may 2010 emea

MAY 2010 www.bus-ex.com

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ON L I N E

The Mantis Group aims to take conservation and carbon footprint control to the next level

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Employees

As we emerge from this recession and recruitment begins to pick up again, many businesses will be seeking new employees with the right skills and adequate training. But this is often easier said than done—especially in industries where specialised skills are required. One way in which businesses can secure the future of their workforce, as well as improve the lives of those around them, is to commit resources to education—and several of our featured companies this month are heavily involved in that.

Indian engineering group Voltas supports an impressive number of social organisations, including several educational institutions, where it runs classes, funds training, uniform and fees, designs courses and provides equipment and teachers. When they are trained, Voltas endeavours to place students with its dealers or franchisees. The company also encourages volunteers from its existing workforce to assist at an orphanage for boys, where they teach mathematics and science and organise educational trips.

EDITORIALEditor In ChiefMartin [email protected]

Managing EditorBecky [email protected]

DESIGNProduction/Creative DirectorZachary [email protected]

Production DesignerKatelin [email protected]

BUSINESSDirector of Editorial Research

Scott Mason [email protected]

Director of Sales

Sean [email protected]

Assistant Research Directors

Vincent Kielty [email protected]

Sam Howard [email protected]

Richard Halfhide [email protected]

Robert Hodgson [email protected]

Administration & Operations

Alice [email protected]

Chief ExecutiveAndy [email protected]

[email protected]

Infinity Business Media LtdSuite 22, St Francis HouseQueens RoadNorwich, NR1 3PN UKTel: +44 (0) 203 137 7100 Fax: +44 (0) 1603 666466

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E d i t o r ’ s l e t t e r

BusinessexcellenceACHIEVING

South Africa-based Mantis Group has joined forces with the Dutch university Stenden to offer a bachelor’s degree programme in International Hospitality Management near its Shamwari reserve. But education doesn’t stop there for Mantis. It also plays an active role in helping to inform tourists and the local community about the importance of conservation, covering issues such as reserve, game, vegetation and water management, as well as anti-poaching initiatives.

At Agnico-Eagle Finland’s Kittilä Mine, finding enough experienced engineers to operate the mine has been a challenge. The University of Helsinki, with support from Agnico-Eagle, is offering an 18 month conversion course to give engineers from other disciplines the skills necessary to adapt to mining—proving that even where skills do not currently exist, they can always be nurtured.

With the support of businesses that have the resources to help effect change, education can be open to all, bringing a new generation of potential employees into the workforce.

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STRATEGIC MANAGEMENT:Printing security Companies must protect themselves from the misappropriation of printed materials and related security breaches.

CUSTOMER FOCUS:A digital masterclassIf you capture the right information, your company’s website could be the key to a goldmine of potential sales.

OPERATIONAL EXCELLENCE:How to beat the competition Taking steps to become more competitive is one way to ensure continued success for your business.

Mantis GroupHealing the world This owner of boutique hotels and game reserves is on a mission to bring conservation to the world’s attention.

Agnico-Eagle Finland: Kittilä MineGlittering prize The Kittilä Mine is one of Europe’s largest and most exciting gold deposits, with plenty more potential to be realised.

Zimplats: Ngezi MineValued resourcesCompanies operating in isolated areas must focus their attention on maintaining a successful retention strategy.

BeniconMore than meeting demand Long-term relationships, shrewd investments and an excellent reputation have enabled this mining company to thrive.

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Mangalore Refinery and Petrochemical LimitedA refined approachIndia’s largest oil refinery is bringing rewards to the local community as well as to its shareholders.

Gulf PetrochemTwenty-first century oil This trader and producer of oil products adapts to market conditions—a hallmark of its forward-thinking approach.

Max PetroleumSize isn’t everything This five-year-old startup is poised to harvest rich rewards from one of the world’s biggest hydrocarbon deposits.

Southern African Shipyards Going global A regional presence is not enough to satisfy this shipbuilder—it wants to make an impact on the global stage, too.

VoltasA journey, not a destination The concept of improvement at Voltas extends far beyond financial results, reaching deep into Indian society.

Godrej PropertiesBuilding on the brand Indian property developer is gearing up for expansion, aided by good communication and long-term partnerships.

Louis GroupA growing familySouth Africa’s Louis Group is now one of the country’s most successful property and investment enterprises.

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Toyota South AfricaA firm foundationUnderstanding the value of collaborative supplier relations, Toyota is investing in its South African supply chain.

Allufer TempestaQuality, Italian styleFor this Italian yacht fitter, the reward for its focus on reliable quality is a client base spanning the globe.

Montego FeedsTaking care of loved onesThis South African company is greatly increasing output in order to cope with demand from loyal customers.

Port of Richards BayExpanding potentialThe Port of Richards Bay is South Africa’s largest cargo port and a significant contributor to the economy.

Technip NorwayTraining to gainThis company provides infrastructure services to customers working in some of the world’s most challenging environments.

Prestige GroupMore than a nameSouth Africa’s largest specialist cleaning company hopes to become a one-stop-shop for facilities management.

JHI PropertyManaging Africa’s expectationsThis company will adapt its business strategy to suit local markets as it expands across the African continent.

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Whether it is police records being dumped in the street, medical data being misplaced or even top secret anti-terrorist plans being inadvertently shown to the general

public, the consequences of security breaches involving printed material can be just as profound as those of the electronic variety. However, many companies

sti l l use no form of authentication for printing, such as ID cards or PIN codes, to secure their print environment. In this sense, print can often be considered the

‘forgotten link’ in the organisational security chain, and not an immediate priority for those responsible for operational and corporate excellence.

However, when a print-based breach occurs, it can often be more devastating than an electronic one which can be monitored and controlled remotely or

through a network. Once confidential or sensitive material has leaked from a company in physical form, the ability to effectively track it and remove it

from circulation is hugely impaired, and its potential impact increased significantly. The fact that such material can of course then be re-

digitised and circulated only adds to the threat involved. In order to avoid your organisation being compromised, here is a list of ten rules and considerations which can address

some of the core issues, and hopefully protect your business from falling prey to such an embarrassing or damaging security breach.1. Understand the risksIt is critical to understand what could make your print environment an attractive target for security attacks on your organisation’s IT environment. The questions for consideration are numerous—for example, do your employees print via third party networks or devices based on partner or client sites? What devices are they connecting to your printers and are these authorised and work-related? What about your customers and partners—what access do you permit to your print environment? Are the devices separated, not merely in network terms but physically? What potentially compromising documents could be retrieved from the output paper tray or recycling bin? All these risks need to be considered very carefully.2. Understand the operational, commercial and legal aspects of security

Mention security to most senior business leaders and many will automatically think of physical security breaches in

the office, or electronic and digital security issues across their networks. However, as the list of embarrassing and litigious security breaches brought about by the

misappropriation of printed materials grows, companies should pay more attention to the power of the written

word, says Howard Roberts PrintingS t r a t e g i c m a n a g e m e n t


printing to the physical security of devices and supplies. In many organisations, such responsibilities would be covered by two distinct departments—IT for the devices and network, and buildings/site management to protect against physical theft or damage. In terms of security auditing, these two departments should work closely together since, from a print perspective, their roles are clearly mutually dependent.8. Secure printing practices should fit your business, not the other way aroundRemember, no two organisations are alike and neither are their secure printing needs. Here are some considerations that will impact your requirements:• What types of documents are printed most—internal or customer facing?• Are the documents informational (e.g. brochures), competitive (e.g. request for information submissions) or legally binding (e.g. contracts)? • Is your industry at high risk of security breaches?• What percentage of documents printed are confidential? • If data is leaked, what are the legal and financial implications?• What are your organisation’s dynamics—office-based, roaming, customer-facing, off-site working? What implications do these dynamics have for the security of the print environment? 9. Mobile printing—ready or notMobility means freedom and flexibility but it also means a potential loss of control from a security perspective. Ensure that your security strategy and AUP cover mobile printing. According to IDC, the number of mobile devices accessing the internet is set to surpass one billion worldwide by 2013—your employees are certainly going to be doing this if they are not already.10. And don’t forget the reception areaEven the most rigorously enforced security policy has the potential to be undermined by offering customers and visitors free wi-fi access and printing facilities at your premises. Such services can represent a great value-add—but only if they are properly secured. Security should ensure that not only is the printer fully firewalled (or, ideally, not connected to the network at all) but that the paper trays contain only blank, unused paper. This is a small detail but one which could make a big difference by keeping work-in-progress or other background information away from prying eyes.

Howard Roberts is technology consulting and solutions manager, Managed Enterprise Services, HP, UK & Ireland: www.hp.com

Make sure that the security strategy covers not only the technical aspects, but also the operational, commercial and legal aspects of security. For example, if a breach occurs, can you be sure you are responding in a way that sufficiently protects the risk of your clients? It is important for organisations to understand what the ramifications are if a security breach occurs and what they could do to prevent it from happening.3. Don’t forget the human touchConfidential information can be at risk from internal threats within your own organisation. If you have network printers, there is the potential for proprietary information to be copied, accidentally or otherwise, from the documents stored in the device’s own memory.

Simply lifting documents left in the printer output tray can pose risks to the organisation and the employees within it as well. Good security practices go right down to the way individuals treat, handle and discard printed materials, what they leave in their pockets, what they carry in their briefcases and even what they read on the train.4. Top-down security strategy is essentialThe need to involve senior management and make sure that the security strategy is driven from the top down is critical to the success of the business and protection of confidential information. Take the example last year in London of Bob Quick, the UK’s most senior counter-terrorism officer, being seen walking to a press conference showing documents marked “secret” that detailed plans of an al-Qaida plot to bomb Britain.

Good practices start at the top. If leaders are not on board with security policies, the company—or country, in the case of Bob Quick—could be placed at risk.5. Turn security from a cost centre into a profit centreSecurity is an organisational enabler. Make secure printing a way to increase overall organisational security and turn printing into an asset that enhances security, productivity and ROI within the overall corporate environment. 6. Define user usage policyUpdate your acceptable usage policy (AUP) which governs the use of email, web, phone, instant messaging and other products to include printers and multifunction printers; and train your employees accordingly. Good practice guides with respect to data production, storage, transport and usage are critical, as internal security breaches are on the rise. Remember—most employees do not realise printers are capable of the same security dangers as PCs!7. Auditing is keyEnsure a single process that covers both technological and physical security. A secure print policy should cover all aspects of the process from content generation and



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Economic turmoil has brought many changes to the way organisations do business. It has forced us to be more efficient and targeted as we are all asked to do more with less. One of the emerging ways today’s marketers are achieving improved results is by harnessing a previously untapped, rich source of knowledge about their customers—their websites. In this article, we’ll delve into five aspects detailing how you can tap that font of

knowledge and turn your website into a customer intelligence tool.1. Locate customer pain pointsPeople’s behaviour in the virtual world is in many ways the same as in the physical. When someone stops to browse items in a store you can tell a lot about their interests—the colours and fashions they like, and so on. The same holds true online. Every time a visitor comes to your website their behaviour reveals two things—what they are interested in and what their pain points or needs are. You need to be able to sense customer attitudes online and respond to them with the same degree of sensitivity and understanding as you would in the physical world. This might mean taking the trouble to listen to any problems, identify areas of interest and offer recommendations and solutions to those customer challenges.

In some cases, the issues might not be immediately apparent. Such latent pain can be exposed by tracking the customer’s online behaviour and reading between the lines of what that behaviour tells you. If your website can help you dig that out, it becomes a powerful tool for customer relationship management. 2. Understand when a prospect is ready to engageThe rise of the internet has turned the traditional sales funnel on its head. A much smaller subset of potential customers is visiting your website. Having carried out their initial research online, these visitors are more knowledgeable about you and the available alternatives than ever before. Since they are wiser, you too have to be smarter to engage with them. You need to start the process of influencing much earlier and very quickly establish yourself as an authority in their area of interest.

The website has become the first step in the customer engagement process—it is a platform to interact with them in an intelligent fashion. If they look at price, for example, it may be a strong buying signal, and shows you that the prospect is trying to qualify you in or out of their selection process. You could respond by showing them

Your company’s website could be the key to a virtual goldmine of potential sales. Darren Guarnaccia examines how to use your website to capture the right information—turning it into a truly powerful customer intelligence tool

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with the rest of your customer management systems, you can track leads-to-wins ratios, analyse those web interactions with successful outcomes and then replicate these successes.5. Track and measure impactThe process of turning your website into a customer intelligence tool involves three phases. First, you must create different kinds of web experiences—using your website to experiment with web page designs, product offers and descriptions, and even content order and flow. Second, you must leverage information about different target customer groups—determined by profiles, geographic location, or other target segments—to give them an increasingly personal experience when they engage with you. Finally, you must track what happens and compare the results against alternative options.

Customer tracking and analysis must be tied directly to the content you deliver. Your website needs to be able to connect the underlying dots for you—how did a visitor first arrive on your site, what content did they browse, in what order, what difference did a new piece of content make, and so on. For effective tracking and measurement, the component elements of the modern web marketing programme must be seamlessly connected.

The latest content management systems allow you to connect historically standalone applications such as customer tracking, campaign management, profiling and analytics with your CRM systems, so the results of new web marketing initiatives can be seen and measured immediately. ConclusionCRM systems of the past have largely been little more than vast silos of dry, historical statistics about offline interactions. Any customer insight they provided was often based on data that was months or even years old. Through their engagements with your website, different customer segments are teaching you more about their day-to-day attitudes and behaviour than traditional CRM data ever could. It’s critical to bring these two types of customer intelligence together and associate real-time customer interactions with other customer management data, such as call centre data and other offline interactions.

By tapping into your customers’ attitudes and tracking and measuring what happens, organisations can now harness the web to build a true 360-degree view of their customers.

Darren Guarnaccia is VP of Product Marketing at Sitecore: www.sitecore.net

relevant solution-oriented content and case studies that reinforce why your organisation is right for them. By using site metrics and weighting various behaviour patterns, it is possible to build up an accurate picture of that customer, what their interests are and so on. 3. Weight and score leadsEvery piece of content on your website can tell you something about your customer—what they care about, what their issues are and where they are in the buying process. To be able to gain this level of insight, all of your content needs to be allocated a score or weight. This enables lead scoring—the process of calculating a visitor’s propensity and readiness to buy, based on the total score produced by their behaviour on your site. Every item they read adds to their profile, allowing you to build up a picture of that individual. It might be possible to work out even more detail by tracking them back to a web forum, or using their internet address to figure out their location and/or their company.

By tying this information together, you get a lead score that measures how serious they are about buying from you. By tracking lead scores, it is possible to create agreement between marketing and sales about what constitutes a qualified lead, making it possible to hand very well qualified leads to your sales people. Not only does this help smooth the relationship between marketing and sales, it makes a big impression on your customers, making them more likely to positively influence your next customers. You can arm your sales team with reams of data about customer interests and concerns, giving them a tremendous advantage as they initiate conversations with prospects to convert leads into real sales opportunities. 4. Harness attitudinal dataVisitor interaction with your site can provide a rich seam of knowledge about attitudes and behaviour that must be shared with other databases, including customer relationship management (CRM) systems. It should be possible, for example, to tune messages and content on the website for different groups of customers and to continually improve upon the online experiences that produce the best results.

Customers reveal a lot about their attitudes, especially if they start making repeated visits or complete a profile form in order to register with you. Harvesting attitudinal data allows you to start personalising interactive experiences to deliver optimum business results. You can track interactions over time, test multiple campaigns and determine what most motivates customers to engage with you. Once you’ve connected web insights

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Although government reports tell us we are officially out of recession, it doesn’t feel like it for many companies. There is a ‘lag effect’ and there are still redundancies and disinvestments to come as businesses continue to suffer weak order books. Also, until the election takes place, business owners still can’t be certain about the outlook for the rest of the year. But so far, it does look as if soft

trading conditions will remain the norm, so businesses are certainly not out of the woods yet. On a positive note, business failures and unemployment figures are slowing down and order books are showing signs of returning to health, but it is essential now for businesses to fight to retain and win customers and to get ahead of the competition.

One of the biggest challenges in UK business at the moment is the fact that business owners almost seem resigned to their fate, complaining that the recession is responsible for the current poor state of their business. But surely, this is a bit like complaining that you are wet because it’s raining. How about wearing a raincoat?

The actual raincoat for business is not defence—it is to attack. Sun Tzu in the sixth century said that you may survive though defence but you can only win by attacking. One of the strangest paradoxes of the business world is how many business owners don’t see their own situation as being competitive. This is absurd, as competition in so many forms is ever present and can never be ignored.

The first line of attack should be to strengthen the customer base. Customers need to be given stronger reasons to buy products than ever before, so investing in innovation,

We may be officially out of recession, but it will take a while before we return to ‘business as usual’. Stephen Archer of Spring Partnerships outlines ways to take advantage of the lull to ensure your business surges ahead of the competition when the upturn comes

How to

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they behave. Continue to develop your products and services. NEVER stand still. Even those lucky enough to have patent or intellectual property protection must seek to acquire more advantages.

Make the customer the central focus for the business. The customer with their money is central to business success; so do not rush to copy competitors’ ways of caring for customers (e.g. automated telephone

services!). Develop new ways to engage with customers in a way that listens to what they want. They will repay you over and over. This is how Virgin Atlantic took so much business away from the likes of British Airways.

Make every customer your friend and endorser. The cheapest marketing is done by customers. If they love your product and service enough then they will build your reputation for you—at the expense of your competitors. If they love your competitor but your products and services are better, then get people to trial you. This is the road to customer conquests.

Assume that competitors will always develop new products or services or ways of doing business. Just as you should be trying to outsmart your competition at every turn, assume at all times that the competition is trying to do the same. So complacency is the big bad ‘C’ word here.

Assume that competitors will steal your ideas—so be willing to steal theirs where appropriate. It is a good idea to copy business best practice—sometimes copying is the best route. However, don’t just copy it; seek ways to improve upon it. Look at how the Japanese destroyed the UK motorcycle industry.

Assume that your business could be killed off by new entrants to the market or new innovations—people or technology based. This is all about the unthinkable. Be prepared for competitors arriving with disruptive innovations. When they arrive, you will have to move very quickly and decisively. Consider how MP3 has affected CD sales—and do you remember cassette tapes?

Look forward, not back. By all means look at your competitors but look to the future to bring your own disruptive innovations and competitive advantages. In the end, competitiveness is a state of mind. Acquire it if you have not done so already. It will be the hanger for your raincoat.

Stephen Archer is director at Spring Partnerships www.springpartnerships.com

marketing and differentiation is essential. Companies need to know what their customers want and even more about what their competitors are offering. Competitors of all kinds are the minimum benchmark for which to aim. But equalling the value of competitive offerings is rarely going to suffice—businesses need to ensure they are moving constantly to stay ahead of competitors and never standing still.

Strong leadership is needed too, to re-engage staff and move the business forward. The recession unfortunately highlighted many examples of poor leadership as many senior executives struggled to cope with the new challenges they faced. In fact, a recent study from the Kenexa Research Institute stated that just 47 per cent of UK employees rated their senior leadership team as effective. In terms of leadership effectiveness, the UK was in fact ranked below India, Brazil, China and the United States. So improving leadership skills is becoming a major concern and a top priority for many UK businesses this year. According to Henley Business School’s Corporate Learning Priorities Survey 2010, which questioned 2,500 HR and learning and development practitioners, developing the leadership skills of middle managers is the number one priority for 67 per cent; and 35 per cent said that leadership development was a priority for their senior leaders.

But companies can improve leadership immediately. One of the most important ways is for leaders to create a compelling vision that employees buy into; and to communicate that vision regularly. They also need to make big decisions, take risks and be prepared to adapt quickly to change and jump on new marketing opportunities. Unfortunately, this kind of leadership is too often stifled in UK companies, with bold decision makers sidelined. To succeed, leaders need to stick their heads above the parapet and demonstrate their vision and confidence in the future. Those that do will find they have the support of a motivated and energised workforce behind them ensuring they will be more likely to achieve their goals. Speed is of the essence. Leaders need to cut down the meetings and excess consensus and just get on with it!

So what can businesses do to be more effective?Firstly, know what your customers want and know even

more about what your competitors are offering and how

“Make every customer your friend and endorser. The cheapest marketing is done by customers”

O p e r a t i o n a l e x c e l l e n c e


Healing


As each day passes, we seem to learn of new threats to our planet’s fragile ecosystem—a vast number of which are the result of global industry. But one pioneering company based in South Africa’s Eastern Cape is giving credence to the idea that industry and nature can work together. It has hit on the perfect blend

of corporate activity and conservation, thanks to its founder’s thirst for local knowledge.The Mantis Group is a group of five-star boutique hotels and game reserves, with

headquarters in Port Elizabeth, South Africa. It does however, have a global reach—indeed, the company recently introduced its Mantis Journeys to South America, which include rainforest visits and a trip to Buenos Aires.

Mantis owns game reservations in Africa, hotels in Europe (and increasingly throughout the world) and is thoroughly committed to education that extends far beyond its work of teaching local people about the importance of their environment. Indeed, the company boasts a welter of global awards for its conservation and educational work, including The World Travel Awards’ World’s Leading Safari & Game Reserve and World’s Leading Conservation Company for the 13th consecutive year in 2009.

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Never has there been a greater need to teach the world about the importance of conservation. Andrew Pelis talks to one South African company that is making impressive strides in doing just that

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This is all a far cry from the desolate landscape which Adrian Gardiner, owner and chairman of the Mantis Group, surveyed back in 1992. “My background was in construction and transport and when I bought 2,500 acres at Shamwari it was degraded, drought-ravaged land. It started out as a weekend farm project for me and at the time I had no intention to put the local wildlife back on the land. As I read up on the area I learned that much of the wildlife had been decimated; the last lion disappeared in 1850 and we hadn’t had rhinos for a very long time. I decided to rejuvenate the area and we gradually re-introduced the native species.”

Following enormous hard work and the consolidation of local farms, Shamwari has grown into a 50,000 acre game reserve, home to Africa’s Big Five inhabitants—lions, leopards, elephants, rhinos and buffalo.

A further 100,000 acre site close to Cape Town; the Sanbona Wildlife Reserve, and links to the high profile Kruger National Park (including a concession permitting the Jock Safari Lodge), in addition to the group’s involvement in Rwanda through its popular Gorilla and Primate Experiences, have helped turn Mantis into the continent’s leading game brand.

Over the past 10 years the group has also moved into the boutique hotel market. It has purchased the Draycott and Lord Milner hotels in London and opened affiliated hotels worldwide which offer the five-star Mantis experience. The UK connection in particular is one that Gardiner has been keen to utilise. “Historically, there has always been a close relationship between South Africa and the UK; and today, around 50 per cent of our 40,000 annual visitors to South Africa come from Britain. We have offices in London, Peterborough and York and sales offices around the world.”

Gardiner says that the last 12 months have seen Mantis achieve phenomenal growth—and he is quick to acknowledge the role of his management team. “We have concentrated on acquiring the right skills within the company and have adhered to a simple ethic: the manager has to believe that they own the business they operate—and I am a great believer in sharing profit around.

“We now have five divisions,” he continues. “Development has grown enormously; and we provide a number of turnkey solutions to people that come to us for help to start hotels or reserves. It is our expertise and experience that has helped to really grow the business in this area recently. We also offer hospitality and marketing services within this sector; while the wildlife division’s success is well documented through our work at Shamwari,” he adds.

The fifth division at Mantis is an area that Gardiner hopes will leave a lasting legacy—education, and not just among its 1,500 employees, but also among local



communities and tomorrow’s future conservationists and hoteliers. “We have joined forces with the world-renowned Dutch university Stenden to create the Stenden University Campus close to Shamwari, which offers a bachelor’s degree programme in International Hospitality Management,” Gardiner reveals. “We accommodate around 200 students and this is the only place in the world where they can do a semester in wildlife.”

Further partnerships with the Born Free Foundation (teaching 500 disadvantaged children a month) and the Wilderness Foundation South Africa, plus Mantis’ very own Shamwari Foundation, help to educate tourists and the local community on the importance of conservation in a number of areas. These include reserve and game management, vegetation management, water management and anti-poaching initiatives.

“I am the chairman of the Wilderness Foundation,” states Gardiner, “and one of our aims is to provide AIDS orphans with an education in hospitality. This project has proved wonderfully successful and my CEO recently won the Rolex Award in recognition of our work.”

Gardiner admits it is challenging to ensure that all sites operate according to Mantis’ credo—which means leaving very little carbon footprint while at the same time operating profitably. “We operate the Green Leaf initiative [which helps to measure and reduce the carbon footprint of tourist accommodations] and are now rolling this programme out to our European facilities. Fortunately we are still relatively small, which makes this much easier to do,” he explains.

While accepting that the global economic situation has had a largely negative effect on standalone hotels, Gardiner says that Mantis Group’s wide range of products and services has helped to strengthen its brand.

The group has now embarked on a business strategy with a special focus on the European market—and Gardiner





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has very clear ideas on its direction. “The marketplace has become very competitive and we receive enquiries every day from businesses wanting our help. We are now consolidating and are being much more selective about which projects we will work with.

“We don’t want to become a hotel chain; we want to create rarity. Each hotel offers a different five-star experience (we are at the top end of the market only) and we try to create a Mantis Journey for each client. For example, if they visit Victoria Falls, they will also visit product along the Zambezi.”

It could be argued that Gardiner has already left a lasting

impression, since he officially owns Africa’s Leading Game Reserve Brand 2009 (another accolade from the World Travel Awards). However, he sees his role in human terms also. “I’d like to take Mantis into areas of distribution and construction, but we would also like to do the marketing, and provide education and exchange programmes.

“Man is probably the most disorganised creature on the planet and has abused all of his resources. We are now at a serious stage—and Mantis is aiming to take conservation and carbon footprint control to the next level,” he concludes. – www.mantiscollection.com Editorial research by Jeff Abbott

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Lapland might be more commonly associated with Santa Claus than mining for gold, but this is where one of the largest gold deposits in northern Europe is to be found. Known reserves at the Kittilä Mine already contain more than four million ounces and there is a strong probability that much more will yet be found in a

series of deposits running along a 25 kilometre trend. The mine is located approximately 900 kilometres north of Helsinki and 150 kilometres

north of the Arctic Circle. Its first gold was poured as recently as January 2009 and commercial production began four months later. Three thousand tonnes of rock a day must be crushed and processed to extract a yield which is currently in the region of 150,000 ounces of gold a year.

Kittilä is the furthest north of all the mines in the Agnico-Eagle portfolio and is worked as an open pit mine at present. However, the mine’s general manager Carol Plummer is quick to dispel images of empty frozen tundra. “In fact, the temperature here is much more moderate than that found in northern Canada. The Gulf Stream from the Norwegian coastline has a moderating effect, so even though we are well within the Arctic Circle, there are trees and shrubs which you might not expect to find,” she says.

prizeGlittering

The Kittilä Mine operated by Agnico-Eagle Finland is one of Europe’s largest and most exciting gold deposits. General manager Carol Plummer talks to Jayne Flannery about the mine’s potential


A g n i c o - E a g l e F i n l a n d : K i t t i l ä M i n e


articdrillingcompany.com

articdrillingcompany.com


www.arinox.se

www.labtium.fi


Battling with the cold is much less of a challenge than finding the skilled people needed to operate the mine. “Finland has a strong mining history, but has had fewer operational mines in recent years, so there is a lack of experienced engineers. We are heavily involved in a whole range of training initiatives and we are very supportive of the University of Helsinki, which is doing an 18 month conversion course to give engineers from other disciplines the skills necessary to adapt to mining,” she explains.

Language is another major challenge for this English speaking manager, particularly in a highly technical

environment where health and safety must always be a priority. “The site has two full-time translators and a multi-lingual management team. It is critical that we understand each other—the terminology we use is not something that can be looked up on Google. Just sending out an email can be a challenge because our use of language has to be precise and fully understood by everyone,” she comments.

As well as the site’s excellent safety record, Plummer is also proud that the mine is working to exceed government environmental guidelines in the management of the waste rock it produces. “We have a very competent environmental team in place and aim to have as little impact as possible.”

Open pit mining is well established; and Plummer expects to see production start on underground reserves later this year. “We are currently undertaking a feasibility study and so far the results are encouraging. Geologically, there is still a lot of open territory and we keep increasing our estimates of the reserves.”

At present there are more than 200 contractors on site, most of whom are attached to one of the 11 diamond drills that literally spearhead the exploration. A further 300 people are directly employed by Agnico-Eagle. Extracting

Labtium is proud to be a long-standing partner of

Agnico-Eagle’s Kittilä Mine. Labtium has been part of

this success story from the first exploration sample to

the planning and building of the mine and its facilities,

providing analytical and expert services. The co-

operation has been a learning process for both parties,

based on strategic partnership where the needs of the

project are jointly investigated and understood.

Labtium


www.oykatiab.com

gold might not be about medieval alchemy, but it is still a complex and demanding process, particularly in this instance, where geology dictates that the rock does not easily give up its prize.

“Each tonne of rock yields on average 4.8 grams of gold,” she states, before going on to explain the series of processes needed to extract the precious metal. “First, we must move the rock to the processing plant where it is broken down in the crusher to pieces less than six inches in diameter. Then it is ground into a powder. We rely on a standard flotation separation method, whereby we add a chemical that causes the gold bearing particles to be


“We are very supportive of the University of Helsinki, which is doing

an 18 month conversion course to give engineers from other disciplines the skills necessary to adapt to mining”



attracted to air. Air is then bubbled through so the gold bearing ore floats to the top of the tank whilst the waste material sinks to the bottom.”

Unlike the company’s other mines, there is refractory rock at Kittilä, which means that the gold cannot be simply dissolved in leaching tanks. “It must first be subject to high temperatures and high pressure in order to break down the sulfide minerals and release the gold and then it can be treated with the normal extraction method,” explains Plummer. “We end up with a high grade sludge which is then melted in a furnace before being poured as gold bricks. However, to give near total purity, it must then be refined even further—but that is not something we do on site. ”

Plummer points out that one of the advantages of being part of a larger group is the sharing of best practices, both from a technical perspective and from the point of view of developing human resources. “For example, our supervision formula was pioneered in Quebec and is used by the Agnico-Eagle mines there. As a group, we have developed a very

specific way in which we want our managers to supervise and communicate. A standard approach and a common communication tool ensures that engineering or maintenance personnel are immediately informed of anything unusual or out of the ordinary. It is important for productivity, but above all for safety that all our supervisors work to the same high standards. There are very clear guidelines in place regarding what should be verified and checked in each operation with specific check lists for each task that must be undertaken.”

Looking to the future, Plummer points out that the mine is in its infancy and has enormous untapped potential. “Already we have 26 million tonnes of probable mineral reserves identified and we know that there is much more yet to be identified. This is what all our exploration efforts are geared to finding out. We don’t yet know what the limit is—only that it is still a long way off,” she concludes. http://www.agnico-eagle.com/English/Our-Bus iness/Operat ing-Mines/K i t t i la /defau l t .aspx – Editorial research by Daniel Finn



www.normet.fi

resourcesValued

Companies operating in isolated areas must focus their attention on a robust retention strategy, among other things. As Alan Swaby learns, the extra effort is frequently worthwhile


resourcesCompanies operating in isolated areas must focus their attention on a robust retention strategy, among other things. As Alan Swaby learns, the extra effort is frequently worthwhile

Z i m p l a t s : N g e z i M i n e

Like many an African mining operation, Zimplats’ Ngezi mine lies in splendid isolation, 150 kilometres south-west of Zimbabwe’s capital Harare and is surrounded by...bush! Even though there is no expat workforce

to push costs up, this remote location means that Zimplats has had to put in place competitive conditions of service in order to retain the full gamut of mining, engineering, geology and metallurgical skills it needs to keep the largest platinum resource in the country running effectively.

The mine lies on a geological feature known as the Great Dyke, first recorded in 1867 as a sinuous, layered, mafic-ultramafic intrusion running 550 kilometres along practically the full north-south axis of the country and ranging in width from four kilometres to 11 kilometres. Fifty years after its discovery, the geological oddity turned into a valuable resource when minerals such as platinum, nickel and copper were identified in the rocks. The 90 kilometre long Hartley Complex is by far the largest and most important segment of the Great Dyke, containing approximately 80 per cent of Zimbabwe’s total platinum group metals (PGM).

In 1990 the mining company BHP, in partnership with Delta Gold, began to develop the Hartley Complex and established a mine, complete with smelter, at Selous in 1994. However, the mine never hit the production targets set by BHP to make it profitable and four years later, the mine was mothballed.

Zimplats came into the picture in 1998, as a spin-off from Delta specifically structured to handle the group’s platinum activities. In late 2000, Zimplats purchased BHP’s share of the Hartley Platinum and Mhondoro Platinum joint ventures, which included the concentrator and smelter, and in early 2001 commenced the development of the then Ngezi open pit mine, as well as the construction of an 80 kilometre tarred road linking Ngezi and Selous.

Zimplats is a business with a complicated structure (it is registered in the UK, listed on the Australian Stock Exchange and 87 per cent owned by Impala Platinum of South Africa). Its success to date can be partly attributed to various financial provisions specified in the original 1994 mining agreement set up


www.metso.com

that would secure significant financial and other benefits for the people of Zimbabwe, and contained a number of special conditions not generally available to the mining industry,” explains Patrick Maseva-Shayawabaya, Zimplats’ chief finance officer. “However, in some cases, the provisions of the agreement were not followed up with the necessary amendments to the various acts, leaving uncertainty—and from time to time, we challenge these issues.”

Ngezi went into production in 2001 as a two million tonnes per annum (mtpa) open pit mine. By 2003, underground trial mining had commenced. The successful trial mine led to the establishment of the first of three underground mines which reached full production of one mtpa ore from FY2006. A second 1.2 mtpa underground mine reached full production in December 2008, thus completing the process of replacing the more expensive open pit ore with cheaper underground ore. A third underground mine is currently under development, and will produce two mtpa when it comes on stream next year. The three underground mines are quite shallow, with maximum depth of around 100 metres. “In total,” says Maseva-Shayawabaya, “Zimplats has invested nearly US$500 million since operations commenced in 2001, approximately half of which was on the three underground mines”.


Metso considers sub-Saharan Africa an area of

exciting business growth and development. Three

years ago, Metso began to develop a dealer

network in this territory to assist in growing its

spares and service operations, focusing on the

African countries which were difficult to service

from South Africa. Agents were appointed in West

Africa, Tanzania, Democratic Republic of Congo,

Madagascar and Mozambique to work alongside

existing Metso subsidiary companies in Ghana,

Zambia and Zimbabwe. This dealer development

has proved very successful, bringing Metso closer

to its customers, playing a part in growing sales

and becoming an integral part of its core business.

Metso

by BHP. Some of these agreements are still to be formalised, which has kept the company’s executives busy defending the company’s position.

“The Special Mining Lease and accompanying Mining Agreement entered into between government and Zimplats were designed to encourage large scale mining investment


http://www.fengxing.com

http://www.za.aps-sales.com


Fengxing, China is pleased to have been involved

in the supply of grinding media for the Ngezi Mine

project and has continued to supply the Zimplats

Selous operation for over six years. In addition,

Fengxing is supplier of grinding media to Mimosa

Platinum in Zimbabwe and Impala Platinum in

South Africa.

Anhui Fengxing Wear Resistant Materials Ltd

Platinum is used mainly in automotive catalytic converters and at the height of the market in mid-2008, was selling for around $2,300 per ounce. The worldwide recession resulted in the platinum price collapsing to a low of around $800 per ounce in late 2008. By that time, Zimplats had a sizable ore stock pile and thus suspended the expensive open pit mining operations which were no longer viable. “The ore body extractable by open pit remains an important source of ore for the future,” says Maseva-Shayawabaya.

Operations underground at Ngezi are completely mechanised. Now with a second concentrator, Zimplats has only to ship half the output 80 kilometres from Ngezi to Selous using a fleet of nine trucks working 20 hours a day. Interestingly, the road was built by Zimplats in just a few months and yet is capable of taking the weight of 100 tonne trucks every 20 minutes. In the four hours of downtime, routine service is carried out. But it’s worth the effort—many of these trucks have now been working since 2001, far longer than the five years anticipated.

When the third decline comes on stream, Zimplats will mine 4.2 million tonnes of ore a year. Ninety-seven per cent of this is worthless; but the three per cent that doesn’t end up in a tailings dam produces 125,000 tonnes of concentrate containing a mix of PGMs and base metals. Process this further, and the concentrate is converted to 7,000 tonnes of white matte which realises 180,000 ounces of platinum, 150,000 ounces of palladium and 18,000 ounces each of gold and rhodium, 3,000 tonnes of nickel, 2,000 tonnes of copper and smaller quantities of silver, ruthenium, iridium and cobalt.

“The white matte is exported to a South African refinery in terms of an off-take agreement,” explains Maseva-Shayawabaya, “which buys the white matte at a price based on the open market value of the contained metals. This has led to profitable operations every year so far, with the exception of 2008.”

Although Ngezi mining operations are highly mechanised, they still rely on an extremely large workforce. Zimplats has a direct payroll of 2,500 responsible for all mining and processing activities, with an indirect workforce of another 1,500 employed by suppliers/contractors that provides a variety of services to the business.

Ngezi is not exactly within ‘let’s-have-a-night-out’ distance from Harare or even Selous; but at least the improvements Zimplats has made are keeping the workforce—especially the key technical staff—in relative comfort and benefiting the whole of the Kadoma district in the process. www.zimplats.com – Editorial research by Paul Radbourne


than

demandMoremeeting

Long-term relationships, shrewd investments and an excellent reputation have enabled mining company Benicon to thrive even as others falter. Andrew Pelis talks to CEO Gideon van Heerden to find out more


It is the nature of today’s business world that small, successful companies tend to get swallowed up by the bigger corporations. Outcomes can be mixed; but for one South African mining entity, being bought out

gave it just the impetus it needed for astronomical growth.Benicon, headquartered in Witbank in South Africa’s

mining province of Mpumalanga, was already working on long-term contracts when the markets began to falter; however, the benefits of having been recently purchased by the Sentula Mining conglomerate were paying dividends. Added to which, the demand for coal has been unrelenting and to some extent, has shielded mining companies from the full effects of the global economic crisis. Benicon was therefore able to emerge from the recession in a particularly strong position.

Benicon operates as a full mining company, offering a variety of services across the whole gamut of coal mining including contract mining, mine planning, drilling and blasting, overburden removals, coal extraction and mine rehabilitation.

“The company was founded back in 1979 and used to be privately owned,” explains CEO Gideon van Heerden, who has worked his way up the company ranks having joined with a mechanical engineering background back in 1992. “During the last decade we began to see expansion and in 2006, Sentula Mining purchased the business, at which point I was appointed as CEO.

“As part of a listed company, our whole world has changed since then,” he continues. “A lot of good things have happened, such as access to financing, while the prestige of being part of a bigger group has led to us winning bigger contracts.”

While acknowledging that the takeover also adds pressures such as adhering to corporate governance, van Heerden says that the subsequent investment Benicon has been able to make has contributed to its remarkable 300 per cent growth rate over the last three years. “Back in 2006, we had 400 employees. Today, that number stands at 1,200. Undoubtedly this is partly because we have been a contractor for many years, during which time we have forged an excellent long-term relationship with Anglo American.

“As their business has grown, so has ours; and while we may have once struggled to meet demand (in areas such as purchasing new equipment and bringing in more staff), with

than

demandmeeting

Long-term relationships, shrewd investments and an excellent reputation have enabled mining company Benicon to thrive even as others falter. Andrew Pelis talks to CEO Gideon van Heerden to find out more

B e n i c o n


http://www.megacube.co.za

http://www.waltell.co.za

the Sentula group going forward.While the economic woes of the world have had

some impact on the company, van Heerden says that this provided Benicon with the opportunity to review all aspects of the business. “Last year was a difficult year but we rebalanced our strategy by fine-tuning all of our departments. We were working with the right commodity—there is always a big demand for coal, so while there was no real growth, there was also no real downscale.”

Having already purchased so much equipment, van Heerden believes that Benicon’s position can now only strengthen, as other companies find it tougher to secure financing for capital expenditure in the new business environment. He foresees an exciting future for the company: “Commercially, we have had to contend with new competition entering our markets as work scaled down. It has been important for us to keep clients satisfied by continuing to perform well; and we have won a couple of new contracts in the last month.” Having undertaken occasional sorties into Mozambique and Zambia, Benicon now has high hopes of further expansion across Africa over the next two years.

All this, of course, is coupled with the strength of ongoing long-term contracts and an excellent reputation in the region. “We are quite bullish; we are in the right business; and we have good foundations and a strong future ahead of us,” van Heerden summarises. www.benicon.co.za – Editorial research by Sam Howard

investment from Sentula we have been able to match our understanding of the business with capital expenditure.”

Among the enormous array of mining equipment that Benicon has purchased have been a number of draglines—some of the largest pieces of equipment used in mining and a rare commodity in Southern Africa—which have undoubtedly played a significant part in the company’s recent successes.

As the company has grown, so too has its need for training, and van Heerden says that this has become one of the key drivers for the whole business. “It is always a challenge to get good people, especially highly skilled artisans and managers—and in this mining area, there is a lot of competition to hire the best staff. Our strategy has been to start training people at the lowest level (we currently have 45 people going through our courses) and we have a three-year lead time before we feel people have

sufficient experience to add value to the business. Much of our training is outsourced—we send employees to colleges, for example. The results are beginning to become apparent now as many of our managers came through our training programmes in the early 2000s,” he explains.

The need for training became ever-more apparent as Benicon embarked on its Black Economic Empowerment (BEE) programme. Van Heerden explains that the first step was to identify individuals that the company felt had the greatest potential. “It has been a very successful but slow process,” he comments, “and we have also seen one or two employees leave the company after getting qualified. But our efforts fit in well with our goal to reach Level Four in the BEE programme (we are currently at Level Six).”

At the same time that BEE became a focus, so too did the need for Benicon to recruit a team of engineers to help maintain the company’s ever-growing fleet of Caterpillar earthmoving equipment and trucks. “We’ve actively purchased a lot of equipment and now command a fleet of 380 earthmoving machines. Overall, we have invested around half a billion rand between 2006 and 2009,” van Heerden says. “This of course has meant that we need engineers to maintain all the equipment.”

Benicon has also created a fully fledged in-house workshop that services vehicles and can strip down and rebuild equipment. There is the possibility that the workshop could provide services for other companies in

B e n i c o n

“With investment from Sentula we have been able to match our understanding of the business with capital expenditure”


refined


refined approach

A

India’s largest oil refinery is bringing rewards to the local community as well as to its shareholders. Jeff Daniel reports

If Mangalore Refinery and Petrochemical Limited (MRPL) of India was a football team, it would be high in the Premier League. After all, it’s the largest and most successful refinery in the whole of the sub-continent, employing some 1,250 people and generating not far short of £5 billion in sales.

Like football teams, it’s a company that also likes to collect ‘silverware’—or at least in its case, public awards. Some of these are more predictable in nature, such as the local

chamber of commerce’s awards for exports or gratitude from the state tax authorities for the contribution the company has made; but many of them are heavyweight and go to the heart of what makes this business successful.

When an operation receives a five-star rating from the British Safety Council for its health and safety management systems or wins high technology awards or environmental

protection recognition, then it’s indicative of a management that is trying to make a positive contribution to its workers, host state and country as a whole.

The refinery is located towards the bottom third of India, in the state of Bangalore on the west coast, facing the Indian Ocean. It’s surrounded by beautiful hilly terrain north of Mangalore city and features a versatile, state-of-the-art plant, giving it considerable

flexibility to process crudes of various API with a high degree of automation.

M a n g a l o r e R e f i n e r y a n d P e t r o c h e m i c a l L i m i t e d


[email protected]

hard to provide an attractive and comfortable home-from-home. The naturally lush green environment is further enhanced with planted gardens and parks and boasts the full range of conveniences you could expect to find in any wealthy urban community—social club, swimming pool, gym, indoor and outdoor sports, hospital and not forgetting connection to cable TV. As well as family homes, single men have their own bachelor hostel.

For employees and the wider community, MRPL has set up an English language secondary school affiliated to the Central Board of Secondary Education and administered by an independently registered educational trust. The school

aims to impart education to all without distinction of caste or creed and addresses the educational needs of the whole locality. In total, there are over 1,000 students enrolled there.

In order to help the poor and underprivileged people of the neighbourhood, self help groups are being encouraged, with training on various skill-developing activities aimed at helping these people into activities designed to generate an income.

It’s also gratifying to note the lengths to which MRPL goes in order to meet its environmental responsibilities. Measures taken for the protection of the environment start at the design stage—the process units are heat integrated to the full extent to achieve higher overall thermal efficiency of the refinery, which automatically reduces fuel oil or fuel gas consumption and emissions. The plant also uses some of the most advanced technology around to treat water and recover 99 per cent of sulphur.

MRPL has also developed a 300-acre green belt around the entire refinery, consisting of plant species specially selected to blend with the local flora. The main objective of the green belt is to mitigate fugitive emissions or accidental releases, control soil erosion, facilitate waste water utilisation, control noise pollution and improve the aesthetic view of the refinery. Some of the species, such as mango and shisum, are expected to act as bio-indicators.

Refining is a hazardous business, with the risk of fire or explosion an ever-present danger, so the last word has to go to health and safety. MRPL is reported to be the safest of all India’s refineries and at one stage went for 1,234 days—equal to 7.3 million man hours—without a reportable injury, making health and safety one area where MRPL is quite different to Premier League football! www.mrpl.co.in – Editorial research by James Boyle

MRPL was created in 1988 as a joint venture between two of India’s significant industrial players but since 2003 it has been a subsidiary of the Oil and Natural Gas Corporation of India—a Fortune Global 500 Company and the first ever Indian entrant in Fortune’s list of the World’s Most Admired Companies in 2007.

The refinery was originally built with a processing capacity of 3.0 million tonnes per annum, but volume has since been more than tripled to the present capacity of 9.69 million tonnes per annum, thanks to investments of around $3 billion. The refinery was conceived to maximise middle distillates, with capability to process light to heavy

and sour to sweet crudes with 24 to 46 API gravity. It’s the only refinery in India to have two hydrocrackers producing premium diesel (high cetane) and the only Indian refinery to have two CCRs producing high octane unleaded petrol.

In fact, MRPL has a product list of around 30 different categories of oil, ranging from LPG for domestic heating and cooking to bitumen which, in addition to satisfying eight per cent of domestic consumption, is exported by the company to Africa, the Middle East and Asia—activity that has brought it many of the accolades it has won.

So successful have sales been that the plant has been utilising designed-in margins and running at well over 100 per cent of nominal capacity for four years—at times peaking as high as 130 per cent. Not surprisingly, plans have been recently announced to increase the nameplate capacity yet again, this time to 11.82 million tonnes per annum at a cost of around $3 billion.

Of course, converting crude oil to consumable products is what refineries are for but it’s how it goes about its work which sets MRPL apart. At times, its list of socially contributory activities reads more like one belonging to a government than a private company. There is barely an aspect of ordinary life within the surrounding district where MRPL isn’t involved—roads between neighbouring villages have been surfaced and fresh drinking water has been made available to villagers, as has free medical treatment of every imaginable kind.

The company is aware that a productive, stable workforce depends upon keeping families and in particular, non-employed spouses, satisfied. As well as several nearby villages, MRPL has its own self-contained and cosmopolitan township which provides residential facilities for about half the workforce and their families. The company has worked

“MRPL has its own self-contained and cosmopolitan township which provides residential facilities for about half the workforce and their families”

M a n g a l o r e R e f i n e r y a n d P e t r o c h e m i c a l L i m i t e d


century oilTwenty-first


of that first facility, three other units were established in the Free Zone. The company now has in operation the original black oil processing plant, a grease manufacturing plant, an oil terminal and a condensate splitter.

In 2007, the organisation realised that the business had the potential to grow from its fairly small size to a large, powerful entity. Sinha was brought into Gulf Petrochem that year, bringing with him 32 years of management experience in various industries. “We brought in Barclays, HSBC and Standard Chartered to secure increased finance for the company, which, along with the establishment of an oil terminal, allowed us to grow dramatically, especially on the oil trading side,” Sinha explains. “We brought on specialist professionals to work in dedicated areas—this enabled our

Jane Bordenave talks to Harsh Sinha, chief executive of Gulf Petrochem, one of the fastest growing oil trade businesses of the moment

Gulf Petrochem is one of the most important oil traders and producers of value-added oil products in the United Arab Emirates. Founded by entrepreneurs Ashok Goel and

Sudhir Goyel in 1998, the Sharjah-based company now has a turnover of $211 million.

“The promoters worked in the oil and petrochemical industry for many years in their home country of India,” explains Harsh Sinha, the company’s CEO, “then, in 1992, they moved to the UAE and began trading in oil and chemicals. In 1998, they decided to cultivate business and increase sales by setting up a processing plant there and Gulf Petrochem was established in Hamriyah Free Zone, Sharjah.” Over the 10 years that followed the construction

G u l f P e t r o c h e m



to make sure that we were not stockpiling product only for its price to drop, leaving us ‘holding the baby’,” says Sinha. “We also stepped up our marketing effort to bolster sales.” As the second half of 2009 brought a more or less complete recovery in the market, the firm was able to pull up its turnover. “We grew by 46 per cent in 2009, yet our achieved turnover of $211 million was a tad shy of our target of $218 million. One must view this in the global economic context. Clearly, attaining our pre-recession projections wasn’t going to be possible in the circumstances.”

Gulf Petrochem is investing heavily in its future growth and development. By the third quarter of 2011, the company will have completed construction of an oil storage terminal just outside the port of Fujairah. The plot that the business has acquired is half a kilometre wide and when finished, the facility will contain over 400,000 cubic metres of storage space. “While we plan to lease out the majority of the capacity, we would also use the facility for our own trading,” says Sinha. “Leasing will be an important part of the revenue stream coming from this new asset.”

In addition to this large construction plan, the company also has a strategic plan to penetrate two new geographical markets—India and Tanzania. Sinha explains the decision process behind this. “At the moment, we are based solely in the UAE, but we intend on branching out into other markets. Given our nationality and prior experience in India, making inroads there is a logical progression. We are planning to put up oil terminals and warehousing across the country for the storage of various oils. In addition to that, we are also in talks with some Indian ports with a view to establishing storage terminals like the one in Fujairah.” The move into Tanzania is already underway, with the company having already acquired land in Dar es Salaam on which it will build a condensate splitter.

Gulf Petrochem is a well-established and adaptable business, driven forward by a knowledgeable and future-conscious board. Having changed its modus operandi to help it adapt to the effects of the economic storm, it has proven itself as an important and long-term player in the field of petroleum products. As it grows into new areas, we can look forward to this company becoming not just one of the best-known oil traders in the United Arab Emirates, but in the world. www.gulfpetrochem.com – Editorial research by Charles Sizeland

business to run in a process-oriented manner.” By the end of the year, the company’s turnover had quadrupled from $26 million to $107 million.

The firm continues to grow and adapt to new markets, reconfiguring the use of its assets as necessary. As an example of this, the business has changed the type of product generated by its condensate splitter to meet the needs of the market. “When the plant was commissioned, the price of some of the finished products we produced, such as naphtha and diesel, vis-a-vis the price of the feedstock

condensate oil was very lucrative,” says Sinha. “However, the market has changed and processing condensate is not as profitable, so we have moved ourselves more towards processing other feedstock such as light crude oil.”

In recognition of market demand and potential, Gulf Petrochem has now diversified into bitumen. The company has been trading in packed bitumen for several years already and has now invested in the infrastructure required to receive bulk bitumen through vessels, and to store and transport the product to its customers across the UAE and Oman. “We are also investing in a production plant that processes bitumen into several value-added products such as polymer modified bitumen, oxidised bitumen, emulsions and cutbacks,” says Sinha.

Although the company has different areas of operation and straddles production and trading, Sinha explains that these are all interlinked and depend on one another. “When you look at our move into large-scale oil trading, it was a natural progression—we already had the infrastructure present in our oil terminal and chartered vessels as well as our existing experience. It seemed to us the logical thing to do.” This move did involve an economic trade-off—as the size of the oil trading business grows, the profit margin in this area gets squeezed. However, not doing so may have stunted the growth of the company as a whole; and Sinha is philosophical about the situation. “As long as we are growing on the top and bottom line and our financial ratios continue to be healthy, we’re happy.”

A diversification in business areas isn’t the only thing that has put pressure on the company’s profits. Particularly in late 2008 and early 2009, it felt the effects of the recession on its sales but decided to act proactively to mitigate them. “We streamlined ourselves, more or less buying to order

“The market has changed and processing condensate is not as profitable, so we have moved ourselves more towards processing other feedstock such as light crude oil”

G u l f P e t r o c h e m


isn’t everything

Size Max Petroleum, a five-year-old startup launched with $46 million from an IPO, is poised to harvest rich rewards from one of the biggest hydrocarbon deposits in the world, Pam Derringer reports


Blessed with great timing, investment funds and industry smarts, London-based Max Petroleum Plc jumped on a rare opportunity to buy a stake in the oil-rich Pre-Caspian

Basin in 2005 and snapped up lucrative oil and gas licenses to 5,212 square miles of land—about the size of Connecticut—in Kazakhstan, a former Soviet republic bordering the Caspian Sea.

Dwarfed by the megabillion oil giants in the region, Max Petroleum ironically gains some advantage from its smaller size because it can afford to tap wells that would be uneconomical for its larger neighbours to develop.

More significantly, Max Petroleum has acquired 1.3 million acres of state-of-the-art 3D seismic data, which President Michael Young says is a major competitive differentiator and the key to the company’s future success. “3D seismic is not new, but this is the first broad use of onshore, exploratory 3D in the Pre-Caspian Basin,” he says. Without 3D data, Max Petroleum would have had little chance of finding any attractive drilling prospects that the Soviets had not already discovered and drilled based on 2D seismic, used extensively to explore the Basin in the past.

But exploratory (i.e., widely spaced) 3D seismic can provide subsurface images of potential oil bearing structures that cannot be seen using 2D seismic, allowing Max Petroleum to see potential hydrocarbon deposits that the Soviets missed, which is key to the company’s business strategy, he adds.

Nonetheless, Max Petroleum’s commitment to go 3D wasn’t for the faint of heart. Just two years old at the time, Max Petroleum’s 2007 decision to go that route required a huge investment of money and time. Shooting 1.3 million acres of 3D seismic cost $35 million and took two and a half years, Young says.

This commitment, in turn, required the hiring of geologists and geophysicists to interpret the data; consequently, Max Petroleum coaxed Richard Hook, a veteran of international oil exploration, out of retirement in 2008 to recruit a Houston technical team experienced in analyzing similar terrain in the Gulf of Mexico.

The geologic analysis still continues, but by the end of 2009 the team of five had developed a portfolio of 12 shallow, post-salt prospects with mean target sizes ranging from 9 to 50 million barrels. The entire shallow portfolio will test 254 million barrels of aggregate resource potential for less than $24 million, or $2 million per well. Max Petroleum has even more explosive upside potential in its

everything Size

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deep portfolio, which consists of 11 prospects and five leads that range in size from 100 to 600 million barrels of oil each.

Undergirding Max Petroleum’s success has been its deep roots in the oil exploration business, with James Jeffs, executive co-chairman, using his industry ties to recruit other top US oil industry veterans to manage and advise the fledgling venture. The team’s seasoned expertise has been key, giving it the perspective to make the right decisions and the courage to take big risks, such as funding the costly 3D seismic program. The team also has strong political ties in Kazakhstan and the US, which is critical to successfully operating internationally, Young says.

In addition, management is savvy enough to know the company’s limits and has wisely confined its direct activities to the shallow post-salt prospects that are relatively affordable to drill. The greater hydrocarbon potential—in the billions of barrels—is buried in the deeper, pre-salt deposits, which can cost up to $25 million apiece to drill, Young says. Instead of overreaching its capabilities, Max Petroleum plans instead to reach agreement with a larger corporation or corporations for deep well exploration. “We’re looking for partners to share the cost for testing deep prospects,” he says, adding that the company hopes to have a pact in place by next fall.

However, Max Petroleum intends to manage and oversee the drilling of the shallow, post-salt deposits itself according to an ambitious timetable, Young adds. “Our goal is to drill and test all 12 prospects by mid-year 2011.”

To date, three of the 12 post-salt prospects have been tested, with one new discovery and two dry holes, which is in-line with the company’s expectation to generate three to four discoveries out of the entire post-salt portfolio. Combined with a field extension discovered previously, Max Petroleum is currently producing 2,300 barrels of oil per day generating in excess of $4 million per month in revenue, Young says.

“That’s what’s exciting,” he says. “We made the first shallow, new field discovery in the Basin since 1993. It was a relatively small structure which the Soviets had not shot 2D seismic over. As there wasn’t any surface expression, we couldn’t have seen it without the 3D data, the technical team and a lot of hard work.”

Finally, Max Petroleum had the fiscal expertise to achieve smart growth, investing more than $300 million in acquiring, exploring and developing its acreage in Kazakhstan and increasing equity to $175 million and loans to $140 million. Annual revenues are expected to hit in excess of $40 million for the fiscal year ending March 31, 2010, and the company is cash positive using one drilling rig, excluding debt repayment, Young says.


restructuring, including high-grading 47 leads generated from 2D seismic into the current high quality post-salt prospect inventory, restructuring its outstanding convertible debt, and syndicating part of the Macquarie loan. “We did everything they asked us to do when many thought it would be impossible given the worldwide economic crisis,” Young says.

“That’s the excitement of our story: where we are now, where we were at that moment and the key decision points,” because Macquarie had to continue to fund the 3D processing to recoup its investment, he explains. “But we met every deadline, oil prices started to recover, and Macquarie now has the potential to earn much more.

“It was touch and go. But they’ve been a great strategic partner,” Young continues. “We did this together. Now we’re sitting on a unique opportunity in the next 12 to 24 months with the post-salt prospects, and we have huge potential on the deep. I don’t know if we will ever see an opportunity like this again.” www.maxpetroleum.com –Editorial research by Bob Meehan

But one of Max Petroleum’s proudest achievements is that it accomplished all this, including completion of the costly 3D imaging project, during and following the 2008 international fiscal meltdown, which dropped the price of oil from $103 to $34 a barrel in less than two months and decimated company earnings and valuation, he says. Many smaller firms in the business did not survive because they couldn’t raise capital, and many thought that Max Petroleum wouldn’t either. “Everyone assumed our primary financial backer, Macquarie Bank Ltd., would push us into insolvency, which could have led to the cancellation of our subsoil license,” Young says.

Instead, Max Petroleum developed a creative strategy to restructure its outstanding debt by issuing warrants representing an effective 35 per cent equity interest in the company in exchange for continued access to capital necessary to keep the company afloat. Most significantly, Max Petroleum won Macquarie’s confidence by delivering on all of its operational milestones agreed to as part of the

M a x P e t r o l e u m



Managing director of Southern African Shipyards (SAS) Louis Gontier has a burning ambition. He is determined to take Africa’s leading commercial and naval shipbuilder from a regional to a global platform.

Based in the Port of Durban, Africa’s busiest port, the shipyard has passed through many phases of evolution—it once focused on luxury yachts—and now concentrates on vessels up to 100 metres in length, particularly large Voith Schneider tugs and other harbour tugs. “We have the capability to tackle bigger projects, but we are restricted on our launching facilities,” Gontier explains.

The company was taken over by a consortium of investors in 2006 having been closed for three years—a move made possible by a loan from the South African government. One of the biggest challenges in returning the company to profitability has been recruiting and training the master shipbuilders who underpin the enterprise. South Africa’s shipbuilding industry is undergoing a renaissance after a number of low-key years—now, SAS is playing a major role in rejuvenating the industry. The yard directly employs or contracts up to 400 personnel including highly skilled craftsmen and is taking a leading role in training the next generation of shipbuilders.

globalGoing

A regional presence is not enough to satisfy the ambitions of Southern African Shipyards. Managing director Louis Gontier talks to Jayne Flannery about the factors that are propelling the company onto the global stage

S o u t h e r n A f r i c a n S h i p y a r d s



“We have undergone many growing pains with regard to staffing the industry. Training is an enormous priority for us and fundamental to the future of the South African shipbuilding industry. We started a full apprenticeship programme about eighteen months ago, but there are no short cuts possible—it can take five to seven years to make a master shipbuilder,” he says.

The shipyard has been in existence for a number of years, but Gontier believes his team has succeeded in breathing new life and energy into the business, in keeping with the new face of South Africa. Black Empowerment is taken very seriously and the yard is fully compliant with all of South Africa’s labour legislation. “We see ourselves as a young and dynamic company that has developed the skills and knowledge to take on complex, out-of-the-ordinary projects that other shipyards may not feel able to tackle,” he explains.

There are, he believes, several important differentiators that set SAS apart from its competitors. “We not only



www.cummins.com


produce a top quality, high end vessel, but we are also extremely flexible in our approach to customisation. Of course we build from a standard platform, but the actual layout of the vessel—for example, different equipment combinations and the number of crew it can carry—depends totally on the client specification,” he says.

“Unlike many other yards which compete only on price, we have no interest in compelling our customers to take a standard design or making them pay the earth if they want to deviate from the standard. We are very happy to adapt a specific design to meet the precise needs of each customer and we go much further than most other shipyards to ensure that our clients get a vessel that exactly suits their requirements.”

Gontier points out that there are a number of different procurement strategies when it comes to making this type of investment, bearing in mind that a typical vessel can cost in the region of $18 million. “We believe that total lifetime cost is much more important than the initial purchase cost, but there are many different approaches. Often, it is a question of achieving a balance between maintenance costs and reliability. Others will opt to renew a vessel after five to seven years, meaning there are no maintenance costs at all.”

However, he believes that the influx of cheap, low quality tugs from China has highlighted the importance of quality standards. “If a vessel is built in China, it will generally be necessary to start an immediate maintenance programme which means it cannot be in constant service. Our tugs, on the other hand, should be virtually maintenance-free for the first five to seven years and they will also be extremely reliable,” he says.

When maintenance is finally needed, the yard boasts a state-of-the-art repair facility offering the full portfolio of services, from rudder and underwater hull repairs to electrical and hydraulic revisions. “In the future, we see ship repair and maintenance as very important to our growth. In common with all shipbuilders, that is where the opportunity to make money lies.”

Reliability is particularly important to the oil and gas industry—just one of the sectors SAS aims to target through its repair services. If critical supplies cannot be moved to an offshore platform because of equipment

“Training is an enormous priority for us and fundamental to the future of the South African shipbuilding industry”


http://www.valvesafrica.com

[email protected]

failure, the resulting downtime can quickly lead to losses that run into thousands of dollars a day.

Approximately four tugs a year leave the shipyard at present, but there is the capacity to work around the clock; and the yard can also accommodate a dual build programme. However, Gontier has his sights firmly set on new ventures further afield. The company is in talks with potential partners in countries as far away as Finland and he also believes there is a bigger opportunity on the African continent.

“Take West Africa and Angola, for example,” he continues. “There is a major market for offshore vessels from these countries because of their growing energy

sector. It is an opportunity that we hope to tap into by sharing our expertise through partnerships with other shipyards where the industry is less well developed.”

Gontier believes that expanding along the African coast by partnering with embryonic enterprises is a win-win proposition for any country that seriously believes it can develop a national shipbuilding capability. “We have a deep and profound knowledge base. The operation we have created in Durban since taking over the company could be seen as a highly successful blueprint to replicate elsewhere. We have proved that our way of working has something valuable to offer,” he concludes. http://www.sa-shipyards.co.za – Editorial research by Vincent Kielty

“We see ourselves as a young and dynamic company that has developed the skills and knowledge to take on complex, out-of-the-ordinary projects that other shipyards may not feel able to tackle”




Voltas is a diverse engineering group, publicly quoted and India’s largest exporter of electromechanical projects—recent major examples include the world’s tallest building Burj Khalifa, where Voltas installed HVAC, plumbing and electrical systems, and Ferrari’s massive new theme park in Dubai where the company

won the $330 million contract for the electromechanical work. Within India, Voltas is a leading OEM in the field of air conditioning and commercial

refrigeration; and additionally designs, manufactures and supplies forklift trucks, warehousing equipment and cranes. It represents the major global mining equipment and textile machinery manufacturers. Its newest fledgling business unit, destined to grow into a substantial division, is involved with water treatment and purification. In addition it is also a leading and well-known room air conditioner brand.

Though it runs modern manufacturing operations at its plants in Thane, Dadra near Mumbai and Pantnagar in Northern India, where the air conditioning, refrigeration and materials handling equipment is made, these employ only around one tenth of the company’s 8,000 employees. “Our core skills lie predominantly in project management, value engineering and the timely completion of projects with a focus on quality,” explains Business Excellence head Prashant Karkare. Voltas is a systems integrator, supporting its operations with manufacturing where appropriate (except for its star-rated Vertis brand air conditioning products which lead in the Indian market and present a great potential for export to Africa and the Middle East).

Voltas, then, is one of India’s most successful businesses. It and its parent group Tata are making a profound impact on the global economy as they reach out into new markets, and it is worth looking in some detail at how they have achieved this—after all, few people can be unaware of Tata’s acquisitions in the steel and automotive markets. A significant factor has been the company’s Business Excellence model, which is known as the Tata Business Excellence Model (TBEM) across the Tata Group.

TBEM is based on the framework of the Malcolm Baldrige scheme—the formal Business Excellence measure recognised in the United States. “Every year, the Tata Group

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As part of the renowned Tata Group, Voltas Limited has improvement in its DNA but as its vice president of Business Excellence Prashant Karkare explains to John O’Hanlon, its definition of this word extends far beyond financial results and reaches deep into Indian society at large

Vo l t a s


http://www.flamco-gulf.com

http://www.flamco-gulf.com

companies undergo an assessment by a qualified team of assessors conversant with the Baldrige model,” Karkare explains. “At Voltas, we use TBEM as the basic framework for carrying out process and systems level improvement.”

Continuous improvement starts with the leadership, so it is not a question of introducing lean practices on the shop floor simply to cut costs, though cost reduction initiatives across Voltas have paid off in the recent recession. Total productive maintenance (TPM) is seriously being pursued to enhance operational efficiencies at the manufacturing plants; and lean manufacturing practices will be introduced sooner or later. “Continuous improvement is part of our DNA, and we encourage all our people to think of ways they can improve not just their work but the whole of their lives,” says Karkare (we will come to that later).

The corporate culture has always encouraged personal development and business excellence. The tools are the best the world has to offer. Last year for example, seven six sigma projects were launched with the help of Motorola University. “We teamed up with their local representatives, designed a six sigma programme, identified projects and married these up with the training,” he says. “We have targeted up to 20 six sigma projects in the current phase and will do a lot more in the coming year and develop some black belts too.” So far, eight projects have been completed and other projects are at various stages of the DMAIC methodology of six sigma.

5S, kaizen and daily work management (DWM) have been introduced at all the manufacturing plants; however, that is just the beginning of the story. “You have to sustain these improvements or you have lost the game! Success comes from grass roots involvement,

Metallic Building Materials of Dubai, in conjunction with its principal, Flamco Middle East, is delighted to have

cooperated with Voltas on its Etihad Towers project in Abu Dhabi. Voltas has demonstrated its forward-thinking

attitude by incorporating the very latest technology within the chilled water system to achieve the best solution

for providing expansion and pressurization control and de-aeration by installing Flamco Pump Automats and

Pressure Step Degassers.

With the high static heads and space restrictions involved, the Flamco systems have achieved a result that would

be extremely difficult had Voltas selected previous generation expansion vessels and air separators. The Flamco

Microprocessor-controlled Pump Automats use pressure-less vessel technology that effectively and substantially

reduces the size and quantity of expansion vessels required to accommodate the thermal expansion in the chilled

water system whilst maintaining the system operating pressure within very precise limits.

Pressure step degassing techniques obviate the need for large tangential air separators. In the smaller models

of pump automats the de-aeration is performed automatically within the unit, whereas the larger models use a

compact Flamco ENA Pressure Step Degasser. The significant space-saving and efficiency of these products is

widely being accepted as the equipment of choice on the region’s most prestigious projects.

Metallic Building Materials

not from coercion by management—when people feel that the changes belong to them, they are stimulated to achieve more.”

There is no better way to illustrate Voltas’ corporate culture than to look at its social programmes. Starting from its engineering core, it has supported an impressive number of India’s life changing social organisations. Examples in Mumbai itself include the Joseph Cardijn Technical Institute and the Bosco Boys’ School, where Voltas conducts a course in maintenance of room air conditioners. Both these institutions help underprivileged boys who have left school early and are at risk of sinking into poverty and even criminal behaviour. In a similar manner, Voltas is partnering with GMR Varalaxmi Foundation in Hyderabad. “These institutions do fantastic work and we run classes for them, bear all the expenses of training, uniform and fees, design the course and provide equipment and teachers. Some of our employees, including retired ones, go and teach there.” When trained, Voltas tries to place the students with their dealers or franchisees, he adds.

More than 1,000 Voltas employees are involved in voluntary work, with the full support of the company. “We want to bring a smile to the faces of old people, widows, mentally challenged children; and bring change into their lives.” The company helps the volunteers with training or by bringing in outside agencies and the like. Akanksha, an NGO which mainstreams underprivileged children in education, operates from Voltas’ Mumbai office and company volunteers provide a mentoring programme for the children. The ANZA Special School for mentally and physically challenged children in Mumbai is another institution Voltas has adopted. Voltas volunteers support income generation workshops by arranging to sell


handicrafts made by the children, and also

support workshops for parents on how to cope. Our Lady’s Home is an orphanage for boys,

where Voltas volunteers teach mathematics and science and organise educational trips.

The Voltas Organisation of Women (VOW) is a registered trust comprising women employees and spouses of male employees and has been in existence for over four decades. VOW provides medical and educational relief to the underprivileged, as well as financial assistance to women’s self-help groups (SHGs) for vocational training. It also organises seminars, workshops and street plays on issues such as human trafficking, domestic violence, girl-child infanticide and health and hygiene. Currently, VOW is looking at the possibility of giving a facelift to the Shepherd Widow’s Home for Old Women and strengthening the SHGs for tribal women.

What relates these projects to business excellence? Consider them alongside Voltas’ customer and employee relations strategies. “Of course we want to improve our customer satisfaction scores but in the last year we have

m o v e d our focus from

customer satisfaction to customer engagement,” says

Karkare. This calls for a higher level of interaction and is paralleled by a similar shift in the company’s employee relations. It is typical that the company has an Affirmative Action programme, to remove the disadvantages experienced by reason of caste or ethnicity.

In addition, Voltas has recently completed a carbon footprint mapping exercise and abatement strategies towards reducing its carbon footprint are being worked out. The company has also undertaken focused steps towards safety in all operations, through implementing safety practices based on the OHSAS 18001 standard. Within the manufacturing operations, ISO 14001 is being seriously pursued in respect of environmental matters. All these initiatives show that Voltas is well on the path towards corporate sustainability.

Clear succession management, streamlined work processes, training and personal development and knowledge sharing all have their place; but Voltas appreciates that there’s more to life than work. “We are developing work-life balance with fun initiatives that defocus people from the job.” Celebrations, dance and talent contests are among the ideas coming from ‘fun committees’. As Karkare says, “We try to create an

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outside-in rather than an inside-out organisation.” While strategic planning, knowledge management,

innovation, a balanced scorecard approach and other sophisticated tools and metrics are employed to the full at Voltas, it is perhaps this deep-seated sense of engagement within the business and with the community at large that has enabled the company to double its turnover from Rs.1,800Cr in FY06 to more than Rs.4,000Cr (around

$900 million) in FY09. Before the recession, Voltas openly said it would like to hit Rs.10,000Cr in FY11.

But however this year turns out, the Indian company’s success in landing contracts not only in the Middle East but as far afield as Hong Kong and Singapore can only mean rapid growth and more opportunity.

This journey is its own destination. www.voltas.com – Editorial research by Jeff Abbott

Vo l t a s

“Our core skills lie predominantly in project management, value engineering and the timely completion of projects with a focus on quality”


Much has been written about the miracle of the Indian economy and its rise to become one of the major global powers of the 21st century. Boosted by economic reform, Indian industries and businesses are emerging as power houses on the world stage, while segments of the community are experiencing

dramatic cultural and lifestyle changes. These changes are easily visible—if you were to look at the skyline of Mumbai today, you could be forgiven for wondering if you were looking at Manhattan or Hong Kong.

One company playing a major part in changing the shape of the nation is Godrej Properties. The company was launched some 20 years ago by the Godrej Group, a highly respected company with a 113-year history of quality and integrity, and a powerful brand name recognised throughout the country. Today, the group has a wide spectrum of interests from fast moving consumer goods and industrial engineering through to appliances, furniture, security and agri-care, and has a presence in some 60 countries worldwide.

Godrej’s diversification into property development was based upon sound business judgement, and its timing was immaculate, coinciding with the first early wave of India’s renaissance. “The group had several parcels of land around the country, and our vision was to monetise them by launching into property development,” explains managing director Milind Korde. “There were not many property developers at that time, and we consequently began with a big advantage.”

From the very beginning, Godrej Properties was structured around a unique joint venture (JV) business model which it has successfully taken country-wide. Each project is managed as a JV development partnership: “Our partner provides the land and we provide the funds, expertise and manpower to manage the project. We also bring the strength of the Godrej brand to marketing the property.”

Today, the company has completed many prestigious developments, including Planet Godrej—a 48 storey tower block that is currently Mumbai’s tallest residential building. The business has regional offices and multiple ongoing projects in Mumbai, Pune, Bangalore, Ahmedabad, Mangalore, Chennai, Kochi, Hyderabad, Kolkata and Chandigarh. One example is the Godrej Woodsman Estate in Bangalore—a development of seven apartment blocks at a height of 16 storeys, surrounded by lush gardens and including facilities such as a club house, swimming pool and children’s play area. “We have a very large canvas at the moment,” Korde continues. “Primarily we develop residential property—and this is based on consumer trust in our brand. But we are also developing upmarket commercial and retail space.”

Good communications and transparency lie at the heart of the company’s operational success, and this ethos spreads throughout all its business dealings. From the very outset of a new project, the JV partner is constantly updated on progress via weekly and monthly meetings. “In terms of property development, our JV partners may not understand all the technicalities—but we keep them informed of what is happening in terms of project schedules,

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Indian property developer Godrej Properties is gearing up for its next phase of expansion. Managing director Milind Korde explains to Gay Sutton how good communications and long-term partnerships lie at the heart of its operations


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Building

Indian property developer Godrej Properties is gearing up for its next phase of expansion. Managing director Milind Korde explains to Gay Sutton how good communications and long-term partnerships lie at the heart of its operations

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for real estate development in the next decade because of the sheer growth of the economy and the population—we have a very large and young population for whom consumer finances are available. And we intend to strongly leverage on this in the future,” Korde comments. “While our focus will continue to be residential, we would like to maintain a balance of two-thirds residential and one-third commercial.”

None of this could be achieved or maintained without a highly skilled workforce, and the Godrej Group has a well established HR process. “We are a very learning oriented organisation,” Korde says. “Through regular reviews we assess our people on their strengths and weaknesses. We then leverage their strengths, identify their weaknesses and provide training programmes to hone their skills.”

The HR process also includes preparing suitable management staff for leadership positions in the future, thus securing succession within the company. This mixture of well honed business partnerships, a powerful brand name, highly trained staff and excellent communication skills is likely to enable the company to expand with confidence and security. www.godrejproperties.com – Editorial research by James Boyle

what kind of revenues we are expecting and when we can expect to realise that profit,” Korde explains. “If they have points of view, we take them on board. But we are the people who drive the project. The buck stops with us.”

Similarly, the company is concentrating on building upon the strength of its customer relationships. “Six months ago we appointed a chief customer officer, who not only deals with customer related grievances, but is tasked with communicating with our customers, managing group discussions and analysing their needs. These ideas are then incorporated into our plans at the design stage.”

With properties aimed at the prestige end of the market, the company works with some of the world’s best architects, and has developed a strong long-term relationship with US engineering and construction company Larsen & Toubro, which handles the majority of the construction work. Again, the relationship is communications based, and a whole series of protocols and technologies have been put in place to enable Godrej to micromanage and oversee the projects.

Using web-based software called Concerto, the company is able to track each project, day by day. “We manage construction projects according to Eli Goldratt’s theory of constraints,” Korde says. “Through Concerto we are able to see if there are likely to be any constraints on the project—of course some are manageable and some are beyond our control. But where we are able to, we intervene strongly and manage those constraints, removing any impediments which could affect the project.”

The relationship with Larsen & Toubro has been very productive, and Korde believes it is central to the company’s ability to deliver superior quality properties consistently and quickly. Maintaining this partnership is a key element of ongoing business strategy. However, he also acknowledges that as the company expands, it will be widening its partnership horizons. “Looking at the scale at which we may operate into the future, there is room for developing two or three more construction partnerships,” he says, “particularly as we expand and operate in different regions.”

Expansion is definitely part of the ongoing business strategy. The company has continued to thrive, in spite of the global recession. “We feel there is a huge opportunity

“Our partner provides the land and we provide the funds, expertise and manpower to manage the project. We also bring the strength of the Godrej brand to marketing the property”

G o d r e j P r o p e r t i e s


growingSouth Africa’s Louis Group is now one of the country’s most successful property and investment enterprises, with a wide range of interests and activities. Ruari McCallion reports

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In just four years’ time, Louis Group will be celebrating 100 years of operation in South Africa. The company was founded by Salim and Michel Louis, who emigrated from Lebanon in 1914 and set themselves up as general wholesale merchants. It continued in that line

of business until 1959, by which time it had become one of the largest wholesale merchants in the country. In that year, the company—led by Salim’s son, Colia Louis—acquired its first commercial property. When the next generation came into the group its focus turned towards expanding its property, investment and administration activities. Still family-owned, the group has been headquartered in Cape Town since 1994, although it retains its original base, an historic building in Bloemfontein.

Louis Group today has a disciplined corporate structure and has grown to become one of the largest privately-owned property, hotel, financial services and technology companies in South Africa. It owns five luxury hotels and is one of the largest landlords in the country, with office blocks, shopping centres, residential and mixed-use buildings in its portfolio. As a developer, Louis Group Property Development offers co-investment opportunities through strategic partnerships in both commercial and residential sectors.

The first Louis Group hotel, the Devon Valley Hotel in the Stellenbosch winelands, was acquired in 2003. It can be the case that a fresh eye and ownership can result in new standards and this has certainly been the case with Devon Valley. Louis Group undertook major refurbishment and renovation and its approach was recognised with rising occupancy rates and increased demand—so much so that it was expanded in 2008 and now offers 50 rooms. Its renovated Flavours Restaurant can now


http://koreserv.co.za

L o u i s G r o u p

Koreserv’s service integration into the Louis Group

portfolio has been rewarding and has given us

the opportunity to serve excellently within an

international service excellence environment. The

Louis Group’s international presence and sound

values have been an inspiration to the individuals

who drive our corporate evolution and their

relationship-oriented and solution-driven principles

have empowered a continued mutual growth. We

are proud to be a part of their daily manifestation

of excellence.

Koreserv

accommodate up to 150 people, served by a brand new kitchen that is twice the size of its predecessor. The improvements have been achieved without sacrificing the hotel’s historical legacy; it still retains the welcoming and comfortable feel of a boutique country house. It has now won the Accommodation category in the Best of Wine Tourism Awards three times—in 2006, 2007 and 2009—with the judges highlighting both the continuous cosmetic upgrading as well as its excellent service standards.

The Erinvale Estate Hotel and Spa in Somerset West, south of Stellenbosch and south-east of Cape Town, has a traditional Cape Dutch-style appearance, a range of suites and rooms and holds memberships at the neighbouring Gary Player-designed Erinvale golf course. It is the only hotel in South Africa to hold Leading Golf Hotels of the World membership. The Fairways on the Bay, at Camps Bay in Cape Town, offers a range of rooms and suites and is handy for business or sightseeing in the city itself. These two Louis Group hotels are among the first in Africa to become part of the Preferred Hotel Group, an international association of independent hotels. Among the advantages is the facility to connect to other hotels across the world, with the confidence of high standards of hospitality wherever you go.

Property investments remain at the core of Louis Group in South Africa. Among its portfolio is The Paddocks, a new retail development in Cape Town, which is being offered as a fully-tenanted investment opportunity. Louis Group Properties will continue to provide management services, as it does with two retail developments on Strand Street, Cape Town; Bellville Mall, Bellville; and the mixed-use retail and offices Belvedere Square in Claremont, among others. It operates some tenanted developments itself and is also a real estate agent in commercial, retail, office and residential sales and letting.

With all that activity, it’s entirely natural that Louis Group should have become established as a leading brokerage in the commercial and industrial property market and is able to provide the full range of traditional marketing services, covering investment sales, leasing, property management and property development.

It’s also natural that the company’s need for effective communications would lead it to invest in high-quality IT. What may come as a surprise is that it decided to take its investment to the ultimate lengths and establish its own company in the market—Louis Group (Africa) Technology. It is actually made up of three businesses: SmartSurv Wireless; AV Alliance; and iCAT.

SmartSurv Wireless is, essentially, an asset management company. Its primary activity is the production and management of cellular network wireless solutions for vehicle surveillance and tracking, although it can be applied to pretty much any asset class. Its services are backed up by a call centre for constant monitoring, alert of tampering and, if necessary, recovery. AV Alliance was originally established to support the audio-visual infrastructure of the Cape Town International Convention Centre (CTICC). It also supplies the International Conference Centre at Durban and is now recognised as a leading specialist in the supply and management of IT services for conferences, industry and events. iCAT is an integrated communications provider to industry and commerce, offering network design and support, including satellite and security systems. It has been managing the IT infrastructure of the Sports Science Institute of South Africa for some time.

One of the needs of the new South Africa is skills. The company has risen to the challenge, with the establishment of the Louis Group Business Academy. It offers an internationally accredited, wholly-sponsored business programme in association with the University of Stellenbosch Business School. Its focus is on equipping individuals to start and manage their own business or to work more effectively within their current roles.

Raising economic involvement is also a priority. KeHa Holdings is a Black Economic Empowerment (BEE) entity, with 60 per cent of the shareholding held by previously disadvantaged individuals (PDIs) and the balance by Louis Group (Africa). The group is involved in agriculture, through Komsberg Farming.

The extent of Louis Group’s holdings in property, business services, hospitality, training and economic empowerment demonstrate that it is an organisation committed to the new South Africa. www.louisgroupint.com

-Editorial research by Jeff Abbott


Few companies can have influenced industry and business as deeply and fundamentally as Japanese car maker Toyota. Quietly and intelligently, during a period of national financial hardship, the company evolved a unique set of operational and business philosophies that have revolutionised thinking in the manufacturing sector worldwide, and are now performing the same miracle for organisations in sectors as widely divergent as health, banking

and government services. Moreover, Toyota has been open about its philosophies in a way that may seem counter-intuitive to some: it did not grasp these successful business advantages to its chest, but shared them, firstly with its suppliers and then with any company interested in learning.

foundationAfirm

Toyota is investing considerable resources in developing its South African supply chain. VP of Purchasing and Engineering Nigel Ward explains to Gay Sutton the value of collaborative supplier relations and Toyota’s philosophy of respect for people and mutual trust


foundationfirm

To y o t a S o u t h A f r i c a


www.takata.com

www.bearings.co.za

The basis for Toyota’s operational excellence is the Toyota Production System (TPS), which defines the company’s management philosophy and how this operates throughout the organisation and into its supply chain. It governs everything from interactions with suppliers through to the shop floor and management levels, and finally to distribution to the customer.

Today, Toyota continues to be the exemplar of what has become generically known as lean manufacturing. Moreover, through operational excellence, quality of product and the ability to manufacture what the customer requires, it has become the world’s number one car maker, manufacturing in some 27 countries and regions around the globe.

Its manufacturing presence in South Africa dates back to 1962, when a company called Motor Assemblies began to assemble cars for Toyota alongside vehicles for other OEMs such as Mazda, Fiat and Renault. By 1981 the plant had become exclusively dedicated to Toyota assembly and between 1997 and 2003, Toyota progressively acquired equity in the plant. Today it is 100 per cent owned by Toyota Motor Company and is run according to all its philosophies.

Nigel Ward, Toyota South Africa’s current VP of Purchasing and Engineering, has also grown with the company.


As a global player in the supply of high quality

and cost effective automotive safety components,

Takata shares a sound business relationship with

South Africa’s leading automaker, Toyota. The

success of both Takata and Toyota is based on

the business principles of safety, quality and cost.

Takata holds this excellent business relationship

with Toyota in high esteem.

Takata

Bearings International has supplied hub units and

wheel bearings to Toyota South Africa’s production

lines since 2005, during which time it has received

several awards recognising its quality management

and supply excellence. Bearings International is

extremely proud of its long-standing association

with Toyota, a global company which demands the

highest standards of performance, safety, ethics,

environmental awareness and social values.

Bearings International


www.schaeffler.com

www.finlam.co.za

www.tenneco.com

Beginning as a trainee in the purchasing department in 1982, he witnessed the plant’s migration to the Toyota Way, and now has a very wide remit encompassing purchasing, planning and engineering. His skill set also epitomises everything that is successful about Toyota. “There are two key fundamentals to the Toyota Way: respect for people and continuous improvement. And we use those principles throughout our plant and supply chain,” he says. “I believe the secret to good management is to really interact with people on this basis of respect and trust. Ultimately I’m not here to manage the job, I’m here to manage the people.”

The Toyota philosophy for supply chain management has always been collaborative and people oriented, and the company has spearheaded a remarkable change in global supply chain awareness over the past 20 years. “Historically, purchasing and supply chain relationships have always tended to be—and I use the word loosely—bloodied and confrontational. However, through mutual trust and an open philosophy from both parties, we have ensured it is participative.”

Unlike many OEMs who source parts from around the world, the Toyota way is to localise its suppliers in the area of the Toyota plant, reducing the need to transport parts over long distances and removing a considerable amount of waste from the system. Toyota South Africa has been actively working towards this for many years, attempting to attract some of the world’s top automotive suppliers to set up operations in South Africa. But it was not until two years ago that the company took the step of doing this in collaboration with six other automotive OEMs operating in South Africa.

The reasoning behind this move was, like most


“We’re well prepared for this upturn and a lot more focused”

Schaeffler South Africa is a subsidiary of the

Schaeffler Group. With its INA, LuK and FAG brands,

the Group is one of the world’s leading rolling

bearing manufacturers and a renowned supplier to

the automotive industry. The Group is a recognised

development partner with systems expertise for

the complete powertrain. With around 1,250 patent

applications annually the Group is one of Germany’s

leading innovators.

Schaeffler South Africa


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ground breaking ideas, surprisingly simple. Setting up a new manufacturing plant is both expensive and risky, particularly when it is supplying into a relatively small business sector—and the automotive industry in South Africa is small in comparison with, say, the coal industry. However, by acting together the car makers believed they would be able to leverage economies of scale, and make it financially attractive for top European and Japanese suppliers to relocate locally.

“We therefore launched an initiative called the South Africa OEM Collaboration Group two years ago,” Ward says. Members include the likes of BMW and VW. “The purchasing heads of each of them have formed

an executive committee. Underneath us we have five commodity groups with a total of 45 people from the OEMs working cross-functionally to identify initiatives to localise new parts in South Africa. If, say, three of us can support the initiative, it can become very lucrative for a global supplier to set up here.”

The initiative has seen considerable success so far, and its work will no doubt continue. During the early days, when the Durban plant first began operating purely for Toyota, approximately 80 per cent of parts used in the factory were supplied by true local South African suppliers. That balance has shifted over the years, and today 80 per cent of supplies are produced by leading

“There are two key fundamentals to the Toyota Way: respect for people and continuous improvement. And we use those principles throughout our plant and supply chain”



www.duco.co.za

global automotive suppliers manufacturing in South Africa. This was achieved by facilitating JVs and TAs with the existing suppliers, says Ward.

The Toyota plant in Durban currently employs in the region of 6,000 people and manufactures two models: the Corolla and the Hilux. Of the 104,000 vehicles currently manufactured each year, some 50 per cent are exported: 50 per cent of which go directly to Europe, with the remaining 50 per cent distributed through 30 countries on the African continent.

In South Africa itself, there is considerable brand loyalty to Toyota. In fact, the company has enjoyed market leader

position for the last 30 consecutive years—a record only surpassed in the brand’s home nation, Japan. Even the recent product recall has worked to its advantage and has been perceived as a largely preventive initiative, reassuring customers that Toyota will always do everything in its power to ensure its products are built to the highest standards of quality and safety.

As you would expect, the Durban plant operates the full suite of Toyota systems. “The Toyota Production System and kaizen are a way of life for us,” Ward says. However, the number of employees at the plant is probably a little higher than the global average. “This is largely because



www.ise-automotive.com

the level of automation here is not quite as high as you would find in the high labour cost countries like Europe and Japan. Labour costs in South Africa are not exactly cheap, but at the moment we have an unemployment rate of 26 per cent, so we have some social responsibility to the economy and to the government to provide jobs. The same applies to our suppliers too. They do not produce the volume to warrant considerable investment in automation. So for them, it’s a matter of finding the balance that makes them competitive.”

Ongoing training is a fundamental element of the global corporation’s kaizen (continuous improvement) philosophy; and one of its key elements is benchmarking, or learning from other people’s operations. The company therefore makes a considerable annual investment in

sending its staff to Toyota facilities in locations such as Japan or Thailand. “We do this for staff at all levels: our team members, middle and senior management. Our team members, for example, will visit these plants and work in the Dojos (the shop floor training facilities), learning all about the systems in operation. They then return and share that knowledge with us in the Durban plant.” This ensures that all plants keep up to date with the latest ideas in operational best practice.

The South African operation also provides a wide spectrum of training through its Toyota Academy for Learning, Africa (TALA), and this is organised into three schools. The first school is aimed at internal employee development, and offers a series of courses ranging from the basics of the TPS and the Toyota philosophies through


“We’re trying to promote best practice within our supplier base in areas such as management, HR development, kaizen and the elements of the Toyota Production System”


www.grupoantolin.com

to team member and senior management development. The second school provides training for the company’s external partners, and is attended by the technical and sales staff from the dealerships.

The third school is for Toyota’s suppliers. “And here we’re trying to promote best practice within our supplier base in areas such as management, HR development, kaizen and the elements of TPS,” Ward says. “This is a very extensive programme, and by working in partnership with our suppliers in this way we can help them to grow with us. We believe that it’s no use us growing and expanding if our suppliers are unable to grow at the same rate.”

The downturn, of course, has significantly affected the automotive sector around the globe, and for Toyota South Africa and its suppliers the story was no different. “We saw a drop in production of between 30 per cent and

40 per cent,” Ward says. “In 2008 we produced 187,000 units and in 2009 we produced 104,000 units—so 2009 was what we think of as a year of survival.

“We did lose a few suppliers who really struggled,” he continues. “We also had to release a number of temporary staff, but we have retained all our permanent staff and this is very much the case in our supply chain too.”

It may have been a hard year, but the company has used that very challenging time positively, to bring about some significant changes and improvements in its own operations, and to help its suppliers do the same.

“To begin with we focused internally, examining our own operations and restructuring our business to perform better and to reduce costs. Then we also worked closely with our suppliers to help them restructure their businesses,” Ward explains. “It sounds simplistic, but one area we worked on was scrap management. We examined how we create scrap in every aspect of the business, not only on the shop floor but also in the offices. From that we were able to change our wasteful processes and behaviours. We then shared this with our suppliers by showing them physical examples in our plant. For example, we showed them how we cut down on the number of forklifts so that we could use less gas.

“In our own plant we also initiated an energy-saving project which we called ‘no work, no watt’,” Ward continues. “We encouraged everyone to turn the lights off and use natural light. In some places, we even took the roof off, replaced it with translucent sheeting and removed the lights.” The initiative has been a great success, and through this alone, the energy costs to the plant have been reduced by 20 per cent. “We’ve also made a big investment in solar heating to heat water for all our ablutions—showers and so on. On a site the size of ours, that has also been a big cost driver.”

Everyone within the organisation has been contributing to this restructuring programme, and Ward is convinced that this type of kaizen activity is the only real route to sustainable business improvement. “You can certainly just slash costs,” he comments, “but simple cost cutting doesn’t bring sustainable benefits in the way that this will.”

In parallel with these internal improvement activities, Toyota invested considerable time and resources in helping its suppliers weather the financial crisis. The effort began with a ‘survival kit for 2009’ aimed at sharing the lessons the company had been learning about business improvement. “This was essentially a roadmap of how our suppliers could study their businesses and look at methods for restructuring,” he explains. “We introduced this to them, and then shared with them the initiatives we had been undertaking in our business.”


Established in1960, Duys is a major, diverse player

in the African engineering sector, servicing the

aluminium smelting, oil and gas, sugar and of course

automotive markets. It has significant production,

general engineering, project management, design

and fabrication facilities, with factories around sub-

Saharan Africa, including Durban, Johannesburg

and Port Elizabeth.

Its main automotive focus is on accessories

including towbars, styling accessories, safety

accessories for mine vehicles, catalytic convertor

components, truck components and others. Being a

supplier to Toyota and several other OEMs, Duys is

committed to quality and the environment.

Duys Component Manufacturers

Grupo Antolin South Africa has established itself as a

world-class supplier within the automotive industry.

Supplying to Toyota SA, among other clients, we

have shown our commitment to competing on a

global level by receiving Overall Supplier Awards with

Toyota SA in 2008 and 2009 for cost management,

as well as quality awards with other clients. We look

forward to offering an expanded product range to

the industry in South Africa.

Grupo Antolin South Africa Manufacturers



www.duys.co.za

Toyota’s VP of Manufacturing, Dave Finch, gave a series of presentations to the suppliers, explaining how the company had been taking advantage of the slowdown to examine and readjust its business, illustrating the changes and improvements that were being made at the Durban plant, and how this was leading to some significant cost savings. The talks were then followed up by visits from Toyota’s technical staff, who spent time helping suppliers identify and implement their own business improvements.

Today there is significant growth in the market and employment rates are climbing. The global automotive sector has undoubtedly evolved, but so has Toyota South Africa and its suppliers. “Our businesses are all a lot leaner and a lot smarter now. We’re well prepared for this upturn and a lot more focused,” Ward says. More than that, the company has cemented the supportive partnership with its suppliers, and this has reinforced the cohesive strength of the business, preparing it well for 21st century operations. www.toyota.co.za – Editorial research by Robert Hodgson



Quality,


Quality,ItalianstyleFor this Italian yacht fitter, the reward for its consistent focus on reliable quality is a client base spanning the globe. Andrew Pelis talks to Gianluca Tempesta to find out more

A l l u f e r Te m p e s t a

The benefits of attending trade shows can rarely have been better demonstrated than in the case of one Italian yacht fitting company. The family-run business had already been producing window and door fittings for Italy’s yacht and ship builders for around a quarter of a century when it attended the prestigious Marine Equipment Show in Amsterdam in 1997.

According to Gianluca Tempesta, head of design at Allufer Tempesta, attending the show was the turning point for a business that has now managed to ride the stormy waters created by Italy’s shipping recession by diversifying into global production.

The company is located on a hilltop in the small town of Sezze, approximately 80 kilometres south of Rome and some 20 kilometres inland from the Mediterranean. It was formed back in 1972, when Tempesta’s father and uncle saw an opportunity to provide services to the then burgeoning yachting industry in southern Italy.



around the world and we have built excellent relationships with the big yacht makers, including Magnum Marine in the US and Gulf Craft in the Middle East. Around 50 per cent of our work is overseas and our business stretches beyond Europe to Egypt, Australia, South Africa and even Argentina—and since 2007 we have also been working for several ship yards in the south of Turkey.”

From its 3,000 square foot base, Allufer Tempesta employs around 40 highly skilled workers in its workshop and design departments. Tempesta is quick to emphasise the importance of design to the company’s success: “We are always trying to be flexible in design and on product size; for Gulf Craft we manufacture parts for yachts ranging from 44 feet to 150 feet. We work on a flexible stock turn and aim to support all kinds of ship builders.

“We do operate some standard production on certain products which we have designed in several shapes and dimensions, but largely we make to order,” he continues. “Every day we look at how we can improve our products through customer feedback; and our IT software helps us

“At that time there were not many yacht fitting companies in Italy, especially in this area—they were more concentrated to the north around Genoa. However, they set up the business here as there were several yacht makers and ship yards in the area,” explains Tempesta. The 30-year-old joined operations after graduating in 2004 and today runs the business with his cousin Giovanni, who was previously general manager before the original founders sadly passed away.

The energy of youth has helped to take Allufer Tempesta in a new direction and today, the company designs and manufactures a wide range of portal fittings including fireproof and waterproof doors, patio glass sliding doors and portholes (out of stainless steel and aluminium) for luxury yachts and military vessels around the world.

“Year by year, there were lots of companies in the area that the business could supply and we expanded our customer base. I think that the moment things changed came back in 1997 when we went to Amsterdam,” Tempesta continues. “Our customers today come from



“Our client relationships are based on the fact that we are an Italian family-run business, which means that interaction with our customers is most important for us”


installation, while employees are actively encouraged to offer thoughts on ways to further enhance production.

Tempesta has good reason to value the ideas of his workforce, for aside from using CNC lathe machines, much of the work undertaken remains manual, true to the concept of Italian craftsmanship. “It is not easy to find the right skills in Italy,” he says, “so all of our people have a long (one year) period of training before they are considered competent in the job. Some of our students graduate at technical school and then go through summer training in our workshop.”

This training and experience is vital in maintaining the high standards of Italian quality that prestigious overseas customers expect. “It is becoming more difficult day by day to manage quality; and you really have to take care of all aspects of design and production,” admits Tempesta. To this end, the company has attained ISO 9001 accreditation and the workshop layout is organised into a series of ‘islands’, with one individual responsible for assessing the quality of each product within each island.

While the cost of steel may have stabilised in recent years, the cost of labour has become a significant factor in Italy. “I think that the problem is one of labour costs and the effect of tax here in Italy,” comments Tempesta. “We pay a high level of tax here and that includes the employee—meaning that wages have to be higher in turn.”

Looking to the future, the aftermarket is becoming an increasingly important factor in Allufer Tempesta’s approach; and with approximately 60 per cent of work coming from repeat business, the need to develop solid, long-standing relationships is crucial. “Our client relationships are based on the fact that we are an Italian family-run business, which means that interaction with our customers is most important for us—we make sure that we are always available for them.

“When we started to take on increasing amounts of foreign work, we quickly realised the importance of the aftermarket. Today, we offer two-year guarantees on our products.”

With opportunity beckoning, Tempesta feels that the company is ready to capitalise on its reputation and capabilities. “I think that we have some special qualities that make our company different,” he says. “The quality of our products and design are appreciated overseas and we want to work side by side with the ship yards. They all know that they can come to us with any request, as we have the design capabilities and forty years of experience in this market.

“For the moment we are working on our stock turn and improving production processes. The next step is to develop new products, as we have seen ship yards reduce the number of suppliers they use—so we want to offer a wider range of products that deliver a wider range of services,” he concludes. www.allufertempesta.it

to work closely with the customer to design the perfect product for them. From the outset we are in direct contact with the customer, linking our software to their systems.”

One of the areas that the business has recently concentrated on developing has been servicing military and authority vessels and Tempesta feels this has also helped the company to ride out the economic downturn:

“We are developing a wider range of products for military yachts but have long supplied watertight doors and hatches for a local ship yard that specialised in building fast Italian police and

coast guard boats. As their business grew it helped ours as well, and we are now also supplying these products in Greece and Goa in India.

“We never pushed this branch of the business in the past and it was not

our core business, but today we are looking to diversify and we

have been fortunate to have the opportunity,” Tempesta adds.

The need for diversification has never been greater; and given the present state of ship building around the world, only the strongest, most enterprising businesses will survive. “We are also feeling this crisis,” agrees Tempesta. “The Italian ship

building sector especially has problems—there has been a

huge reduction of orders which we too have felt, so it is good

that we have been able to find work abroad and via the military, so that we

are not in a bad situation.” At the same time, the need to drive greater

efficiency through operations is not lost on Tempesta and he cites investment in software and

workers’ opinions as important parts of the continuous improvement process. IT links not only to customer systems but also helps the company to improve maintenance and

“Our client relationships are based on the fact that we are an Italian family-run business, which means that interaction with our customers is most important for us”



careTaking

oflovedones106 www.bus-ex.com May 10

careones

Pet lovers are known to make sacrifices for their animals; but as Alan Swaby discovers, it is not always necessary to choose the product with the highest price tag

M o n t e g o F e e d s

Recessions invariably cause managers to consider just how vulnerable their businesses are, and the shape of the markets they are in. Hannes van Jaarsveld, CEO of Montego Feeds in South Africa, hasn’t had to worry too much about that. Instead, his concern has been focused on how to satisfy the demand from

new customers bailing out from the higher priced products they used to buy.Montego makes dog and cat food that occupies the middle ground on price but is towards

the top end on quality. “We have a different strategy to most,” van Jaarsveld explains. “We don’t sell through supermarkets, so we aren’t chasing volumes or at the whim of price chasing buyers. Instead, we aim for discerning buyers who remain loyal to a product once they can see that their pets are flourishing on that food.”

Rather than going through a wholesaler who would want a 20 per cent slice, Montego sells its products through pet shops, vets and farmers’ cooperatives and holds a healthy 12 per cent of the £250 million market. The result is a high quality product sold at an affordable price—in other words, exactly what buyers are looking for in these cash-strapped times.

It wasn’t always so with the Montego brand. Van Jaarsveld got into the business almost by accident. His training and background is in auditing but seeking a change of scene, he


www.sakkorecobag.co.za

In fact, digestibility is a key requirement of good dog food. Nothing loses a customer quicker than upsetting a loved one’s digestive system. At Montego, one-ton batches of ingredients are weighed and then thoroughly mixed before being cooked at 95°C—the optimum temperature for gelatinizing maize in order to break it down and render it absorbable. Once cooked, the mixture is extruded into bite sized pieces, coated in fat for flavour and then bagged. Preferring not to use artificial flavours, the quality of the fat

component has to be particularly good.Thanks to a £1 million investment four years ago,

production at the company was largely automated and effectively tripled to around 35,000 tons per annum. But this output is now no longer sufficient to satisfy demand. Even working three shifts a day, it’s got to the point where further expansion is needed. Contracts are being drawn up for the supply of yet another production line that will come on stream in the autumn and once again triple output to 90,000 tons a year.

“We won’t change our policy of not selling through supermarkets,” says van Jaarsveld, “but we may agree to manufacture own-brand dog food for a supermarket chain that’s approached us. This way, we could immediately use some of the extra capacity which will help pay off the £1.5 million investment we are making without putting us in the financial trap supermarkets like to spring. Because they are asking us, we can dictate the terms of the contract—not the other way around.”

The one downside to the business is its location. Graaff-Reinet is in the middle of the Karoo desert—miles from all major conurbations. But it could be worse. It’s no more than 250 kilometres from its source of maize and 250 kilometres from Port Elizabeth, through which it imports 600 tons a month of meat and bone meal from Italy. So while the transportation side of matters incurs some extra costs, they are offset by the generally lower costs of labour and land.

“We’re now celebrating 10 years of business since taking over control,” says van Jaarsveld. “The first five were difficult; but now that I have my three sons helping in the firm, the fifteen-hour days are a thing of the past. The business is buoyant and we’re now able to put something back into the community.” www.montegoclassic.co.za – Editorial research by Paul Radbourne

started working as a financial consultant to Montego—at that time, a general miller and maker of animal feeds—only to discover that the business was technically insolvent. With his help, the company struggled on for a couple of years until the owner decided that enough was enough and applied to go into voluntary liquidation. Montego’s major creditor only agreed to play ball on the condition that van Jaarsveld stayed on to keep the dog food side of the business afloat.

The first decision he took was to improve the quality of the product, aiming for better margins from a more discerning purchaser. “We were also extremely lucky to have a number of loyal outlets,” he says, “who were willing to pay in advance for the goods they wanted.”

Credit management still remains a key focus for the business. In an industry where 45-day credit is normal (or 90 to 120 days if dealing with supermarkets), Montego has a strict 24-day collection period. But it’s a policy that works both ways—not having to finance customers actually enables Montego to keep prices down and give better value for money.

Montego only makes dried food based on a mix of cereals and meat-based protein, with added vitamins and minerals. The protein comes from meat and bone meal produced from abattoirs processing meat for human consumption. Although most of this meal is imported, 10 per cent is sourced locally as a bi-product of the ostrich meat industry.

Some cheaper brands of dog food also use bird bi-products—but this time in the form of chicken feathers! Apparently the blood they contain is particularly high in protein but extremely low in digestibility. Go even cheaper and the protein might not contain any vital meat material whatsoever. A couple of years ago, maize/wheat protein from China, contaminated with melamine, caused a number of pet deaths in the US and Europe, as well as in South Africa.

“We aim for discerning buyers who remain loyal to a product once they can see that their pets are flourishing on that food”

M o n t e g o F e e d s

We would like to express our thanks and gratitude

to Montego Feeds, our partners in developing

multilayer flexible packaging to the highest

standards. Montego Feeds believed in our vision

and cumulative skills, giving us the opportunity,

flexibility and time to advance new technology.

PP Bags Manufacturing


Expandingpotential

The Port of Richards Bay, in KwaZulu Natal, is South Africa’s largest cargo port and a significant contributor to the country’s economy. Jimmy Hills talks to Gay Sutton about a vision for the port to become a global leader


Expandingpotential

The Port of Richards Bay, in KwaZulu Natal, is South Africa’s largest cargo port and a significant contributor to the country’s economy. Jimmy Hills talks to Gay Sutton about a vision for the port to become a global leader

P o r t o f R i c h a r d s B a y

The Port of Richards Bay is run by Transnet National Ports Authority (TNPA), part of the state-owned transportation authority Transnet, and was opened in April 1976 to handle the export of coal from Mpumalanga Province. Beginning with a modest two berths to handle coal, it has diversified and grown at an average rate of one

additional berth every two years. Today it is South Africa’s largest cargo handling port, handling around 55 per cent of the country’s seaborne cargo.

Located some 160 kilometres north of Durban on the estuary of the Mhlathuze River, the port is one of just two deepwater ports in South Africa, and is designed for Cape-sized vessels up to 150,000 tons and 17.5 metres in draft. Serving the hinterland provinces of KwaZulu Natal, Mpumalanga and Gauteng, as well as the aluminium factories and paper mills that have grown up around it, the port contributes significantly to the national economy. “Our analysis indicates that a berth returns around one billion rand of revenue for the country,” explains planning and development manager, Jimmy Hills. “That is, in revenue to downstream industries and businesses.”

Coal continues to be a major element of port operations, and the recent addition of a new R443 million coal berth has taken capacity from 72 million tons to 84 million tons a year, firmly establishing Richards Bay as the world’s largest coal exporting port. “The new berth was one of our two yearly expansions,” Hills says, “but ultimately we intend to upgrade capacity to 91 million tons a year through terminal efficiency and productivity



improvements. We will then cap our coal capacity at that. However, if the coal reserves in Mpumalanga prove to be sufficient to warrant further expansion, then we’ll increase the number of coal berths.”

Last year around 65 million tons of coal was exported through Richards Bay. The coal arrives on massive 200-wagon trains on the purpose-built and aptly named Coal Line, which not only links the port to the coal mines of Mpumalanga Province but also provides access to the extensive national rail network.

Richards Bay has diversified considerably, and the growth in its market sectors looks set to continue. Today the port also handles bulk liquid commodities, dry bulk and break-bulk, including around 2.5 million tons of ferrochrome which is used in the manufacture of stainless steel, and around three million tons of magnetite, a by-product of rock phosphate operations. “China and India currently import huge volumes of magnetite for steel manufacturing,” Hills explains, “and we anticipate that the volumes going through the port will increase to around 10 million tons in the near future.”

Meanwhile, the port’s liquid bulk handling capacity is currently in the process of being expanded to meet market demand. “We’re currently in the process of finalising the

construction of our second bulk liquid berth, and this has largely been driven by the requirements of bulk liquids manufacturer Sasol. When the project is completed

in a couple of months’ time, it will double our bulk liquid capacity from 1.2 million to 2.4 million tons a year,” he continues.

The port imports a range of other products including 1.7 million tons of alumina a year from Australasia, which is used at the two aluminium factories sited in Richards Bay, and around 2.5 million tons of coking coal a year for the steel manufacturing industry.

The current phase of expansion includes the construction of a dry dock ship repair facility capable of handling Cape-sized vessels. In tandem with this, plans

are being made to improve the port’s infrastructure over the next few years, including upgrades to the rail and road links and the power supply,

and the acquisition of four new tugs between 2011 and 2014. Meanwhile, the next berth expansion is scheduled to start in

2014, which will increase the break-bulk capacity.TNPA has a very clear vision for the long-term development of the port. A detailed plan,

which has been enshrined within a Port Development Framework, proposes

continuous expansion at the rate of a berth every two years to utilise

all of the current port property, and then to expand westwards along the river floodplain. “We know exactly which way the port must go,” Hills says. “And we

“We anticipate that the next major growth of container terminals will most probably be located here”

Po r t o f R i c h a r d s B a y


have just completed due diligence investigations to confirm the viability of all these developments.”

Currently only around 70 per cent of the port’s 3,780 hectares of land has been developed, but the due diligence investigation has recommended the acquisition of a further 2,500 hectares of land further up the river floodplain. “The horizon for this is long-term,” Hills says. “However, we’ve ensured that the spatial development framework for the City of uMhlathuze (Richards Bay) reserves the land for this purpose.”

TNPA also has its sights set on diversifying into another lucrative and rapidly expanding market sector—container cargo. To date, the port has only handled very small amounts of container traffic, but it has the road and rail infrastructure to support a major container hub. Currently the port of Ngqura at Coega between Cape Town and Durban is being developed as South Africa’s container hub; however, the sector is expanding at such a rate that within the next 10 years, a decision is likely to be needed to establish the location of the next container hub.

“We have completed two major feasibility studies to confirm the viability of the positioning of container terminals within the port of Richards Bay,” Hills says. “And we anticipate that the next major growth of container terminals will most probably be located here.”

These future plans for the port have been largely shaped


the environmental perspective,” he explains. “Firstly, we have a mud flat area within the port perimeter that is a breeding ground for prawns. We will have to recreate those mud flats elsewhere and ensure they function properly before we plan to destroy the existing ones and begin construction. Secondly, we have Africa’s most southerly papyrus swamp. We are therefore confining the port to one side of the valley while the other side is being set aside to create nature reserves where an offset area can be created for mitigating the impacts of development, within and outside the port.”

With the development framework, environmental offset provisions and necessary infrastructure in place, the Port of Richards Bay looks set to continue its relentless expansion. Already established as South Africa’s largest cargo handling port, it may well have the potential to become one of the biggest players globally as well.

http://ports.co.za/richards-bay.php – Editorial research by Vincent Kielty

by two key constraints: environmental and geotechnical. As the site is in the river floodplain, it is located on mud flats. Considerable work has been undertaken to establish the underlying geology of the area and map out the deep river channels. And construction work will be confined to the areas that are capable of providing sound footings. “There have been a huge number of environmental constraints too, some negative and some positive,” Hills continues. The City of uMhlathuze (Richards Bay) is in the process of completing an environmental management framework for the port and the industrial developments around it.

“There have been two areas of critical importance from

Po r t o f R i c h a r d s B a y

Dura Soletanche Bachy, in operation since 1953, is

one of the leading specialist geotechnical contractors

in the Southern African region. It is a wholly owned

subsidiary of the world’s leading geotechnical

contractor Soletanche Bachy, a subsidiary of

Soletanche Freyssinet. Dura Soletanche Bachy is

proud to be associated with the construction of the

diaphragm wall at the Richards Bay Coal Terminal.

Dura Soletanche Bachy


gain Training to


Te c h n i p N o r w a y

projects for example, in Egypt. We’re also looking at Caspian subsea operations.” It isn’t the only company active in those areas—far from it—and isn’t alone in the North Sea, either. It’s a very competitive area and that competition has led to a raft of significant advances in marine energy technology over the past 40 years. It remains a technology-rich environment and if you’re not at the forefront of development, you’re nowhere.

“Our main differentials besides our competent people are our technologies, our product focus and our project execution model,” says Hasselknippe. “We have a strong focus on organisation, from project set-up through management and support functions, which we organise as a matrix of operation. We believe we have developed a very good quality management service, with a strong focus on growing and training people.”

The company’s employees in Norway represent 25 nationalities from across the world—as far afield as Australia and the Americas, as well as European countries and Russia. Induction training begins with health, safety and environment

Subsea construction and engineering company Technip Norway provides essential infrastructure services to customers working in some of the world’s most challenging environments. Ruari McCallion reportsgain F

rench engineering company Technip, headquartered in Paris, employs more than 23,000 people across the world and generates an annual turnover in excess of €7 billion. The

Technip Group’s main office in Norway is in Sandvika, a few kilometres west of Oslo, with additional facilities in Orkanger, Haugesund and Stavanger. As the leading subsea engineering contractor on the Norwegian continental shelf, Technip Norway employs around 370 people and generated revenues in excess of €400 million in 2009.

“In Norway we design, fabricate, install and service systems for subsea oil and gas fields,” says Hallvard Hasselknippe, managing director of Technip Norway. Globally, Technip is involved in most segments of the oil and gas business, apart from down-hole and production, including subsea, large onshore facilities and offshore platforms. “Technip Norway’s primary area of work is the Norwegian continental shelf but we also work on subsea projects offshore north-west Russia, in the Barents Sea and on some ad-hoc international


www.dofsubsea.com


(HSE), followed by technical initiation. The company also sends its management group on three-day courses, which re-emphasise HSE as well as covering leadership and communications. The intention is to embed its core cultures and values within the company from top to bottom, such that Technip can become the reference company in safety performance. It offers a number of issue and project-specific courses and has implemented a structure for project execution training in partnership with an external consultancy.

“Everyone has to meet our safety and quality (QHSE) standards—that is essential,” says Hasselknippe. “We have an apprenticeship scheme and graduate recruitment and training programme, which enable us to ensure we have a mix of younger and more experienced people. We blend newcomers’ training into project work, which gives them an insight into different parts of the business. We expect a certain level of competence in our recruits and our 18 to 24 month initial training process enables us to see how quickly our new employees understand the business and become valuable contributors. We give new recruits proper work from the outset, under guidance of course, which means they get direct experience immediately.”

Technip Norway operates as a main contractor to oil and gas companies and is currently engaged as an EPIC (turnkey) contractor on several significant field developments in the Norwegian North Sea sector. The current portfolio includes the Dong Oselvar and the ENI Goliat, both EPCI projects. Goliat, in the Barents Sea, is the company’s largest project ever in Norway.

“Our previous track record includes, among others, the Marathon Alvheim development. We were responsible for the whole subsea part of the project, apart from the design

DOF Subsea Norway has been an established

player in the subsea market for over 30 years.

Originally founded in 1979 as Geoconsult, DOF

Subsea Norway joined the DOF Subsea Group in

2005 and together has grown to become a leading

provider of specialist subsea services for the oil

and gas sector worldwide. DOF Subsea provides

project management, survey, construction and

IRM services, involving complex and challenging

engineering, in an international environment. By

providing these core services from a large fleet

of modern subsea construction, intervention and

survey vessels, DOF Subsea is able to enhance

service delivery and reduce overall risk.

DOF Subsea Norway




and fabrication of the Christmas trees and control system—but including on this occasion design and fabrication of manifolds. We normally just install, rather than produce,” he says. “Our supply chain has been developed through long-term partnerships over many years.”

The company operates a fleet of 16 vessels, with three more due to arrive over the next two years. Apache, one of the company’s reeled pipelay vessels, is operating from the Orkanger Spoolbase near Trondheim and spools between 10 and 20 kilometres of pipeline on each of its trips, servicing the mid-Norwegian Shelf developments planned for the coming years. About 650 kilometres of pipeline, ranging in size from six to 16 inches in diameter, has been produced since operations began in 1995.

“Skandi Arctic is a purpose-designed and built diving support vessel, which was commissioned in 2008 and is jointly owned with DOF,” Hasselknippe says. “We developed it when we won an innovative diving frame contract from Statoil in 2006.” While a lot of subsea work is undertaken by remote-operated vehicles, there is still a call for diving. “We concentrated on remote operations from the early days and many fields today are below the maximum mandated depth for diving of 180 metres. Many clients prefer diver-less operations; however, diving is still a skill worth having, especially when dealing with unexpected contingencies. Divers can deal with emergencies faster than you can design tools for the job.” The fleet also includes other high spec powerful deepwater pipelay and multi-purpose subsea construction vessels, which are designed to be capable of working year-round in virtually all sea, depth and weather conditions. However the climate develops, the Barents Sea and north-east Atlantic is still likely to remain a cold, stormy and challenging environment, so sophisticated heavy-duty vessels will continue to have a role.

“Our challenge recently has been the effect of the financial crisis on revenues and activities. However, we prepared well ahead of the impact and were able to ride out the storm without any significant drop in the activity level,” he says. The opportunity to construct and install the Hywind wind turbine enabled the company to diversify into new areas; but oil and gas will continue to be its main market.

“Looking forward, we expect some high market activity levels. The Norwegian Shelf is starting to look very promising; Statoil and others are determined to replace declining production. Mix that with frontier operations, like the Barents Sea and north-west Russia, and this remains an interesting area to be in. Our challenge is to ensure we have the people and assets to maintain competitiveness. That’s why we are investing in recruitment, training, our fleet and development of the subsea segments—to ensure we continue to serve our markets in an outstanding way.” – Editorial research by Vincent Kielty

www.technip.com/english/profile/popup_soc/p_completeq.html


than aname More

The Prestige Group, South Africa’s largest specialist cleaning company, has its sights set on becoming a complete one-stop-shop for facilities management. CEO Johan Du Toit explains to Gay Sutton how good people management is a key element of the company’s success


Over the past 20 years, a revolution has been happening in the boardrooms of companies small and large. The engagement of cleaning services—once the preoccupation of the middle and lower management tiers—is increasingly being taken into the

boardroom, where strategic management and decision making can deliver significant value. Not only does a clean office or facility improve the image of a company, it plays an important role in improving health and safety, and can increase the lifespan of buildings, equipment and furnishings. Additionally, for sectors such as hospitality, healthcare and food processing, it is essential for regulatory compliance. One company that has led the migration from middle management inconvenience to strategic corporate value is the Prestige Group, South Africa’s largest specialist cleaning company.

Launched in 1969 and headquartered in Randburg, northern Johannesburg, Prestige employs over 50,000 staff, runs 45 offices across South Africa and provides specialist cleaning services to a wide range of sectors including retail, education, industrial and mining, healthcare, hospitality and the food industry. Alongside this, the company has been expanding into related services through a series of strategic acquisitions. For example, within the healthcare sector, it can provide staff and services such as CSSD packing, laundry and linen services. Through its First in Staffing Solutions business, it can provide contract staff for the hospitality sector, while Edge Performance

More P r e s t i g e G r o u p


Management delivers training. And its most recent acquisition—a company called NICE—hires out portable toilets for events and construction companies. Cleaning services, however, remain the core company business.

Managing such a diverse range of services across a large country presents its challenges, and over the years the company has developed a decentralised management structure consisting of seven divisions, each with its own managing director. Five of the divisions are regional and ensure that all clients receive a personal service and a quick response; one division manages the specialist healthcare and hospitality operations; while the seventh is the support centre which delivers corporate support services such as payroll, training and procurement.

People are central to Prestige’s operations and the company manages a comprehensive scheme for staff selection, training and development. This happens not only at shop floor level, but also applies to management.

“It’s very important for us to select industry leaders and specialists for our management posts,” explains CEO Johan Du Toit. “Most business negotiations today are done with financial directors, so having managers who talk in corporate language makes a big difference, especially in food hygiene, healthcare and hospitality. We also do a lot to provide our managers with the opportunity to advance their careers.

“We currently have over 1,200 senior and middle management employees on formal learning programmes, including NQF (National Qualification Framework) levels III and IV,” he continues. One such programme is a ten-month management development course. “It begins with five days at a development centre in the Veldt, where they are analysed under pressure. When they come back, a personal development programme is worked out for that

person, which includes one-to-one coaching.”A business can only ever be as good as the staff who

deliver the service; and for Prestige, this is the cleaners. New staff are given a five day induction at their regional training centres, and are then sent out into the field with existing cleaners on a buddy system. However, their skills levels and training needs are continuously monitored, and cleaners are provided with ongoing training to NQF levels I and II.

“We have a large training department, with training facilities in each of the regions, and our regional training managers are responsible for analysing and delivering the training needs for the region,” Du Toit explains. The content of the training is individually tailored to the knowledge and skill requirements of the job, and to address any issues on individual contracts.

Staff are reviewed on a monthly basis using the balanced scorecard method, and this is then linked in two directions: firstly to the training programme, and secondly to an incentive scheme that annually provides an overseas holiday for the best performing individuals. “We’ve been doing this for four years, and it’s made a big impact on morale and performance. We publish the results of the analysis quarterly so everyone knows where they are, and whether they need to put in extra effort to win the trip.”

Although cleaners have never been high earners, Prestige has always recognised good performance at each contract location, and top achievers are invited to an annual regional achievers awards ceremony where their accomplishments are recognised.

“We’ve also introduced a Supporter Club,” Du Toit continues. A questionnaire is circulated between all staff, and this provides the company with feedback on company performance in 12 key areas. “The feedback shows that generally people are happy and content. And this gives


don’t change suppliers because someone else is faster and cheaper. Our suppliers have to meet rigorous quality, cost efficiency, pricing and environmental requirements, and they need to be innovative and specialist in those things,” he says. “And while we do our own research into new cleaning methods, our suppliers also keep us abreast of the latest developments, presenting new products and chemicals equipment.”

Du Toit’s vision for the future of the company is to expand on the range of additional services that it can provide. “We already have four years’ experience in this: in hospitality we can provide executive housekeepers, bar staff and porters and in healthcare we can provide nurses, theatre staff and so on. I see Prestige becoming a one-stop-shop for a whole cluster of services. We are currently looking at a variety of functions in the mining sector which might be suitable for acquisition. And we aim to do this in each of our sector areas,” he concludes. www.prestigecleaning.co.za – Editorial research by Paul Radbourne

them a vehicle to voice their opinions or their needs on the shop floor, which we can then address per contract.”

Quality of service is vital to Prestige’s continuing development. Not only does each operational manager monitor standards, but on larger contracts, customer relations managers with responsibility to corporate head office also make regular inspections and obtain feedback from the clients regarding satisfaction levels and issues.

Suppliers also play a key role in the company’s success. Prestige partners with a number of international and local

suppliers, each of them supplying specialised equipment and materials for the entire group. “And here, I would emphasise the word partnership,” asserts Du Toit. “We

P r e s t i g e G r o u p

“I see Prestige becoming a one-stop-shop for a whole cluster of services”


www.geochem.co.za

Managing

expectations Africa’s


expectations Africa’s

Adapting its business strategy to suit the local market is a skill that JHI Property has already perfected—and one that will prove invaluable as it eyes further expansion on the African continent. Andrew Pelis talks to project manager Jaco Nel to find out more

J H I P r o p e r t y

One might expect recent economic conditions to have created the greatest concern for Africa’s property management market; but it is the reliability of contractors that remains the pre-eminent factor for Johannesburg-based JHI Property.

“Economies are constantly going up and down, but the challenge for us in Africa is always to deliver at the right price for our clients,” states Jaco Nel, project manager at JHI.

A flexible commercial strategy has been the driving force behind the company’s success for the past couple of years since it was formed by a merger between Gensec and JHI Real Estate (the company is registered as Gensec Property Services). In that time the business has expanded its operations beyond South Africa’s borders into Botswana, Ghana, Lesotho, Mozambique, Namibia, Nigeria and Zambia.

However, although speaking on-location at the company’s latest project in Ghana, Nel says that aside from South Africa and its neighbours, the concept of JHI’s portfolio of services remains hard to grasp for much of corporate Africa. “As an all-round property services company, we offer a wide range of services including property management, project management, facility management, broker services, property development (and re-development), maintenance planning, consulting and valuations.

“Although we are successful, I think that facility and property management in Africa is still a relatively new concept and it really takes a bit of selling to convince corporate clients that you can add value to their property and bottom line.”

It is a message that JHI has conveyed better than most, however, with approximately R31 billion of assets under management, including 1,035 buildings and 7.7 million square metres of floorspace. “We mostly focus on retail, commercial and industrial sectors and offer a variety of services; but cleaning and security would be among the biggest areas of business for us,” Nel explains.


www.vdoconsulting.co.za

slow and bandwidth can be extremely costly.With a workforce totalling around 700 people, JHI has

invested heavily in human resources and in-house training. “The right skills exist in South Africa, and rural upliftment has meant that lots of skills transfer has taken place. I also see here in Ghana a genuine willingness to learn,” Nel comments.

Part of the motivation behind training staff up has been JHI’s successful implementation of South Africa’s Black Economic Empowerment initiative. At present, JHI is approximately 35 per cent black owned, and the company has been actively involved in the development of black owned and empowered SMMEs within the property field.

The company has a strong belief in ‘sharing the business’ and supports black SMMEs by entering into agreements whereby the company and the black SMME form a joint venture and tender for specific projects. Once the joint venture is formed, an operating committee is established to assume the responsibility of managing the joint venture for the benefit of both parties.

Nel admits that the economic slump has affected business; but JHI is now very much looking ahead to busy times. “Last year we did see a lot of projects shelved,” he acknowledges, “but this year has seen a definite upturn. We have benefited from not having a specific focus on any one sector—if you have to wait for the big contracts you will quickly go bankrupt. From small to big accounts, our approach is the same and in bad times, you have to do more of the smaller contracts. We always have to watch materials costs and are often price victims when there is more demand than supply, but if anything, next year looks like we are going to be over-busy.”

The real challenge, he says, is to obtain products at a realistic price and within a realistic timeframe—always an issue throughout Africa. “The contractors we chose in Ghana were local as we wanted to help the local economy but we still have to ensure that the client delivers the guarantees promised. We always aim to get the pricing and bidding right and to put guarantees on the table.”

As we speak, JHI has just announced its intentions to expand its African footprint into Zimbabwe and Tanzania, while assessing business opportunities on a project-by-project basis in Sudan, Mauritius and Swaziland. “The competitiveness for services like property management remains fierce and it is essential that we focus on what we can do to deliver at the right price for the client. I’ve been with JHI for fifteen years now and under our dynamic CEO, Marna van der Walt, the company will definitely continue to grow,” Nel concludes. www.jhi.co.za – Editorial research by Robert Hodgson

The company boasts an impressive portfolio of projects including the Ikoyi Hotel in Lagos, Nigeria; the Greenstone Shopping Centre in Edenvale, Johannesburg; the PricewaterhouseCoopers building in Sunninghill, Johhanesburg; and a Marriott hotel in Accra, Ghana.

Nel is currently in Takoradi, Ghana, overseeing a construction project that will build a new facility for US-based Expo. “The facility will service the needs of the oil industry and the rigs,” he explains. “Construction started in January and should be completed by August this year. The main challenge has been to get the materials into Ghana, as many of them are not readily available here.”

The project represents an interesting challenge for JHI, as American companies tend to be very forward-thinking on issues of green buildings and energy efficiency—something Nel feels is perceived as less of an issue in most of Africa (excluding South Africa). “Many companies in Africa are less clear on the benefits and the savings they can make. However with Expo, we have to bring these issues into the design—even small acts like using certain types of paint can give a feeling of green.”

Nel says that in addition to ‘thinking green’, JHI’s investment in technology has brought the company closer to its clients, wherever they are in the world. “We operate an internet system that allows the client to view a project from anywhere in the world. This has been particularly helpful in the Takoradi project. So much of what we do relies on good communications.

“We have been using the same IT system for the last 10 years with great success and the main thing is that it is a live thing—so, with the right security measures, the client can view contacts, drawings, documents, tender bids, photographs and even financial reports immediately.” At the same time, Nel concedes that the African continent as a whole has room for improvement, suggesting that in Ghana, for example, although internet and wireless are available, speeds are excruciatingly

J H I P r o p e r t y

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Our clients determine our success; our team is

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Documents

may 2010 emea