sunday times combined metros 1 - 12/11/2012 10:37:53 am...
TRANSCRIPT
Sunday Times Combined Metros 1 - 12/11/2012 10:37:53 AM - Plate:
�APITEC Bank hasdominated the Top 100Companies list in thepast three years, much
like Ferrari once d o m i n at e dFormula One.
The group’s CEO, RiaanStassen, is a devout Ferrari fanand draws his leadership stylefrom the racing team’smanagement principles. It hashelped him build his retail bankinto an outfit that beat all theother JSE-listed companies in therace to the top of the Top 100Companies list.
Capitec was ranked first in 2010and second last year.
An investment of R10 000 inCapitec five years ago was wo r t hR64 597 at the end of Septemberthis year. This represents anannual compound growth rate of45.23%.
Stassen and his team, which hehas led without major changessince the bank’s inception 11years ago, is “driven to perform”.
The bank’s management strivesfor perfection, much like Ferrari’steam on the race track. Stassen,who owns a Ferrari and has beento the factory in Italy, attends atleast one Grand Prix a year. Helauds the racing team for theirconstant support for their drivers.This is something he tries toimplement in his Stellenbosch-based group.
“A hundredth of a second canmake a difference between poleposition or second,” he said.
This philosophy has helped thebank differentiate itself from itpeers. It is regarded as the masterin the unsecured loans segment,beating the traditional big fourbanks to the point that some ofthem started to emulate itsbranch structure and model.
Capitec Bank’s founders are notshy to say they spotted anopportunity caused by the
On fast track to success
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Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
CAPITEC BANK2007: R10 000 | 2012: R64 597
TOP 100 COMPANIES
Number
1
0
5 000
10 000
15 000
20 000
25 000
20122011201020092008
mainly by informal contractors,making it difficult for traditionalbanks to assess their propertyva l u e .
Capitec is of the view thatbanks will effectively be carryingon the old apartheid approach ifthey continue to fo c u s on securedlending.
Stassen expects the unsecuredlending market to grow. Cap i t e ccurrently offers up to R230 000 inunsecured loans and he hopes itwill be able to offer a R500 000non-asset-backed loan one day.
He said secured and unsecuredloans must be viewed differentlyin the South African context,where only 1.6 million houses arem o r t g ag e d .
Capitec Bank, which is signingup about 90 000 new clients amonth, will not be entering thesecured lending market any timesoon, nor will it dip its toes in theinvestment wealth or corporatemarket in the near future.According to the bank, thedifference between a rich andpoor person is in the way theymanage their money, not inbanking needs.
Stassen has hopes of seeingCap i t e c go into markets such asIndia. He would like to enter otherregions with partners who willprovide lower cost of access todistribution, like a retailer or atelecommunications company.
He does not fear Post Bankwhizzing past Capitec, despite ithaving the largest footprint inSouth Africa. He said he has notseen a successful post bankanywhere in the world and addedthat having a large footprint doesnot guarantee dominance in them a r ke t .
Capitec has an active clientbase of more than four millionand a national branch footprint of534, 128 of which are located inmalls. Over 30 reflect the newbranch layout and corporateidentity. Another 28 branches aredue to open before the end of thefinancial year.
Cap i t e c ’s revenue stream forthe first six months to end-Augustgrew by 61% year-on-year toR583-million.
Headline earnings grew by 43%to R700-million and headlineearnings a share grew by 35% to702c. Income from credit grew by37% to R3.6-billion.
Last month, Stassen had todefend his decision to sellR88.4-million worth of shares inCap i t e c at a time when theinvestment community rated theshare as a buy.
He said he was “embarrassed”at the public reaction after thenews broke. At the time he was atpains to explain his personalinvestment strategy, whichinvolves reviewing his investmentbi-annually and offloading sharesif necessary.
He remains the bank’s sixth-largest shareholder, holdingR400-million worth of shares.
The difference
between a rich and
poor person is in the
way they manage
their money
apartheid regime. Before 1994,most underprivileged groups hadto fund long-term assets by acombination of savings and short-term loans, which led to most ofthe houses or property in SouthAfrica not being securable in atraditional bank’s framework.Most rural houses are on triballand and without title deeds.
In urban townships, houseshave been renovated over time,
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C O M P A N I E SNovember 18 2012 | www.timeslive.co.za
Sunday Times Combined Metros 2 - 12/11/2012 10:38:10 AM - Plate:
2 | BusinessTimes November 18 2012���� ���� ����� �
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Capitec Bank
Mr Price
Coronation Fund Managers
Shoprite
Famous Brands
Assore*
EOH
Woolworths
Pinnacle Technology
Aspen Pharmacare
Clicks
Howden Africa
Anglovaal Industries
Ellies
Truworths International
Invicta
PSG Group
Kumba Iron Ore
Oceana
Foschini
Value Group
Brimstone Investment Corp -N
Spur Corporation
Cashbuild
Spar Group
Remgro
Metrofile Holdings
Naspers -N
Santam
Resilient Property Income Fund
Metair Investments
Capital Property Fund
Massmart
Vukile Property Fund
Imperial*
Tiger Brands
Discovery
Exxaro Resources
Growthpoint Properties
Acucap Properties
Hyprop Investments
RMB Holdings
Mediclinic International
Sycom Property Fund
Sanlam
SABMiller plc
Compagnie Fin Richemont
FirstRand
MMI Holdings
Premium Properties
Trencor
Clientéle Life
Nedbank
Liberty
MTN
Fountainhead Prop Trust
Netcare
Hudaco
Redefine Properties
Bidvest
Hospitality Property Fund - A
Datatec
Emira Property Fund
Kagiso Media
Pick n Pay Holdings
Nampak
Lewis Group
Cipla Medpro
Omnia
Foord Compass
Brait
Steinhoff International
Tongaat-Hulett
Octodec Investments
Mondi plc
Mvelaphanda Group
Advtech
Bowler Metcalf
Sasol
SA Corporate Real Estate*
Illovo Sugar
Italtile
Wescoal Holdings
African Bank Investments
Absa
ELB Group
City Lodge Hotels
Zurich Insurance
African Rainbow Minerals*
Datacentrix
Delta
Reunert
Standard Bank
Palabora Mining
Wilson Bayly Holmes - Ovcon
Gold One
HCI
Old Mutual plc
BHP Billiton plc
Astral Foods
3 945
2 625
870
3 750
1 726
7 360
940
1 790
460
3 370
1 642
999
2 075
190
3 140
2 930
2 600
23 000
2 265
5 200
229
720
1 005
6 350
5 499
17 800
145
19 278
11 600
2 579
1 300
610
8 416
1 191
12 750
18 400
2 650
8 410
1 610
3 150
4 650
3 303
2 210
1 880
2 225
19 358
4 521
2 190
1 515
1 351
3 450
825
12 525
7 388
10 281
675
1 179
8 600
825
13 500
1 400
3 600
1 213
1 430
1 490
2 130
5 652
401
8 050
850
2 575
1 995
10 200
1 853
6 515
990
471
660
30 000
401
2 418
608
66
3 150
12 250
2 120
8 110
19 500
13 200
502
1 451
6 800
9 905
9 003
12 120
281
7 450
2 232
25 112
12 200
22 400
12 599
3 100
16 834
7 250
32 970
3 900
6 079
1 795
14 300
5 788
2 900
5 976
690
9 400
8 170
6 750
50 292
5 400
12 651
570
1 000
2 200
15 500
12 800
14 525
395
51 497
18 979
4 800
2 790
1 059
16 691
1 799
18 751
27 312
5 550
16 094
2 487
4 660
7 160
3 700
4 100
2 700
3 757
36 176
5 006
2 789
2 119
1 770
5 345
1 100
18 299
9 925
16 021
809
1 790
11 180
935
20 600
1 585
5 265
1 339
1 925
2 041
2 860
7 151
665
12 500
815
2 940
2 608
13 975
1 900
8 419
210
575
800
37 229
360
3 050
639
95
3 305
13 850
2 550
9 195
25 500
16 298
489
619
6 895
10 563
8 900
13 775
348
8 740
2 284
25 785
10 400
64 597
60 111
54 324
52 355
51 407
50 523
47 696
46 465
46 048
43 259
41 674
40 121
38 096
38 068
36 714
35 665
33 384
31 956
31 893
31 517
31 078
30 624
29 197
29 191
28 614
28 468
28 129
27 764
27 281
26 153
25 750
25 429
24 222
23 838
23 610
23 275
23 150
22 702
22 501
21 745
21 709
21 306
21 295
21 233
21 129
21 089
21 020
20 042
19 712
19 275
19 172
18 360
18 308
18 235
18 169
18 106
18 063
17 776
17 706
17 704
17 565
17 360
17 315
17 307
17 214
17 174
17 170
17 149
17 101
16 530
16 140
15 749
15 699
15 451
15 349
14 979
14 944
14 858
14 773
14 673
14 667
14 554
14 394
14 360
14 276
14 089
13 929
13 903
13 835
13 660
13 437
13 096
13 033
12 949
12 790
12 384
12 167
11 971
11 962
11 817
45.23%
43.15%
40.28%
39.25%
38.74%
38.26%
36.68%
35.96%
35.72%
34.03%
33.04%
32.03%
30.67%
30.65%
29.71%
28.96%
27.26%
26.16%
26.11%
25.81%
25.46%
25.09%
23.90%
23.89%
23.40%
23.27%
22.98%
22.66%
22.23%
21.20%
20.82%
20.52%
19.36%
18.97%
18.75%
18.41%
18.28%
17.82%
17.61%
16.81%
16.77%
16.33%
16.32%
16.25%
16.14%
16.09%
16.02%
14.92%
14.54%
14.02%
13.90%
12.92%
12.86%
12.77%
12.69%
12.61%
12.55%
12.19%
12.10%
12.10%
11.93%
11.66%
11.61%
11.59%
11.47%
11.42%
11.42%
11.39%
11.33%
10.57%
10.05%
9.51%
9.44%
9.09%
8.95%
8.42%
8.37%
8.24%
8.12%
7.97%
7.96%
7.79%
7.56%
7.51%
7.38%
7.10%
6.85%
6.81%
6.71%
6.44%
6.09%
5.54%
5.44%
5.30%
5.04%
4.37%
4.00%
3.66%
3.65%
3.40%
Share name Open (cents)
Close (cents)
Final value (R)
Compoundgrowth 5
yrsShare name Open
(cents)Close (cents)
Final value (R)
Compoundgrowth 5
yrs
TOP 100 COMPANIES OVER FIVE YEARS
Graphic: FIONA KRISCH Source: I-NET BRIDGE * denotes where a dividend due at period end has been accrued.
�HE winner of the Sunday Times Top 100Companies is Capitec, which has shakenup the financial services industry. It isranked first based on its extraordinary
growth in value over the five years to end-September.
We also recognise the Business Leader ofthe Year — decided by CEOs of the Top 100Companies — the Lifetime Achiever, and acompany which has made a meaningfulcontribution through corporate sociali nve st m e n t .
This year’s Business Leader of the Year isAspen CEO Stephen Saad.
Th e Lifetime Achievement award — wh i c hrecognises someone who has made a significantdifference during his or her career — goes toBobby Godsell. The decision was made inconsultation with a panel that included BusaCEO Nomaxabiso Majokweni, David Shapiro,director of Sasfin Securities, and AndrewMcGregor, MD of Who Owns Whom.
The winner of the Corporate SocialInvestment award is Sappi — based onresearch on CSI done for the first time by WhoOwns Whom.
How we calculate the
Top 100 companies
�HE Top 100 Companiesawards acknowledgethose listed companieswhich have earned the
most for their shareholders.The share-price
performance of everycompany listed on the JSE iscalculated on the basis ofR10 000 invested over fiveyears — from October 1 2007to the end of September 2012.
The winner is the companythat earns the most for itsshareholders in terms ofshare-price growth, aftertaking into account normaland special dividends andbonus shares reinvested.
Where there is an
unbundling, the proceeds ofthe unbundled company aretreated as a special dividend.
Apart from being anaccurate measurement ofshareholder fortunes, theshare price, plus the amountof income returned toshareholders, is an indicatorof the soundness of ac o mp a ny ’s operations — if oneaccepts that share-priceperformance is generally anaccurate barometer.
All calculations are carriedout by I-Net Bridge, thefinancial services informationcompany that is part of TimesMedia Group, the owner ofBusiness Times.
We exclude suspendedcompanies (although they areincluded in some one-yeartables), preference shares andloan instruments.
If prices declined at the endof September as companieswent ex-dividend, we haveaccrued the dividend.
Companies with a secondarylisting on the JSE are included.
In previous years, weexcluded companies which didnot meet the minimum valuetraded of R10-million a year.
Last year, however, weincreased the minimum valueto R20-million due to highertrading volumes over theyears, and to exclude penny
st o c k s .This qualification does not
apply to the Top 100 one-yearand 10-year tables, whichhave a minimum value tradedof R10-million.
We have also included aTop 40 table to show theperformance of the blue-chipcompanies in the JSE’s Top 40i n d ex .
The Top 100 over 10 yearsreflects the performance ofcompanies that have shown atrack record for investorswith a long-term view.
Certain information usuallycontained in the Top 100survey can be found in thiswe e k ’s Business Times.
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Bank newcomer
takes top spot
Companies which were
in the top 20 over the
last three years.
Assore
Capitec Bank
Kumba Iron Ore
Howden Africa
Mr Price
Shoprite
Clicks
Pinnacle Technology
Famous Brands
Truworths International
Coronation Fund Managers
Graphic: FIONA KRISCH Source: I-NET BRIDGE
THE ROYALS
2011
2010
2009
2008
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2006
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2002
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Assore
Capitec Bank
Basil Read
Basil Read
Distribution & Warehousing Network
Mittal Steel SA
Grindrod
Grindrod
Mvelaphanda Resources
Mvelaphanda Resources
East Daggafontein
Dimension Data
Adcorp Holdings
Profurn
Nu-World
Dimension Data
Q Data
Ellerine
Investec
Investec
Investec
M & A Investment Corp.
M & A Investment Corp.
National Bolt
Waltons
Waltons
Metair Investments
Metair Investments
Toyota SA
Toyota SA
Toyota SA
Gold Fields of SA
Otis Elevator Co.
Metro Cash & Carry
Metro Cash & Carry
Metro Cash & Carry
PREVIOUS WINNERS
Graphic: FIONA KRISCH Source: I-NET BRIDGE
Sunday Times Combined Metros 3 - 12/11/2012 10:38:29 AM - Plate:
�T was a particularlydepressing Monday morningwhen we met former AngloAmerican executive and
business leader Bobby Godsell.Across the country, thousands
of mineworkers had downed toolsin the most violent strikes since1987, with 34 protestors dyingbrutally at the hands of police. TheEconomist had called us “SadSouth Africa” in a scathing leadarticle, dissecting all SouthAfrica’s challenges and missteps.M o o dy ’s and Standard & Poor’shad just downgraded the country’sdebt, triggering a number ofdowngrades in the private sector.
Times are tough, said Godsell,who played a crucial role, withCyril Ramaphosa, then leader ofthe National Union ofMineworkers (NUM), in endingthe 1987 strike. “But don’t talkabout a problem if you’re not alsogoing to talk about a solution. Theproblems are well k n ow n . ”
Godsell, who helped to convinceHarry Oppenheimer toacknowledge NUM at Anglo’soperations when black unionswere still illegal, is optimistic thatunion leaders and miningcompanies will find a new set ofrules that will guide labourrelations, just as they did in 1987,when Ramaphosa led nearly halfa million miners on a three-weekstrike — during which Anglo fired50 000 workers.
The strike led to an agreementbetween NUM and Anglo aboutthe union’s right to picket, marchand hold meetings, illegal underapartheid laws but tolerated as ittook place on Anglo’s privateproperty. Dismissals couldsuddenly be queried and appealsbrought to an external arbitrator.
“That code is still in existence.That was 25 years ago. Now thereare new workers and newleaders,” said Godsell. “Th echallenge now in the industry, fo rall the leaders of all the unions, isto bring them into a room andsay, Look, the old rules don’tappear to work any more, let’swrite some new rules. And hell, ifwe could do this in 1987 in themidst of a state of emergency andthe regular imprisonment withouttrial of political activists, surelywe can do it now.
“The leadership has got to dothis. Leaders must lead. And it’snot only in government.”
It is time for a new politicaldispensation in South Africa, saidGodsell, who was involved in theanti-apartheid movement throughthe Methodist Church and theProgressive Party’s youth wing.He chaired a public anti-apartheidprotest meeting in the DurbanCity Hall at the age of 16.
“All I can really say to youabout political leadership is Ithink it’s time for new wine andnew wine skins. I think we’re stillcaught in a time warp; I think theANC often falls back on what itdid during the struggle, and it didvery good stuff. But dwelling onthe past doesn’t help you to seizethe future,” he said.
“There are political challenges.I think we’re dealing with thea n a c h r o n i st i c structures of thepast and we probably need a newpolitics, certainly a new dialogue,a new sense of sharedresponsibility. But you know, thatdoesn’t let citizens off the hook.Citizens should lead by example.You have to be sweeping yourown back yard.”
He refers often to the line, “We
sweep and keep clean our yard”,from the Vision Statement byAntjie Krog and Njabulo Ndebelethat features in the Nat i o n a lPlanning Commission’s NationalDevelopment Plan.
Godsell, who described the timehe spent on the commission asthe “very best thing in my life”, isconfident that the NationalDevelopment Plan, which has wonpraise from many quarters as theway forward to solve SouthAfrica’s many challenges, enjoyssignificant political and publicsu p p o r t .
Implementing it will requireenergy from the government andpressure from citizens, Godsellsaid. “I simply do believe thatwithout concerned, active parents,we can’t get 27 000 public schoolsright. Will we expect our kids towork hard? Will we insist thatteachers are in class on time andteaching? So I think with theimplementation — the question isalways: are you prepared to startwith yourself? You’re much morecredible when you hold thegovernment accountable whenyo u ’ve swept your own backya r d . ”
There is a need for business tobe “c o u r ag e o u s ” and to play amore active role in highlightingproblems and proposing solutions,but it’s not always easy to get
business to cohere and agree, hesaid.
“Businesspeople are engaged inmaking money. Every pizza storeis in competition with every otherpizza store, and they’re competingwith McDonald’s. Business startsfrom a principle of competition;labour starts from a principle ofunity. A lot of business things areabout making money; they don’tsit well on T-shirts. We don’t havean equivalent to ‘an injury to oneis an injury to all’.
“Having said all of that, if yourcountry is in crisis, and we areindeed in crisis now, everyindividual and every part ofsociety, including business, has aduty to say we can’t run a goodbusiness in a failing society. If thehouse is burning, everybody hasto drop whatever else they’redoing and help — t h at ’s thechallenge to business,” saidGodsell.
Business and governmentshould also work hard toovercome the “trust deficit”between the parties, partly rootedin the ANC’s communist past.
“I must say, speakingpersonally, if you are a patriotand you want the best for yourcountry — I can’t think of a singlesituation I’ve been in, including bythe way, my Eskom experience, inwhich my bona fides have been
questioned. I think the realchallenge is to love your country,demand your rights and the rightto criticise everybody, but to workfor solutions,” he said.
Godsell, who resigned asEskom chairman during a boardmeeting standoff with then CEOJacob Maroga, who was in chargeduring the rolling blackouts of2008, was accused of racism. TheNUM and ANC came out in hisdefence.
He is not one to ask about thehighlights of his career, thementors, the lessons learnt. “Ihonestly don’t dwell in the pastvery much.”
His wife, Gillian, recalled: “Inthe late ’70s, the fledglingindustrial relations department[at Anglo] was a group of young,formidably intelligent people, whowere sent out on some rather oddtasks. To value achievementswhich, looking back, may seemrather trivial, it is important toremember how vicious racerelations were in those days, howdeep the lack of respect for blackmineworkers, how terrible thewages, living conditions, fatalityrates. Sometimes when Bobbylooked back on his career and gotdespondent, he would say: Well, atleast I made them put doors onthe black mineworker toilets atWestern Deep.”
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Let’s
talk
about a
solution
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‘The challenge now in
the industry, for all
the leaders of all the
unions, is to bring
them into a room and
say, Look, the old
rules don’t appear to
work any more, let’s
write some new rules’
BusinessTimes | 3November 18 2012 ��:� �;;� ��:���<
Sunday Times Combined Metros 4 - 12/11/2012 10:39:25 AM - Plate:
1
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39
40
Mr Price
Shoprite
Assore*
Woolworths
Aspen Pharmacare
Truworths International
Kumba Iron Ore
Remgro
Naspers -N
Massmart
Imperial*
Tiger Brands
Exxaro Resources
Growthpoint Properties
RMB Holdings
Sanlam
SABMiller plc
Compagnie Fin Richemont
FirstRand
Nedbank
MTN
Bidvest
Steinhoff International
Mondi plc
Mondi Limited
Sasol
Absa
African Rainbow Minerals*
Standard Bank
Old Mutual plc
BHP Billiton plc
Anglogold Ashanti
Gold Fields
Investec plc
Harmony Gold
Investec Limited
Impala Platinum
Anglo American plc
Capital Shopping Centres plc
Anglo American Platinum
2 625
3 750
7 360
1 790
3 370
3 140
23 000
17 800
19 278
8 416
12 750
18 400
8 410
1 610
3 303
2 225
19 358
4 521
2 190
12 525
10 281
13 500
1 995
6 515
8 197
30 000
12 250
13 200
9 905
2 232
25 112
30 350
12 126
7 049
7 952
7 215
24 050
47 000
15 705
109 100
12 599
16 834
32 970
6 079
14 300
9 400
50 292
14 525
51 497
16 691
18 751
27 312
16 094
2 487
3 700
3 757
36 176
5 006
2 789
18 299
16 021
20 600
2 608
8 419
8 453
37 229
13 850
16 298
10 563
2 284
25 785
29 242
10 675
5 128
6 983
5 110
13 900
24 466
4 380
42 800
60 111
52 355
50 523
46 465
43 259
36 714
31 956
28 468
27 764
24 222
23 610
23 275
22 702
22 501
21 306
21 129
21 089
21 020
20 042
18 308
18 169
17 704
15 749
15 349
14 604
14 773
14 276
13 835
13 033
11 971
11 962
9 950
9 708
9 083
9 041
8 816
6 752
5 548
4 355
4 250
43.15%
39.25%
38.26%
35.96%
34.03%
29.71%
26.16%
23.27%
22.66%
19.36%
18.75%
18.41%
17.82%
17.61%
16.33%
16.14%
16.09%
16.02%
14.92%
12.86%
12.69%
12.10%
9.51%
8.95%
7.87%
8.12%
7.38%
6.71%
5.44%
3.66%
3.65%
-0.10%
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-1.91%
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-7.55%
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Share nameOpen (cents)
Close (cents)
Final value (R)
Compoundgrowth 5 years
TOP-40 INDEX COMPANIES OVER FIVE YEARS
Graphic: FIONA KRISCH Source: I-NET BRIDGE* denotes where a dividend has been accrued.
British American Tobacco and Vodacom havenot yet been listed for 5 years on the JSE .
�TEPHEN Saad sawthe opportunity todevelop affordable,quality medicines,
and in less than 15 years hastransformed the localpharmaceutical industry andcreated the world’s ninth-largest generic drugsc o mp a ny .
Aspen Pharmacare hasmade medicines moreaffordable, and sells one ofevery four medicines inSouth Africa.
Under Saad’s leadership,Aspen has grown into amultinational operating outof South Africa, during aperiod when mostpharmaceuticalmultinationals have soldtheir plants.
The group has doubled insize almost every threeyears, and recorded revenueof R15.3-billion for the yearending June.
Saad, 48, developed acollaborative approach withglobal companies — wh i c hsaw generic companies asrivals — to the point wherethe world’s fourth-largestpharmaceutical group, GSK,is Aspen’s largestshareholder, with an 18.6%st a ke .
Along with Aspen co-founder Gus Attridge, Saadset out to change theperception that genericswere inferior to brandedproducts.
The pair started whatthey intended to be a smallbusiness from a two-bedroom house on the Bereain Durban.
But then they saw anopportunity to take over thebiggest and oldestpharmaceutical company inthe country, SA Druggists,and Aspen Healthcare wa sborn in a deal described as amouse swallowing anelephant.
After the takeover, thegroup signed agreementswith multinational drugcompanies to m a n u f a c tu r elicensed versions of theirdrugs. It bought companiesaround the world, fromLatin America to Australia.
Initially, AspenHealthcare wanted to closedown the SA Druggistsfactories and movemanufacturing to Asia, butSaad changed the strategy:he believed the SouthAfrican plant was the heartof the business.
To improve standards atthe Port Elizabeth site, hevisited about 40 plantsworldwide and in March2005, Aspen became thewo r l d ’s first genericsproducer to receive approvalfrom the US Food and DrugAdministration (FDA) tomake certain ARVs.
Today, more than1.5 million HIV/Aids patientsin Africa use Aspen’s basketof ARVs every month.
The SA Druggiststakeover was the first ofmany for Aspen, and showsSaad’s ability to translatebig dreams into r e a l i ty .
But deal-making, growingbusinesses and
entrepreneurship is inSaad’s blood.
In the early 1990s, heworked for QuickMed andmerged it with Covan toform Zurich, which waseventually sold forR75-million.
With a restraint of tradeand R20-million in hispocket at the age of 29, hegot involved with VarsityCollege, a private tertiaryeducation institution. He andAttridge turned it aroundand sold it to LeisureNet forabout R100-million.
Colleagues say Saad hasan ability to develop arapport with anyone. Anddoes not care aboutmaterial things.
Nonetheless, he is inninth position on theSunday Times Rich List,with his share in Aspenworth R6.4-billion — thec o mp a ny ’s market captoday is R70-billion.
Aspen has 18 factories onsix continents and Saad’srole now is more strategicin terms of risks andop p o r tu n i t i e s .
However, he continues toworry about the detail,from the molecularrequirements of drugs tothe company’s financials.
He has also managed tonavigate the tricky watersof the government, wh i c hoften accuses the p r ivat ehealthcare industry ofprofiteering at the expenseof consumers. Whereothers have taken on thegovernment in public, Saadhas always dealt withissues behind closed doors.
Aspen played a crucialrole in the roll-out of cheapARVs — which has not beenwithout commercial benefit.The high volumes allow thecompany to reduce the costof production.
Saad said: “We have
what benefits you deliver tosociety. I don’t know if itwould be as easy doingsomething that would notadd such value.”
He enjoyed “proving theconventional wisdom wrongthat you can’t manufacturecompetitively in SouthAfrica. We have 18 sitesaround the world . . . butthe South African site is theb e st .
“The lovely thing aboutliving in South Africa is youcan make a tangibledifference.”
the best from his staff.“I say to my kids: ‘If you
lose and you try yourhardest, there’s nothingmore you can do. You canhold your head up withpride. But even if you winand haven’t tried your best— don’t look in the mirror.’ ”
Obsessive about work/lifebalance, he exercises aboutsix hours a week, and lovesthe bush.
He combined his love ofexercise with socialupliftment. He recentlyc o mp l e t e d a 240km cyclingrace in 16 hours — ridingfor a while with HealthMinister Aaron Motsoaledi— to raise R10-million toimprove paediatrichospitals in South Africa.
Senior executive StavrosNicolaou said: “Stephenlikes to test boundaries.One of the worst things youcan say to Stephen is that itcan’t be done, like we couldnever become marketleader in Australia — he’sbound to prove you wrong.”
Aspen is now Australia’snumber one generic playerand is responsible for onein seven scripts.
The sports-mad Saadwent to Durban High School,and then studied to be achartered accountant, eventhough he knew it wasn’t forhim.
However, he did manageto take a gap year to playrugby in Ireland.
A partner at the firmwhere Saad did his articlesdescribed him as a birdwith clipped wings.
Saad has no plans toleave Durban, and is not agood traveller unless he hashis whole family with him.
He calls his wife and fourdaughters “the big five”.
� ��������� ���� � �������� �
From two rooms to R70bn������ ������ ��� � �� ���������������� ���������� ���� ���� � ������ ���������� ��� ���� �� ������������� ����� �� ��� � ���� ��
‘The lovely thing about living in
South Africa is you can make a
tangible difference.’
� ��������� ���� � ����� �����’�� ���� �������� ����� ���� �������������� �� �� � �� !"���� ������� ���� � ������
delivered sustained,unbroken compound growthin sales and headlineearnings a share of over40% for 14 years, and wehave successfully globalisedthe group, selling morethan 50% more offshorethan we do domestically.”
He proved the scepticswrong when Aspensuccessfully bedded downSigma’s pharmaceuticalbusiness, which was boughtin 2009 in Australia forR5.9-billion. Within 18months, pre-tax earningshad doubled toA$140-million.
But his passion and focusremain in South Africa. “Ithink our biggestachievements are the hopewe give South Africa.
“We ’ve built aninfrastructure, we workpassionately, and we showit can be done.
“Our job is made somuch easier when you see
He enjoys wat c h i n gexperts from overseas walkinto the F DA - ap p r ove dplant, or watching thepeople on the ground dealconfidently with regulatorsand m u l t i n at i o n a lc o mp a n i e s .
Saad comes across as aregular guy from Durbanwho loves sport and a goodl au g h .
He hates bureaucracyand wants people to takeresponsibility for their owndecisions and the divisionsthey run.
He hates being stuckbehind a desk, and believespeople spend too much time“managing up”: worryingabout what the layer aboveis thinking.
So the group head officein Durban is small — 40people deal with 6 000employees around the world.
Saad may appear genial,but don’t be fooled: he’scompetitive, and expects
4 | BusinessTimes November 18 2012#�$� %&&� ��'$����
Sunday Times Combined Metros 6 - 12/11/2012 10:39:55 AM - Plate:
6 | BusinessTimes November 18 2012���� ���� ����� �
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Tree farming branches out
�������� �����
�ROM school to aprofessional career — theShanduka Foundation isinvolved in all levels of
e d u c at i o n .The foundation, which was
started in 2004, has taken secondprize in the corporate socialinvestment category of the To p100 Companies survey.
The foundation is part ofShanduka Investment Holdings, acompany founded by businessmanCyril Ramaphosa.
The foundation’s flagshipproject is Adopt-a-School wh i c h ,says executive director DonnéNicol, started off as aninfrastructure project.
However, as the educationcrisis worsened, the foundationrealised more needed to be doneto boost literacy and numeracy.
“Over the years, we’vedeveloped the school developmentmodel. . . [which] looks atinfrastructure, academics, thesocio-economic environment ands e c u r i ty .
“So, we go in and we do a needsanalysis of the school and thecurriculum needs of the teachers,and also include the needs of thepupils,” said Nicol.
Part of the foundation’s successhas come from working with thegovernment at district level,
rather than with the nationaldepartment.
The programme also includesother structures such as non-governmental organisations, localgovernment and other companies.The foundation works with anaverage of 15 other organisationsat any given school.
Nicol said 167 schools had been
adopted so far, and around 450 000children had received tangibleeducational benefits as a result.
Another project is ShandukaBlack Umbrellas, an initiative toincubate entrepreneurs who mayhave ideas, but who lack theresources to get started inbusiness.
Entrepreneurs in small to
medium enterprises are trained,mentored and, for a subsidisedmonthly fee, provided with officefacilities such as telephones,desks, access to the internet andt r a n sp o r t .
The foundation has fourincubators — in Johannesburg,Pretoria, Durban and Cape Town— “but we are aiming for 10 ove rthe next two years”, said Nicol.
The foundation’s target is tohave half of all businesses that gothrough the incubators becomingsustainable within three years.
The foundation has also starteda “black pages”, which listsSMMEs and small black-ownedbusinesses. The book isdistributed to procurement officesaround South Africa.
Then there are the bursariesthe foundation distributesthrough the Cyril RamaphosaEducation Trust to disadvantagedstudents. The focus is onbusiness-related qualifications,and so far 47 students havereceived support. An internship
programme has helped 33 pupils,graduates and work seekers injust over two years.
At the foundation’s creation in2004, R100-million was committedby Shanduka Investment Holdingsfor 10 years. About R67-millionhas been spent so far.
“The commitment fromShanduka really helps, and is alsoattractive to donors because theyknow that the money they put indoesn’t go towards the running ofthe foundation, but to the actualprojects,” said Nicol.
To keep the project sustainable,Adopt-a-School is a 10%shareholder in logistics andshipping company Grindrod SA.
Nicol said: “Grindrodapproached us and we gottogether with its BEE partners . . .
“Grindrod has become moreinvolved with us and particularlywith the schools in Durban. Forus it’s wonderful, because it’s asustainable way going forward.”
The Shanduka Foundation itselfhas adopted a primary schoolcalled Olifantsvlei, in southernJohannesburg, and everyShanduka member makes amonthly contribution to thei n st i tu t i o n .
“We are very proud of our schooldevelopment model. I think it’s amodel that has great potential . . .and as we’re learning it’s gettingbetter and better,” said Nicol.
�APPI’S Project Grow has allthe features of anaggressive permanent jobcreation and
entrepreneurship developmentprogramme, despite it being acorporate social responsibilityprogramme.
The project, which helped Sappiwin the Top 100 CSI award, can beused as a best practice example ofwhat works for the government’srural development strategy.
Project Grow was established in1983 with three people on 8ha ofland. Communities have sinceidentified the economic spin-offsof the project and it has grown somuch that there are now 2 500growers on about 15 000ha andcreated 9 700 jobs. The tree-farming scheme is managed byS ap p i for subsistence farmers whohave access to between one and20ha of land each.
Communities make their landavailable for planting eucalyptustrees while Sappi gives farmersfree seedlings, interest-free loans,technical know-how and an off-take agreement when the treesare harvested after 10 years.
While the trees are growing,S ap p i gives farmers advances tokeep going and at harvest timethe company will buy the timberfrom the farmers and pay themafter subtracting the advancepayments made.
The project was piloted inKwaZulu-Natal and covers areasfrom Manguzi near Kosi Bay inthe north to Port Edward in thesouth and inland areas in Ixopoand Nongoma.
It was recently introduced inthe Eastern Cape — near Bizana,Lusikisiki and Umzimkhulu.
S ap p i ’s head of corporateaffairs André Oberholzerattributes the success of Project
G r ow to collaboration andpartnerships which encompassthe creation of contractorbusinesses and jobs.
He said Project Grow hasbenefits for the company becauseit is strategically aligned as itprovides fibre for Sappi, andbuilds positive relations withneighbours and communities.
Project Grow provides Sappiwith almost 130 000 tons of timbervalued at more than R50-million aye a r .
“There are high barriersassociated with timber farming.There are high costs of seedlings,fertiliser, harvesting and transport,in addition to the long periodbefore trees are felled.
Project Grow helps smallfarmers offset all of these,”Oberholzer said.
The interest-free loans cover allfarming input costs, including theannual maintenance ofp l a n t at i o n s . The communities alsor e ap the rewards of timber priceswhich keep on rising because ofthe increasing demand from thetelecommunications andelectricity industries.
Between 1995 and 2010, Sappiinjected R305-million into theproject. “When we started the
project, we said we are going tostay with the communities andsee the project going forward. Atthe same time we said let thecommunities do it themselvesrather than us doing it for them,”said S ap p i ’s general manager forforestry, Terry Stanger.
More than 80% of the farmersare women. More than 100 smalland micro enterprises and over1 100 job opportunities have beenc r e at e d .
“We have seen people creatingbusinesses because all the
supporting services to farmingsuch as transportation and fellingof trees are provided bycontractors from the communitiesand others have set up shops inthe communities,” said Stanger.
Oberholzer said the farmersbenefit from the expertise such asguidance on environmental issuesby creating awareness ofwetlands, illegal logging,plantation management andwe e d i n g .
“We provide the necessaryguidance around safety duringharvesting and transportation,fire management as well as createan enabling environment forfarmers and communities to enterthe formal economy,” he said.
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‘When we started, we said we are going to stay
with the communities and see this forward’
Making its mark in the classroomThe foundation works
with an average of
15 other organisations
at any given school
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�ORPORATE socialresponsibility at Mondigoes further thansimply ensuring all the
boxes on the scorecard aret i c ke d .
“Mondi has consistentlyscored full points for enterprised eve l op m e n t and socio-economic development in thethree years since we beganbeing rated,” said Ron Traill,CEO of Mondi South Africa.
“However, there is anadditional and greaterinvestment made by Mondi inthese development i n i t i at ive sthat are not included in ourBBBEE scorecard.
“This is simply because wealready achieve the maximumpoints and the effort required tocollate the information in themanner required by the BEEverification process isp r o h i b i t ive . ”
Mondi Zimele is one of thesei n i t i at ive s .
The enterprise development
agency provides support for theestablishment and developmentof businesses in Mondi’s forest-growing areas and surroundingcommunities.
Mondi Zimele was launchedin 2007 and has to date helpedto establish 18 businesses inMondi’s value chain with a totalturnover of R306-million a yearand which employ more than2 200 people.
Mondi Zimele is placingspecial emphasis on job-creationprojects.
Mondi’s Food 4 Forestsprogramme started in 2009 aspart of an initiative to i mp r ovethe health and safety of peopleworking in the group’sp l a n t at i o n s .
“A study showed that a lot ofthe workers out in the forestsare nutritionally deficient,”Traill said.
“There are high HIV/Aidsprevalence rates and nutritionaldeficiency just makes thesituation so much more dire.
The Mondi board felt it was theright thing to do to at the veryleast provide a hot meal withsufficient calorie intake for hardl ab o u r . ”
The Food 4 Forestsprogramme provides a dailymeal to about 8 000 forestrywo r ke r s .
These workers are not Mondiemployees, but are employed bycontractors to work in Mondi’sp l a n t at i o n s .
“A recent survey has shownimprovements in the generalhealth and wellbeing of workersand their families,” Traill said.
Forestry is by definition arural operation and Mondi hastherefore had to deal withseveral land claims over theyears. However, the group seesitself as playing a leading rolein the settlement of landrestitution claims on forestryland.
Up until August this year,Mondi had settled 19 landclaims involving around
35 000ha of forestry land.The settlements are based on
a sale and leaseback model.Mondi leases back the land fromthe communities to which it isawarded, manages the forestryoperations and providesopportunities for thecommunities to get involved inthe forestry business.
The agreements are for 20years, after which communitiescan choose to either enter into anew lease and managementagreement with Mondi or takeover the forestry operationst h e m s e lve s .
“Mondi’s land claims modelinvolves business developmentand support for new landowners in order to ensuresustainability of both fibresupply and new forestrybusinesses,” Traill said.
“The support is provided byMondi employees and throughthe Forestry PartnersProgramme, a division of MondiZimele.”
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Sunday Times Combined Metros 8 - 12/11/2012 10:41:02 AM - Plate:
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Cut-price can
still offer value
Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
MR PRICE2007: R10 000 | 2012: R60 111
TOP 100 COMPANIES
Number
2
20122011201020092008
0
3 000
6 000
9 000
12 000
15 000
Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
CORONATION FUND MANAGERS2007: R10 000 | 2012: R54 324
TOP 100 COMPANIESCO
Number
3
20122011201020092008
0
1 000
2 000
3 000
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Uranium One
Conduit Capital
Purple Capital
Lonrho plc
Indequity
Ingenuity Property
Litha Healthcare
Buildmax
Erbacon
Taste
Thabex
Redefine Properties
EsorFranki
Sanyati
Amalgamated Electronic
Kumba Iron Ore
Capital Property Fund
Basil Read
Alert Steel
EOH
Brimstone
Grand Parade
Stefanutti Stocks
Resilient Property
Adaptit
Orion Real Estate
Raubex
B&W Instrument & Elec
Calgro M3s
Mediclinic
Rockwell Diamonds
Aspen Pharmacare
Mix Telematics
SA Corporate Real Estate
Pinnacle Technology
Onelogix
Hardware Warehouse
Kap International
Assore
Exxaro Resources
Blue Financial Services
African Rainbow Minerals
Grindrod
Afrimat
Rolfes
York Timber
Sovereign Food
Marshall Monteagle plc
Acucap Properties
1time Holdings
2011.12
2011.08
2011.08
2011.12
2011.09
2011.08
2011.12
2012.02
2012.02
2012.02
2011.02
2011.08
2012.02
2011.02
2012.03
2011.12
2011.12
2011.12
2011.06
2012.07
2011.12
2012.06
2012.02
2011.12
2012.06
2012.06
2012.02
2011.08
2012.02
2012.03
2012.02
2012.06
2012.03
2011.12
2012.06
2012.05
2012.06
2012.06
2012.06
2011.12
2012.02
2012.06
2011.12
2012.02
2012.06
2012.06
2012.02
2011.09
2012.03
2011.12
179.44%
170.32%
123.41%
116.62%
96.16%
91.32%
67.96%
61.76%
57.37%
55.15%
54.81%
45.95%
43.48%
42.71%
41.42%
41.19%
40.30%
39.91%
39.24%
38.94%
37.65%
36.96%
36.46%
35.46%
34.82%
33.45%
33.41%
33.10%
32.91%
32.60%
31.80%
30.53%
29.91%
29.58%
27.78%
27.73%
27.22%
25.82%
24.71%
24.01%
23.96%
23.53%
23.47%
23.34%
23.14%
23.08%
22.37%
21.19%
21.16%
20.97%
Share name YearCompound
growth 5 years
TOP 50 GROWTH IN TURNOVER
Graphic: FIONA KRISCH Source: I-NET BRIDGE
Coronation CEO happy
to ‘quit while at the top’
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#HE MR Price Grouphas come a long waysince it started as aone-store factory
outlet buying and sellingove r runs in Klerksdorp.
The clothing retailer,which has a marketcapitalisation ofR35.9-billion, has developeda brand that shoppers findtrendy and fashionablewhile still offering goodva l u e .
It has been South Africa’sbest performing retailer,and the second bestperforming share overallover the past five years —showing compound annualgrowth of 43.15%.
The group understandshow to keep its waresrelevant, ensure quick stockturnaround and maintainstrong gross margins. Theperformance has beendriven by innovative and
astute management.The handover from long-
term CEO AlastairMcArthur to Stuart Birdtwo years ago appears to
have been seamless.Sales continue to outstrip
those of its peers, and itsmarket share is 13% — upfrom 10% in 2006. The group
grows margins throughstrong sales performance,increasing tradingdensities, vigorous costcontrol and the closure ofunprofitable space.
The group, which owns360 stores under the brandnames Mr Price, Miladys,Sheet Street and Mr PriceHome, has appeared severaltimes in the Top 10 of theTop 100 Companies.
It has recordedcompound growth of 25% inreturns to shareholders forthe past 26 years.
Bird attributes this to aclear strategy, focus on thecustomer, employing goodpeople, combining fashionand value, and being acash-based retailer.
The group has 73 storesoutside South Africa, 47 ofwhich are corporate-ownedoutlets in Botswana,Lesotho, Namibia, Swa z i l a n d ,
range of items. Bird saidthe online service wo u l dgive Mr Price access to newmarkets in Africa andove r s e a s .
The group is investing instate-of-the-art systems andis developing more cost-effective distributionfacilities and structures tohandle its planned growthin volumes.
For the interim reportingperiod to August, theretailer reported 14.9%growth in sales — of which78.5% were in cash.
Mr Price Group’s apparelsegment, which accountsfor 71.6% of group sales,experienced growth of 15%on a comparable basis. Itsannual results are due thiswe e k .
The percentage of foreignshareholding in Mr PriceGroup at the end of lastyear was 42%.
‘Putting your
brand into
t h i rd - p a r t y
hands brings
reputational risk’
Nigeria and Ghana. The restare franchised.
“Franchising was initiallyconsidered to be a lower-risk approach, but werealised putting your brandinto third-party handsbrings reputational risk andbrand issues,” said Bird.
The group aims to t a keits existing businesses intonew markets and launchother formats. In August, itintroduced an online salesfacility, which p r ov i d e saccess to the group’s full
&ORONATION FundManagers was thethird-best performingcompany over the
five years ended September 30,with a compound annualgrowth in its value of 40.3%.
Coronation runs nearly athird of all assets undermanagement in South Africa,at R339-billion. Th eAssociation for Savings andInvestment South Africa putthe managed assets of thelocal collective investmentschemes at R1.13-trillion atthe end of the third quarter,to September 30.
Coronation posted 6%growth in headline earningsfor the half-year to March. Itdeclared an interim d iv i d e n dof 95c a share.
Despite presiding over thespectacular growth in bothresults and share price,Co r o n at i o n ’s CEO HugoNelson will step down at theend of January 2013 to pursue
personal goals and go onsabbatical for “at least aye a r ”. Chief operating officerAnton Pillay has been
appointed CEO designate.“I’ve been with the firm for
13 years and CEO for five ofthose years. I think thebusiness is in a very goodplace,” said Nelson.
“At the time when I movedfrom a technical role tobusiness leadership, I made aclear commitment to reassessafter five years.
“I felt there was a naturalsuccessor in Anton Pillay, whohad been chief operatingofficer during my tenure asCEO. I felt the business wasdoing well and it’s alwayseasier to do a handover undersuch circumstances.
“I thought this would begood timing to take time off asit wasn’t going to harm theshareholders of the business. Ifelt very much this was a case
of quitting at the top.”Nelson, a medical doctor by
profession, said Coronation’ssuccess was the result ofsticking to its knitting.
“Historically we’ve beenmuch more of a business-to-business service provider —only recently have we grownin the retail space. We try todeliver a good service to ourclients, and that means goodperformance over a period offive years or more. We’vebeen fortunate to have hadtremendous stability in ourstaff and that has enabled usto perform at such a level.”
Nelson said the initialstages of any investment wereprecarious and the companytook great care in communi-cating its strategy to clients.
He said the worst
‘We ’ve been
fortunate to have
had tremendous
stability in our staff’
investments currently weregovernment bonds and certainsegments of developing-market equities — such asSouth African retailers.
“The retail businesses arefantastic. However, their sharevaluations are pricing inabsolutely spectacular futureperformance. From ourperspective, the majoropportunities for SouthAfrican investors are offshore,in both developed anddeveloping-market equities.”
8 | BusinessTimes November 18 2012��� $%%� �������
Sunday Times Combined Metros 9 - 12/11/2012 10:41:20 AM - Plate:
BusinessTimes | 9November 18 2012 ������� ����� �
�HE JSE All Share index would havegiven you an annualised return of6.6% between October 2007 and theend of September 2012 — but it
must be seen in the context of the economiccrisis of 2008 and 2009.
If you had bought shares at the end of2009, as the crisis was ending, your moneywould have grown at a rate of 16% a yearfor the three years. If you were in it forthe long haul, you would have made 17.6%a year for between 2002 and 2012.
Had you narrowed your focus toresources, over five years you would havelost 2% of your capital on an annualisedbasis. If you were in it for a decade, youwould have seen an 11.7% annualisedreturn, and if you had bought the sharesat the end of 2009, you would haverealised a 5.6% annualised return.
Financials would have been a better betthan resources. Over five years you wouldhave earned 8.1% a year, but over threeyears and 10 years you would have seenreturns of 18.8% and 18% respectively.
Industrials and listed property wouldhave given you far and away the bestreturns. Industrials over five years wouldhave netted you 14.2% a year, and 23.6%and 23.5% a year over three and 10 yearsrespectively. Listed property would have
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Staying in for
the long haul
brings returns
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Art is surprisingly
recession-proof and
auctions have shown
record prices
given you annualised returns of 13.5% overfive years, and 22.1% and 23.6% over threeand 10 years respectively.
If you had sought safety in bonds, youwould have seen a 10.6% annualisedreturn over five years. Over three years,you would have made returns of 12.7%,and over 10 years this would havedropped to 11.3% a year.
Cash would have been a better bet thanresources for all but the 10-year period.You would have seen returns of 8.2% overfive years, 6.3% over three years and 8.8%over a decade.
Houses and art are two other likelydestinations for investment rands.
According to Absa’s data, the smoothedaverage purchase price for approved loanson a medium-sized house (between 141and 220m²) was R941 744 in September2007. The same-sized house would beworth about R1.03-million now, anincrease of a R87 130, which translates toa 9.25% increase over the period.
Because art is something one can enjoyevery day, cashing in can be more difficultthan for other investments. The range ofpossible investment artists is virtuallyendless, so expert advice is vital. However,art is surprisingly recession-proof andauctions before, during and after the globalfinancial crisis have shown record prices.
Cruel shadows, an oil painting by SouthAfrican artist Robert Hodgins, sold onauction for R99 000 in 2007. Five yearslater, Strauss & Co estimate that Hodgins’Three Golem Figures (oil and graphite oncanvas) will go for R400 000 to R500 000.
But there are no guarantees. GregoireBoonzaaier’s 1957 work View of the Capea rc h i v e s (oil on canvas) sold for R385 000 in2007. In a 2012 auction in London, three ofhis works failed to meet their minimumbids and were “bought in” by Bonhams.
Art is surprisingly
recession-proof and auctions
before, during and after the
global financial crisis have
shown record prices
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Sunday Times Combined Metros 10 - 12/11/2012 10:41:39 AM - Plate:
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Job growth held
back by red tape������� ��� � ���� �� ���� �� ��������� ������� ����� ��������
Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
SHOPRITE2007: R10 000 | 2012: R52 355
TOP 100 COMPANIES
Number
4
20122011201020092008
0
5 000
10 000
15 000
20 000
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�HITEY Basson, theman responsible forbuilding one of themost successful
retailers in Africa, says exc e s s ivetrading constraints are putting adamper on intercontinentaleconomic growth and significantjob creation opportunities.
Over the past 33 years Bassonhas grown Shoprite Holdings(Shoprite) from an initialR1-million acquisition of eightsmall stores to a business with amarket cap of R100-billion.Shoprite now has over 1 700stores in 17 countries.
In fact, if you invested R1 000when the company listed in 1986,that investment would havegrown to R1.2-million today.
Shoprite was the fourth mostprofitable investment and thebest investment in the foodretail sector over the past fiveyears. A R10 000 investment fiveyears ago at a share price ofR37.50 would have shown anannual compound growth of39.25% and would today be
worth more than R52 000, with ashare price of R168.34 a share atthe end of September.
Basson and his team havebecome so effective that onaverage the group is able toopen a new shop every weekand now employs 100 000 people,making it one of the largestemployers in Africa.
small things right like exportingour goods and products to otherAfrican countries.
“Currently we have to importmeat for our shops in Africa fromplaces like Argentina and Brazil,while some of the world’s bestmeat can be found right here inSouth Africa,” said Basson.
“If we could convert these importsfrom other countries into exportsfrom South Africa, the countrywould be able to generate thousandsof additional jobs without having tospend large amounts of capital tocreate those jobs.”
Basson said differentgovernment departments had tostart working together to resolvethe issues around exports. “Weneed a central minister to drivethat process. It’s currently beinghandled by too many departmentsand small objections end upblocking the entire process.
“I am very bullish on SouthAfrica, but the problem is we needto work about 20 times faster tomake sure that we benefit from theseemingly obvious benefits thatexist from other African countriesexpanding at a rapid pace.”
Nedbank Capital analyst SydVianello said Shoprite had clearlydemonstrated that “the early birdcatches the worm”, adding that thegroup had captured the first-timeadvantage on the continent.
“Th at ’s a huge advantage tohave, but believe me, Africa was nowalk in the park for Shoprite.
“They lost money in Angola fora long time before it becameprofitable, but the traditionalU-curve has worked brilliantly forthem in that country because Ithink it is either their best orsecond-best performing territory inAfrica.
“S h op r i t e ’s experience has nodoubt taught them a lot aboutwhere the money will be made andwhat ingredients are necessary tomake a country a profitableve n tu r e , ” said Vianello.
Basson said it was alsoimportant to lower entry barriersfor small business in South Africato ensure more robust employmentgrowth. “We had a campaign acouple of months ago, where wewanted to buy about 1 000 ovens to
get people to do homemadecooking for our stores, but it is justtoo hard for the small guys tocomply with excessive regulationin some cases. In the end, we hadto scrap the campaign and all thejobs that would have come with it.”
He said while legislation wasimportant, small businesses wereoften not given a fair chance todevelop in South Africa — acountry with an unemploymentrate of almost 30% according to thelatest census information releasedat the end of October.
“Remember, trading is awonderful and flexible business. Ifyou need to survive, you can sellyour goods on the pavement. Weneed to make it easier for the
smaller people to comply, andprovide them an opportunity toalso supply the bigger companies.
“If I had my life over, I woulddefinitely choose to be in the retailbusiness again. If you have afactory without orders, you just goone way and that’s down, whereas,as a retailer, you can always adjustyour stock levels to be on termswith your suppliers and yourclients,” said Basson.
Av i o r Research analyst MarkHodgson attributed Shoprite’ssuccess to an effectivemanagement team, well thought-out investments, effective sourcingand cost control.
“We like to run a lean, mean andhungry machine,” said Basson.
‘There are
substantially more
jobs if we can get
small things right’
But, said Basson, there weremany more opportunities tocreate additional jobs if onecould cut through red tape andtrading barriers.
“It is easy to set up a newshop and to train a 150 or 200people to work in the shop. Butthere are substantially morejobs for South Africa if we get
10 | BusinessTimes November 18 2012��� ��� �������
Creating sustainable CSI opportunities and ...
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Sunday Times Combined Metros 11 - 12/11/2012 10:41:56 AM - Plate:
BusinessTimes | 11November 18 2012 ���� ���� ����� �
�HE Top 100 is dominated bycompanies in the retail sector,which has outperformed the all-share index, banks, resources and
i n d u st r i a l s .Foreign investors now own about half of
the retail sector on the JSE, up from 24%in 2007.
Theresa Heath, retail analyst at Stanlib,said: “SA retail shares are now bigenough to count on international investorscreens.”
Truworths, for example, is 70% owned byforeign funds, Shoprite 50% and Clicks 63%.
The purchase by overseas funds hashelped the retail index shoot up 108.9%over the past five years compared withthe all-share, which has increased 19.34%.
The profits of some of the listedretailers have grown more than 15 foldsince 2000, and continued to grow throughthe global financial crisis.
Retail is a well-run and competitivesector. But investors are largelyinterested in exposure to consumers inemerging markets, especially Africawhich, according to PwC, is generatingsubstantial consumer demand.
Domestic factors have also helpedretailers’ performance. Shoppers h avespent more because real wage growth hasoutstripped inflation in many sectors;lower interest rates have helped richershoppers; and poorer shoppers h avebenefited from higher social grants.
The growth in unsecured lending hasalso played a role.
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Foreign investors
go berserk over
shopping shares���� ���� ���� � ������� ����� ������� �������� ��������� ����� � �������� ��� ����� �� ��� � ����������� ������
‘SA retail shares are
now big enough to count
on international investor
s c re e n s ’
Shoprite, the fourth-best performer onthe Top 100 over the past five years, hasgreater exposure to Africa than any otherretailer, with the rest of the continentaccounting for 11% of group sales.
The big clothing retailers are all in thetop 20 of top share performers.
Mr Price — in second position over fiveyears — is followed by Woolworths(eighth over five years), TruworthsInternational (15th) and Fo s c h i n i , in 20thsp o t .
But is this the end of the big run fo rretailers? There is some concern they areove r va l u e d .
Heath said: “We think they willcontinue to deliver, but maybe . . . thebiggest quantum of margin expansion ofearnings growth is now behind us. All thesigns are pointing to consumers findingthings tougher . . .”
So which sectors are likely to be thenext strong performers?
Adrian Saville, chief investment officerof Cannon Asset Managers, pointed toresources and i n d u st r i a l s .
“We are flagging resources as a broadcluster, and the domestic-focusedindustrial cluster including building,construction, engineering, domesticmanufacturing and equipment suppliers.”
He said resources were su b st a n t i a l lyunderpriced. “Investors will give you allthe reasons to stay away from the sectorfrom labour action to electricity pricepressure — but the companies are notpriced for difficulty but disaster. To me,t h at ’s where the best opportunities reside.”
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Sunday Times Combined Metros 12 - 12/11/2012 10:42:14 AM - Plate:
�AMOUS Brands, the ownerof Steers, Debonairs,Wimpy, Mugg & Bean,House of Coffees and other
franchises, has been rewarded byshareholders and analysts withconsistent “buy” r e c o m m e n d at i o n s— because the fast-food groupsticks to a tried-and-tested strategy.
It buys market-leading orchallenger brands that connectwith the public, and provides slicksupport in the background.
Any investor sinking R10 000into the share five years agowould now be sitting on R51 407.
Franchisees have benefited too,because all the attractive marginsare at their end.
So shouldn’t Famous Brandsstruggle if the handsome marginsare at store level, for thefranchisees? It’s all about strikingthe right balance and volumes,said CEO Kevin Hedderwick.
“What has set us apart from ourpeers is that we deliberately choseto get into logistics to service our
franchisees, and to manufacture ontheir behalf. This helps make pricesfar more competitive.
“But it means we have to go forvolume, and that depends on themix — how much we do for thefranchisee and what it does to ourmargins,” said Hedderwick.
“We ’ve just opened a logisticscentre in Nelspruit because wehad enough scale and volume inthat geographical area.”
Famous Brands now roasts itsown coffee, makes juices andsauces, and has brought a varietyof other functions in-house.
Hedderwick said capacity keptcoming, though in a calculated way.
“We buy brands at the front endand build the back end.
“But we won’t get involvedwhere the capital expenditurerequired is excessive. It must below, with a quick payback period.
“Making chips is an example —a huge outlay and a lot of skill isrequired to start making chips, sowe won’t do it. We don’t do
everything the franchise networkrequires.”
It is this cagey use of cash t h atkeeps luring investors.
“Our balance sheet is strong,and we are a highly cash-generative business,” saidHedderwick.
“We pay back debt quickly, andour gearing is sitting at 4%.
“This means we can beacquisitive when opportunitiespresent themselves. We are not atsaturation point yet — if we see acompelling case, we’ll buy.”
While the ability to pay downdebt is attractive to shareholders,the company has no particulardividend policy. When there ismore cash on hand, it simply paysout a smaller percentage tomaintain reserves for acquisitiveag i l i ty .
Famous Brands’s strategy hasalways been to buy brands thatalready lead their segments, or toback potential challengers whocould benefit with a little helpfrom a finely honed organisation.
For example, it is in chicken forthe long haul with Giramundo,even though Hedderwick praisedKFC and Nando’s for the imposingbarriers to entry in this sector.
From essentially a fast-foodtakeaway specialist, FamousBrands is keen on getting itscustomers to sit down byexpanding its presence in family-style restaurants.
First up, pubs. “KEG has beenour flagship, and we’veoverhauled it and made it morec o n t e mp o r a r y , ” said Hedderwick.
“We can show franchisees whatgood looks like and entice them.Pubs that can’t become KEGs willbecome Brewers Guild, which is ahybrid of the old brands. We arein the process of converting four
or five pubs to Brewers Guild —there is no point in having fourdifferent pub brands.”
He said no matter what a SouthAfrican wanted to eat, FamousBrands had to offer options inevery category.
“If it has a food and beveragespin, then we’re interested. Wewant to get into the completefood-service landscape.”
That doesn’t just go for SouthAfricans. “We have been in Africaacross our borders for 15 years orso, and we have planted manyseeds in the last decade . . .” hesaid.
“We are about to embark on anaggressive strategy from 2013; togo deep into our existing presenceon the continent, but notnecessarily into new territories.
“We ought to understand themarkets by now, although the
route to market in Africa and theretail-space aspect presentchallenges. If we can buymanufacturing facilities at criticalmass we’ll look at them too.”
Hedderwick said food servicewas closely linked to the economy,and Famous Brands was poised tobenefit as soon as GDP grew.
“We have to constantly work toremain contemporary and offer astrong value proposition forcustomers — when disposableincome comes under pressure it isthe value proposition thatbecomes compelling.
“It has also been shown thatwhen GDP begins to increase in acountry, because people becomecash-rich and time-poor, morepeople buy food out of home.Food-service profits tend to rise attwice the rate of GDP growth. Ithink we’re in a good space.”
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�XPOSURE to the rightminerals at the right timehas secured strong returnsfor investors that have put
their money behind base-mineralsminer and marketer Assore.
At number 6, Assore is the onlyresources company to make itinto the top 10 of the 2012 Top 100Companies list.
A R10 000 buy-in into Assore atR73.60 a share five years agowould have grown to R50 523 byend-September, at a share price ofR329.70. Assore’s shares were firstlisted on the JSE in 1950, and haveenjoyed almost 100-fold growthover the past 15 years.
The company’s principalinvestment is a 50% interest inAssmang, which it jointly controlswith African Rainbow Minerals.
Assore chairman DesmondSacco said the company had justreleased all-time-record results,with earnings of R3.7-billion,mainly bolstered by higher iron-
ore prices.“We expanded our iron-ore
business at just the right time. Sixyears ago, when we started ourexpansion at Khumani, iron-oreprices were hovering at $50/ton andsince then we have seen prices ashigh as $185/ton for a shortperiod,” said Assore CEO ChrisCo r y .
In 1929, Sacco’s father Guidostarted exploration for manganesein the Kalahari. The companysubsequently diversified into iron-ore and chrome mining, ferro-
alloys production, and selling andmarketing commodities.
As s m a n g ’s plans for the comingfive years include a manganeseexpansion that will increaseproduction to five million tons ayear. “We believe the rightdirection for us to continue on ourcurrent upwards trajectory willbe to produce and sell moremanganese in the future. Wealready have the plant capacityand infrastructure in place butrequire additional shafts andrelated infrastructure,” said Cory.
The company was consideringits position in ferroalloys as ever-increasing electricity tariffs aremaking it difficult to survive inthis business, he added.
Electricity prices have morethan doubled in five years andstate-owned power utility Eskomis now seeking a further 16%increase in tariffs.
Assmang had to temporarilyhalt ferrochrome production andconverted most of its Machada-dorp ferrochrome furnaces intoferromanganese furnaces.
Cory said increasing powerprices would work againstg ove r n m e n t ’s call fo rb e n e f i c i at i o n .
“The main ingredient that goesinto beneficiating our ores ispower, and the increasesadministered by Eskom aremaking our alloys businessu nv i ab l e . ”
Sacco said Assore had beenaffected by strikes at other mines.“The big concern is customerperception of reliability of supplyfrom South Africa.”
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FAMOUS BRANDS2007: R10 000 | 2012: R51 407
TOP 100 COMPANIES
Number
5
20122011201020092008
1 000
3 000
5 000
7 000
Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
ASSORE2007: R10 000 | 2012: R50 523
TOP 100 COMPANIES
Number
6
20122011201020092008
5 000
15 000
25 000
35 000
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Sunday Times Combined Metros 13 - 12/11/2012 10:42:30 AM - Plate:
�ECHNOLOGY company EOH’sforay into the public sector haspaid off handsomely with thecompany being listed seventh in
the Top 100 Companies survey.Compound growth over the last five
years is sitting at 36.68% and a large partof that is attributed to the company’saggressive expansion into the publicsector, which now accounts for about aquarter of r eve n u e .
If you had invested R10 000 in EOH 10years ago, that investment would beworth a little more than half a millionrands today. This is a reflection of thebuoyant share price that has been on anupward trend for the last five years.
Five years ago, the share price wasabout R9.40 and today it is about R39 andshowing no signs of slowing down,particularly after the positive results fromthe 2012 financial year.
EOH, with the second-largest marketcapitalisation in the technology sectorafter rival Datatec, has leapfrogged overits competitors since it listed in 1998.According to CEO Asher Bohbot it hasgrown “44% per annum compounded sinceinception” and grew revenue by 50% lastye a r .
It surpassed the R1-billion revenuemark in its 2009 financial year. In its 2012financial year, EOH earned income ofabout R3.6-billion and was left with a netprofit of R223-million, after taking intoaccount all costs and expenses.
While government has proven that itcan be great business, it has alsorendered many companies bankrupt dueto non-payment.
However, Bohbot said EOH has faredwell thus far. “We are aware of thechallenges [in the public sector] and caterto them up front. We have propercontractual obligations that are adheredto by both sides and the most importantthing is that we ensure that we deliver.You have to be a lot sharper when you’redealing with government,” said Bohbot.
According to Bohbot, the key to theconsistent performance shown by EOH isthe level of execution, which comes fromthe calibre of talent running theorganisation. “In today’s world we don’tcompete on the right strategy, especiallybeing a public company. The strategy isout there for everyone to see, but the realcompetition happens at an executionlevel. And to execute, you need to attractand retain the right people,” he said.
He admitted that highly specialised ITskills weren’t always available inabundance and this is why EOH hadmade human development a priority.
“This year, in terms of employment, wereached the 5 000 people mark and wealso have 620 interns,” said Bohbot.
One of the things the leader is mostproud of is the level of transformation thecompany has achieved. This was helpedby a black economic empowerment (BEE)deal brokered with Mthombo IT in 2005,which raised the BEE profile of thecompany and resulted in a 25% broad-based black shareholding.
“We are reasonably transformed anddoing well on our BEE scorecard,” hesaid. “Thirty-eight percent of thecompany is under black ownership and57% of our employees are black. We dobelieve that sustainable transformation iskey for South Africa and it will allowbusiness to grow.”
With a cash pile of R452-million, Bohbotsaid, acquisitions were part of the growthplan. “Not to force growth but keep themomentum of the business going andlook at organic growth and acquisitions.”
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Graphic: FIONA KRISCH Source: I-NET BRIDGE
EOH HOLDINGS2007: R10 000 | 2012: R47 696
TOP 100 COMPANIES
Number
7
20122011201020092008
500
1 200
1 900
2 600
3 300
4 000
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Sunday Times Combined Metros 14 - 12/11/2012 10:42:46 AM - Plate:
�HEN Ian Moir becameCEO of Woolworthstwo years ago, he saidhe would fine-tune
strategies that were working well,lose those that were not andimprove decision making.
“We weren’t really deliveringand had become a littleove r c o n f i d e n t , ” said Moir.
Following his intervention,which included direct sourcing,focusing on the core customer,and lowering lead times inclothing, the share price has risensu b st a n t i a l ly .
This has placed Woolworthseighth in the Top 100 Companies,reflecting growth in its shareprice from R17.90 to R60.79.
A R10 000 investment inWoolworths five years ago wouldhave been worth R46 465 at theend of September.
The business has been madesimpler and more profitable. It isusing direct sourcing rather thanthird parties.
The up-market retailer hasbenefited from an absolute focuson LSM 8 to 10 customers in fo o dand clothing. Margins have
improved and increased theprofitability of the business.
And the market approves. Aninvestment in Woolworths hasshown compound annual growthof 35.96% a share over five years.In the last year alone its shareprice has shot up 73%.
“We ’re more commercial,decisive, simpler. We’ve taken alot of complexity out of the
business and made decisionmaking easier,” said Moir.
The opportunity in food is stillabout getting more people to shopwith focus on price, and theexpansion of its product offerings.
One of Moir’s favourite imagesis getting consumers to shop withtrolleys rather than baskets.“We ’re behaving more like asu p e r m a r ke t . ”
The food division has had salesgrowth ahead of the market andgained market share over the pasttwo years, and there’s room formore growth. Woolworths has a25% share of the local fresh fruitand vegetables market, but it hasonly a 2% share of other goodsfrom cereals to coffee to cleaningm at e r i a l s .
Its food business is forecast todeliver strong same-store growththis year as higher LSMconsumers increase theirspending with a benign interestrate environment and rising foodi n f l at i o n .
The clothing division has beengaining market share with the re-
launch of its brands RE andStudio gaining favour with ayounger customer.
The retailer continues to takeout franchise operators andconvert them into corporatestores. It has bought back about80% of its franchisees at a cost ofR700-million, giving Woolworthsgreater control of its brand.
Analysts see further potentialin operating efficiency, which isstill low compared with its peers.
Woolworths reported 2012financial results marginally aheadof expectations. Headline earningsa share were 260.6c, a growth of24.4%. Group sales rose 11.8%.Sales growth in South Africanclothing was up 12.6% and in foodup 11.9%. Australian operationstook strain and sales contracted2.6%.
The retailer has made a biginvestment in Australia. CountryRoad, its 88%-owned subsidiary,bought 40-year-old fashion retailerWitchery Group for aboutR1.5-billion.
“The first signs are incrediblypositive. The Australian businessis nearly two-thirds the size ofour South African clothingbusiness,” said Moir.
But Australian tradingconditions have been tough forthe past two years and is expectedto remain so for another 18 to 24months. The group has investedheavily in online retailing and istaking the strategy forward overthe next three to five years.
Africa contributes a relativelysmall percentage to Woolworthsat about 3% of turnover, but Moirbelieves that it might account for7% of group sales in five to sevenyears, and 10% of group profitover the next 10 years.
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Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
WOOLWORTHS2007: R10 000 | 2012: R46 465
TOP 100 COMPANIES
Number
8
20122011201020092008
500
1 600
2 700
3 800
4 900
6 000
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14 | BusinessTimes November 18 2012���� ���� ������
Growing trees makes dreams come true
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Sunday Times Combined Metros 15 - 12/11/2012 10:43:05 AM - Plate:
BusinessTimes | 15November 18 2012 ���� ���� ����� �
�INNACLE TechnologyHoldings retained its ninthspot in the Top 100Companies rankings. Its
compound annual returns toshareholders rose just over onepercentage point from theprevious year to 35.72%, perhapssignalling the effect its most recentacquisitions have had on profits.
CEO and founder Arnold Fourieagreed, attributing the group’simproving performance to goodacquisitions.
In the year to September, theIT c o mp a ny ’s various subsidiariesbought out the remaining sharesin partly-held subsidiary Explixfor R3.5-million; a majority stakein infrastructure company MerquCommunications for R3-million;and the entire business ofinternet security distributore-Secure for R5.1-million.
“These are small acquisitionsand are not currently making thatmuch money, but they’re strategicacquisitions,” said Fourie.“Th ey ’re providing the group withaccess to market spaces that weh ave n ’t been in before.”
The purchases follow last year’sR16.8-million deal to buy out theremaining shares in its 60%-heldcabling and related ICTinfrastructure distributor DataNetInfrastructure Group, as well asthe R11.3-million deal for 39.2%more of its ICT-sector financierCentrafin; and the 2010acquisition of the Axiz
Technology Group at R151.2-million. Centrafin was generatinga lot of revenue for the group.
Daniel Isaacs, an equity analyst
at 36One Asset Management,which owned 6.9% of Pinnacle atthe end of June, said the mostnotable buy was Axiz.
“This was an excellentacquisition as Axiz had very littleclient and product overlap withthe existing business,” saidIsaacs. “The Axiz business hasbeen seamlessly integrated, whichis testament to management’soperational excellence.”
In its results to June 2011, thecompany said revenue grew by57% to R5-billion, and more thanhalf of that came from Axiz andCentrafin. The following year’s setof results showed the integrationof the Explix and DataNetpurchases helped cut operatingexpenses. Indeed, efficiency is oneof Pinnacle’s competitiveadvantages, said Fourie.
This helped it a c c u m u l at eheadline earnings of R280-millionin 2012, a major boost from R104-million just four years ago.
The secret was “continuous
profit growth, and keeping thec o mp a ny ’s balance sheet robust.We remain efficient,” said Fourie.
Said Isaacs: “Pinnacle will nowlook to grow more through non-distribution channels which isevidenced by its ‘Projects andServices’ segment and its recentacquisition in this space, MerquCommunications. Merqu focuseson data-centre design andinstallation which are an integralpart of the cloud computingi n f r a st r u c tu r e . ”
Fourie said Pinnacle was now ina position to provide all thehardware and software needed tobuild the data centres that cloudcomputing depends on.
�N the past five years Aspen’stotal return to shareholdershas been 34% — c o mp o u n d e d— a year. In the period, the
pharmaceutical company hasexpanded from being an almostentirely local operation to one thatoperates in more than 150countries.
Aspen ranks number 10 in thisye a r ’s Top 100 Companies.
Investec asset managementanalyst Neil Stuart-Findlay saidmuch of the company’s successcould be attributed to theoutstanding leadership andinsight of CEO Stephen Saad andhis deputy Gus Attridge.
From the late 1990s, whenAspen was founded, until 2007, thecompany fo c u s ed on generic drugmanufacture and distribution inSouth Africa. Because of the shiftin demand towards cheaper off-patent generic products, themodel proved to be a superbearnings provider.
But it wasn’t enough for topmanagement, which began an
acquisitive drive that has madeAspen one of the biggestpharmaceutical companies inemerging market economies. Inaddition to being beneficial froman earnings and share-priceperspective, the global expansionhelped the company diversifyregulatory and currency risk.
As the rest of the world began tobuckle under the global economiccrisis in the third quarter of 2008,
Asp e n ’s earnings moved upwards.Having just concluded its first dealwith global drugs manufacturerGlaxoSmithKline (GSK), Aspen hadnot only acquired new products, italso had a pipeline into newterritories through which it couldintroduce its own products.
Importantly, it had alsoacquired GSK’s knowledge of theregulatory lay of these new lands.GSK’s primary objective is toresearch and develop newproducts and bring them tomarket under patent, whileAsp e n ’s is to manufacture genericalternatives, which it markets anddistributes. The strategiccollaboration between the twocompanies involves Aspenacquiring the rights to GSK-developed products nearing theend of their patent, which Aspenthen markets. Where appropriate,it creates a generic product.
Despite Aspen issuing a 16%equity stake to GSK in 2009 —GSK now owns a 18.6% stake —most of the deals it has done have
been debt funded. With thecompany being such a strongcash-flow generator, these debtsare quickly paid up, leavingAspen sufficiently capitalised toseek out new deals.
Attridge said part of Aspen’sstrategy was to reach moremarkets instead of getting biggerin existing markets. He said itmade more sense from a riskperspective to do five small dealsin five different countries thanone big deal in one country. Thisstrategy also gave the companythe opportunity to groworganically and not justa c q u i s i t ive ly .
However, as the company
grows, so the deals need to growto have any real effect on thebottom line.
And they have. In January 2011,Aspen concluded its acquisition oflisted Australian drug makerSigma, which was strugglingfinancially. Sigma was turnedaround operationally and Aspen isnow the biggest genericpharmaceutical manufacturer inAu st r a l i a .
Stuart-Findlay said the effect ofcost cutting and improvedefficiencies is likely to furthereffect Sigma’s bottom line in thenext 18 months to two years,which will result in an earningsuplift for Aspen over the period.
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Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
PINNACLE TECHNOLOGY2007: R10 000 | 2012: R46 048
TOP 100 COMPANIES
Number
9
20122011201020092008
0
500
1 000
1 500
2 000
Share price, weekly (cents)
Graphic: FIONA KRISCH Source: I-NET BRIDGE
ASPEN PHARMACARE2007: R10 000 | 2012: R43 259
TOP 100 COMPANIES
Number
10
20122011201020092008
1 000
3 800
6 600
9 400
12 200
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Sunday Times Combined Metros 16 - 12/11/2012 10:43:19 AM - Plate:
1
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100
Capitec Bank Holdings
PSG Group
Brimstone Investment -N
EOH Holdings
Mr Price
Shoprite
Kumba Iron Ore
Cashbuild
Invicta
Naspers -N
Assore*
Premium Properties
Value Group
Truworths
Aspen Pharmacare
MTN Group
Woolworths
The Foschini Group
Wilson Bayly Holmes - Ovcon
Distribution & Warehousing Network
Octodec Investments
Grindrod
Capital Property Fund
Massmart
Santam
Clientéle Life Assurance
Phumelela Gaming & Leisure
Astral Foods
Hyprop Investments
African Bank Investments
Clicks Group
Kagiso Media
Digicore Holdings
Spur Corporation
Growthpoint Properties
Distell Group
Anglovaal Industries
Hudaco Industries
Acucap Properties
ELB Group
City Lodge Hotels
Trencor
Omnia
Tsogo Sun
Remgro
Redefine Properties
Datatec
RMB Holdings
Italtile
MMI Holdings
Metair Investments
Tiger Brands
Mediclinic
Rainbow Chicken
Netcare
Sasfin
Fountainhead Prop Trust
Adcorp
FirstRand
Sanlam
Discovery
PPC
Brait
Imperial*
Sycom Property Fund
Absa
Peregrine
Compagnie Fin Richemont
BHP Billiton plc
Group Five*
Bidvest Group
Datacentrix Holdings
SABMiller Pplc
Reunert
Pick n Pay Holdings
Foord Compass
Oceana Group
Illovo Sugar
SA Corporate Real Estate Fund*
Standard Bank Group
Tongaat-Hulett
Bowler Metcalf
AECI
Steinhoff International
African Rainbow Minerals*
Aveng
Caxton & CTP
Amalgamated Appliance
Sasol
JD Group
Altron
Sun International
Liberty Holdings
Argent Industrial
Iliad Africa
Barloworld
ArcelorMittal SA
Nampak
Altech
Investec Limited
160
495
50
104
505
650
3 710
670
450
1 880
1 420
158
30
575
665
848
456
955
850
36
246
122
156
1 520
3 180
130
99
1 310
1 060
535
625
290
20
310
456
1 180
1 410
1 600
960
330
1 365
670
1 650
280
6 610
244
660
975
109
540
448
7 201
774
252
295
595
226
607
668
740
805
785
930
4 900
815
2 995
220
1 545
4 926
510
4 322
123
6 969
1 880
530
440
1 540
800
169
2 870
5 000
220
2 220
694
3 705
870
505
85
11 705
1 600
775
2 658
4 832
215
205
5 880
2 030
1 395
2 151
2 412
22 400
6 750
1 000
3 900
12 599
16 834
50 292
15 500
8 170
51 497
32 970
1 770
570
9 400
14 300
16 021
6 079
12 651
13 775
650
1 900
1 420
1 059
16 691
18 979
1 100
885
10 400
7 160
3 305
5 788
1 925
192
2 200
2 487
9 313
5 976
11 180
4 660
2 550
9 195
5 345
12 500
2 000
14 525
935
5 265
3 700
639
2 119
2 790
27 312
4 100
1 345
1 790
3 090
809
2 800
2 789
3 757
5 550
2 900
2 940
18 751
2 700
13 850
1 120
5 006
25 785
2 540
20 600
489
36 176
6 895
2 041
815
5 400
3 050
360
10 563
13 975
800
8 184
2 608
16 298
3 129
1 730
295
37 229
4 650
2 295
8 500
9 925
630
520
7 190
4 100
2 860
4 350
5 110
1 900 427
672 132
550 038
504 855
389 896
353 807
337 266
319 734
303 066
297 265
279 841
272 589
268 217
245 949
244 524
231 113
229 783
213 068
205 763
205 266
192 975
180 422
164 274
162 570
157 177
156 100
148 444
146 444
142 473
139 024
131 128
130 621
130 452
126 638
122 399
120 341
119 487
116 713
115 402
113 281
106 779
103 571
101 124
100 137
99 786
97 503
97 330
93 828
92 698
92 093
90 695
88 179
86 324
85 522
85 049
83 995
83 539
82 839
80 227
79 081
77 520
76 717
75 186
74 757
73 078
71 372
70 949
70 694
68 436
68 392
68 294
68 218
66 701
61 875
61 016
60 251
59 408
56 725
54 756
54 592
53 665
50 838
50 607
50 449
49 290
48 278
47 685
46 692
45 487
43 335
43 256
41 086
38 012
37 184
36 111
35 496
34 278
33 658
33 580
33 320
69.00%
52.32%
49.29%
48.02%
44.24%
42.85%
42.17%
41.41%
40.65%
40.38%
39.54%
39.17%
38.95%
37.75%
37.67%
36.89%
36.81%
35.79%
35.31%
35.28%
34.45%
33.55%
32.30%
32.16%
31.72%
31.63%
30.97%
30.79%
30.43%
30.11%
29.35%
29.30%
29.28%
28.90%
28.46%
28.25%
28.15%
27.85%
27.71%
27.47%
26.72%
26.34%
26.03%
25.91%
25.87%
25.57%
25.55%
25.09%
24.94%
24.86%
24.67%
24.32%
24.05%
23.94%
23.87%
23.72%
23.65%
23.54%
23.15%
22.97%
22.73%
22.60%
22.35%
22.28%
22.01%
21.72%
21.65%
21.60%
21.21%
21.20%
21.18%
21.17%
20.90%
19.99%
19.82%
19.67%
19.50%
18.95%
18.53%
18.50%
18.30%
17.66%
17.60%
17.57%
17.29%
17.05%
16.91%
16.66%
16.36%
15.79%
15.77%
15.18%
14.29%
14.03%
13.70%
13.51%
13.11%
12.90%
12.88%
12.79%
Share nameOpen (cents)
Close (cents)
Final value (R)
Compoundgrowth10 yrs
Share nameOpen (cents)
Close (cents)
Final value (R)
Compoundgrowth10 yrs
TOP 100 COMPANIES OVER 10 YEARS
Graphic: FIONA KRISCH Source: I-NET BRIDGE * denotes where a dividend due at period end has been accrued.
Ec o n o m i c
pendulum
influences list�������� ����
�HE list of top performers over 10 years reveals justhow difficult it is for companies to maintain highreturns for shareholders. Not only that, but asurprising number of seemingly impregnable
companies fall by the wayside.To maintain a compound annual growth rate in share
price of over 40% for 20 years is unthinkable in the face ofchanging market conditions, leadership overhauls and stiffcompetition. Athough the companies in the top 10 of thelong-term list almost certainly have capable leadersguiding them, the same can be said of many of the bottom10.
Shaun le Roux, portfolio manager at PSG AssetManagement, said the list illustrates the importance ofbeing in the right industry with the right managementteam.
“Owning a well-managed company in a fast-growingindustry can be extremely rewarding for an investor —there is not one company on the list of top 10 p e r fo r m e r sthat has not had an above-average management team. Atthe same time, all the dogs have one [or both] of twoingredients: being in a challenged industry or having amanagement team that allocated capital poorly.”
Le Roux said the standout sectors on the JSE over thepast decade have enjoyed the benefits of growinghousehold incomes and aggressive expansion into informaland under-served markets.
“Capitec has led the way in micro-lending and banking,Shoprite in food, Mr Price in clothing and Cashbuild inbuilding materials.”
However, he said, not all companies exposed to theconsumer have done well — especially those thatmanufacture or distribute consumer products and havehad to compete directly with cheap Chinese and Asiani mp o r t s .
“A relatively strong rand has seen companies likeCeramic [tiles] and Nu-World [appliances] battling tomaintain profitability.
“It is interesting to note that mining shares can be foundamong the best and worst performers. Kumba has benefitedfrom the very sharp appreciation in the iron-ore price, whilemost miners have failed to capture the benefits of risingcommodity prices thanks to rampant cost pressures.
“One characteristic that the top four performers have incommon is that they were quite small companies 10 ye a r sago — all of their market capitalisations were significantlybelow R1-billion.
‘‘It is much easier for a small company to quickly growits profits or asset value than it is for a very largebusiness. Smaller companies are typically more nimbleand have many more opportunities to maketransformational investments to grow their business.”
Adrian Saville, chief investment officer at Cannon AssetManagers, said while only one producer found its way intothe top 10 — Kumba — the bottom 10 was largelypopulated with producers and miners.
“Perhaps producers will come off a low base now, butthere’s a possibility that there could be a protracted periodof pain ahead. It isn’t a good economic direction.
“Service companies can ‘m a ke ’ things, for example ininformation technology, but if you’re a retailer . . . yourvalue-add hinges on consumer spend. This is not
sustainable if nothing is being made. There has to be aproduction underpin to the economy.”
He said recovery in production was an economici mp e r at ive .
“This table shows that South Africa has not had a strongproduction underpin, and we see that in the manufacturingdata over the past few years. I think that’s unlikely to
repeat for another 10 years.”Looking at Top 100 lists from decades gone by, Saville
said, it wasn’t often that a company managed to stay insuccessive lists.
“Invariably there is an almost zero chance of onecompany repeating that kind of performance over the longrun. After five years, most fall out of the top 10.”
Juniors in mining plunge to end of list ���� ������
INVESTORS in junior mining compa-nies have had a tough time of late,with share prices falling by up to95% in the 12 months to end-Septem-ber.
Seven of the 10 worst performerson the JSE were small mining com-panies, mostly with projects in explo-ration or development stage, that raninto operational or funding troublesover the period.
Great Basin Gold, which suspend-ed operations at its Burnstone minein September after its cash dried up,was the overall worst performer,with its share price dropping fromR13.50 to 70c. The company, whichalso owns a mine in Nevada in theUS, entered business rescue inSeptember.
Weak platinum prices, safety stop-pages, labour unrest and rising costscaused troubles in the industry,making it difficult to raise capitaland turn around loss-making opera-tions. Aquarius Platinum, EasternPlatinum and Atlatsa Resources allfeature on the list of the 10 worstp e r fo r m e r s , with Aquarius share-holders losing 77%, Eastplats 74%and Atlatsa 68%.
Shareholders in Wits Gold, an ex-ploration and development companythat pulled out of a bid to buy Har-mony Gold’s Evander mine, lostnearly 60%, while First Uranium,which sold off assets to AngloGoldAshanti and Gold One, declined 72%.
Shareholders in Coal of Africa,who faced losses of 67% over theyear, have more reason to smile af-ter the company found a Chinese in-vestor early in October. The compa-ny was under pressure to find capitalto develop mines at Makhado andVe l e in Limpopo.
However, one junior miner made itto the top performers’ list over theyear. Shareholders in Central RandGold, an exploration and miningcompany with operations in thesouth of Johannesburg, saw returnsof 150% over the year. Its share priceof 10c at the end of September is stillhowever, a long way from the R10.69the company listed at in 2007.
The worst performers’ list in-cludes struggling airline 1Time Hold-ings, which has announced the liqui-dation of its main operating sub-sidiary; investment holding companySherbourne Capital; and industrialgroup Dorbyl, which warned in Octo-ber that it was in distress and “rea-
sonably unlikely” to pay all itsdebts. Trade in Dorbyl shares wassuspended this month.
The top performing company overthe period with returns of 292% wasCalgro M3 Holdings, a housing de-veloper. Its share price jumped fromR1.20 to R4.70 at the end of Septem-ber. Electrical products and televi-sion aerial company Ellies was insecond place with returns of 278%.
Three technology firms made it tothe top 10: Adapt IT Holdings, whichoffers consulting and software de-velopment services, was third withreturns of 156%. Fourth wa sFoneworx Holdings, which offershosting, disaster recovery and busi-ness continuity services and thetechnology platforms used for vot-ing by SMS in programmes likeIdols, returning 150%.
Pinnacle Technology, which dis-tributes hard- and software, was10th with returns of 93%.
The rest of the top 10 consists ofprivate school group Curro Hold-ings, Taste Holdings, which ownsScooters Pizza, St Elmo’s, Maxi’sand NWJ Jewellery; engineeringgroup Howden Africa; and SAFrench, which distributes towercranes and hoists.
16 | BusinessTimes November 18 2012���� ���� ����� �
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Calgro M3
Ellies
Adapt IT
Foneworx
Central Rand Gold
Curro
Taste Holdings
Howden Africa
SA French
Pinnacle Technology
Conduit Capital
Mr Price
Anglovaal Industries
Interwaste
Investec Property Fund
Imperial*
Invicta
Super Group
Metair Investments
RMI Holdings
Woolworths
Spur Corporation
Rolfes
Old Mutual plc
Famous Brands
120
185
65
95
4
655
115
1 421
5
949
64
6 729
3 233
37
1 030
10 525
4 590
840
1 590
1 251
3 500
1 300
216
1 491
4 249
470
690
155
225
10
1 629
270
2 900
10
1 795
108
12 599
5 976
70
1 780
18 751
8 170
1 535
2 790
2 153
6 079
2 200
370
2 284
7 250
39 167
37 767
25 625
25 013
25 000
24 870
23 781
21 728
20 000
19 329
19 286
19 268
19 189
18 919
18 588
18 486
18 474
18 274
18 020
17 962
17 913
17 788
17 712
17 679
17 677
291.67%
277.67%
156.25%
150.13%
150.00%
148.70%
137.81%
117.28%
100.00%
93.29%
92.86%
92.68%
91.89%
89.19%
85.88%
84.86%
84.74%
82.74%
80.20%
79.62%
79.13%
77.88%
77.12%
76.79%
76.77%
Share name Open (cents)
Close (cents)
Final value (R)
Compoundgrowth 1
year
TOP 25 COMPANIES OVER ONE YEAR
Graphic: FIONA KRISCH Source: I-NET BRIDGE
* denotes where a dividend has been accrued.
Sunday Times 18/11/2012 01 01bt1811BusinessTimes 1 AL 16/11/2012 10:08:09 PM
Business, 18-Nov-2012-Page 1, Cyan Business, 18-Nov-2012- Page 1, MagentaBusiness, 18-Nov-2012-Page 1, Yellow Business, 18-Nov-2012- Page 1, Black
Business
B-1 JDCP
����� �����
�UMAN Settlements MinisterTokyo Sexwale and hispartners in MvelaphandaHoldings are set for a festive
bonus of what could be R265-million onthe sale of its stake in Absa.
The holding in Absa empowermentvehicle Batho Bonke is the juiciest inS ex wa l e ’s long list of empowermentdeals.
Mvelaphanda Group, one of theinvestment vehicles that madeSexwale and his business partners,including Mark Willcox and MikkiXayiya, fabulously wealthy, startedselling assets in September 2009 whenSexwale decided to re-enter politics.
The company, newly renamed Ne wBond Capital, grew significantly afterits listing via the reverse takeover ofRebserve in 2004. Its portfolio over theyears included stakes in Gold Fields,Trans Hex, JIC Mining Services,Afrox Healthcare and Swissport.
Over the past year, it sold shares inVox Telecom and Life Healthcare andunbundled and listed Mvelaserve,which provides outsourced businesssupport services.
Mvela Resources was sold in June
Batho Bonke empowermentconsortium, was valued fairly at R1.3-billion, putting Mvela Holdings’ st a kein Batho Bonke at R265-million. TheAbsa payout of R2.2-billion for theconsortium is due on November 28.
Mvela Holdings will also benefitfrom a lucrative financing deal withfellow Batho Bonke beneficiaries.Mvela Holdings is set to get at leastR90-million from consortium partnersas repayment of a small loan,calculated at R7.3-million based onAb s a ’s regulatory filings in 2004.
Mvela Holdings toldMail & Guardian it would get R90-million in repayment of the loan, astatement it later withdrew. Queriesto Mvela on Friday were referred toWillcox, who was abroad and had notresponded at the time of going topress.
“The minister doesn’t comment onthe operations of companies he is notrunning,” said Xolani Xundu,S ex wa l e ’s spokesman. Sexwale put hisbusiness interests in “blind trusts”when he was appointed a minister in2009. His net worth based on disclosedinterests in listed companies was putat R1.9-billion at the end of March2010 by Who Owns Whom.
At the time of the Absaempowerment deal, loan funding wasextended to Batho Bonkeshareholders to buy shares in thebank. In terms of the fundingprovided by Mvela, the loans wouldbe repayable on value realisation ofBatho Bonke shares at the higher ofthe principal loan amount plusinterest, at prime plus 5%, or anamount equal to 25% of the valueactually realised by the borrowers.
This 25% may be cut to 12.5%,according to Mvela Group’s annualreport. The R90-million mentioned isbased on 12.5%.
Despite having no operating assetssince the unbundling of Mvelaserve in2010, directors were rewarded richly.Mvela paid more than R1.5-million toBlackstar for the services of AndrewBonamour, appointed CEO onJanuary 19, and R1.1-million foracting financial director WilliamMarshall-Smith.
Directors’ remuneration totalledR5.3-million for the year to June,compared with R26-million a yearearlier. Former CEO Yolanda Cuba,who stepped down at the end ofDecember 2010, was paid R10-millionfor six months of the financial year.
New Bond Capital had notresponded to questions at the time ofgoing to press.
Happy Xmas, Tokyo & Co������� ��� �������� �� ������� �������� ���� �� ���� �����
‘The minister
doesn’t comment on
. . . companies he is
not running’
last year to Northam Platinum. InSeptember, it led a buyout of mediagroup Avusa, which owns the SundayTimes. Avusa was unbundled andrelisted as Times Media Group, andMvela transferred its shares in thegroup to its shareholders. Last month,Mvela Group reached an agreementto sell its sole remaining asset,12.3 million shares in constructioncompany Group Five, for R30-million.Group Five shareholders will vote onthis on November 27.
The company is set to become littlemore than a cash shell when the Absadeal is finalised, but Mvelashareholders can first look forward toa lucrative Batho Bonke payout. It hadcash of nearly R514-million at the endof June versus R88-million a yearearlier. Debt totalled R317-million.
S ex wa l e ’s Mvela Holdings, whoseshareholders are reportedly mainlytrusts with the Sexwale, Wilcox andXayiya families as beneficiaries, willbenefit from the Batho Bonke sale viaits 19.9% stake in Mvela Group, whichowns an effective stake of 47.3% in theBatho Bonke consortium. Malta-basedinvestment group Blackstar is themajor shareholder in New BondCapital after buying 28% in January.
Mvela Group said in its annualreport for the year to June that itsAbsa stake, held as part of the bank’s
������� ���
THE Telkom board has appoint-ed its third chairman in as manyyears and the brave man step-ping into the position with imme-diate effect is Jabu Mabuza.
Mabuza, who is also deputychairman of hotel and leisuregroup Tsogo Sun and presidentof Business Unity SA, was ap-pointed earlier in the week as anon-executive director at Telkom.
“I am happy and grateful toserve, and I am looking forwardto being part of the board thatwill help manage Telkom’sf u tu r e , ” he said.
He said he would retain hisdeputy chairmanship in TsogoSun and that the board was clearabout the government’s policies.
Telkom has been mired incontroversy and uncertainty inrecent weeks after four non-exec-
utive directors were voted out bythe government, which is the ma-jor shareholder, at Telkom’s an-nual general meeting last month.
Chairman Lazarus Zim re-signed in September, board mem-bers Jacky Huntley and JuliaHope said last month they willretire as directors and, at the be-ginning of this month, directorPhakama Dongwana resignedwith immediate effect. Shortly af-ter that CEO Pinky Moholi saidshe will step down at the end ofMarch, two years after she tookup the position as Telkom’s fifthCEO since listing in 2003.
Minister of CommunicationsDina Pule has handed in aproposal to the cabinet for a de-cision on a turnaround strategy
for the fixed-line operator.“In the next week or two the
strategy will be clear,” saidM ab u z a .
Te l ko m ’s shares have been ona downward spiral in the last fewmonths and this week reached anew low of R15.80.
Elias Masilelela, CEO of thePublic Investment Corporation(PIC), which owns 10.9% ofTe l ko m , said Te l ko m ’s woes werea “destruction of shareholderva l u e ”.
Masilela said that “talkingdown an asset in public” coulddo more damage to Telkom andthe PIC was going to step in.
“We will drag people scream-ing and shouting behind closeddoors and explain to them whatinvestment is about and how theyshould manage the asset we haveinvested in,” he said.
Telkom will release its results
for the six months to Septembertomorrow. It said in a trading up-date this week it expects head-line earnings a share to be be-tween 78% and 83% lower thanthe comparative period. Basicearnings a share are expected tobe between 62% and 67% lower.
David Couldridge, an analystfrom Element Investment Man-agers, said strategy and indepen-dence would be important for thenew chairman.
“W h at ’s important is gettingthe company back on track andthat takes leadership,” saidCo u l d r i d g e .
Leslie Maasdorp and KholekaMzondeki were also appointed tothe Telkom board this week. —With Sapa
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ý The Top 100 supplement isin this week’s Sunday Times
ý Additional Top 100 tablescan be found on pages 7, 8, 11,13 and 14
Telkom appoints Mabuza as new chair
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Sunday Times 18/11/2012 01 01bt1811BusinessTimes 7 AL 16/11/2012 09:03:36 PM
Business, 18-Nov-2012-Page 7, Cyan Business, 18-Nov-2012- Page 7, MagentaBusiness, 18-Nov-2012-Page 7, Yellow Business, 18-Nov-2012- Page 7, Black
Business
����Sunday Times ������� � � ����� �������������� | �B-1 JDCP
Baltic
Sea
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Sea
RUSSIA
RUSSIA
LITHUANIADENMARK
LATVIA
SWEDENFINLAND
NORWAY
ESTONIA
Goteborg
Trondheim
Tromso Murmansk
Nalunaq
KirunaSvappavaara
Kittilä
Kevitsa
Bjornevatn
Kjellmannsasen
Pahtavaara
AitikMalmberget
Gruvberget
Kvannevann
Kemi
LaivaBjorkdalKankberg
BolidenSvartliden
Orivesi
Jokisivu
DannemoraGarpenberg
Zinkgruvan
Tellness
Talviva
Pampalo
KylylahtiPyhäsalmi
Hitura
Helsinki
Oslo
Nuuk
Reykjavik
Stockholm
Copenhagen
Minsk
Mosjøen Aluminium Smelter
Pori Copper Smelter
Kokkola Zinc Smelter
Tornio Ferrochrome Smelter
Rönnskär Copper/
Gold Smelter
Fjaröaál Aluminium Smelter
Grundartangi
and Straumsvik
Aluminium Smelters
Harjavalta Copper/Nickel Smelters
Moi Rana Ferroalloy Smelter
Sunndal Aluminium Smelter
Bremanger Ferrosilicon Smelter
Høvanger Aluminium Smelter
Bjølvefossen Ferrosilicon Smelter
Ardal Aluminium Smelter
Karmøy Aluminium Smelter
Husnes Aluminium Smelter Odda Zinc Refinery
Bergsoe
Lead Smelter
Nikkelverk
Nickel/Copper/
Cobalt Refinery
Lista
Aluminium
Smelter
Fredriksrad
Titanium Plant
NORDIC MINERALS
Iron ore
Plant
Zinc
Gold
Chromite
Ilmenite
Nickel
Copper
COMMODITY
KEY
Graphic: FIONA KRISCH Source: INTIERRARMG
����� �������
�HE Nordic region’s miningsector is being rapidlydeveloped and will be lookingfor closer cooperation with
mineral-rich African countries.Magnus Ericsson, chairman of the
Stockholm-based Raw MaterialsGroup — a mining research andanalysis consultancy — said Swe d e n ,Finland, Norway and Greenland hadalways viewed SA favourably butwere now worried about the country’slabour problems.
“Investors and companies in Nordiccountries, as I am sure in many othercountries, are worried that labourproblems on South African minesmight not be easily solved,” Ericssonsaid.
“Over here, we are watchingdevelopments very closely and are ofthe opinion that the unrest in SouthAfrica is highly political, whichmeans things can get out of handvery quickly.”
He said South Africa needed to findan urgent solution.
“In the longer term it may be
beneficial for the country to increasethe degree of mechanisation on itsmines.
“When moving to more mechanisedmining, people need to be morehighly skilled and therefore higherwages would be appropriate, as is thecase with most of the miningoperations in Nordic countries.
“The problem in South Africa atthe moment is the fact that wageincreases are not linked to increasedproductivity, which is not sustainablein any country in the longer term,”said Ericsson.
He said West Africa lookedpromising for investment, e sp e c i a l lyin terms of equipment, technologyand skills transfer.
“We find countries like SierraLeone, Cameroon, Liberia and othersvery exciting.
“There really are only two majorunexplored horizons left in the world,Africa and the Siberian parts ofRussia. Whereas the Siberian partsare closed off, Africa is opening up for
foreign investors and this is theregion where see great futureop p o r tu n i ty , ” he said.
Ericsson said Nordic countrieswould look to nurture closerrelationships with African countriesthrough the African DevelopmentForum, which recently haddiscussions about a mineraldevelopment centre that would focuson governance issues in mining.
Good governance and strongpolitical and organisational supportfor the Nordic mining sector in recentyears resulted in it growing rapidly. Ithas attracted investment of$5.78-billion over the past five years.
Chris Hinde, director of the miningresearch consultancy IntierraRMG,said a stable mining environment hadattracted significant interest in theNordic region, which had been under-explored in the past. Exploration hadnow indicated very good mineralprospects, he said.
Projects to the value of $2.76-billionwould go ahead in the next five years.
This compared to South Africa whereprojects being developed added up toaround $12-billion.
This year, exploration spending inSweden, the strongest mining countryin the Nordic region, was expected toreach record levels of about $95-million, an increase of 14% comparedto last year. Ericsson said projectionsfor 2013 also looked strong andspending would reach well above$100-million among the 35 largestcompanies operating in Sweden.
Currently, Sweden, Norway andFinland are ranked by the FraserInstitute — an independent researchgroup — among the 10 countries withthe most “c o n st r u c t ive ” miningenvironments, with Greenland not farbehind. SA, battling cost inflation, anincreasingly difficult labourenvironment and concerns aroundstate intervention, ranked 54th in thesame survey.
The Nordic region mainly producesiron ore, lead, zinc, copper, gold,silver and coal.
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Foord Compass
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Kumba Iron Ore
Blue Financial Services
PPC
Clicks
Atlatsa Resources
Vodacom
Palabora Mining
City Lodge
Woolworths
Howden Africa
Growthpoint Properties
Mr Price
Trans Hex
Coronation Fund Managers
Spar
Truworths
Pinnacle Technology
PBT Group
Telemaster
Fortress Income Fund - A
Sun International
British American Tobacco plc
Assore
Famous Brands
African Media Entertainment
Netcare
Adaptit
Life Healthcare
Pick n Pay Stores
Cashbuild
Massmart
Verimark
Astral Foods
ISA Holdings
JSE
Pan African Resources plc
Indequity
Spur Corporation
Stefanutti Stocks
BHP Billiton plc
Vukile Property Fund
Invicta
Anglovaal Industries
Reunert
AngloGold Ashanti
Foschini
RBA Holdings
2011.08
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1 136.37%
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166.24%
111.89%
107.46%
89.32%
71.90%
71.69%
55.98%
50.24%
50.16%
48.51%
46.32%
46.03%
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44.27%
43.62%
38.28%
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34.24%
33.86%
33.48%
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32.30%
32.26%
31.99%
31.49%
30.54%
29.87%
29.87%
29.73%
27.95%
27.93%
27.45%
27.27%
27.14%
27.04%
26.88%
26.78%
26.76%
26.50%
26.26%
25.88%
25.74%
25.70%
25.62%
25.40%
Share name YearReturn on
shareholders funds
TOP 50 RETURN ON
SHAREHOLDERS FUNDS
Graphic: FIONA KRISCH Source: I-NET BRIDGE
PREPARE for superlatives if you talk to BHPBilliton, the world’s biggest miner, about theshale energy revolution.
“This is absolutely stupendous,” says MichaelYeager, chief executive of its petroleum division.“This is the biggest thing that has happened inmy [35-year] career.”
For once, the company line could be anunderstatement. The shift taking place in theenergy industry is of a scale to rival anythingseen in several decades, say industry watchers.As one puts it: first there was nuclear, thenCh i n a ’s growth explosion — and now shale.
What that refers to is the resource-rich shalerock that was formed from the “muddy gumbo“,as Yeager puts it in his Texan drawl, which layat the bottom of ancient oceans. Today, it sitsbeneath traditional oil and gas reservoirs, forwhich the shale rock is often the source.
Large-scale extraction of shale’s oil and gashas been made practical only recently, bydevelopments in hydraulic fracturing or“fracking” — shattering the rock and flushing itwith liquid to encourage the oil and gas to flowout — and horizontal drilling, allowing vastlyincreased access to the seams of shale.
The implications for the world’s biggesteconomy, the US, are profound, since it happensto be well endowed with the stuff.
Because of shale, the International EnergyAgency this week announced that the US willovertake Saudi Arabia as the world’s top oilproducer by 2017, and overtake Russia as thebiggest gas producer even sooner — by 2015.
BHP, the Anglo-Australian mining colossus,has been in the shale arena for only 18 months.But by spending some $20-billion buying upassets it has key positions in four major USshale formations: Fayetteville, Haynesville,Permian and Eagle Ford.
Across this acreage, it has 45 drilling rigsbusy sinking wells, the bulk of which are atEagle Ford, a 640km-long and 80km-wide streakof shale under south Texas. It is now the biggestoil field development in the world, and BHPholds the second-strongest position.
But every revolution must have its losers too,and in the shale phenomenon they are stillbeing decided.
Headline concerns around fracking may focuson people setting fire to what comes out of theirt ap s , but locals are more bothered about thedust clouds and road damage from the hugetrucks rolling to and from the shale gasoperations. In DeWitt county in Texas, h o st i n g21 of the rigs in operation at Eagle Ford, thecounty judge said he was facing a $432-millionbill for road repairs and upkeep. DeWitt is hometo just 20 000 people.
The industry has to tread a careful line tomake sure it all stays worth the while of thoseliving in fracking areas.
— © The Daily Telegraph, London
Fracking is a
bonanza for
global miner
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IDC in Action
Green Energy Efficiency Fund @ prime less 2%. Competitiveness through energy savings.
Who qualifies
Companies in the private sector, registered and operating in
South Africa who plan to:
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enhanced performance technologies
The Industrial Development Corporation (IDC) and the German Development Bank (KfW) have partnered to
establish a R500-million facility for energy efficiency and small-scale renewable energy projects called the Green Energy Efficiency Fund.
To apply online for funding of R1 million or more go to www.idc.co.za
Telephone: 086 069 3888
Email: [email protected]
Liberty Group Limited - an authorised Financial Service Provider in terms of FAIS Act (License no: 2409)
Terms and conditions apply.
Contact your Liberty adviser or broker, call 0860 327 327 orvisit www.liberty.co.za
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Liberty’s Income Protector is the most comprehensive income protection in
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Sunday Times 18/11/2012 01 01bt1811BusinessTimes 8 AL 16/11/2012 09:04:48 PM
Business, 18-Nov-2012-Page 8, Cyan Business, 18-Nov-2012- Page 8, MagentaBusiness, 18-Nov-2012-Page 8, Yellow Business, 18-Nov-2012- Page 8, Black
Business
� | �������������� �������� � � � �������� ������ Sunday TimesB-1 JDCP
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Vividend Income Fund
Fairvest Property
Foord Compass
Ferrum Crescent
Growthpoint Properties
PPC
Clicks
Blue Financial Services
Vodacom
City Lodge
Howden Africa
Woolworths
Mr Price
Coronation Fund Managers
Sun International
Spar
British American Tobacco plc
Truworths
Life Healthcare
Pinnacle Technology Holdings
Fortress Income Fund
PBT Group
New Africa Investment
Famous Brands
Telemaster
Indequity
Cashbuild
Netcare
Pick n Pay Stores
Massmart
Astral Foods
Calgro M3
ISA
Verimark
African Media Entertainment
Pan African Resources plc
JSE
Stefanutti Stocks
Anglovaal Industries
Vukile Property Fund
Spur Corporation
Adaptit
Adcock Ingram
Reunert
Tiger Brands
Foschini
Hospitality Property Fund
Invicta
Combined Motor
Oceana
2011.08
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2011.09
1 136.37%
1 029.40%
345.86%
166.24%
141.88%
82.51%
67.95%
60.46%
55.98%
49.61%
46.32%
44.70%
43.96%
43.59%
42.31%
38.36%
37.77%
37.23%
35.36%
34.68%
34.24%
34.05%
33.21%
32.04%
30.36%
29.26%
29.24%
29.18%
28.34%
27.93%
27.74%
27.46%
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25.74%
25.49%
25.33%
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25.03%
24.79%
24.79%
24.53%
Share name YearReturn on equity 5
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TOP 50 RETURN ON EQUITY
Graphic: FIONA KRISCH Source: I-NET BRIDGE
������� ������ �����
P O ST BA N K ’s corporatisation should be con-cluded by the third quarter of next year, accord-ing to Chris Hlekane, the new CEO of the SouthAfrican Post Office (Sapo).
Sapo aims to invest an estimated R3.3-billionin the project.
Hlekane said “f i r ewa l l s ” will be erected be-tween Postbank and the core business of thePost Office. This has to be done because thep a r a st at a l ’s banking arm has to operate withinthe Banking Act and regulations. Previously ithad been operating within the Post Office Act.
“If we are not structured right, we might beseen as anti-competitive,” said Hlekane. He isaware that his competitors will argue that Post-bank is prefunded.
P r ov i n g the transfer-pricing approach usedby the Post Office and Postbank is prudent andthat the latter is competitive will be a challenge.
Hlekane has submitted a resourcing plan toMinister of Communications Dina Pule for ap-proval before the search for an executive teamfor Postbank starts.
At the moment it is headed by Absa’s formerretail banking boss, Venete Klein, and Th ab oMosala, a banking and finance academic.
S ap o ’s management is working with T r e a su r yto ensure that Postbank reaches the requiredcapital adequacy levels.
Hlekane believes the group will fulfil all bank
licensing requirements.When asked whether there was a need for a
Postbank, Hlekane said it provided good va l u e tocustomers, especially in rural areas. It has thehighest market share in the Mzansi banking prod-uct at more than 50% while the traditional big fourbanks lag behind.
Some analysts have said government may re-quire civil servants to bank with Postbank in or-der to push up its cust o mer numbers. The govern-ment is the largest employer in South Africa.
Hlekane has prioritised the appointment of achief information officer for Postbank so it canroll out fresh IT infrastructure that will addresssecurity breaches.
Earlier this year the bank fell victim to a hi-tech cyber-heist of R42-million. This was after itspent about R2-million to keep its head of technol-ogy infrastructure away from the office for closeto 17 months while also paying consultantsR200 000 a month for work that could have beendone by internal staff.
A report on the investigation into the heist isstill to be tabled before parliament.
������� ������ �����
CHRIS Hlekane, new CEO of the SAPost Office (Sapo), is finalising theappointments of a chief operatingofficer, chief financial officer andchief information officer.
He warned that there might bemanagement reshuffling as hefinalises his executive team.
The troubled parastatal has beenwithout a finance chief for two yearsand operations head for a year.
S ap o was hit by a leadership crisiswith the resignations of chiefoperating officer John Wentzel,chairman Vuyo Mahlati and CEOMotshoanetse Lefoka, who left after aR425-million lease scandal this year.
Hlekane said Sapo’s incomingfinancial officer comes from thegovernment sector. He has alsofinalised his short list for the chiefinformation officer position, which hestill needs to present to hisshareholder, the government.
Last month, Hlekane had to acceptMiyelani Holeni’s resignation within
days of appointing him to amanagerial position. Holeni was oneof five top Ekurhuleni municipalofficials accused of corruption. Holeniis currently trying to clear his name.
Sapo is also seeking a head ofprocurements, a general managerand a sourcing manager. Hlekanehopes to fill the posts by year’s end.Communications Minister Dina Pulehas to approve the ap p o i n t m e n t s .
Hlekane said beefing up systems tostop corruption is a priority.
The former Airports Company ofSA general manager said it is“critical” to find a sustainable way ofdealing with corruption. “As anorganisation, we have a lot to do.”
Sa p o ’s new
chief builds
top team
������� ���� � �����
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�HE CEO of the South AfricanInstitution of CivilEngineering (SAICE), ManglinPillay, is an incorrigible
optimist but believes the spending oftrillions of rands in infrastructure thegovernment promises, including R840-billion by the end of next year, is notgoing to happen any time soon.
The government simply does nothave the capacity, he says.
And although government makesall the right noises about bringingtechnically qualified people back intothe system to help with the roll-outof infrastructure programmes theevidence that this is happening is“very isolated and rare”.
“The problem is still that thingsare handled by inappropriatelyqualified people who don’t knowwhat they’re doing,” he says.
Ministers of departments likefinance, public works, localgovernment and economicdevelopment have acknowledged theneed to improve capacity, but little isbeing done.
“Th e r e ’s a call from thedepartments of public works andlocal government to employprofessionally registered engineers,but civil servants are still usingunregistered engineers. They’rehiring unqualified people to dotechnical work.”
As a result, people withoutappropriate skills are adjudicatinglucrative tenders. Tenderingprocesses are flawed and engineeringcompanies lose millions of rands
tendering for projects that areshelved or given to ridiculouslyunqualified competitors.
“I’ve just spoken to the director ofa consulting company who saystheir hit rate for tenders is 2%,” s aysPillay. “A guy with 20 years oftraining and experience, wh o s eprofessional rate is R2 000 an hour,spends months preparing a tenderbut wins only two out of a hundred.That is deplorable. There is a hugeproblem in our procurement andtendering processes.”
Many companies no longer tenderfor government infrastructureprojects. “Th ey ’d rather just tacklethe private market.”
Civil servants who should bedriving infrastructure projects donothing for fear of cocking up.
“Because they’d rather not doanything that gets them into troublethey don’t do anything at all,” s aysP i l l ay .
This is reflected in the SAICE’sinfrastructure 2011 report card, abarometer of infrastructure basedon an internationally recognisedrating system. It gives a D minus tomost municipal infrastructure, j u stone notch up from defunct.
Provincial roads, water andsewerage systems are in thiscategory, and deteriorating by theday with continued lack ofmaintenance, says Pillay. “It’s acrisis.”
Have we reached tipping point?“We ’re almost beyond tipping
point.”
The problem is a simple one, hesays. There are dangerously fewqualified engineers at localgovernment level. There is noshortage of ministers talkingsensibly about the need to, as Pillayputs it, “employ technically qualifiedpeople back into the system”.
But at town council level thereverse often happens.
“The Nelson Mandela metro [PortElizabeth] is down to its lastengineer, who is about to be sacked.Without properly qualifiedengineers there will be noinfrastructure development, he says.
“It’s a no-brainer.“Municipalities used to have what
they called town engineers. Thenew system kicked those guys out.We need them back.
“How do you deliver engineeringservices, roads, water, seweragesystems or any other infrastructurewhen you don’t have an engineer?Engineers are central toinfrastructure service delivery, but
numerous municipalities don’t havea single engineer.”
Those hiring consultant engineersoften subject them to micro-management by clueless officialswith political agendas.
“Our members who areconsulting in local government arehampered by lots of politicalinterference. They don’t havesufficient authority and power tocontrol projects. Very often there ispolitical interference in the projects.
“What we require is appropriateauthority for our engineers to geton with the job of serviceinfrastructure delivery. Politicalinterference stalls projects.” And,
he says, it costs ratepayers millions.The interference is “often”
motivated by corruption. Officialsinsist that private companies they’reinvolved with do the work, and willdelay or even derail projectsa c c o r d i n g ly .
This is why project deadlines areso often missed.
“When politicians get too closelyinvolved with infrastructuredelivery you very often getunskilled organisations getting thework. That pushes the project costup and brings in more delays. Thenyo u ’ve got an unqualified charactersitting there in the municipalitymanaging the project.”
There has been a notable increasein political interference “withMangaung in mind”, he says.Projects are being held hostage bypolitical point-scoring, jockeying forposition and factionalism.
Because government does nothave the capacity to identifyprojects, roll them out, ensureproper procurement processes arefollowed and do operation andmaintenance, South Africa is losingits engineering capacity. In acountry that is crying out forinfrastructure there is not enoughfor our engineers to do.
Consulting companies are gettingrid of engineers. Pillay mentions acompany that recently “released” 15engineers.
“That is totally unacceptable. In acountry where the focus should beon engineering service delivery weshould be employing engineers, notreleasing them.”
The SAICE is a lobby group. Itsjob is to make government ministersand officials understand what needsto be done, and then help them doit.
In spite of all evidence to thecontrary, Pillay insists it is makingprogress. “A big problem is theconstant changing of ministers anddirectors general,” he says.
“We will make a noise with theminister, and he will adhere to itand start rolling out something.
“Six months later, he’s fired, andwe ’ve got to start with the new guy,making the same noises all overag a i n . ”
Churning at the level of bothministers and senior civil servantshas left the government short of“institutional capacity”, he says.
To build up and preserve thiscapacity, national, provincial andlocal government departments needengineers at senior levels.
“They must remain there for atleast five to eight years so theinstitutional memory of projects,spending on projects, operation andmaintenance, is there. We have tohave engineers occupying seniorposts to keep that institutionalmemory of projects.”
Pillay, 36, qualified as a civilengineer at Wits University, andspent a year working for nationalgovernment before deciding it was“too slow”. He then worked as aconsultant engineer for seven yearsbefore joining SAICE in 2010.
He says there is a danger that bythe time government gets its acttogether and begins rolling outprojects, the country’s engineeringcapacity will be seriously depleted.
“There is a five-year windowperiod after which the current cropof senior engineers will have goneinto retirement and many youngerengineers will have left thecountry,” he says.
“There will be a major void in theengineering sector.”
� ��������
Spending without skills is futile��� ������� ����� ��������� �������� ����� ���������� ��� ���� ����� ���� ��������� ��� �������� ����� ���� ��������� ������� ������ !��"#
� ���� �����!�� �"� #��$��� �!� �� �"� % � ��� ���� ����� ����� �� ���& '������� ��� (� ����� � ��� �� ������!� �"�����!#�!��)�%����(����!� )� ������ ���������� ������
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Varsity College is an educational brand of The Independent Institute of Education (Pty) Ltd which is registered with the Department of Higher Education and Training as a private higher education and training institution under the Higher Education Act, 1997 (reg. no. 2007/HE07/002). Company registration number: 1987/004754/07.
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Sunday Times 18/11/2012 01 01bt1811BusinessTimes 11 AL 16/11/2012 09:44:27 PM
Business, 18-Nov-2012-Page 11, Cyan Business, 18-Nov-2012- Page 11, MagentaBusiness, 18-Nov-2012-Page 11, Yellow Business, 18-Nov-2012- Page 11, Black
Business
����Sunday Times ������� � � ����� �������������� | ��
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Capitec Bank
Mr Price
Coronation Fund Managers
Shoprite
Famous Brands
Assore
Woolworths
Aspen Pharmacare
Clicks Group
Anglovaal Industries
Truworths International
Kumba Iron Ore
Oceana Group
The Foschini Group
Spar Group
Remgro
Naspers -N
Santam
Resilient Property Income Fund
Capital Property Fund
Massmart
Vukile Property Fund
Imperial Holdings
Tiger Brands
Discovery Holdings
Exxaro Resources
Growthpoint Properties
Acucap Properties
Hyprop Investments
RMB Holdings
Mediclinic
Sycom Property Fund
Sanlam
SABMiller plc
Compagnie Fin Richemont
FirstRand
MMI Holdings
Nedbank Group
Liberty Holdings
MTN Group
Fountainhead Prop Trust
Netcare
Hudaco Industries
Redefine Properties
Bidvest Group
Emira Property Fund
Kagiso Media
Pick n Pay Holdings
Nampak
Lewis Group
Hold+
Hold-
Hold
Hold
Buy
Sell
Hold+
Buy
Hold-
Hold+
Hold-
Hold-
Hold
Hold
Hold
Sell
Buy
Hold
Sell
Hold+
Sell
Hold
Hold
Hold
Hold
Hold+
Sell
Hold
Hold
Hold
Hold+
Hold-
Hold
Hold+
Hold+
Hold
Hold
Hold
Hold
Buy
Hold
Hold+
Buy+
Hold
Hold
Hold+
Buy+
Hold
Hold+
Hold+
Share nameGuideline
12.78
9.33
-11.67
20.66
14.31
-8.19
-25.39
-4.18
7.09
0.9
-0.15
13.75
21.99
15.31
16.28
-2.4
6.65
17.28
-9.15
15.23
% EPS growth
2012
15.41
21.12
-11.92
20.59
14.3
9.91
9.88
6.2
8.72
-6.06
5.65
15.38
21.32
5
19.19
1.68
0.94
15.34
-4.85
22.22
% DPS growth
2012
I-NET BRIDGE CONSENSUS FORECAST
Graphic: FIONA KRISCH Source: I-NET BRIDGE
36.62
25.49
32.37
19.46
22.06
-1.9
24.6
27.58
30.48
19.57
12.96
-7.66
35.15
21.49
34.95
17.2
64.99
0.45
-18.62
3.38
40.14
-0.95
16.54
20.66
28.37
13.37
104.57
62.98
7.09
10.38
24.85
-7.85
22.87
46.93
23.74
12.56
33.1
42.16
8.4
29.92
2.47
20.67
39.9
-3.82
6.62
39.97
32.08
40.44
31.1
11.96
% EPS growth
2013
40.19
25.67
33.08
21.12
10.5
28.18
16.67
27.13
45.04
23.45
12.58
-7.27
32.82
19.6
33.98
15.61
22.36
18.92
19.8
14.58
19.67
6.72
17.22
21.62
18.84
-5.32
6.98
5.12
13.98
1.04
8.97
5.48
27.23
8.62
28.69
16.57
9.12
39.67
10.83
33.35
6.75
12.64
37.27
0.74
50.94
3.36
26.06
17.69
37.96
11.76
% DPS growth
2013
72.59
49.09
55.65
41.47
46.69
-5.37
46.85
46.72
52.06
33.64
30.42
-19.03
50.24
41.76
55.37
36.92
102.51
11.36
-11.38
11.63
65.49
4.85
20.48
32.43
48.85
17.1
119.56
74.22
16.22
20.76
61.6
-1.56
33.99
70.32
39.06
29.57
44.51
65.69
24.6
40.47
9.93
34.94
53.96
2.08
22.85
49.52
52.55
79.32
48.03
21.91
% EPS growth
2014
79.22
47.96
58.2
44.42
33.5
34.55
32
46.56
67.92
35.57
29.94
32
47.18
38.24
54.64
32.8
43.82
29.73
30.55
23.72
43.24
32
18.96
34.7
38.26
4.28
14.82
12.38
23.49
10.52
32.69
12.68
39.23
25.73
60.6
34.41
16.81
66.46
14.58
45.53
14.53
28.3
54.77
6.91
70.42
10.41
45.49
51.39
50
20.36
% DPS growth
2014
108.59
75.26
62.93
75.37
-16.08
69.61
71.03
40.96
48.48
62.52
58.75
160.58
86.67
12.21
28.85
61.27
126.85
86.63
41.39
87.09
5.62
96.3
64.77
48.39
59.86
36.03
55.88
71.32
133.63
34.17
% EPS growth
2015
112.42
73.63
66.86
59.5
29.09
57.37
90.32
49.06
48.37
60.73
50
80.72
63.22
20.9
29.71
44.93
18.63
20.38
36.33
58.97
20.9
45.66
94.78
57.94
19.2
90.5
15.11
63.38
83.19
33.48
% DPS growth
2015
��������� ���
THE government’s target of100% broadband penetrationby 2020 could be reachedsooner than that — if it usessatellite services.
The Department ofCommunications last weekacknowledged the potentialrole of satellite in thenational broadband project.It could be used to widenthe present geographiccoverage of around 30%,which covers 75% of thepopulation, said thedepartment’s Norman
Munzhelele.“Including satellite
services takes theseparameters to 100%geographic coverage and100% population coverage,but [with] limited speed anda f fo r d ab i l i ty, ” Munzheleletold an industry workshop.
Most of the existingcoverage is in urban areas,leaving huge tracts of ruralregions without internetaccess. David Williams, CEOof Avanti Communications,a broadband satelliteprovider, said it is noteconomical for
t e l e c o m m u n i c at i o n scompanies to lay fibre inthese areas, owing to fewerpotential users.
Research firm InformaTelecoms and Media’sreport on broadband inAfrica calls lack of ruralconnectivity “m a r ke tfailure”.
“Although some mobileoperators may see ruralmarkets as the next growthfrontier, it remains veryhard for them to findcommercial viability inconnecting remoteconnectivity to national
b a c kb o n e s , ” wrote KalyanMedapati, a senior analystat Informa.
Avanti launched itsHYLAS 2 satellite in August,covering northern, easternand southern Africa. Thesatellite delivers video anddata services and isavailable to consumersthrough local partners.
“We sell bandwidth totelecoms companies, whothen sell it to consumers,”said Williams, adding thatthese were mainly satellitebroadband, backhaul and IPtrunking services.
�� �� ���� �
�HE CompetitionTribunal has approvedtwo related transactionsthat will ultimately put
horseracing and tote betting inthe Western Cape under themanagement of PhumelelaGaming and Leisure.
The approval is on conditionthat no merger-specificretrenchments take placewithin two years of the date ofthe transaction.
Phumelela currentlyadministers racing in Gauteng,Eastern Cape, Free State andNorthern Cape and providestote betting services in all theprovinces except KwaZulu-Nataland the Western Cape, whereGold Circle is active.
As a result of the newarrangements, Phumelela willcontrol tote betting in eight ofthe country’s nine provinces.
The deal involves the assetsand operations of Western Caperacing first being sold toKenilworth Racing, a Cape-based organisation controlledby an association of racehorseowners and members of theWestern Province RegionalRacing Association.
All shares in KenilworthRacing will then be sold to theThoroughbred HorseracingTrust. The trust is a non-profitorganisation created to promotethe interests of everybodyaffected by the sport in SouthAfrica. Its only source ofrevenue comes from its 35.26%shareholding in Phumelela.
The Competition Commissionblocked the deal on March 19,s ay i n g it was likely to placePhumelela in a position to closedown bookmakers and wouldlead to a deterioration in thequality of horseracing events,which would negatively affectowners, trainers, jockeys andracing enthusiasts.
Kenilworth Racing and theThoroughbred Horseracing
Trust then requested thetribunal consider the ruling,asking that it approve bothmergers without conditions.
The tribunal found it wasunlikely that the transactionwould substantially lessencompetition in the horseracingoperations and sports bettingmarkets. Since racingenthusiasts and horses rarelytravel to other provinces toattend races, each province isessentially its own monopoly.Allowing the deal to go aheadmakes nothing worse — onemonopolist is simply beingchanged for another.
As regards the tote bettingaspect of the deal, Phumelela isalready the country’s leadingtote operator and currently
operates the tote in theWestern Cape under GoldCircle’s licence. The deal goingahead will therefore have littleeffect on the competitiveness ofthe gambling industry.
The tribunal’s full reasoningregarding competitionconsequences will follow “indue course” and it remains tobe seen whether theCompetition Commission willappeal the tribunal’s ruling.
Phumelela CEO Rian duPlessis on Thursdaycommended the tribunal on itsdecision and said approval forthe mergers would enableenergetic action to be taken toreturn Western Capehorseracing to profitability.
The transaction is stillsubject to approval by theWestern Cape Gambling andRacing Board.
Gates are open on
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4th INVESTMENT AND TRADE INITIATIVE (ITI) TO INDIA
Join the Department of Trade and Industry (the dti) and participate in the 4th
Investment and Trade Initiative (ITI) to India in 2013. The planned activities for this
initiative include trade and investment Seminars, mini Exhibitions, Business-to-
Business meetings and Site visits in the cities of New Dehli and Mumbai from
25 February -1 March 2013.
The ITI is part of the dti’s objective of creating market penetration for South African
value added products and services in India, and to promote South Africa as a trade
and investment destination.
Event Dates: 25 February - 01 March 2013
The targeted sectors: Agro processing,�����¿��������� ����������
���������,������������������ �������������������. Also invited are
companies seeking to attract foreign direct investment and project owners or
managers seeking joint venture partnerships in the following sectors:
������������� , ICT,�������,���������������������� ������.
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� Export ready
� Should have been in business for at least 2-3 years
� Should have a proven business and export track record; and
�� ��������������� ������������� �¿� �
the dti �����������"
� Hotel accommodation up to R2,000.00 per night
� Economy class return airfares to a maximum of R13,000.00
� Excess baggage to a maximum of R2,000.00 (display material/ samples)
� Business to Business meetings for participants
Companies that apply to participate will be screened and selected in line with EMIA
guidelines and market requirements. Interested companies are required to
complete and submit EMIA application form to:
������������������#�����$�� �%������
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The closing date for submission of application forms is +,�-��������+*.+/
���������������������� �������� �������� � � ���������������¿�����
Zanele Kobue; Tel: 012 394 1067; E-mail: [email protected] or
Mpho Sebatana; Tel: 012 394 3415; E-mail: [email protected]
�������������������� �������������������������� ��"�www.thedti.gov.za
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empowering industries and broadening economic participation
Sunday Times 18/11/2012 01 01bt1811BusinessTimes 13 AL 16/11/2012 09:40:18 PM
Business, 18-Nov-2012-Page 13, Cyan Business, 18-Nov-2012- Page 13, MagentaBusiness, 18-Nov-2012-Page 13, Yellow Business, 18-Nov-2012- Page 13, Black
Business
����Sunday Times ������� � � ����� �������������� | ��
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Great Basin Gold
Aquarius Platinum
Dorbyl
1time Holdings
Eastern Platinum
First Uranium*
Atlatsa Resources
Coal Of Africa
Sherbourne Capital
Witwatersrand Cons Gold
Evraz Highveld Steel & Vanadium
Sacoil
Hulamin
Wesizwe Platinum
Telkom
Lonmin plc
Bauba Platinum
Kelly Group
Verimark
Firestone Energy
1 350
2 440
280
33
565
240
449
630
10
4 700
3 990
62
750
170
3 203
13 140
225
356
153
13
70
565
67
8
146
58
145
211
4
1 900
1 900
30
375
87
1 760
7 470
130
208
84
8
519
2 316
2 393
2 424
2 584
2 769
3 229
3 349
4 000
4 043
4 762
4 839
5 000
5 118
5 495
5 737
5 778
5 843
6 152
6 154
-94.81%
-76.84%
-76.07%
-75.76%
-74.16%
-72.31%
-67.71%
-66.51%
-60.00%
-59.57%
-52.38%
-51.61%
-50.00%
-48.82%
-45.05%
-42.63%
-42.22%
-41.57%
-38.48%
-38.46%
Share nameOpen (cents)
Close (cents)
Final value (R)
Compoundgrowth 1
year
WORST 20 COMPANIES OVER ONE YEAR
Graphic: FIONA KRISCH Source: I-NET BRIDGE * denotes where a dividend has been accrued.
1
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Buildmax
Great Basin Gold
Sanyati Holdings
Aquarius Platinum
Sentula Mining
Eastern Platinum
Jubilee Platinum plc
Wesizwe Platinum
Super Group
Blue Financial Services
Witwatersrand Cons Gold
Lonmin Plc
Hulamin
Morvest Business Group
Protech Khuthele Holdings
Evraz Highveld Steel & Vanadium
EsorFranki
Sovereign Food Investments
Kelly Group
Sappi
450
2 148
340
8 000
2 360
1 600
1 377
945
13 400
340
14 500
51 801
2 369
135
242
11 380
672
1 750
1 006
10 590
14
70
21
565
180
146
126
87
1 535
41
1 900
7 470
375
24
45
1 900
132
415
208
2 366
311
326
618
758
775
913
915
921
1 180
1 206
1 310
1 488
1 646
1 926
1 961
2 080
2 228
2 371
2 391
2 407
-50.05%
-49.58%
-42.69%
-40.31%
-40.04%
-38.04%
-38.02%
-37.93%
-34.78%
-34.50%
-33.40%
-31.68%
-30.29%
-28.07%
-27.81%
-26.95%
-25.94%
-25.01%
-24.89%
-24.79%
Share name Open (cents)
Close (cents)
Final value (R)
Compoundgrowth 5
yrs
WORST 20 OVER FIVE YEARS
Graphic: FIONA KRISCH Source: I-NET BRIDGE
APPLE and Samsung might tradeblows about whose phones have soldthe most in an opening weekend, buttheir figures pale by comparison withthe number of people who use theWindows operating system. Indeed,Windows 8 will roar past half a billioninstallations well within its first year.
Such trivia might make you thinkWindows 8 has been polished to withinan inch of its life, but this is perhapsthe most controversial release ofMicrosoft’s most important productsince the operating system first sawthe light of day back in 1985.
That, however, is down to Apple.The ubiquitous touch screens that area consequence of the iPad and iPhonehave proved a profound challenge tothe keyboards and mice usuallyassociated with computer operatingsystems. With Windows 8, Microsofthas faced up to the challenge that,some argued, threatened its veryex i st e n c e .
So launching Windows 8 could not
be more important: that’s whyMicrosoft has accompanied it by thefirst computer that it has made itselfand also by a comprehensivelyintegrated new version of its mobilephone software — Windows Phone 8.
CEO Steve Ballmer admits that he is“betting the company” on a newap p r o a c h .
That new tablet computer, theSurface, is genuinely innovative.Where Apple made a clever foldingcover for the iPad that also doubles asa stand, Microsoft went a step furtherand made the cover also act as a fullyfledged keyboard.
Early next year Microsoft will followup the consumer-friendly Surface witha Pro version, which will feature Intelprocessors — the current lower-priceRT Surface is built around the Armprocessor, which uses a differentarchitecture to the Intel chips and isoptimised for mobile use. The Proversion will do everything a standardcomputer can do, including run all the
software you need. The RT tablet’schip means traditional programmeswo n ’t run and need to be recompiled,hence the current slight dearth ofapplications for the Surface.
Despite sales initially being“m o d e st ”, as Ballmer recently told aFrench newspaper, Surface is a finetablet, beautifully made, and lookslikely to have a bright future. It is also,as Microsoft intends, likely toencourage innovation from otherm a n u f a c tu r e r s .
At the heart of both the Surface andother Windows 8 devices is a newrelationship with touch screens.Where Microsoft has previouslytweaked existing versions of Windowsto accommodate, say, a stylus or atouch interface, with Windows 8 theinterface has been reinvented.
Analysts at Gartner estimate that by2015 there will still be 32 millionApple tablets to Google’s 16 millionand Microsoft’s 10 million. It would beeasy to claim that Microsoft is still
lagging behind, but factor in the totalfigures for each OS, including tablets,phones and other platforms, and thefigures look rather different: 2.3 billionfor Microsoft, the same for Google andjust 1 billion for Apple. Microsoft isnot going after the tablet market orthe phone market — it’s aiming todominate the touch-screen worldinvented by Apple, just as it dominatesthe desktop market at present.
Microsoft has created an interfacefor both tablet and mobile phones thatfocuses on being touch-friendly as wellas providing the information you needwithout having to open any apps. Thisis based on live tiles: big, square, easy-to-read, and to touch icons that displayinformation. Those tiles are usedacross all Microsoft’s platforms,whether it’s on a mobile made byNokia, HTC or Samsung; a tablet, or al ap t op .
It means that your phone or tabletwill feel uniquely personalised. —© The Daily Telegraph, London
����� ������
GOOGLE’S Android operatingsystem for mobile devices nowcommands close to 75% of themarket for this software, givingthe global search giant moresway than ever in determiningsmartphone and tablet designand use.
Figures released this week byresearch firm Gartner show thatAndroid’s share of the globalmobile operating system (OS)market is up from 52.5% lastyear to 72.4% in 2012. Apple’siOS, found on iPhones, iPodsand iPad tablets, is down from15% to 13.9%.
The appetite for Microsoft’snew mobile OS, Windows Phone8, is growing, albeit off a tinybase, but has gone from 1.5%market share to 2.4%. The realgrowth following its recentlaunch will only become appar-ent in 2013.
BlackBerry-maker RIM’sshare of the smartphone OSmarket dropped to 5.3% offabout double that a year ago. InJanuary next year the companywill release a radically over-hauled version of its mobile OSand two high-end smartphones.
Mobile operating system soft-ware like Android, iOS, Win-dows Phone and BlackBerry OSdefine the experience peoplehave on their smart devices, butare not money-spinners. R ev -enue comes from the app storesattached to mobile OSs and, as aresult, the number of apps d eve l -oped, available and sold.
Gartner’s third-quarter fig-ures for 2012 showed that smart-phone sales were up about 47%over the same period last year,edging 40% of total mobile phonesales, which were down overallby 3.1%. Samsung and Appledominate the smartphone spaceand the two companies accountfor just under 50% of the smart-phone market.
Nokia dropped from numberthree in the second quarter ofthis year to number seven insmartphone sales — its placewas taken by RIM. The reverseis likely to occur in the nextquarter on the back of Nokia’sWindows Phone 8 sales.
The shining star in the smart-phone market is Samsung — theKorean company’s range ofGalaxy Android phones are a hitand command 32.5% of the glob-al smartphone market.
�ETWEEN the launch inOctober of Windows 8,accompanied by a$1.3-billion m a r ke t i n g
campaign, and the first seriousattempt by Google to take onAp p l e ’s iPad, it’s hard to saywhat has been the single mostimportant recent technologyproduct launch.
In fact, it’s that multitude ofnew devices and services thatis the most importanttechnology trend in its ownright. As internet entrepreneurJason Calacanis said, it tookApple 25 years to perfect itsfirst computer, five years tomake the first iPod “exc e l l e n t “,and just 11 months to perfectthe iPad. And it’s hard toargue with Calacanis’s notionof “Time to excellence”: thepace of innovation in consumertechnology has never beenf a st e r .
And this fast-forwardingexplains the sheer volume oflaunches that will translateinto an advertising assault onconsumers this Christmas.Whether it is Samsungcompeting with Apple, orDyson launching innovativeheaters and vacuum cleanersto compete with the likes ofHoover, a company’s ability todevelop and launch newproducts, either off its own bator in response to the actions of
rivals, has never been moreacutely important.
At the same time,competition on the innovationfront means that these newdevices and services are muchmore affordable forconsumers. The days ofspending tens of thousands ona laptop seem long gone, whileGoogle’s new Nexus 4 phoneand Nexus 10 tablet both offertop-of-the-range devices forthe price of rival mid-rangeproducts. Amazon’s Kindletablets, built on Google’sAndroid operating system, alsobring the e-reader into theiPad age.
New technology also bringsnew opportunities: tablets canincreasingly replace laptopsfor many more tasks. Morebroadly, they are part of aworld where, increasingly,
every screen is a touchscreen,and where every internetconnection is a high-speedconnection. This presentsmyriad opportunities that wehave yet to realise: as Sir TimBerners-Lee, the inventor ofthe web, commented, we haveyet to see the true power of aconnected world.
A shadow hanging overmuch of that progress,however, is the patent battlesbetween the big technologycompanies. An apparentlyendless round of litigation iscosting billions, and enrichingonly the lawyers. As rivalcompanies build increasingly
similar devices, it should be nosurprise that patent lawyersrub their hands in glee andfew, with the exception ofMicrosoft’s top lawyer, claimthat the current system is notholding back further andfaster innovation.
The key development for theUK this year was not a gadgetbut a whole new mobilenetwork. The launch of EE’s4G was also a victory forconsumers over lawyers. Planshad been put on hold asVodafone, O2, Three and EE,the owners of T-Mobile andOrange, battled for the right tolaunch a service that, it is
claimed, will enhance the UK’sability to competeinternationally and boost theeconomy. In the end, onecompany was given the go-ahead to cobble together a 4Gservice: EE launched itsservice with a big party inLondon and was handed a six-month head start on othermobile providers. Tariffs startat £36 a month, a price t h atanalysts at CCS Insightdescribe as “cautious and doesnot suggest an aggressive pushto lure customers from othern e two r k s ”.
They also question whetherconsumers will actually bedrawn to a network that isfocused on major cities andnot very good in buildings.“Marketing so far has beencentred on speed rather thanservice,” said CCS. “We
question whether this alonewill be sufficient to encouragecustomers to upgrade to thenew network.”
New devices, whetherAp p l e ’s iPad Mini, or the NokiaLumia 920 handset, are whatgrab the media’s attention andexcite consumers, but what’skey is the infrastructure theyplug in to.
Perhaps surprisingly, itcould be Microsoft that leadsthe way for the next few years.Windows 8 will eventually berunning on half a billiondevices, from tablets to laptopsand desktops. With the launchof its Surface tablet and thenew version of Windows, thesoftware giant has woken upand designed a new interfacethat aims to bring togethermobile and desktop computing.Live tiles display theinformation you need at aglance — and which, of course,depend on always-onconnectivity, both at home andout and about.
Little wonder that Facebookfounder Mark Zuckerbergrecently said that if he had towork somewhere else it wouldhave been Microsoft. WhenFacebook admires Microsoft,it’s clear that innovation intechnology can still surpriseus all. — © The DailyTelegraph, London
2012: the year of
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THE City of Tshwane’s g ov -ernment hopes it can lever-age “smart city” technologiessuch as data mining andanalytics to decrease bulkwater losses and s averatepayers money by bring-ing down costs.
According to Tshwane’scity manager Jason Ngobeni,the city loses 24% of its waterbecause of technical or eco-nomic reasons. This is theequivalent of R300-million’sworth of water literally goingdown the drain.
A recent study of the watercrisis in South Africa report-ed that for every percentagepoint of water lost approxi-mately 200 000 jobs may belost too, which could lead toa 5.7% drop in disposable in-come on a per capita basisand a 5% increase in govern-ment spending.
Burgeoning informal set-tlements, or squatter camps,are compounding the prob-lem.
Ts hwa n e has formed apartnership with US multina-tional IBM to find so-calledsmart solutions for its watermanagement problem.
IBM deployed six of itsglobal experts to the city lastmonth for three weeks, tohelp identify and fix weak-nesses in the city’s wat e rmanagement strategy. TheIBM team looked at va r i ab l e ssuch as infrastructure, watermanagement, water policyand water loss through leak-ag e .
According to the report bythe IBM experts, by planningmore effectively, performingtimely adjustments and mak-ing internal processes moreefficient, the city can im-prove its water conservationand delivery efforts by asmuch as 25%.
The IBM team said that al-though the city has watermanagement challenges ithas the right fundamentals inplace. But it has to work onits infrastructure, be pro-ac-tive and have a p r e d i c t ab l egovernance framework.
Tshwane toget ‘smar t’with water
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BHP Billiton plc
Anglo American plc
British American Tobacco plc
Sasol
SABMiller plc
Bidvest
MTN
Compagnie Fin Richemont
Shoprite
Imperial
Steinhoff International
Vodacom
Massmart
Mondi
Pick n Pay Stores
Anglo American Platinum
Sappi
Barloworld
Kumba Iron Ore
AngloGold Ashanti
Gold Fields
Aveng
Naspers
Spar
Datatec
Grindrod
Murray & Roberts
Telkom
ArcelorMittal
Woolworths
Impala Platinum
Oando plc
Altron
Netcare
Mediclinic
Exxaro Resources
Tiger Brands
Blue Label Telecoms
African Rainbow Minerals
Wilson Bayly Holmes - Ovcon
Santam
Pioneer Foods
Nampak
Aspen Pharmacare
Harmony Gold
Distell
Clicks
Lonmin plc
Remgro
AECI
Assore
Mr Price
Tongaat- Hulett
Foschini
Kap International
Omnia
Reunert
Super Group
Altech
Life Healthcare
Sun International
Illovo Sugar
Palabora Mining
Truworths
Group Five
Astral Foods
Combined Motor Holdings
Anglovaal Industries
Eqstra
Stefanutti Stocks
Rainbow Chicken
Afgri
Clover
HCI
Hulamin
PPC
Adcorp
Cashbuild
Mpact
Basil Read
Capital Shop Centres plc
Pinnacle Technology
Mondi plc
Invicta
Evraz Highveld Steel & Vanadium
Growthpoint Properties
African Oxygen
Bell Equipment
Raubex
Mvelaserve
Lewis
Caxton & CTP
Trencor
RMB Holdings
Adcock Ingram
Business Connexion
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Iliad Africa
Distribution & Warehousing Network
Comair
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1049 132
565 048
335 559
201 452
271 565
48 032
156 094
110 711
30 500
44 768
119 775
47 917
18 845
56 990
11 702
87 280
50 674
28 191
33 755
84 785
78 893
26 576
62 749
7 907
14 873
19 806
21 371
52 515
32 422
9 001
71 609
18 597
11 030
43 344
47 084
36 692
13 834
4 923
35 313
11 246
18 482
9 595
12 884
26 140
40 611
9 780
4 096
38 230
58 021
10 894
17 461
4 220
17 522
12 602
14 364
7 513
5 419
6 106
4 050
8 468
11 573
11 379
7 202
6 771
7 533
3 245
2 343
5 483
12 559
4 778
4 910
7 728
3 863
16 930
7 498
6 419
1 871
1 915
5 605
4 061
92 619
2 184
5 640
7 916
4 291
55 786
5 354
3 757
4 369
2 306
6 114
6 070
20 296
27 201
4 965
3 075
2 471
1 946
2 614
2 202
25.09%
21.87%
19.05%
15.17%
8.97%
3.62%
18.77%
17.48%
3.78%
4.17%
7.15%
15.57%
2.06%
7.28%
1.23%
8.04%
-1.06%
1.95%
45.94%
21.97%
16.66%
1.12%
4.03%
2.44%
1.75%
1.18%
-2.39%
2.62%
-0.06%
6.66%
15.05%
-1.54%
1.49%
7.61%
6.75%
12.38%
10.87%
2.66%
19.69%
4.15%
7.29%
4.31%
6.39%
18.65%
15.64%
6.60%
4.64%
15.76%
46.19%
6.21%
28.75%
10.08%
8.46%
14.56%
4.55%
5.85%
9.20%
6.03%
1.12%
13.65%
8.94%
8.35%
16.15%
25.22%
0.72%
5.14%
1.89%
11.08%
3.95%
3.29%
3.40%
2.47%
2.95%
17.48%
1.13%
12.50%
2.13%
4.62%
1.66%
2.82%
-22.72%
4.82%
7.30%
9.04%
-0.27%
26.75%
5.57%
5.76%
6.70%
1.92%
16.07%
9.06%
35.64%
-6.97%
18.07%
1.56%
5.24%
0.31%
2.00%
0.41%
13.42%
8.59%
10.17%
12.76%
5.37%
10.07%
14.66%
14.34%
10.26%
7.53%
4.80%
21.75%
6.68%
7.41%
5.84%
4.74%
-1.06%
3.44%
66.08%
12.40%
8.85%
1.72%
2.54%
11.99%
4.32%
2.14%
-3.95%
1.68%
-0.06%
21.18%
5.80%
-2.25%
3.18%
4.07%
3.15%
7.19%
16.10%
10.10%
10.12%
6.61%
6.99%
7.58%
7.85%
10.89%
5.84%
9.56%
15.99%
5.71%
10.77%
7.64%
21.32%
28.96%
5.83%
13.44%
3.49%
8.52%
18.54%
10.08%
2.77%
15.81%
7.53%
6.73%
20.38%
32.89%
0.84%
13.65%
6.70%
16.75%
2.56%
5.50%
5.44%
2.33%
5.51%
7.32%
1.05%
13.29%
7.32%
15.24%
1.86%
4.32%
-1.47%
12.91%
7.43%
6.39%
-0.35%
2.54%
5.45%
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7.71%
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8.16%
-1.18%
16.21%
2.19%
9.10%
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0.77%
Share nameYear Total assets
(Rm)
Profit after tax/
turnover
Profit after tax/total assets
Share nameYear
561 196
222 011
179 121
169 446
162 765
133 534
121 884
90 816
82 731
80 830
80 434
66 929
61 209
57 964
55 634
51 484
50 695
49 823
48 553
47 849
41 877
40 885
39 487
38 820
36 744
35 885
35 406
33 668
31 453
28 604
27 593
27 223
23 563
23 221
21 986
21 305
20 479
18 715
18 142
17 893
17 707
16 853
15 819
15 256
15 169
14 176
14 103
13 844
13 532
13 397
12 948
12 122
12 081
11 631
11 018
10 945
10 923
10 205
9 972
9 812
9 754
9 173
9 092
8 830
8 783
8 606
8 294
8 287
8 143
7 991
7 855
7 290
7 224
7 092
6 957
6 826
6 423
6 310
6 281
6 230
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5 845
5 739
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5 246
5 071
5 033
4 943
4 857
4 819
4 649
4 618
4 454
4 314
4 294
4 230
4 228
4 163
Turnover (Rm)
Turnover (Rm)
140 808
48 562
34 117
25 699
14 594
4 836
22 882
15 874
3 130
3 369
5 751
10 421
1 259
4 222
683
4 141
- 536
971
22 304
10 512
6 979
456
1 592
948
642
424
- 845
882
- 18
1 906
4 153
- 418
351
1 766
1 484
2 638
2 227
497
3 573
743
1 291
727
1 011
2 845
2 372
935
655
2 182
6 250
832
3 722
1 222
1 022
1 694
501
640
1 005
616
112
1 339
872
766
1 468
2 227
63
443
157
919
322
263
267
180
213
1 240
79
853
137
292
104
175
-1 362
282
419
506
- 15
1 415
292
292
337
95
781
437
1 657
- 322
805
67
225
13
85
17
Profit after tax (Rm)
Profit after tax (Rm)
Total assets (Rm)
Profit after tax/
turnover
Profit after tax/total assets
TOP INDUSTRIAL & MINING COMPANIES
Graphic: FIONA KRISCH Source: I-NET BRIDGE * denotes where a dividend due at period end has been accrued.
��������� ���
CHIEF information officershaving sleepless nights over anincreasingly mobile workforceshould not expect any respitesoon — African mobilesubscriptions are projected togrow rapidly, while employersapprove of the increasedproductivity and efficiency thatmobile devices bring.
Research firm InformaTelecoms and Media this weeksaid the number of activeAfrican SIM subscriptions acrossall devices — includingcellphones and tablets — willcross the 750 million markduring the fourth quarter of thisyear. This is expected to reach abillion before the end of 2015,helped along by competition,new data services and strongeconomic growth.
Tony de Sousa, executiveresponsible for products and
marketing at information andcommunications technologycompany Gijima, said employerslike the quick access toinformation and the speed andagility that has come with theshift from desktops to mobiled ev i c e s .
But different deviceconfigurations have made itdifficult to integrate these withexisting IT systems, whereasenterprising cyber criminals havefound new ways to gain access tosensitive corporate information,including releasing applicationsthat can spy on the data storedon a device.
Gijima has built a solution tobridge the gap betweene mp l oye r s ’ interest in mobilityand IT departments’ s e c u r i tyfears.
Launched last month andnamed mobileIT, the platformallows for secure devicemanagement, integration and app
development, among otherthings.
“We in Africa have been verypoor at developing softwareintellectual property,” said DeSousa. “We have traditionallybeen consumers of othercountries’ intellectual property.”
The app development side ofthe platform allows one to buildapps across Apple’s iOS, Google’sAndroid, BlackBerry, Symbian,Windows Phone and even featurephone platforms.
“In Africa, most people do nothave a computer. Not many usebroadband, but most usecellphones,” said De Sousa. “InSouth Africa there are more than50 million phones. Of that, 82% iswhat we call feature phones.”
It would therefore be foolish toignore the feature phonesegment, and that is why it wasincluded in the mobileITplatform, which De Sousa says isa first for Africa.
������� ����
�T WILL not be possible to expandnetwork infrastructure andbroadband capacity unless moreresponsible utilisation is
e n c o u r ag e d .This is according to Arun
Bhikshesvaran, the global chiefmarketing officer for technologycompany Ericsson. The company,which provides t e l e c o m m u n i c at i o n sequipment and services to mobile andfixed network operators, has ove r1 000 networks in more than 180countries.
Bhikshesvaran cautioned againstthe “out of control” usage of networkinfrastructure and suggested a pay-as-you-use model because “s o c i e tycannot continue to take bandwidthand network capacity for granted”.
He used e-mail as an example.“If we go back to the fundamentals:
to mail something to somebody in thephysical world costs money. If youwant to send a postcard it costs less,and if you want to send a biggerpackage it costs a little bit more. Whydon’t we apply the same thing to e-mail?
“If you send a text-only message,you can send it for next to nothing. If
you want to send a 10MB [megabyte]attachment you know it’s going to costyou something. I think that will makepeople become more aware. Peoplesend an e-mail with a 5MB attachmentand copy 10 other people: it’s out ofcontrol.
“It’s not very smart to do that andit does not lead to a sustainablesociety. But if you make people payfor what they consume, it willincrease responsible behaviour. That’sthe logic for every other part ofsociety: you pay for gas as youconsume it, you pay for electricity asyou consume it.
“Why should network capacity andbandwidth be treated anyd i f f e r e n t ly ? ”
Bhikshesvaran said if bigcompanies applied this modeli n t e r n a l ly it would lead to increasedproductivity, a reduction of costs andbetter utilisation of the infrastructure.
“There is an increasing awarenessin Google and Facebook that networksare critical for success, because over-the-top [services] and cloud does not
exist without the network. There areother players which take networkcapacity for granted and their modelsare being challenged all the time,” hesaid.
Ericsson has conducted research in25 cities around the world whichshows a correlation between the levelof ICT (information, communicationand technology) investment in a cityand its social, economic andenvironmental progress.
Johannesburg was one of the citieschosen in Africa, along with Lagosand Cairo.
The three reports looked at the ICT-generated benefits to the city, citizensand businesses using variousindicators and then gave the cities ascore.
Singapore came out tops due to thehigh level of governmentalinvolvement and focus on ICT as anenabler for city development. It scoreda mark of 66. Johannesburg scoredjust eight and Lagos five.
The report suggested the scorescould be improved by “addressing thedigital gap through digital accessinitiatives, ICT literacy training forthe underprivileged and ensuring theintegration of ICT into publicadministration to improve efficiency”.
Ericsson calls for rational bandwidth use�� ������� ������������� ��������
Gijima platform tackles security
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“Harry! Bet you the whole
neighbourhood will be
chasing this one!”
“Then we better get onto it
before we are left behind.”
The Manufacturing Competitiveness Enhancement Fund (MCEP) is an initiative of over R5 billion supporting South Africa’s manufacturing
industries to improve competitiveness and sustain employment.
Cash grants and concessionary industrial financing facilities are available to companies operating in certain key manufacturing industries.
Funding is available to enhance competitiveness and improve resource efficiency.
If you need to improve your efficiency, feasibility or cluster competitiveness, then visit www.investmentincentives.co.za/mcep to ensure that
you are not left behind.
MCEP is an initiative of the Department of Trade and Industry and the Industrial Development Corporation.
Chillibush8567IDC
�ůĞĞ���ĂŶĂŐĞŵĞŶ���Žů�ŽŶ(Reference no. CBRTA/HO/0012)
�ŚĞ� ������� �Ğ��ŝ�Ğ�� ŚĞ� �Ğ�ŝĐĞ��ŽĨ� ��ŝĂďůĞ���ŽŝĚĞ����� Ž���ŽŝĚĞ� ŝ��ŝŚ�Ň�ĞĞ�ĂŶĚ�Ň�ĞĞ�ŵĂŶĂŐĞŵĞŶ�
services for a period of three (3) years.
��ĐŽŵ��ů�Ž���ď�ŝĞĮ�ŶŐ��Ğ��ŝŽŶ��ŝůů�ďĞ�ŚĞůĚ�ŽŶ��ŽŶĚĂ���ŚĞ 26th of November 2012 at 10h00.�ŚĞ�ĐůŽ�ŝŶŐ�ĚĂĞ�ĂŶĚ���ŵĞ�ĨŽ����ďŵŝ��ŝŽŶ��ŝ���ŝĚĂ���ŚĞ 14th of December 2012 at 11h00.
�ŽĂĚ���ĂŶ �Ž����Ŷ �ĞĐ�Ž�Ă�Ğ�������ĸ��ĐĞ���ĂĐĞ(Reference no. CBRTA/HO/0013)
�ŚĞ���������Ğ��ŝ�Ğ��Žĸ��ĐĞ���ĂĐĞ��Ğ���ŵĂĞĚ�Ă���������Ă�Ğ�ŵĞĞ����ĨŽ��ŝ���ŽĂĚ���ĂŶ��Ž��Ŷ��ĞĐŽ�ĂĞ���
�����ŚĞĂĚ�Žĸ��ĐĞ�ĂŶĚ��Ă�ĞŶŐ��ĞŐŝŽŶĂů�Žĸ��ĐĞ��ŚĞ��Ğ��ŝ�ĞĚ�Žĸ��ĐĞ���ĂĐĞ�ŵ���ďĞ�ŝŶ�Ž��Ă�Ž�ŶĚ���ĞŽ�ŝĂ�
Ă���ŚĞ�ŽďũĞĐ��Ğ�ŝ��Ž�ŝĚĞŶ��Ĩ��ĂŶĚ�ůĞĂ�Ğ�ŝĚĞĂů��ĐŽ��Ğī�ĞĐ��Ğ��ŚĂďŝĂďůĞ�ĂŶĚ�ĂŝůŽ��ŵĂĚĞ�Žĸ��ĐĞ��ĨŽ��ŚĞ�
���ĂŶĚ��Ă�ĞŶŐ��ĞŐŝŽŶĂů��ĸ��ĐĞ
��ĐŽŵ��ů�Ž���ď�ŝĞĮ�ŶŐ��Ğ��ŝŽŶ��ŝůů�ďĞ�ŚĞůĚ�ŽŶ��ŽŶĚĂ���ŚĞ 26th of November 2012 at 14h00.�ŚĞ�ĐůŽ�ŝŶŐ�ĚĂĞ�ĂŶĚ���ŵĞ�ĨŽ����ďŵŝ��ŝŽŶ��ŝ���ŝĚĂ���ŚĞ 14 December 2012 at 11h00.
The Cross Border Road Transport Agency (CBRTA)�ŝ��Ă��ĐŚĞĚ�ůĞ����ĞŐ�ůĂŽ���Ă�ŚŽ�ŝ��Ğŵ�Ž�Ğ�ĞĚ�ď��ŚĞ�
�Ž�Ś��Ĩ�ŝĐĂŶ�ůĞŐŝ�ůĂ��ŽŶ�ĞŶĚŽ��ĞĚ�Ă��ŚĞ���Ž����Ž�ĚĞ���ŽĂĚ���ĂŶ��Ž���Đ���ŽĨ���� �Ă��ĂŵĞŶĚĞĚ��ŚĞ��ŽůĞ�ŽĨ�
ŚĞ��������ŝ��Ž���ŽŝĚĞ�ĂĚŝĐĞ���ĞŐ�ůĂĞ��ĨĂĐŝůŝĂĞ�ĂŶĚ�ĞŶĨŽ�ĐĞ�ůĂ��ŝŶ��Ğ��ĞĐ�ŽĨ�Đ�Ž���ďŽ�ĚĞ���ŽĂĚ��ĂŶ��Ž�
The C-BRTA invites bids for the following services:
Please note the following:
��ůĞĂ Ğ��Ž�Ğ��ŚĞ��ĞĨĞ�ĞŶĐĞ�ŶŵďĞ��ĨŽ��Ăůů�ĐŽ��Ğ �ŽŶĚĞŶĐĞ ��ĐŽ��Ğ �ŽŶĚĞŶĐĞ��ŝ�ŚŽ��Ă��ĞĨĞ�ĞŶĐĞ�ŶŵďĞ���ŝůů�
���ŶŽ��ďĞ�Ă��ĞŶĚĞĚ��Ž�
���ůů�ď�ŝĞĮ�ŶŐ� Ğ ŝŽŶ��ŝůů�ďĞ�ŚĞůĚ�Ă�������ŝŬŬŝĞ��Ğ� ĞĞ�����ĞĞ����ůĞŶ��ĂŶŽ��ĸ��ĐĞ�Ă�Ŭ�� ŝůĚŝŶŐ�����ĞŶů�Ŷ���Ğ�Ž�ŝĂ�
���ĞŶĚĞ��ĚŽĐŵĞŶ� ��ŝůů�ďĞ�Ă�ĂŝůĂďůĞ�Ĩ�Žŵ�Ž���Ğď ŝ�Ğ�����Đď��Ă�ĐŽ��Ă�ŽŶ��ŚĞ���Ś�ŽĨ��Ž�ĞŵďĞ�������
���ďŵŝ ŝŽŶ � ŚŽůĚ�ďĞ�ĚĞůŝ�Ğ�ĞĚ��Ž�Ž��Žĸ��ĐĞ ��ŝŶ�Ž��ŚĞ��ĞŶĚĞ��ďŽ��ůŽĐĂ�ĞĚ�ŝŶ��ŚĞ��ĞĐĞ��ŽŶ�Ă�ĞĂ�Ž��Ă���ŚĞ�
����ĐŽŶ�Ğ��ŝŶ��ŚĞ��ĞĐĞ��ŽŶ�Ă�ĞĂ��ŝĨ�ŝ��ĐĂŶŶŽ��Į���ŝŶ�Ž��ŚĞ��ĞŶĚĞ��ďŽ���Ě�ŝŶŐ��ŚĞ�ŚŽ� � ��ůĂ�ĞĚ�ŝŶ��ŚĞ�ďŝĚ�ĚŽĐŵĞŶ����
�����Žĸ��ĐĞ �ĂĚĚ�Ğ �ŝ � ŝůĚŝŶŐ�����ůĞŶ��ĂŶŽ��ĸ��ĐĞ�Ă�Ŭ�������ŝŬŬŝĞ��Ğ� ĞĞ�����ĞĞ����ĞŶů�Ŷ���Ğ�Ž�ŝĂ
No late submissions will be considered.
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