Transnet has a competitive advantage in its three ports. Transnet is of the view that the Port of Ngqura is the best placed South African container terminal to act as a hub for east-west and north-south trades. Trade between countries in the southern hemisphere is growing rapidly and the south-south trade route is forecast to emerge as a significant global trade route in the medium to long term. In addition, the Port of Ngqura through its link to the Coega Industrial Development Zone will offer additional business and employment opportunities through value-added and logistics services, and could become a major facilitator of international trade. This will enable South Africa to play a role as a regional transhipment hub for sub-Saharan Africa. Ngqura as a transhipment hub can serve as an alternative to existing hubs for traffic between Asia and South America. No suitable facility currently exists.

“Recent engagements with a number of lines has indicated that they wish to use Ngqura as their hub based on their approved hub and spoke operations plans” END

To learn more visit www.dti.gov.za.

focus EAStERn CAPE


Michael Kernekamp joined East London Airport as a junior fireman in 1983 and has progressed through various positions to assume his current role as Airport Manager. He talks to South Africa Magazine.

By ian Armitage

F o R E A S t L o n D o n A i R P o R t

sky’sthesky’sthesky’s

E ast London Airport is a regular within the pages of

South Africa Magazine and it wasn’t that long ago that we talked to Airport Manager Michael Kernekamp about a terminal upgrade that he described as “a milestone and central to the city and province’s economy”.

Things didn’t stop there. The terminal upgrade was just part of ongoing investments aimed at meeting current and future passenger demand.

“The upgrades to the terminal building were completed in time for the 2010 FIFA World Cup and have provided significant capacity increases. The terminal is now far more aesthetically pleasing for passengers,” says Kernekamp.

East London Airport processed 339,000 departing passengers in the last financial year.

Most passengers are business people and politicians, as the region houses the main administrative headquarters for the province.

It is hoped that growth in the area’s tourism and conference sectors will add to passenger numbers.

Kernekamp is preparing for that.

“For an airport to succeed it has to continually maintain, develop and

East London Airport focus EAStERn CAPE


the upgrades to the terminal building were completed in time for the 2010 FiFA

World Cup and have provided

significant capacity

increases


East London Airport focus EAStERn CAPE

Wasteman’s presence is experienced through the results they achieve.

CommitmentThe Board of Wasteman, together with all of our staff, are committed to the provision of service to our Clients based on the following tenets:

Health Safety and EnvironmentThat we carry out our work without the causing of harm to people or the environment.

SustainabilityThat we are committed to the principle of sustainability and interact pro-actively with our Clients to assist with the reduction in the volume of waste to landfi ll.

ComplianceThat we will comply with both the spirit and the letter of the extensive legislation relating to the management of all waste entrusted to us by our Clients. In addition, we will assist our Clients in meeting the obligations imposed.

Wasteman

expand its infrastructure – which is our objective,” he explains. “Our runway upgrade, the biggest upgrade project in East London Airport’s history, began in January 2012 and is scheduled for completion in the coming months.”

It is a huge undertaking, costing some R160 million, and involves the rehabilitation, strengthening and resurfacing of runways and taxiways to cater for anticipated future aircraft loadings.

In addition, a new friction course is being added to improve safety and surface riding quality.

“The runway-end safety areas are being extended from 160 metres to 240 metres and runway edge strips are being strengthened,” says Kernekamp.

“Our investments are focused on maintenance and planning for the future, making sure we build capacity and retain a high safety focus.”

According to data East London Airport provided, approximately 65,000 tons of asphalt will be laid down during the project.

To put that into context, it is equivalent to paving about 70 kilometres of a major, single-carriageway road – about enough road to get you from Sandton to Vereeniging.

“We are also upgrading the airport’s perimeter patrol road, which will see better emergency response times,” adds Kernekamp, who says “careful planning and co-ordination of stakeholder activities has been critical in maintaining normal airport operations”.

Investments like this are crucial for the Eastern Cape.

“We’ve more investment planned,” Kernekamp says. “One such investment will be the replacement our instrument landing system. The current system is now eight years old and will be replaced in 2013 with a new R16 million system.

Treatment Pipe Inspection and Analysis Emergency Spill Response

Recycling Collection & Removal Specialised Cleaning

Wasteman is a leading Company operating in the field of Waste Management on a national basis across South Africa. Our fully integrated and comprehensive service offering has been developed over the past 30 years and is the result of a dynamic interaction between our dedicated staff and their clients in the provision of an optimal solution to their needs.

WWasteman operates according to the principle of BAEEP (Best Available Economic and Environmental Practice). Accordingly, we will ensure that our Clients will enjoy the benefits of “best practice” which are constantly evolving as changes in technology are adopted into business practice.

WWasteman has a proven track record of providing our Clients a one-stop solution through a tailored application of our comprehensive range of services, to suit our clients specific needs.

INNOVATIVE COMMITTED INVOLVEDEMAIL: [email protected] TEL: 011 524 8900 FAX: 011 524 8990


“The airport has also completed a R12.5 million project for the upgrade of the fi re ring main. This project included the replacement of old asbestos water pipes with new ductile iron pipes, new fi re hydrants, a new booster pump and two new water reservoir tanks with a capacity of 300,000 litres each. This project has assisted in enhancing the safety of aircraft operations and has made massive savings in water usage at the airport.”

The future is bright for the airport and the Eastern Cape Province.

“We are, as our investments show, preparing for what might happen in the future in terms of bigger aircraft coming in and more travellers,” Kernekamp says. “The airport plays a role in the economy of the region and we work closely with the local chamber of business, monitoring trends. Obviously we have been in a national recession and the rising fuel prices haven’t

helped the airline industry, so yes we have seen the impact this has had, especially the leisure travellers that use the airport.”

The last few months have shown a signifi cant drop in passenger numbers.

“In December we were 22 percent down on the previous year and in January 24 percent down on the previous year. I think that was due to one airline operator going into liquidation. Basically 30 percent of our passengers were using a certain low-cost carrier. Some of their passengers, a small percentage, were absorbed by the current airline that is operating here. Nonetheless we have taken a knock.”

Despite the collapse of low-cost carrier 1Time - lessening the scope of choices available to the air traveller, and a blow to the spirit of competition - Kernekamp expects a bright future for South African and African aviation.

East London Airport FOCUS EASTERN CAPE

Nedbank Business Banking congratulates its client, East London Airport, for investing in passenger safety and operational efficiency for its growing community. As your chosen banking partner, Nedbank Business Banking is proud to be partnering with you on your journey to success. Through our decentralised service model, which empowers our regions to offer customised end-to-end business solutions, we have supported your vision. As your business manager and team of banking specialists, we will continue to deliver the same quick turnarounds and tailormade solutions to help your future growth and developments take flight.For more information please email: [email protected] Business Banking − partnering for growth for a greater South Africa.

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Proud to be supporting East London Airport on taking off

“Kulula are setting up offi ces as we speak, so that is fi lling that void,” he says. “They are a professional company and they fall under the umbrella of Comair with the likes of BA - globally a strong company. Also they offer a very attractive package in terms of their global network. Now you can fl y from East London to anywhere in the world. They are a breath of fresh air, really, and we are very happy with what they have to offer. I know it will be excellent for the passengers using this airport and for the economy of the area, not to mention the growth in tourism, so competition will be healthy for the consumer, especially the frequent fl yer.” END

To learn more visit www.acsa.co.za.


investment in the coega iDZ is opening up opportunities that will “drive regional development, diversify and

expand industrial bases as well as create direct and upstream employment,” says Coega Development

Corporation’s Christopher Mashigo.

By ian Armitage

C o E g A i n D u S t R i A L

d Ev El o p m En t z o n E

A ccording to Christopher Mashigo, an executive

manager of the Coega Development Corporation (CDC), the Coega industrial development zone (IDZ) in Port Elizabeth has helped “create jobs and drive growth” in the Eastern Cape.

Established by the South African Department of Trade and Industry, with the Eastern Cape Provincial Government and Eastern Cape Development Corporation as shareholders, and managed by the CDC, the IDZ is designed to “position South Africa as a hub for Southern African trade,” he says.

And it is succeeding.In 2001 the government

established four industrial development zones (IDZs) at Coega just outside Port Elizabeth, East London, Richards Bay and OR Tambo International Airport.

The zones were designed to “induce investment and create jobs”.

Critics say IDZs have largely failed, and the rate of job creation has been disappointing.

They think more could have been accomplished for economic development through direct investment from the state.

Mr Mashigo however says IDZs work and their successes should not be

measured in mere years but in decades given that they are long-term development investments. He pointed to a number of investment projects in Nelson Mandela Bay and the Eastern Cape, including the deep-water Ngqura port project and a proposed multibillion-rand oil refinery.

“Investment in the Coega IDZ is opening up opportunities that will drive regional development, diversify and expand industrial bases as well as create direct and upstream employment,” he says. “The municipality and CDC are collaborating to put incentives on the agenda to create investments that create jobs and diversify the employment base.”

With the government trying to transform the country into an industrial state, a great noise has been made about the Industrial Policy Action Plan and the new growth path.

In this financial year [2012/13] alone 5,364 jobs have been created and 6,505 people have been trained by the CDC.

Since inception, the CDC, and its Human Capital Solutions unit, has trained 25,586 people and created 6,875 construction jobs, 3,484 permanent Coega IDZ jobs and 44,786 indirect jobs.

The employment figures – some 3,770 jobs – are

coega IDZ focus EAStERn CAPE


driven by direct investments in the IDZ by business, such as Dynamic Commodities, Discovery Health, Acoustex, Benteler, Cape Concretes and Cerebos, Mashigo says.

New developments in the IDZs are focused mostly on functions in the industrial and manufacturing value chain, he adds.

“With a bouquet of projects valued at more than R140 billion, the IDZ is set to steer the Eastern Cape into the economic future, ensuring investments comes here and to help the region contribute more to the economic and developmental growth of South Africa.”

At present, the Coega IDZ contributes about 5.9 percent to the Eastern Cape’s GDP and 0.5 percent to national GDP.


“Naturally we want to boost that and grow it,” Mashigo says.

Among the most recent investors is Discovery, South Africa’s largest medical aid scheme provider.

Discovery Health opened a call centre at Coega that has employed 336 people and is expected to employ 400 by January 2013.

“That is an exciting project creating jobs. Discovery has grown fourfold in the last 12 to 14 months, which is a fantastic story of growth.”

The Coega IDZ is home to 22 operational investors, amounting to R1.2 billion in investment, and a further R7.5 billion in investment is in implementation stage.

One of the major investments includes Fortune-500 company First Automobile Works (FAW), China’s largest vehicle manufacturer, who are building a new R600 million vehicle and truck assembly plant, Mashigo says.

That investment is in Zone 2 of the IDZ, where the CDC plans to set up a tool, die and mould (TDM) cluster. FAW’s construction firm, WBHO Construction, recently broke ground on the site of the plant, which is due for completion by December 2013.

FAW’s investment is great news for Nelson Mandela Bay and the Eastern Cape economy.

“It is fantastic. Production capacity would be 5,000 trucks a year in the first phase and 30,000 passenger vehicles a year in the second and the investment is valued at R600 million, with R200 million earmarked for plant construction and equipment, and R400 million to start up and run the facility over the next few years. The trucks are destined for the local market as well as a number of African countries and this is all part of a bigger plan to create a platform for Tier 1 suppliers who aren’t yet present in SA.”

Mashigo says partnership, cooperation and the right incentives were “critical” in securing the investment.

“We have worked with government at all tiers to ensure and to continue to ensure we create a more competitive environment for all investors.”

This isn’t the only major coup. AfriSam, a leading black-controlled, unlisted cement company, recently signed a lease agreement worth R634 million to establish a Greenfield milling and blending plant in Zone 5 of the Coega IDZ.

The new facility will supplement its existing supply into the Eastern Cape market.

The construction of the plant will create about 400 temporary jobs, while its operation would create about 90 permanent jobs.

“This will see the Zone 5 metallurgical cluster filled,” says Mashigo. “It speaks of growing investor confidence in the IDZ. I believe AfriSam chose Coega because of the quality of its infrastructure and proximity to the Port of Ngqura, which makes it cost effective to import the raw materials needed to produce cement products.”

There is much more going on. “We also have a wide variety of

opportunities in agro-processing and a lot of local produce is being processed, packaged and exported from Coega IDZ through to

Ngqura and to international destinations. Dynamic Commodities has a staff of 1389 and they have exported more than R140 million of fruit sorbet, So Shi, and other fruit products around the world. We have Coega Diary, which produces UHT milk for local retailers, and there is EC Biomass with makes bio fuels from wood chips.”

Renewable energy is “an interesting field”, he says.“We have three wind energy projects and one solar

project that are in various stages of development, all of which will be contributing to the national grid by 2015. On top of that we have secured two ferromanganese smelters with a combined investment value of over R8 billion and the Coega IDZ is also home to the first steel mill in the Eastern Cape, pioneered by AgniSteels, an Indian company which partnered with a local business to form a consortium.

“The IDZ is coming into its own and is contributing to the future of the Eastern Cape,” Mashigo concludes. END

To learn more visit www.coega.co.za.

coega IDZ focus EAStERn CAPE

Discovery has grown fourfold in

the last 12 to 14 months



nigeria is Africa’s foremost business destination second only to South Africa.

By ian Armitage

InvEstmEnt p r o f I l E :

nIgErIA

o ver the past decade Africa has been the second-fastest

growing economy in the world, with GDP accelerating more than five percent a year on average, according to the World Bank.

And even as the global economy has slowed in recent months, growth in Africa has largely remained on track, with the World Bank predicting the continent could be on the brink of an economic takeoff much like China 30 years ago.

So what’s driving it?Africa’s natural

resources are a big factor; so too is the continent’s rising consumer class.

According to the McKinsey Institute, household consumption is now higher in Africa than India or Russia, and it is expected to grow – it estimates that the number of African households with discretionary income is expected to jump by more than 50 percent to almost 130 million by 2020.

“Africa is increasingly being taken more seriously as an investment and business destination, but in many sectors, a window of opportunity does still remain open for establishing an early mover advantage,” says Ajen Sita, Africa Managing Partner at Ernst & Young. “However, competition is intensifying and that window is closing.

“For companies and investors looking for long-term sustainable growth, we are in no doubt that the time to act on the Africa opportunity is now. Now is the time to invest in understanding markets, identifying partners, developing opportunities, configuring industries, building brands and establishing local credibility.”

Investors have taken note. Oil-rich Nigeria has been a preferred destination – it being Africa’s most populous country and second-largest economy – where economic growth was around six percent every quarter in 2012 and stocks have surged.

It ticks all the right boxes.The good news for would-

be investors is that Nigeria’s economy is expected to grow slightly faster this year than in 2012, driven by progress in the agriculture, banking and oil sectors, while high inflation rates should ease slightly.

Growth in Africa’s second biggest economy is forecast at 6.75 percent compared with an estimated 6.61 percent in 2012, according to an outlook from the national bureau of statistics (NBS).

“Energy reforms ... banking sector, agricultural reforms and oil sector reforms are expected to drive higher growth during the period (2013-2016),” the report says.

focus nigERiA



GDP should expand by an average of 7.2 percent next year, 6.9 percent in 2015 and 6.6 percent in 2016, it said, adding that the projections assumed no change to monetary policy, stable fuel prices in the continent’s biggest oil producer and a stable external environment.

The rapid growth of mobile subscribers is another big draw for investors.

South African company, Shanduka Group, recently bought shares in MTN Nigeria - the largest mobile operator in Nigeria with more than 45 million subscribers and an estimated market share of 48 percent - worth R2.96 billion.

A statement by the company said Shanduka Group bought the shares through its subsidiary in Mauritius.

“This is the largest investment the company has made outside South Africa,” said Phuti Mahanyele, the CEO of Shanduka Group. “It is most signifi cant investment in another African country. MTN Nigeria is a business that is well established within a market that has great potential for further growth. Shanduka will continue to pursue opportunities in other parts of Africa.”

South African banking group FirstRand is, meanwhile, aiming to become a major player in Nigeria after its subsidiary, Rand Merchant Bank, secured an investment banking licence from the Central Bank of Nigeria.

FirstRand CEO Sizwe Nxasana said in a statement on that FirstRand sought to build a presence in high-growth African markets with attractive long-term prospects.

“This move is consistent with our strategy, as we often enter a new market through the appropriate operating franchise, in this case RMB, and the rest of the banking group may then follow,” Nxasana said in a statement. “Nigeria currently offers strong growth prospects, particularly with regards to corporate and investment banking,” he added.

RMB has been operating from a representative offi ce in Nigeria since January 2010, and chief executive Alan Pullinger said the licence - which required an initial capital investment of $100 million from the company - would “allow us to signifi cantly scale up our in-country offering”.

“Nigeria as a country and the West African region as a whole are experiencing signifi cant growth,” he said.

South African investors are also eyeing Nigeria’s


power sector, eager to replicate the success story of MTN in Nigeria, especially in the electricity sub-sector.

There are opportunities in the food sector too.In 2012 South African consumer goods group Tiger Brands acquired a 63.35 percent shareholding in fl our and pasta maker Dangote Flour Mills Plc in Nigeria for approximately R1.5 billion- its third and biggest deal yet in West Africa.

“We believe it will present growth opportunities for both organisations and be mutually benefi cial. Dangote Flour Mills will add signifi cant scale to Tiger Brands’ existing Nigerian businesses‚“ Peter Matlare‚ CEO of Tiger Brands said.

Nigeria is among the countries that are leading the charge in Africa’s economic revolution. The increasing fl ow of foreign direct investment, and investment by African into other regions of Africa, could launch the continent to greatness over the medium future.

“Nigeria’s large market, growing middle class and rapidly transforming economy continues to attract international investors, who fi nd these opportunities irresistible,” one expert told South Africa Magazine.

Many are predicting that Nigeria may soon join the Brics (Brazil, Russia, India and China and South Africa), nations, with the country’s Finance Minister and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala confi rming that Nigeria has what it takes join the Bric nations in an interview with the BBC. She admitted however that even though the fundamentals are right, infrastructural constraints, such as epileptic power supply, hinder growth.

“When we solve those problems, we are going to be in the low double digits and that will parachute Nigeria into the Brics,” she said. END

AT A GLANCE

Oil-rich Nigeria is unable to supply its own population with electricity and the country ranked 178th of 185 economies on access to electricity for new businesses in the World Bank’s latest “Doing Business” publication.

Infrastructure is a key to the country’s future. Power outages have forced more than 90 percent of industrial users in Nigeria to install their own generators. Reforming the power sector is of huge importance.

Nigeria’s road networks also need improving, the 49km Lekki-Epe toll road being an exception. The average Nigerian worker spends up to fi ve hours each day commuting and deliveries are, perhaps unsurprisingly, slow.

Problems of corruption and ineffi ciency continue to plight Nigeria but reforms and a banking industry clean up (with the Nigerian Stock Exchange suspending and delisting companies for poor compliance) has certainly helped.

Nigeria now has an elected leadership but there are some serious security threats with clashes between the Muslim north and Christian south.

However, the opportunities remain. Rising consumer spending is drawing in retailers as a rising middle class warms to luxury brands, smartphones and imported beer in particular.

focus nigERiA


continental Reinsurance is

the largest local reinsurance company

in nigeria. the pan-African reinsurer is

headquartered in Lagos, operates in

more than 35 African countries, and has

expanded its regional footprint with offices in Cameroon, Kenya and

Cote D’ivoire.

By ian Armitage

u P P i n g t H E ante:

Continental reinsurance continues to expand

p an-African reinsurer Continental Reinsurance is ambitious.

In the last 12 months the Nigerian reinsurance company has opened a new offi ce in Abidjan, Cote D’Ivoire, and converted its regional offi ce in Nairobi to a full-fl edged company having been granted a license to operate in Kenya.

“Continental Reinsurance has been doing business in Kenya since 2009, but the growing demand for reinsurance products saw us go to a fully-fledged company,” says CEO Femi Oyetunji. “It is an important market.”

That’s not the end of the African expansion.

The company expects to have its offi ce in Tunisia back up and running by the end of the quarter and will launch a Southern African operation some time soon.

So what’s the secret?“2012 was a good year,”

he explains. “We moved into new territories and we opened a new offi ce in Abidjan, Cote d’Ivoire, to strengthen our underwriting operations in Francophone West Africa. We also incorporated a subsidiary in Kenya in Nairobi – it is a fully licensed Kenyan offi ce.

“We now have three branches outside Nigeria - Douala in Cameroon, Nairobi and Abidjan - and we have

plans to open more branches in the near future to improve service to clients.

“Things are looking good. We have a solid balance sheet and we’ve embedded enterprise risk management, which is really driving the business forward.“

Dr Oyetunji became CEO in January 2011 and has helped put Continental Re on a stronger footing.

“What we have put in place in Continental Re is strict enterprise management framework,” he says. “The company is a pan-African reinsurer, and what we want is to demonstrate our commitment to our market - Africa.

“We believe we have to keep African premium as much as possible within Africa. So, for us in Continental Reinsurance, our ambition, which is in line with our vision, is to truly become the premier pan-African reinsurer.”

It would seem the company is heading in the right direction.

“So far it has been positive,” Oyetunji says.

In a fi rst for Nigeria (and indeed Africa as a whole, South Africa excluded) Continental Reinsurance has signed the UN Environmental Programme Finance Initiative’s Principles for Sustainable Insurance, a principles-based global framework to manage

continental Reinsurance focus nigERiA


Continental Reinsurance

has been doing business in Kenya since

2009, but the growing demand for reinsurance

products saw us go to a

fully-fledged company

ante:


continental Reinsurance focus nigERiA

environmental, social and governance risks and opportunities in the insurance business.

According to Oyetunji it is a huge step in the “right direction” and means Continental Re is committed to integrating environmental, social and governance issues into its core business strategies and operations, and to implementing the principles across all fields of work.

“That is what we are doing,” he says. “As a reinsurer, we are in the business to protect people in the long-term. I am therefore very proud we’ve taken this route.”

It demonstrates Continental Re’s adoption of sustainable insurance aims, accountability, and transparency to the public in managing environmental, social and governance issues.

It provides a “solid platform for the future”.“As I said, we want to expand and to

do that well you have to act in an orderly manner,” Oyetunji says. “It is very important. Our plan is to strategically grow the business

throughout the continent, with energy and life insurance as two key growth opportunities.

“Our policy is to concentrate on Africa. We are expanding because we believe that reinsurance conducted at a pan-African scale is in the best position to offer clients stability, longevity, innovations and more tailored service that is more responsive to market conditions.

“We are already working in more than 35 countries in Africa with our three strategic offices, and more are planned. Africa is interesting to us in particular because it has one of the lowest insurance penetration rates in the world, excluding South Africa, and very fast growing economies. Africa in general is full of opportunities and we are targeting that.

“Our services are driven by our new corporate philosophy of sustainable trust.”

To help it articulate the pan-African strategy and to communicate the fact that

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it is a responsible reinsurer, Continental Re has enlisted the help of Gong Communications, a specialist brand agency.

Oyetunji says the move has “assisted in branding across Africa” and that the task was such that “professionals were needed to communicate effectively and consistently across the continent”.

Does he expect a bright future?“I do,” Oyetunji stresses. “One important

thing is that we are committed to our shareholders and we are committed to rewarding them with dividend and good returns on their investments.

“We aim to project ourselves as a pan-African reinsurer as we focus on expanding our presence in line with our five-year strategic plan. Our transformation isn’t complete. Before I became CEO, the business recapitalised, and we have focused on a ‘back to basics’ approach, looking to offer outstanding service, the right

packages, and getting the fundamentals right, while driving international best practice through the business in the shape of enterprise risk management.

“As we grow we will sustain what we have done and improve at various levels.

“We believe we can be the premier pan-African reinsurer, we have a good track record, working to international best practices.

“This is a transitional year for Continental Re when all the various initiatives of the past few years will come together.”

Continental Re first began operations in 1987. It was listed on the Nigerian Stock Exchange in 2007 and is rated B+ (Good) by AM Best for financial outlook, credited for robust risk-adjusted capital.

Its product mix includes a full range of treaty and facultative reinsurance services. END

To learn more visit www.continental-re.com.



Z i C o E y E i n g

pan-Africangrowth

Zico Group, established by prominent business

activist Sandile Zungu, is going Pan African says

CEo tshego Sefolo.

By ian Armitage

B lack-led private equity fi rm Zico specialises in quite a lot of things - management buy-outs, leveraged buy-ins, expansion capital, growth

capital, replacement capital or acquisition capital, privatisation, restructuring or unbundling initiatives, acquisition of strategic equity interests, and joint ventures.

And it does all of that with black empowerment at its core.

The Johannesburg-based fi rm, which was established by prominent business activist Sandile Zungu, invests in all stages, except start-ups and early stages.

According to CEO Tshego Sefolo, it prefers to invest in companies operating in automotive (motor retail and allied services), operational services, which include specialised, security, cleaning, laundry, hygiene, pest control and fumigation, human capital recruitment, training and development, fi nancial services, and mining and resources.

But it will consider “almost any investment opportunity”.

“We’ve traditionally invested in the South African market, but we have now set our sights on expanding across the broader African continent,” explains Sefolo.

Zico comes with a proven track record, he says, and was launched “off the back of” South Africa’s economic redistribution. The business has however emerged as a credible diversifi ed investment holding company.

“Zico has grown into one of the most prominent players and matured into a fully fl etched investment house,” Sefolo says.

Zico has participated in some of South Africa’s biggest BEE equity transfer deals. Recently the group scooped an equity stake in KwaZulu-Natal based operation Spring Lights Gas (SGL), together with Kwande Capital, an emerging investor in the energy space. It was a major boost for the province. “We are fairly established in the South African market,” says Sefolo. “We see

Zico Group focus nigERiA




South Africa as a gateway to Africa so, in that context, we see ourselves as well positioned to expand and take opportunities outside of the South African borders. Of late, we’ve been aggressive with mining and resource opportunities in the rest of Africa in places like Zimbabwe, Zambia and the DRC and Ghana. We think there is clearly an opportunity there. If you look at the infrastructure projects that are happening in the rest of Africa we think there is scope to tapping into those investments, largely born out of the legacy of under investment in infrastructure in the rest of Africa and it is in that context that we see the continent as a compelling place from an investment perspective.”

Zico has a measured approach, which balances exposure through partnerships with other players seeking African equity, he says.

That approach is designed to mitigate the risk inherent in growing an African portfolio.

“Our view is that Africa as a continent isn’t homogeneous and the different countries have got their very specific requirements that any investor would have to be sensitive to. To mitigate some of those issues and potential risks, you can enter

Cliffe Dekker Hofmeyr is one of South Africa’s largest full service corporate and commercial law firms, specialising in competition law, dispute resolution, employment law, finance and banking, real estate and tax law, among many other practices.

We believe in partnerships. We make it our priority to get to know our clients so we can understand their business and management needs, then act accordingly. We have the depth of skills to respond to a client’s business operations locally and anywhere in the world through our alliance with DLA Piper.

We are considered one of the most transformed law firms in the country. The percentage of candidate attorneys (CA’s) qualifying in South Africa is around 65% for women across races. With regards to our 2012 intake of CA’s, 73% are female and 55% are black. Our female associates make up 59% of the group and 57% of the group are black. When it comes to our senior associates, 71% are female and 47% are black.

Cliffe Dekker Hofmeyr

Four years in a row, we have advised on more M&A deals than any other law fi rm in South Africa, taking top honours in the DealMakers Awards for M&A deal fl ow in 2009, 2010, 2011 and now again in 2012. Adding even more shine is being ranked 1st by Deal Flow and 1st by Deal Value in general corporate fi nance. We say olé to our legal teams - and of course, we take our hats off to our clients.

* Wikipedia – Golden Sombrero: The term derives from hat trick, and since four is bigger than three, the rationale is that a four-strikeout performance should be referred to by a bigger hat, such as a sombrero.

Cliffe Dekker Hofmeyr is a member of DLA Piper Group, an alliance of legal practices

www.cliffedekkerhofmeyr.com

Last year, we scored a hat trick.THIS YEAR MAKES IT A GOLDEN SOMBRERO.*

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into partnerships with local players who are familiar with the market. It gives us a lot of comfort that we have someone on the ground closer to the issues and able to respond to some of the challenges as opposed to us being based in Johannesburg. In any market it is very difficult to try and operate or manage via remote control. You need to be fairly close to the market so that, as and when the issues arise, you’re positioned to respond to them.”

Sefolo referred to partners such RMB Corvest,

which has enabled the acquisition of a share in Nigerian-based company, Vital Products Plc, a successful manufacturer and importer of a range of food products.

“Yes, we have gone with RMB Corvest and then we own Vital products with local shareholders, including a management team. Nigeria, if you look at it from a size point of view, it is a population size three times the size of South Africa. I think it’s in excess of 160 million people. So from a market point of view, it is a massive opportunity. It is a very fragmented market, though. Logistics is quite a challenge. Your ability to move freely and move goods freely is quite a challenge but if you are able to put processes in place to get around that, you’re able to tap into that market place. We see that as an opportunity. Any investor looking to invest in that sort of market, with the characteristics that it displays, is really compelling.”

Zico’s mining and resources arm, African Vanguard Resources, recently entered into a restructure of Rockwell Diamonds Incorporated, a mid-tier diamond mining and development company which represents the focussed evolution of the company’s strategic goals.

“The Rockwell transaction represents a milestone in the development of Rockwell and the maturation of African Vanguard Resources’ goals, but it facilitates the entry of new participants into the diamond mining industry. We took one of our underlying diamond assets and spun it into Rockwell

Diamonds to enable it to have a bigger platform in terms of assets to mine.”

Mining is a market Zico is aggressively targeting.

“We are pursuing mining opportunities through African Vanguard Resources,” says Sefolo. “We invested in several mining companies, namely Harmony Gold, One Gold, Rockwell obviously, and Goliath Gold.”

Sefolo says the company is also close to concluding a “major deal in the sector”.

Another target market is energy. We’ve mentioned the fact the group

recently brought a take SLG.It is a deal Sefolo is excited about.“We are pleased to have partnered

with Kwande Capital in concluding an acquisition of one of the leading piped gas suppliers in SA.”

ZIco is also planning investment into the soft services industry and has concluded a number of deals in other sectors over the last 12 months.

Is Sefolo happy with Zico’s performance?“We are very pleased with the

performance of our portfolio of investments, which are performing in line with our expectations,” he says. “This enables us to focus on identifying new investment opportunities, while working with our management teams to extract value in the businesses we have invested in.”

Zico focuses on the acquisition and active management of a number of investments within the automotive, services, mining and resources sector.

Whilst committed to delivering a consistent performance for its shareholders, the company simultaneously strives to select investment partners that together can creatively respond to the needs of both local and African communities.


“As I said, the portfolio is performing very well and in fact I think we can confidently say that it is performing ahead of expectation which is a very good position to be in because it enables you to spend more time reaching for new investment opportunities instead of managing challenging assets in the portfolio. On the back of that it does mean that you have to continuously monitor it and make sure that it continues to perform well. I think it is performing in line with expectations. We don’t have businesses in the portfolio that worry us. Every now and then one has to have interventions over specific issues but we are currently very happy with the direction it is moving in.” END

To learn more visit www.zico.co.za.

B igen Africa, an African infrastructure development solution company, is ambitious. Established in 1971, it is

renowned for its smarter business approach, interlocking world-class best-practices, development fi nance, engineering and management consulting expertise to customise innovation.

The company currently has 14 branches in South Africa as well as other offi ces in other parts of the continent and it plans to expand its business in West Africa through Ghana

before proceeding to East Africa through Kenya and then move on to Central and North Africa by 2016.

In the past, Bigen Africa has successfully delivered cost-effective, sustainable infrastructure projects in several African countries, including Botswana, Malawi, Namibia, Zambia, Ghana, Angola and Nigeria.

We asked CEO Dr Snowy Khoza a few questions about the continent’s growth potential, how the fi rm is positioning itself as a premier infrastructure developer and ‘S-Vision 2016’.


Bigen Africa CEo Dr Snowy Khoza talks targets, goals and African growth in an exclusive interview with South Africa Magazine.

By ian Armitage

Q&A Q&A Q&A W i t H D R

S n o W y K H o Z A , C E o o F B i g E n

A F R i C A

Bigen Africa focus inFRAStRuCtuRE DEvELoPMEnt


A SUSTAINABLE HERITAGE…

Bigen Africa has given the pre-schoolers of the Zithuthukile Crèche situated in the northern –Natal town of Newcastle a lasting gift – a solid and well-equipped four-classroom building replacing an outdated and dilapidated facility which posed safety risks to the children.

The social investment initiative fl ows from a revenue management enhancement contract the Newcastle Local Municipality awarded Bigen Africa in 2003.

“As part of our developmental agenda in doing good while doing business, our Revenue Management programme assists the municipality in turning its debtor’s book into revenue through the application of eleven principles of revenue management,” says Dr Snowy Khoza, Bigen Africa CEO.

“In line with our vision to provide sustainable solutions over the entire lifecycle of infrastructure projects, our focus is on improving the quality of life of people. Our policy on social responsibility has the same focus – we do good in the communities in which we operate, in collaboration with local stakeholders so that we can maximise the impact the infrastructure has on the lives of the people,” says Snowy, a development activist at heart.

“Our decision to support the children of Zithuthukile Crèche was based on recommendations by the people of Newcastle with whom we worked on the project. Stakeholders identified the crèche as the highest priority for receiving assistance,” says Wallie Louw Bigen Africa’s Managing Principal responsible for the Asset and Revenue management portfolio.

When Bigen Africa visited the crèche for the fi rst time, it had two buildings, one of which was donated by the then Iscor in 2000. The other building was an old mud-built block which was built by the community. The original classroom was held together by fencing wire. Bigen Africa committed funds plus sweat equity towards the building of the classrooms. The work commenced in the beginning of June 2011 and the project was completed in August 2011.

Many community members benefi tted from employment opportunities during the construction, in addition to numerous part-time opportunities, including brick-layers, labourers, female cleaners, plumbers

and scholars to do decorate the outside walls.

The additional classrooms have improved the learning conditions in the crèche. The kids are able to play freely and are

safely accommodated. The community in general is proud of the new building and as a result more parents are registering their kids at Zithuthukile.

and scholars to do decorate the outside walls.



Roadlab was established in 1965 and have built a sound reputation inherent in large-scale civil engineering materials testing, with extensive experience in South Africa & Africa.

Roadlab are SANAS Accreditation in accordance with ISO 17025 and is committed to generating synergy on all projects, adding value not only through the contribution of its resources, but through innovation, empowerment and excellence in service.

Maintaining a highly motivated staff complement that ensures our clients receive only the best possible service and offering tailored solutions to our clients needs, Roadlab aim to become the dominant Civil Engineering Materials Laboratory, equipment and services provider in Sub-Saharan Africa by maximizing profi tability and shareholder value and by delivering products and services that lead in quality, innovation, customer satisfaction and value. We measure this against the highest engineering standards and international best practices.

Roadlab Dr Khoza, you took over as CEO from Bigen Africa founder Francois Swart, who retired in 2010, are you enjoying the challenge?I fi nd my job exhilarating. As a development activist, my main contribution is to ensure that the company is well positioned, maintain its development activism and delivers its mandates accordingly in the infrastructure development space. This is going on well as we continue to support governments to deliver their infrastructure delivery mandates. I continue enjoying the tremendous support from shareholders, the board and our dedicated and enthusiastic team.

What were your initial goals, targets and objectives?For me there were two major objectives that I wanted to achieve within the fi rst two years of my responsibility in Bigen Africa. The context of this is that, at the time when I joined, Bigen Africa was a mature engineering fi rm at the peak of an S-curve. The shareholders and the board of directors wanted to optimise the company’s position in the market to create a next upward S-curve. With my experience in social and fi nancial development work with the government, the Development Bank of Southern Africa and the National Energy Regulator, I realised that the true essence of the company was that of an infrastructure development company rather than just another engineering fi rm. And that was probably my fi rst objective – to guide the company towards a repositioning, away from pure engineering, to providing and applying infrastructure so that its

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Contact Numbers:Tel: 011 828 0279Cell: Deon Beekhuizen - 082 578 6985 Cell: Nico Herbst - 082 376 1712

E-Mail Addresses:[email protected] Email: Deon Beekhuizen - [email protected]: Nico Herbst - [email protected]

socio-economic benefi ts impact signifi cantly on the communities, improving people’s quality of life. The board and shareholders bought into what then became our S-Vision 2016 strategy. The second objective was our Africa footprint strategy - to fully reposition Bigen in the continent. As an Africa infrastructure company run by Africans who understand the African continent, I believed that we could do more than what we were doing. In this regard, our African footprint was expanded to cover southern, western and eastern parts of our continent, with a plan to later expand into the central and northern parts. We have ensured that our African solutions to infrastructure development benefi t more countries than just a few. This has been done very well within our third objective of building strong strategic partnerships in infrastructure delivery. The partners have to have a willingness to take risks and share the upside of it with those countries that opened


We want to contribute to the strategies of communities and countries by

addressing their key public policy priorities


DFR Engineers is a dynamic and experienced electrical, electronic, and mechanical engineering consultancy with the capacity to provide comprehensive and value-driven design and project management services.

We provide specialist solutions to clients in the property, banking, commercial and industrial markets.

Our dedicated and professional team of specialists have built a reputation of providing viable, durable and cost-effective solutions to meet challenging project requirements throughout Africa. Visit the website for more information at www.dfreng.co.za

DFR Engineers doors for us (within our indigenisation policy to build countries from within). We have become an African partner of choice for those international companies that are interested in developing the continent for the benefi t of our people, rather for their profi t interest only. Our development fi nancing capability has also attracted great partners who are willing to bring their fair capital share into the continent. Although it sounds like a simple challenge, it entailed guiding the team away from its main focus on generating blueprints and technical drawings to introducing the element of community benefi ciation. This process required a penetrating interrogation of our strategies, processes, and more importantly, our thinking.

Has the company evolved under your leadership then?Yes it has. But even though I led the evolution as the ‘activist newcomer’ it has been a team effort supported by shareholders and the board. I believe change was necessary to take the company to a new level of sharper business acumen and stronger market penetration.


THORNTREE VIEW SETS NEW BOUNDARIES FOR HUMAN SETTLEMENTS

The design of the Thorntree View Integrated Development, a massive and ambitious human settlement between Tshwane’s Rosslyn and Soshanguve communities, provides a balance between the traditional concept of providing shelter and the need for economic growth and social and ecological development in the community.

The development, situated in the north of the City of Tshwane, is a joint public-private Safdev SSDC initiative. Infrastructure development firm Bigen Africa provides the civil and electrical engineering consulting services.

“Thorntree View is an embodiment of the Breaking New Ground principles at work. Its design stimulates wealth creation, poverty alleviation and equity by seamlessly blending 29 000 subsidised, institutional and bonded housing units with public open spaces, business and commercial stands, schools, sports fields and parks,” says Dr Snowy Khoza, Bigen Africa CEO.

Already, over 14 000 residential units have been serviced, totalling a construction value of more than R240 million. The development also caters for 24 primary schools, 12 secondary schools, 35 business stands, 176 hectares of public open spaces and parks and 133 institutional sites which will be utilised as clinics, churches, crèches and community facilities.

The Thorntree View concept and its application made the development so popular that it is now the fastest developing area in the City of Tswane.

“Bigen Africa managed to combine best practices for human settlements with new initiatives developed specifically for Thorntree View. We had to densify and realign the already approved township layout in terms of Breaking New Ground principles, but without compromising the already issued development rights and ensuring that the flamboyance of the development was kept intact. This involved, amongst others, re-designing the sewer infrastructure to accommodate the previously installed the mid-block sewers.” says Dr Khoza.



BES Africa Engineering & Management Consult Pty Ltd formerly trading as Batseta Engineering Services is an Engineering Consultancy registered in South Africa in 2010. As part of the Construction Codes of Good Practice, gazetted on 4 May 2009 which seeks to deal with past inequalities, Bigen committed itself to enhance sustainable growth of micro, medium and small Broad Based Black Economic Empowerment (BBBEE) companies through their enterprise development programme. Accordingly BES Africa Engineering & Management Consult became a benefi ciary of this programme.

BES Africa Engineering & Management Consult is 100% black owned, with a level 1 BBBEE status. Services rendered include amongst others;

• Project and Programme Management• Infrastructure Development Planning • Construction Management • Electro-Mechanical Engineering• Water and Sanitation• Roads and Stormwater• Transportation Engineering• Structural Engineering

BES AFRICA

BIGEN AFRICA HELPS REALISE BOTWANA’S DEVELOPMENT GOALS WITH NORTH-SOUTH CARRIER WATER TRANSFER SCHEME

Leading infrastructure development fi rm Bigen Africa has been appointed by Botswana’s Ministry of Minerals, Energy and Water Resources as representative for the second phase of its North-South Carrier (NSC) water transfer scheme.

The NSC is a key aspect of the Botswana government’s long-term strategy to ease the water demand burden on the eastern part of the country. Phase two is aimed at completing a water transfer strategy which feeds on various dams, existing or newly emerging from the fi rst phase, which was completed in 1999.

“The Botswana government recognises the importance of infrastructural investment as a key foundation for national, regional and local economic growth and development,” says Dr Snowy Khoza, CEO of Bigen Africa, “and that local content is key to ensuring a direct contribution to the growth of the national economy. As these priorities align with the business focus of Bigen Africa as well as its mission of “doing good while doing business”, the company is the perfect choice for this commission.”

Planning of the second phase was started in 2007 and construction commenced in the second quarter of 2012. It is anticipated that second-phase construction will be completed within 24 months, with commissioning and trial operation expected by mid-2014.

The direct water transfer route (running primarily alongside north-south traffi c route A1) passes the demand nodes of Palapye, Mahalapye and Mmamabula – where raw water treatment will occur – en route to Gaborone.

The NSC is expected to deliver 45 Mm³ of water per annum and costs were estimated, in 2010, to amount to BWP5.5 billion.

• Structural Engineeringdams, existing or newly emerging from the fi rst

Snowy Khoza, CEO of Bigen Africa, “and that local

within 24 months, with commissioning and trial

Mahalapye and Mmamabula – where raw water

Unit E101 Jacaranda PlaceWoodmead Business Park145 Western Services RoadWoodmead

BES Africa Engineering & Management Consult is a specialized multi-disciplinary engineering company which provides technical and professional expertise within infrastructure, development and planning.

Our in-house engineering team is structured to identity and perform in Our in-house engineering team is structured to identity and perform in these specialized areas to client’s requirements and specifications, with the ability to project manage, engineer and deliver beyond the customer’s expectations. In conjunction with our associates that provide high quality service in our areas of expertise we offer engineering services on a turnkey basis.

Products & Services:

• Civil Construction Engineering• Civil Engineering Consulting Services• Electrical Engineering• Engineering Consulting Services• Environmental and Geophysical Engineering

Tel: +27 11 656 4309Fax: +27 11 656 4319

Email: [email protected]: www.besafrica.co.za


At K2M Environmental we believe that the company vision should be enshrined in our day-to-day activities through a set of core values and our vision is to build sustainable partnerships with our clients by offering best practice, cost effective and appropriate solutions through the integration of development and planning, information technology and information management skills.

This vision is supported by a set of core values which include:

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Range of products and services:

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Assessment studies· Socio-Economic Surveys and Analysis· Development Feasibility Analysis· · Local Economic Development Plans

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Cell: 082 7760 881 Email: [email protected]

Bigen is renowned for integrating the entire value chain in an infrastructure development. Why is that important?This approach ties in with our S-Vision 2016, which states that Bigen Africa is an infrastructure development fi rm that provides services in engineering, management consulting, development fi nance and advisory services. We say that infrastructure development is about the sustainable benefi ts of the socially desirable development outcomes that emanate from the use of the infrastructure. These include access to services, reduction of poverty, capacity building, empowerment and the creation of employment opportunities. We want to contribute to the strategies of communities and countries by

Bigen is renowned for integrating the entire value chain in an infrastructure development. Why is that important?This approach ties in with our S-Vision 2016, which states that Bigen Africa is an infrastructure development fi rm that provides services in engineering, management consulting, development fi nance and advisory services. We say that infrastructure development is about the sustainable benefi ts of the socially desirable development outcomes that emanate from the use of the infrastructure. These include access to services, reduction of poverty, capacity building, empowerment and the creation of employment opportunities. We want to contribute to the strategies of communities and countries by


FROM THE LARGEST RESERVOIR TO THE SMALLEST HOUSE CONNECTION – BIGEN AFRICA HAS IT COVERED!

Mangaung Metro has appointed infrastructure solutions company Bigen Africa to monitor the design and construction of a reservoir which will meet the 2015 water requirements of Bloemfontein’s rapidly growing southern suburbs. The company will also design the bulk supply pipeline from the reservoir to planned suburbs.

The 45Ml reservoir, which will be built at Longridge in the south of the city, will nearly double the 47Ml storage capacity of the two existing reservoirs there.

“The metro realised that the current storage capacity was insuffi cient to meet the expected 2015 demand due to the rapid expansion in the city’s southern suburbs,” says Bigen Africa’s Civil Engineering Principal: Robert Moffat. “These include the recently awarded housing projects in Hillside View and Vista Park Extensions 2 and 3, as well as expected demand from the planned Liege Valley suburb.”

Both the reservoir and the pipeline will be the largest projects in their respective categories for Bloemfontein. They will serve about 16,000 households in Liege Valley and Hillside View, with further capacity to provide water to the Grasslands area (12,000 households).

Always looking for ways to improve existing technology and reduce expenses, Bigen Africa has taken a fresh approach to the project from scratch and considered various design options. For the reservoir, both a rectangular and a circular design were considered, but the latter was found to be the more economical and optimal dimensions were established. These are a diameter of just under 75m and wall height of 11.4m, with the wall post tensioned both circumferentially and vertically, and tapering from a 700mm thickness at the bottom to 350mm at the top. The initial roof slab design – a 300mm thick post-tensioned fl at slab on a

column grid of 10 x 10m – was rejected by the contractor, Ruwacon Construction, in favour of precast columns and slab panels, so that wall, fl oor and roof can be constructed separately and therefore simultaneously. The result is a considerable saving in construction time, from an envisaged 22 months to 16 months.

A separate tender is required for the distribution main from the new Longridge reservoir, which will be 11.3km long, with the pipeline diameter starting at 800mm and tapering to 500mm. Various draw-offs will occur along the way. The tender is due to be out by the time this article appears in print.

Bigen Africa does not only involve itself in massive supply projects such as this, but also gets its hands dirty by managing contractors working on various water conservation and demand management projects to curb losses and improve billing on the demand side. These projects range from repairing leaky residential water meters to fixing leaks on larger diameter pipelines, valves or reservoirs and refurbishing aging infrastructure in pump stations. Such smaller projects are, nevertheless, vitally important to Mangaung’s water loss reduction plan to ensure that there is enough water for all the people of Mangaung!


addressing their key public policy priorities - integrated human settlements, rural development, renewable energy, road and rail freight transport and the operation and maintenance of existing infrastructure. This can be achieved if the entire value chain from problem identifi cation to building, operating and maintaining the infrastructure is interlocked with policy development and development fi nancing.

Does this approach set you apart from the competition?It does. We think from problem identifi cation and get involved in policy support, helping in project fi nancing to delivery. Our development fi nance approach sets us ahead of the pack I believe. Clients who partner with us are able to tap into our many development fi nance institutional partnerships. Projects follow money, not the other way round.



How is the business performing?We had a very encouraging 2012 across the entire spectrum of our activities. For example, our revenue increased by fi ve percent, our projects pipeline continued to expand and we have a healthy cash reserve. 51 percent of our revenue was generated by multi-divisional projects. We continue appointing key staff members to support our 2016 strategy and we remain encouraged by our pragmatic reach into the continent to broaden our income base and geographical reach.

BIGEN AFRICA BREAKS NEW GROUND WITH SCOTTSDENE HOUSING PROJECT

Bigen Africa has been appointed consulting engineers for a ground-breaking housing project in Scottsdene, Western Cape by Calgro M3 Holdings, the developer.

Bigen Africa will undertake management and design of all civil engineering work required for this project, which follows government’s new approach to developing integrated human settlements by actively involving private sector funders.

This new approach is set to be more successful in addressing the national housing backlog, according to the parties involved. Despite the fact that 2,8 million houses have been built since the advent of democracy, South Africa has “hardly moved in breaking the [housing] backlog at a rate of just 10 percent per annum”, says Tokyo Sexwale, Human Settlements Minister.

“This project is an encouraging and decisive step in the right direction, and one which addresses both the housing backlog and the high levels of unemployment,” says

Deon Fabel, Executive Director : RSA South at Bigen Africa. “By actively involving private sector funders, government will go a long way towards achieving Minister Sexwale’s challenging target of delivering 220 000 homes a year between 2010 and 2014.”

The four-year integrated housing project in Scottsdene is set to be completed in 2015, is a successful example of building a truly integrated community, and the first of its kind to be implemented in the Western Cape.

“The idea behind this development is not to base housing just on a reliance of Government funds,” says Patricia de Lille, executive mayor of Cape Town, “but also to draw in the private sector to balance the forces of the housing market.”

The more than 2000 families to be housed in the 22 ha settlement will not only receive water and electricity services, but will also benefi t from a network of tarred cycling lanes, sidewalks and taxi embayments.



What are your aims, targets and projections for 2013 and beyond?Basically our plans for the year are linked to our strategic objectives which are to: add new products and continuously improve existing products; increase the development impact of our strategic projects; expand our capabilities in mining, rail and EPCM, development economics and mechanical engineering; access and mobilise development finance for infrastructure projects within the continent; remain committed to zero tolerance to corruption; and develop a spirit of risk and performance sharing.

Our S-Vision 2016 plots our Africa expansion plans, building on our current relatively low base. Firstly, we shall expand our presence in SADC countries through our Pretoria head office and our offices in Botswana, Namibia and Zambia. Then we plan to broaden our reach into West Africa

through our branch in Ghana and partnerships in Senegal and Mali where we are already working on projects. In this region we target the roads and transport, industrial and mining, water and sanitation and housing and commercial development sectors. Lastly, when we have established a strong foothold there, we aim to expand into East Africa through Kenya.

If there is justification for our presence anywhere on the continent of Africa, we are ready to become involved.

How would you sum up the African opportunity?I would say I am optimistic and very excited that we can support our own African agenda. END

To learn more visit www.bigenafrica.com.

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oil and gas discoveries make East Africa a rich

hunting ground says Khamis Suleiman, the gM of

AoN Tanzania.

By ian Armitage

Aon seeks

expansion

A on is the largest insurance provider on the African continent and many of its units are continuing to expand, offering

a broad array of risk management services, insurance and reinsurance brokerage and human capital consulting.

The longest commodities boom in recent times coupled with massive political and socioeconomic changes have together altered the face of Africa.

It represents opportunities for those that are hungry enough.

“Aon’s interest in Africa provides a further indication of the sea change in attitudes towards prospects for the continent,” says Khamis Suleiman, the GM of AON Tanzania. “Aon Tanzania provides an array of services focusing on solutions matched to our clients’ needs. We understand the changing local and global economic market. With our access to both the local and global insurance markets, and our wide-ranging industry expertise, we provide service differentiation by process, rather than by product alone.”

Suleiman has a positive outlook on Tanzania’s and East Africa’s future and he compared it’s oil and gas potential to the gold rush in South Africa —where production of the commodity went from zero in 1886 to 23 percent of the global supply in just 10 years.

It has Aon excited. “We are excited because our economy

is growing and there is a lot of potential. Investors are coming from the oil and gas and mining industries,” says Suleiman.

Oil and gas is booming in Tanzania. According to British Gas International (BGI), appraisal work showed that the offshore Tanzania contained about three trillion cubic feet of natural gas in the southern part of the country.

BG Group and Statoil, as well as Total, are exploring for oil and gas in the country also.

Tanzania is a country on the up and up. An economy that was once largely socialist

AoN Tanzania focus inSuRAnCE




ICEA LION TANZANIA’S business relationship with AON TANZANIA goes back to 1998 when we first entered the Tanzanian insurance market. The partnership has since that time progressively grown and today ICEA LION views AON Tz. as a trusted business partner. AON Tz is not only experienced and professional in their broking services but also go an extra mile in providing clients with personalised risk management services.

We, as leading underwriters in this market, therefore greatly value the distinctive capabilities that AON Tz. embodies. Therefore, we have every confidence that through AON Tz., our mutual clients are assured of the best possible service. Over the period of our partnership with AON Tz. we have insured numerous clients in various sectors of the economy, including Hospitality, Transportation, Brewing, Manufacturing, Sugar Processing, Mining and Oil and Gas.

We expect to consolidate our relationship not only by deepening our roots in these sectors but also expanding into other sectors. Given that our two companies share the same ideals, AON Tz and ICEALION are definitely Better Together!

ICEA LION TANZANIA

in character has transformed into an open market economy with free enterprise, significant investment opportunities, technological progress and growing sophistication.

It will all lead to more business, directly and indirectly for Aon in Tanzania.

“With the East African Community gradually taking shape in all sectors and investment coming in there is obvious opportunity for Aon,” says Suleiman. “Globally, Aon is the second-largest insurance broker by market value and many of its global clients are investing in or coming to Tanzania. Our advantage is that they are already Aon customers or they are aware of Aon’s reputation and they come to us.

“There are two types of covers here we are placing. We have local covers. For example – employee benefits, medical, accident and compensation. Properties, which are situated here in Tanzania like motor vehicle policies. For the complex risks like public liabilities, Energy Package Risks etc, all of these covers are insured overseas because most of the insurers here cannot take that kind of risk because of the complexity of the activities and the amount of liabilities.”

Expansion is on the cards, he adds.“We expand our extra services on an

Ad Hoc basis. There is no demand at the moment for evacuation covers but we see there is a need to have those kinds of covers because of the existence of the ex-pats so we definitely find a solution for those kinds of covers.

“We do not at the moment offer kidnap and ransom insurance covers but we know with the existence of ex-pats and oil and the activities along East Africa, those kinds of covers will definitely be on demand in the near future. When there is a need we will definitely be on to it.”

Suleiman says Aon Tanzania’s strength is its people and their ability to serve clients well.“To a certain extent our success locally has

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been down to the global brand and reputation of Aon. But, the brand is not only the thing that gives you mileage – you have to make extra personal effort to get the account. I agree it gives us mileage but a lot of effort is also required from our staff, management and senior managers.”

Aon Tanzania offers general brokering and insurance - things like personal liability – but has the ability to offer wide range of services because of global network.

In addition to the bigger clients, they work with local companies and SMEs.

It is the second biggest insurance broking firm in the country with a 23 percent market share.

“Aon was registered here in Tanzania in the 1970s but at that particular time there were changes across Africa and most of the African countries were embracing socialism


- Tanzania along with them,” says Suleiman. “That led to all foreign insurance companies being prohibited from doing any business in Tanzania. Insurance intermediaries were not able to do business in Tanzania so before, Aon was registered but it didn’t transact any business. It was just on paper. In 1988 the insurance market was liberalised, like other financial institutions, and the government allowed foreign companies to work in Tanzania. AON bought a 51 percent stake in a local company that was then largest insurance agent in the country, and this is how Aon re-emerged into the Tanzanian market.”

Suleiman has been with Aon for 12 years, joining in October 2000.

He says its “broking market is about 23 percent of the entire brokers’ market”.

“We have multiple clients - multinationals, local companies, individuals and the like,” Suleiman says. “We have Barclays in our books because Barclays are serviced by Aon elsewhere so when they come into Tanzania they are serviced by us here also. We know Aon in the UK is very strong for example in oil and gas and as I said there is the potential in Tanzania for oil


We have multiple clients - multinationals, local companies, individuals and

the like

With over 25 years of industry experience tailored to Africa & the Indian Ocean Islands, we have a nuanced, strategic understanding of the expectations of local and international insurance markets prevalent on the continent. We strive to be the lowest cost producer providing work of the highest quality – proper and fair adjustments which are quickly and consistently executed to generate informative, concise reports in accordance with the highest professional and ethical standards. We deliver: • Lossadjusting&claimssupportservicesin

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Our philosophy is that prompt and professional Our philosophy is that prompt and professional investigation, informative concise reports, and equitable settlements form the back-bone of a credible claims handling service.

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and gas activities and most of the investors here are Aon global clients elsewhere so we automatically get those clients. At the moment potential is where there are exploration activities, mainly oil and gas.”

Aon has 62,000 employees in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, it helps a wide range of clients develop effective risk management and workforce productivity solutions.

Aon has been repeatedly named the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources.

Aon Tanzania provides an array of services focusing on solutions matched to its clients’ needs, understanding the changing local and global economic market. END

To learn more visit www.aon.com/tanzania/.


Emerging market (mass market) segments are increasingly important and the battle is being won by smaller, agile players, who offer cost- and technically-leading products and services.

By ian Armitage

old mutual iWYzE: E M E R G I N G M A R K E T A P P E A L

s outh Africa’s emerging market has become a priority segment for many businesses in several

industries, and the battle for market share, it seems, is being won by smaller, agile players and those able to interact with - and communicate effectively to - the market.

One of those players, iWYZE valuables insurance, the direct short term offering from Old Mutual, was formed in 2010.

“We’re a valuables insurance specialist whose services and approach lends itself well to the emerging market,” says Willem Smith, iWYZE Chief Executive.

According to Smith, iWYZE was created as part of Old Mutual’s strategy to “exploit group synergies” in this market, where it “had built a strong position”.

“iWYZE was formed to create a capability whereby, from an Old Mutual perspective, we have a wider product range and offering to specifically the emerging market in South Africa – and to widen that offering from a financial services perspective. We are targeting that market and it is where growth lies; it is the untapped part of our market. For instance, there are around about nine million cars on the road of which only 2.9 to three million are insured. So there is a huge opportunity.”

iWYZE is a collaboration between the Retail Mass division of Old Mutual and Mutual & Federal, a wholly-owned subsidiary of Old Mutual. Its unique approach, coupled with the strength of those brands - especially in the mass market - provides a solid platform for the future, Smith says.

iWYZE focus inSuRAnCE



PFK Electronics is aleading electronics company focused on the design and manufacture of innovative products, encompassing electronic vehicle security systems, telematics systems, alcohol interlock devices,

convenience modules, body control modules, CANBus controllers, diff lock and gearboxcontrollers, exhaust emission controllers and instrument clusters. Products and services aresupplied to original equipment manufacturers (OEM’s), the aftermarket, major fleet and freightcompanies, as well as the public transport sector in global markets.

PFK was established in Durban, South Africa in1985, and has regional sales offices in Durban,Johannesburg, Cape Town, Port Elizabeth,UK, Sweden and Mauritius. In November 2012,the company acquired Pi-Shurlok based inPietermaritzburg. The production plant is nowbased at these premises. In South Africa PFKvehicle security products are sold under the Autowatch brand and reach the market via a national network of approved Fitment Centres,selected insurers, direct sales to transporters, and fleet and freight companies. OEM businessis featured under the brand, PFK Shurlok. Morethan two thirds of PFK’s products are exported,reaching 26 countries worldwide via a network of dedicated global distributors.

PFKisaccreditedwithISO16949,ISO14001,ISO9001,FORDQ1,BMW:VDA6.3Arated,IPC610: D Compliant , PQESE : C rank, SPICE ISO/IEC15504AutomotiveSPICELevel3

PFKhasexperiencedsignificantannualgrowth inrecent years, and key to this success is innovation, quality, flexibility in design and manufacture andkeeping engineering at the core of the business. With product design and business systems driven byacultureof innovation,andan in-house,stateof the art SMT production facility, PFK is able toprovide full lifecycle solutions from concept to production, or build-to-print under licence frommajorfirsttiersuppliers.PFK’smarketdominancein vehicle security systems and recent rapid growth in alcohol interlock devices and telematics systems is due to innovative features, extremely highqualityproductsandunparalleledafter-salessupport. PFK has been recognised a number oftimes for its leadership in the industry.

Someofthemorerecentawardsare:• The Supplier Merit Award from GMSA (2005,

2007,2008&2009)•TechnologyTop100–Winner forExcellence in

theManagementofSystems (2007,2009,2011);WinnerintheManagementofInnovation(2012)

•KZNExporteroftheYearAward–Winner,LargeCategory(2009,2010,2011)

• Automechanika SA Innovations Award – SilverAwardWinner(2009)

•KZNTopBusinessAward–LargeCategory(2010)

AUTOWATCH•Autowatch The Autowatch range of vehicle security products

has been a market leader for many years. The brand has a 75% local market share, withproducts distributed through approximately 500fitmentcentresthroughoutSouthAfrica.

•AutowatchAlcolock PFKisaleadingdesignerandproducerofalcohol

breathalyser based immobilisers (also known as alcoholinterlocks).Historically,theseweresuppliedmainly to Europe and Scandinavia, but PFK haswidened its focus with the launch of a tethered system,whichspecificallytargetstheSouthAfrican,American and Australian markets. All alcohol interlock devices from PFK, meet the stringentCENELECEuropeanandNHTSAUSAstandards.

•AutowatchTracking For a number of years, PFK has designed

and manufactured tracking systems for major international tracking companies. In 2009, thecompany built on this strength by successfully launching their own full tracking service in South Africa for the stolen vehicle recoveryand fleet management market. Under theAutowatch Tracking brand PFK is expandingon this core offering with a number of related products in the areas of asset tracking and driver behaviour profiling.

PFKSHURLOKPFKShurlok,encompassesautomotiveelectronicsystems for the OEM market. It includesconvenience modules, body control modules, CANBus controllers, diff lock and gearboxcontrollers, exhaust emission controllers, security systems, keyless entry systems, telematics systems, instrument clusters, just to name a few! Full life cycle, from design concept to fullproduction or build-to-print under licence frommajor first tier suppliers, in an ISO/TS 16949, FORDQ1,VDA6environment.

A Ghost that Stops Thieves in Their TracksAutowatch Tracking is a division of PFK Electronics, an award winning company, known for producing world-class vehicle electronic solutions. The revolutionary Ghost Wireless Immobiliser is a tiny but powerful device that is nearly impossible to find once installed, and capable of stopping a stolen vehicle in its tracks. The Ghost is just one of a number of devices in PFK’s Autowatch Tracking range. The range includes products focussed on vehicle and asset tracking, stolen vehicle recovery, fleet management and insurance telematics (mileage monitoring and driver behaviour profiling).

For more info visit www.pfk.co.za

“iWYZE is positioned for broad appeal in the South African market, but specifically targets the emerging market where it is believed a significant opportunity exists.”

A very small percentage of those in the mass market have short-term insurance.

“It is definitely a growth market and since our inception things have gone well for us,” Smith says. “From a growth perspective, it is above expectation and we have been doing really well.

“We have been able to make a fairly significant impact in the Old Mutual customer base – about a fifth of those clients have not taken any insurance on their valuables before. Roughly, about 50 percent of our client book is existing Old Mutual policy holders.

“The iWYZE product is not solely aimed at that market, but it is our focus. We’re more gaining traction on the emerging market.”

This segment has been traditionally neglected and approximately 35 percent of South Africans have had no access to formal financial services.

“You can’t approach this market in the same way you would the traditional market. The way these segments are accessed or communicated


We see massive potential, not just in terms of selling and fulfilment capability, but also servicing


iWYZE focus inSuRAnCE

With NetAssess, you will receive the most comprehensive and accurate assessing service for your business. The key features of our service includes:

• Independent Web-Based Assessment Service• On-line booking service at our 54 nationwide

drive-in centre’s• Expertly trained assessing technicians• High resolution photographs depicting

damaged areas• Assessments signed off by senior management

before submission• Work-in-progress system linked to insurance,

repairer and client for each vehicle• Express Warning Notification (EWN) in case of a

delay from any parties• EWN helps control ever increasing car hire costs

“NetAssess not only guarantees service of the highestmagnitude, we also pledge a scrupulous attitude towards an honest and sincere relationship with all clients.”

Net Assess, your only choice in assessing to must differ significantly to the means with which traditional customer segments,” says Smith.

The trick is reaching them effectively.The best way, he says, is online.“We see the future as going

online. We see massive potential, not just in terms of selling and fulfilment capability, but also servicing. From an iWYZE perspective there is a big focus on ensuring our online experience becomes industry leading. We currently have a full procurement capability online and we are one of the very few insurers to have this in South Africa. Many have a quoting capability online. But no one has a straight through processing capability and we do. We rolled that out last year and it is becoming fairly successful. We’ve seen volumes pick up.”

His view is that the market will grow steadily.

“The market in South Africa is still a little bit slow but we have seen a pick-up in the online space,” Smith says. “My view is that for the next couple of years you will probably see a steady growth in the online space but not massive volumes. But there is clearly steady growth and we are at a tipping point here. I believe in the next five years, ten certainly, that tipping point will be reached.

“If you think about the market we are in, most of your young and emerging market clients have cell phones and are technologically minded and inclined. Our view is that this untapped market is specifically well educated when it comes to technology. The best way to communicate to them is through that, online and social media.”

From the start of our relationship, we knew that we would be part in the making of one of the new market leaders in the insurance industry. Their brilliant management team, headed by Willem, a leader in the insurance industry, will ensure that everyone is proud to be associated with the iWYZE brand.

Tel: 010 593 2670 · Fax: 086 576 4498 · Email: [email protected] · Web: www.netassess.co.za

iWYZE’s promise is that it is straight and transparent with its clients.

“Coming to us is straight forward,” says Smith. “We make it easy for people to come and get valuables insurance.

“In terms of our offering, there are a couple of important things. First, we offer value for money – or at least try to offer value for money. We won’t necessarily be the cheapest in the market but we hope we give real decent value. Then it is about being transparent and clear. So the policy is clearly stated. The small print is accessible. We handle claims efficiently and quickly.

“Client focus and experience is also critical. It is a competitive environment as you know. We’re up with a host of other players and unless you are on the field you’re not in the game. You have to ensure the client has a decent experience when they go through the application, that they understand the policy, that the policy works, and that they’re getting value for money. We try and make the application as interactive as possible.”

Smith doesn’t believe that organising the right insurance should be a five-minute decision, though.

“That’s my view,” he says. “I also don’t believe that insurance that it should be bought without any advice. We have a team of consultants who are accredited under the Financial Advisory & Intermediary Services Act to give advice and they are trained to advise clients on the insurance options that suit them best.

“To stress, we believe our target market wants value for money but also comprehensive coverage. We also realised that clients want the peace of mind that their valuable possessions are protected, but don’t want to be burdened with industry jargon and small print. We’re making it as easy as possible for people to protect their valuables through the Old Mutual Group, which has a solid track record of securing positive futures for clients for over 168 years.” END

To learn more visit www.iwyze.co.za.



A F R i C A ’ S M o S t t A L K E D A B o u t

golf holegolf hole

g olf tourism is very popular in South Africa and it is easy to see why. This is an almost perfect golfi ng country - ideal

weather, wonderful scenery and a population obsessed by sports and the outdoors. Add in Gary Player - one of the world’s all-time great champions - as a national sporting hero, and it is little wonder that South Africans and tourists alike fl ock to play on some of the world’s best and most affordable courses. There is even the option to mix it up a little - golf, spa and safari.

This is exactly what Limpopo-based Legend Lodges, Hotels & Resort has to offer.

Pete Richardson, the fi rm’s corporate sales manager, also looks after PR.

He says Legend offers “something different”. And why doubt him? Legend is regular

winner at the prestigious World Travel Awards.“We’re a unique, world-class resort

situated in the African bush and boast a world fi rst signature golf course, a unique 10-hole tribute golf course, the world famous Extreme 19th, and a host of other facilities and activities,” says Mr Richardson.

“We like to think we are something that is a little bit different.”

The Extreme 19th is the world’s longest and highest par 3, played from the top of a mountain.

The only way to the tee box is by helicopter and you play to a green that is the shape of Africa.

“We have such a unique proposition in terms of the golf industry which is the Extreme 19 and the world’s only 18-hole signature golf course, designed by the world’s top golfers. We fi nd that the Extreme 19th in particular is on a lot of peoples’ Bucket Lists - i.e. something to do before they die. This morning we actually had a guy who fl ew out from the UK and landed in South Africa on Monday morning, fl ew into us by helicopter this morning, played the Extreme 19th and then he is fl ying back to the UK tonight. It’s a true story. The Extreme 19th

Legend Lodges focus tRAvEL


South Africa Magazine talks to Pete

Richardson corporate sales manager at

Legend Lodges, Hotels & Resort, a unique,

world-class resort that is home to the world

famous Extreme 19th.

By ian Armitage



We specialise in:

Concerts We have delivered sound, screens, lighting and structures for international concerts and our own national stars for both indoor and outdoor venues.

ConferencesWe have been involved in many conferences for a diversity of clients such as ICC; Brand Botswana; NAFCOC; Chamsa to name but a few.

AudioThe ability to paint a WORLD without the brush of the visual and to conduct all frequencies into a harmony so powerful that it stirs the imagination and moves the soul.

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is an amazing experience and it has been the talk of the golfi ng world for some time. If people come to South Africa for business or a holiday, they know we are accessible. You can come here for a night, play golf and then go somewhere else. You can also link it with your safari experience. We’ve made an impact in terms of PR and marketing with the Extreme 19 and it’s had a fabulous effect.”

The fi rst quarter of this fi nancial year is the busiest Legend Lodges has ever had, says Richardson.

“Our bookings for 2013 at this stage are looking superb,” he explains. “We had our busiest January ever and February is set to look the same. It is our busiest fi rst quarter ever.

“What do I think this is down to? Several factors, really. I think it is a combination of hard work over the last three to four years, getting the mixture right in terms of the offering to our clients – both businesses, golfers, independent travellers - and it’s the economy picking up a bit globally. I think we’re beginning to

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see the effects of the FIFA World Cup from 2010 too. People thought that event would mean that 2011 and 2012 were great years but actually I think it has taken a little bit longer for people to get their brochures and realise that South Africa is a fantastic country. Let’s not forget that the weather is great also!”

Work has taken place on improving Legend’s online presence and it has launched an online booking service as well as several social media campaigns.

“We’ve noticed an increase in bookings following that,” says Richardson. “We now have a department that specialises internally in terms of our online presence. We engaged with a company who are our online social media arm. We’ve invested a lot of money over the last 12 months and we’re beginning to see things moving. The new internal reservations system has had an immediate effect on online bookings.”

In terms of Legend’s conferencing facilities, that offering too has been

Conferencing is a growth area for

us and we believe we have an

excellent offering



enhanced, with the building of the R10 million Queen of Sheba Conference Centre which adds to the existing 300-seater Sofala Conference Centre and 400-seater Monomotapa special event venue.

“That was built to satisfy massive demand for a more ‘African environment’ to host events,” says Richardson. “It was opened last March and we built it in just 29 days. We had a booking that was looking to go into a specialist facility and we couldn’t cater for the booking so we made sure we fi nished it for this specifi c event and it’s been busy every since.

“Conferencing is a growth area for us and we believe we have an excellent offering. If you want a conference in an authentic bush environment - proper African bush - there are very few places that can cater for more than 100-150 people. We targeted this market. This is why we built it in the middle of Limpopo and in the middle of a 22,000 hectare Game Reserve.”

One of Legend’s big attractions is Big Five Entabeni Safari Conservancy. Investment too has been put into this arm of the business with the purchase of new game vehicles from Toyota.

In total, Legend spent R15 million on a mixture of game vehicles, minibuses for transporting guests and logistical vehicles for staff use.

“We brought some of the game vehicles from Toyota and some also came from Hyundai and we brought some Iveco Trucks,” says Richardson. “It brings total number of vehicles we have to 52.

“We actually purchased 28 11-seater Toyota game viewer safari



cruisers, each with built-in radios, canvas roofs – to ensure all-round visibility – and top-of-the-range safety equipment. We did that in the last quarter of 2012. All the game vehicles are the same brand but overall it is a mixture of Toyota and Hyundai. Hopefully this fl eet will last three-fi ve years. Three years ago we bought 20 game viewers and these new ones are an addition to our existing fl eet. They’re used every single day.

“Have they been well received? They have, but as they are a different colour to the previous vehicles, the animals were quite curious about them at fi rst! The new ones are brown and our last fl eet were green. At fi rst they were inquisitive but now nothing. They just get on with their lives in the bush. They very soon became accustomed.”

Legend has a lot going on - resorts, game and safari lodges, country lodges, coastal hotels and lodges, and cultural villages and shebeens, golf, and an airstrip – you name it.

Understandably Richardson is excited by the future.

“You can see from our investments last year that we’re optimistic and are investing,” he says. “We built the new conference centre, we invested in those new vehicles, and then we have our new clubhouse which has cost us around R25 million. If you don’t invest then you go backwards. We know our product is as good as it gets and we’re very proud of it. We know people will come and the amount of enquiries and visitors we get is increasing by the day. We’re very optimistic.” END

Thousands of people each year enjoy the adrenaline rush of Legend’s unique golfi ng experience. The resort also now boasts almost 250 luxury rooms.

To book your stay visit www.legendlodges.co.za.


t H E C i t y t H A t works for you

W hen it comes to quality of governance and fi nancial management few can claim to be better than Cape Town.

The City delivers basic services effi ciently, is doing more for genuine black economic empowerment and the upliftment of the disadvantaged than any other metro in the country, and even has a functioning billing system.

We recently talked to Alderman Ian Neilson who told us more about the City’s fabulous achievements.

Are you making strides in your goal to create a ‘better life for all’? The City aims to create a Cape Town that works for everyone. Since being elected to offi ce, this administration has made great strides in delivering on this promise. We are committed to redress and delivery. As such, our priority areas remain those in which the poor and the vulnerable reside. Good fi nancial management has meant that our budgets are used responsibly, which allows for more money to be used on important projects such as the provision of human settlements, safety, health and infrastructure. We have delivered human settlements to previously disadvantaged communities, have invested in roads and public transport and we have put more police offi cers on visible patrols.

You have fi ve strategic pillars. What are they? And why are those pillars important? The work we do at the City is informed by our five strategic pillars or focus areas. These are the Safe City, the Well-run City, the Inclusive City, the Caring City, and the Opportunity City. The Opportunity City will be one in which conditions attract investment and job opportunities. The Safe City, through community and stakeholder involvement, will mean freedom from fear of crime, and safer

The city of cape Town focus CAPE toWn MuniCiPALity


Cape town is miles ahead of the other

South African metros when it comes to quality

of governance and financial management. South Africa Magazine

talks to Alderman ian neilson, the city’s

executive deputy mayor.

By ian Armitage


streets for all citizens. The Caring City is one where all citizens, particularly those most in need, have access to basic services. The Inclusive City is one where every resident has a say and a stake in the future and where community involvement in decision making is important. The well-run city means a transparent and corruption-free local government, which is receptive to the needs of its citizens. These fi ve strategic pillars provide the framework within which the City aims to deliver a home for all her people: where they see a real future for themselves. Those values are informed by our drive to create a city of economic opportunity that addresses the imbalances of the past through a commitment to reconciliation, redress, delivery and diversity.

A safe, effective and reliable public transport system means it is easier for people to move from their home to their place of work

UMTHA is a consulting company with an enormous amount of internal

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Please tell me about your aims, targets and projections for 2012-13 to 2014-15? Will we see a lot of change in the city?Our Integrated Development Plan (IDP) sets out our basic strategy. We consulted with more than a million Capetonians during the drafting of that document. It has helped us craft the blueprint of our designs with the aim of a moving beyond the old straight-jackets of compliance. We crafted it with an expansive agenda in mind that sought to activate the full creative potential of this organisation and the combined potential of the private and civil society sectors. In order to deliver on the strategy, we had to change the way that we work. That is why we have structured the City to deliver on the five pillars as five strategic focus areas.



Ulwando Bushclearing (Pty) Ltd is a national provider of contracting and professional services in the environmental services sector.

Established in 2005 in Gauteng, Ulwando has grown into a national company that is the preferred supplier to our clients which include ESKOM, various municipalities (including Cape Town), Metro Rail and Transnet Freight Rail. Our contracting side is primarily involved in services including specialized tree felling and pruning, bush clearing, landscape maintenance and grass cutting.

Our professional services side includes SETA accredited tree identification training, vegetation management plans, rehabilitation plans, project management and botanical assessments.

Ulwando Bushclearing (Pty) Ltd is Black Empowerment Enterprises (BEE) as well as a Black Women Owned Organization (BWO).

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2012 saw many major transport upgrades (upgrading and expanding public transport interchanges (PTIs) over next five years, for example). Are citizens already seeing the benefits? The geographic lay out of the city means that it is physically impossible to build more roads. The City has taken a policy decision to promote public transport over private transport in all its design decisions. A safe, effective and reliable public transport system means it is easier for people to move from their home to their place of work and for communities from far flung areas to interact with each other. As part of Apartheid’s legacy, many people were relegated to the margins of the City. We know that, in order to redress this, people need to be able to take advantage of the economic and other opportunities of the central City. Design decisions in the past tried to keep people apart; modern day design must undo those mistakes of the past and bring people closer to each other. The use of public transport and travelling on the city’s roads forms a large and necessary part of the daily

lives of Cape Town residents and it is the City’s mandate to ensure that commuters can travel in safety and with dignity. The City manages over 200 public transport interchanges (PTIs) and law enforcement is a primary focus area as part of our commitment to being a Safe City. Security at PTIs is currently provided by various private security companies and supported by the City’s Law Enforcement, Traffic Services and Metro Police and the South African Police Services (SAPS). The City has also introduced a specialised Law Enforcement Unit - the Transport Interchange Unit - which deploys dedicated officers to various major PTIs, focusing on Joe Gqabi, Bellville and the Cape Town Station Deck. This has seen a marked reduction in crime and vandalism, through the enforcement of the City’s By-Laws. One of the biggest threats to the safety of commuters is vandalism and anti-social behaviour. Daily patrols by the Transport Interchange Unit ensure that PTIs are monitored and that every effort is made to maintain and improve the commuters’ overall experience of public transport in Cape Town.


Are you happy with what you’re doing/have achieved? Cape Town is miles ahead of the other South African metros - Johannesburg in particular - when it comes to quality of governance and financial management. Why is that? What do you do differently?Our public accounts committee – a key oversight committee, with the responsibility of ensuring that the public’s money is spent responsibly – is chaired by a member of the opposition. Our tendering system is constantly streamlined and improved and our staff are committed to the idea that “this City works for you”. Our Council meetings and portfolio committee meetings are open to any member of the public wishing to attend them. This administration is committed to transparency and accountability and this has gone some way in making us a better run metro. More must be done and challenges remain.

The City delivers basic services rather efficiently, is doing more for genuine black economic empowerment and the upliftment of the disadvantaged than any other metro in the country - and even has a functioning billing system. Are you proud of that? Again, how are you able to do it when so many other struggle?We are very proud of our track record but there is always more to do and more people that need our help. Our nation’s history is one of discrimination and it would be foolish for anyone to think that the legacy and effects of apartheid can be undone in a short space of time. We have made huge strides in this task by creating confidence in our governance structures. This confidence means that more businesses are investing in the city which creates more opportunities for everyone who lives and works here. END

To learn more visit www.capetown.gov.za.



BiddingF o R F o u n t A i n H E A D C o n t i n u E S

Biddingwar

A s we’ve seen many times within the pages of South Africa Magazine over the last

few months, South African property funds are actively looking to add to their retail portfolio. Fund managers want good returns. And Retail is delivering - retail sales in the country rose more than expected last month, perhaps underlining why fund managers are actively targeting that sector.

The increasing need and want for retail assets has seen JSE listed property company Fountainhead Property Trust, which owns or has stakes in several shopping malls in South Africa, fi nd itself at the centre of what would be the biggest property transaction in the continent’s largest economy.

“As indicated in a number of SENS announcements on 30 January both Redefi ne and Growthpoint have submitted bids for the portfolio,” says Fountainhead CEO Alex Phakathi.

Mr Phakathi was appointed to the role in September 2012, a few months after Redefi ne acquired the Fountainhead Management Company - a third party type property asset management company, which takes care of the management of Fountainhead’s underlying assets - for about R660 million.

Fountainhead boasts a property portfolio valued around R10.3 billion and its underlying assets include Centurion Mall, Westgate, The Boulders, Blue Route Mall, Kenilworth Centre and N1 City Mall.

“I’m perhaps best known for being the CEO of Pareto, an unlisted property loan stock company,” Phakathi says. “In 2011 I was

fountainhead focus PRoPERty


fountainhead Property Trust is the

subject of a bidding war between growthpoint,

the JSE’s biggest property company, and Redefine, the

JSE’s second biggest. Fountainhead CEo Alex Phakathi talks exclusively to South

Africa Magazine.

By ian Armitage



Umhlanga Resources is proud to be associated with Fountainhead Property Trust and its Professional Management Team.

Umhlanga are pioneers in High Traffi c mall-cleaning & hygiene related services.

Fountainhead is a key account in our mall portfolio and this partnership has and willcontinue to grow from strength to strength.

Our goal remains to always provide Fountainhead patrons an Unmatched, Safe, Clean and Hygienic Shopping Experience.

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appointed Redefi ne Properties’ acquisitions and disposal executive and after Redefi ne Properties acquired the Fountainhead Management Company I was seconded to Fountainhead as CEO.”

Redefi ne, the JSE’s second biggest property company with a market capitalisation of about R29 billion, concluded the acquisition with the intention of gobbling up Fountainhead’s underlying assets. An initial offer was made.

“When I was appointed here, in September, I had to step down from all my activities at Redefi ne to act as a CEO of Fountainhead. Since then I’m not doing any Redefi ne function, I’m dedicated to Fountainhead work amongst other things, to avoid potential confl ict of interests.”

In October 2012, Growthpoint, the JSE’s biggest property company with a market capitalisation of about R44 billion, entered the picture, offering Fountainhead unitholders 35 Growthpoint units for every

100 Fountainhead units held, beating Redefi ne’s existing offer of three Hyprop units and 62.5 Redefi ne units for every 100 Fountainhead units held.

Growthpoint said in a statement that the portfolio would complement its own existing retail portfolio, and would provide it with an opportunity to increase its geographic diversifi cation.

“Fountainhead has a high-quality portfolio that is predominantly retail focused, which will enhance the portfolio of any bidder,” says Phakathi.

Following Growthpoint’s bid Redefi ne raised its offer in December and in a statement released in January said talks about its proposed acquisition were “materially complete”.

The two companies entered into exclusive talks and they were extended until Feb. 22. But, shortly before a decision was taken (we’re writing this piece on Feb 21), Growthpoint announced it would increase its

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As indicated in a number of SEnS announcements on 30 January

both Redefine and growthpoint have

submitted bids for the portfolio


offer from 35 to 37 Growthpoint linked units per 100 Fountainhead units.

Growthpoint said Fountainhead unitholders should consider the offers from both Redefine and Growthpoint and choose which offer to pursue.

“Fountainhead is a PUT - Property Unit Trust, a collective investment scheme in property which invests in a portfolio of investment grade properties that is held for its rental income and capital appreciation - so our main function is to manage the portfolio so as to grow the distribution to the unitholders, grow the asset value of the property and show sustainable growth going forward,” says Phakathi. “That is really what we intend doing. How do you achieve the sustainable growth in the long-term? You do that by improving the tenant mix, negotiating sustainable rentals, controlling the operating costs, looking at acquisition opportunities, refurbishments and decreasing operating costs, which is a bit of a challenge but that is what we are hoping to achieve. Of course, we’ve had the bidding war, which is most interesting. I started my time as CEO with two big players wanting to acquire the assets. On one hand your mandate is to run the portfolio and it is business as usual and on the other hand you have corporate action that you need to deal with. It has been quite an interesting journey in the last few months. The bidding has been complex, controversial and intellectually challenging!”

It has required focus, he says. “That’s vital. I had to make sure that we focused on managing the portfolio. Also the board at Fountainhead have given good direction during this process. It has been quite exciting and informative and I think corporate action like this, it will be the first of its kind in size in the South African property market.

“This will be trend-setting for the listed property sector. Everybody is watching to see which way this will go. But, I think, whichever


way it goes, it will set a precedent in the long-term. Fortunately for us, the board of Fountainhead appointed a committee of independent directors and they are dealing with this particular corporate activity so the rest of us are left to run the business without being sidetracked by it.”

This focus has seen Fountainhead continue with several major projects, notably the redevelopment of Blue Route Mall. The shopping centre, which is located in the leafy suburb of Tokai, Cape Town, opened in March 2012, but construction continued on the new multi-storey parkade and other minor elements.

Phakathi called the redevelopment a “major transformation”. It was an evolution from the ground up, says Asset Manager, Trevor Matthews. “We decided to build a new mall and moved from the old one - which was built in the 1970s - in March 2012,” he explains. “A key part of that was fl oor area, which we’ve increased considerably, and it is home now to over a hundred of the country’s leading retail and entertainment outlets. It was also about the design, the layout and we’ve focused on those elements. It has been a steady considered process, with extreme attention to detail.”

It’s paid off.“I think we’ve not only met the original vision of

the project, but exceeded it,” Matthews says.

Since joining there are a few things i’ve focused on, particularly the completion of

the big projects that were already underway, such

as the Blue Route mall, Bryanston shopping centre

and Centurion mall



Designed by the renowned local architects Louis Karol, the mall may resemble an airport to some but it means the building is naturally lit (owing to the amount of glass used), and a glass viewing deck has been built into the food court section offering uninterrupted views of the Constantia Mountains.

The retail line-ups at the mall includes a 9,660m² Checkers/Hyper, a 6,351m² double volume Woolworths, and a 4,093m² Edgars store.

“We agreed on the double-level design because of the constraints of the land itself. We’re fl anked by residential properties on two sides and a CBD and a main road on the other two sides, so we couldn’t go left or right, backwards or forwards; we could only go up. Because we went two-tiers the idea was to have wider malls, higher shopfronts and obviously lots of natural light - it is based on the Westfi eld shopping centre in London. It worked out exactly as the architects anticipated.”

The additional open parkade area with be completed over the next few weeks.

“The response from the public, tenants and the industry has been wonderful. People are excited and amazed by what we have produced here.

“Come end of March, we will be a year of trading and as we speak the fi nal touches are being made to the parking which means by April the project will be completely fi nished.”

Phakathi is understandably enjoying his role.

“As you know, property is a long-term business which means it is something you cannot turnaround quickly,” he says. “Since joining

there are a few things I’ve focused on, particularly the completion of the big projects that were already underway, such as the Blue Route mall, Bryanston shopping centre and Centurion mall; and ensuring a smooth transition from the previous to the new asset management team. It was important to manage the portfolio properly and maximise what we have.

“Also, the new set of asset managers that Redefi ne has brought on board since buying the management company have introduced a new novel and entrepreneurial way of looking at shopping centres and the letting of the shopping centres. I think through the relationship that Redefi ne has with big retailers, we’ve been able to assist in


the negotiation of the leases and we’ve been able to convince some retailers, for example, that they need to expand or refurbish and I think going forward we’ll capitalise on that advantage that relationship that we have with the retailers. To be able to add value to the shopping centres and obviously add value to the retailers stores and create a sustainable shopping centre with a pleasurable environment for the shoppers. Hopefully at the end of the day the unit holders will be seeing the benefit and increasing their property income.

“To sum up, if you look at the time that we have had, it’s about five months, the concentration was closing off last year and we managed to achieve the distribution and the income that was promised to the unitholders at the beginning of last year. Also we wanted to be able to complete the projects that had already been started and

lastly, we are currently in the planning stages of different projects in each shopping centre. They range from what I called Defensive projects - refurbishments because if you don’t, you’ll start losing income - and income generating refurbishments and extensions to produce an upgraded environment.”

Phakathi must be doing something right – otherwise the JSE’s biggest and best wouldn’t want to buy the trust.

“Well, look at it this way, it’s a good portfolio, especially the shopping centres - they are some of the best in the country,” he says. “It is undecided how the bidding will go, whoever buys it will have a good portfolio..

It is likely the process may drag out a little bit longer, but whatever the result, if it happens, it will be South Africa’s biggest property transaction. END

To learn more visit www.fountainheadproperty.co.za.


Because we went two-tiers the idea was to

have wider malls, higher shopfronts and obviously lots of natural light - it is based on the Westfield

shopping centre in London


Highly recommended events through to April 2013

SOUTH AFRICA7th Africa Economic ForumSandton Convention Centre161 Maude Street Sandown 2196JohannesburgSouth Africa6 March 2013www.saconvention.co.za

Money Expo 2013Sandton Convention Centre161 Maude Street Sandown 2196JohannesburgSouth Africa7-9 March 2013www.moneyexpo.co.za

Retail World Africa 2013Sandton Convention Centre161 Maude Street Sandown 2196JohannesburgSouth Africa11-13 March 2013www.terrapinn.com/exhibition/retail-world-africa

Propak Africa 2013Expo CentreCnr Nasrec & Rand ShowJohannesburg 200012-15 March 2013www.propakafrica.co.za

ARA Week 2013Westin Grand HotelConvention Square Lower Long Street Cape TownSouth Africa18-22 March 2013www.citac.com/index.php/archive/items/ARA-week-2013-announcement.html

WoodEX for AfricaGallagher Convention Centre 19 Richard DriveMidrand

Johannesburg 1685South Africa21-23 March 2013www.woodexforafrica.com

LAMIPISA 2013 - Leadership and

Management in Projectified Industry

South AfricaCape Peninsula University of Technology,Cape TownSouth Africa1-4 April 2013www.cput.ac.za/lamipisa-2013

BioEnergy World AfricaSandton Convention Centre161 Maude Street Sandown 2196JohannesburgSouth Africa8-11 April 2013www.terrapinn.com/exhibition/power-electricity-world-africa/bioenergy.stm

Source Africa: The African Textile,

Apparel and Footwear Trade EventCape Town International Convention Centre Coen Steytler AvenueCape Town 8000South Africa 9-11 April 2013www.sourceafrica.co.za

The Solar Show AfricaSandton Convention Centre161 Maude Street Sandown 2196Johannesburg9-10 April 2013www.terrapinn.com/2013/solar

SatCom AfricaSandton Convention Centre161 Maude Street Sandown 2196Johannesburg27-30 May 2013www.terrapinn.com/exhibition /satcom-africa

AFRICAIFSEC West AfricaEko Hotel & Suites, Kuramo Waters,Victoria IslandLagosNigeria5-6 March 2013www.ifsecwestafrica.com

Offshore West AfricaInternational Conference CentreCastle RoadAccraGhana19 - 21 March 2013www.offshorewestafrica.com

CAPE V, 5th African Petroleum

Congress & ExhibitionLe Méridien Re-NdamaPO Box 4064 Libreville Gabon26 - 28 March 2013www.biztradeshows.com/trade-events/african-petroleum-congress-exhibition.html

Buildexpo Africa 2013Kenyatta International Conference CentreHarambee AveNairobiKenya4-6 May 2013www.expogr.com

ZIMEC 2013The New Government Complex Conference CentreIndependence Avenue, KamwalaLusakaZambia18-20 June 2013www.zimeczambia.com

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