Sino -SymbioSiS

					The

AfricAn Business                                             Journal
June 2010   Volume 1   Issue 4   www.tabj.co.za



IN THIS ISSUE ►           ExclusivE intErviEw     manufacturing    associations
                          Avril Cole              Sembel-It        AMD & AAD




    Sino-SymbioSiS
        Entering a new era of Chinese-African relations
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                                                              EDITOR’S Note



IT’S haRD TO believe the 2010 FIFA World Cup        oil and gas. In Sino-Symbiosis, we dissect the
is only a few weeks away—29 days, to be ex-         benefits and caveats of the new China-Africa
act. South Africa is a seasoned international       era and highlight the massive influx of Chinese
sporting events host, but the football World        investment dispersed throughout Africa.
Cup, the biggest international sporting event           Then we turn our eyes inward at more of
after the Olympics, is in a class all its own.      Africa’s finest businesses, such as Baroque
With a television audience of billions and an       Medical, whose Johannesburg-based training
estimated 3 million visitors, the world will be     facility is helping patients across southern
visiting South Africa in June. And extensive        Africa. With so much to be proud of, we hope
preparations have been made. Football fans          you find time to enjoy this issue between
will enjoy the multi-billion rand worth of in-      qualifying rounds!
frastructure projects recently completed in
anticipation of the beautiful game. We can
hardly wait.                                            Sara Kopamees
    In keeping with the world coming to Africa          sarak@georgemedia.ca
this month, TABJ explores the changing face of
foreign investment in the continent, specifically
China’s ignited push for African minerals and
TABJ Team


Sara Kopamees | Editor in Chief | sarak@georgemedia.ca
Anna Guy | Associate Editor | annag@georgemedia.ca


Vladimir Lukic | Art Director | vladimirl@georgemedia.ca
Brian Rushton Phillips | Art Director | brianrp@georgemedia.ca
Dzeneta Zunic | Sr. Graphic Designer | dzenetaz@georgemedia.ca
Chris Moore | Sr. Advertising Designer | chrism@georgemedia.ca
Margaret Oldham | Advertising Designer | margareto@georgemedia.ca


Khayyam Darr | Research Director | khayyamd@tabj.co.za
Luke Manwaring | Research Director | lukem@tabj.co.za
Natalie Edney | Research Director | nataliee@tabj.co.za


Michael Alexander-Jones | President | michaelaj@georgemedia.ca
Linda Neal | Director of Finance and Operations | lindan@georgemedia.ca
Naveed Yusuf | Chief Information Officer | naveedy@georgemedia.ca
Gemma Parkins | Executive Assistant | gemmap@tabj.co.za


Ben Weaver | Publisher | benw@tabj.co.za


Contributor | Nuala Gallagher




                                South Africa Office              UK Office
         GEORGE MEDiA inC.      23 Wellington Road               Parkshot House
                                Parktown, 2193                   5 Kew Road
                                Johannesburg                     London
   Table of Contents
                 JUNE 2010 | VOLUME 1 | ISSUE 4




CoVeR FeAtURe     sIno-sYMbIosIs Entering a new era of
                  Chinese-African relations                                            008


sPeCIAL RePoRt    Exclusive interview with AVRIL CoLe, Associate, Macleod Dixon        016
                  news In ReVIew Angola                                                024
                  CoUntRY PRoFILe Angola                                               028
                  Market Spotlight eskoM                                               032
                  Exploring our backyard: bARoqUe MedICAL
                  brings world class educational institute and medical devices to SA   036

CoMPAnY FoCUs     Glowing with goodness: GoLdenGLo                                     048
                  Making better, best: ConsULtInG enGIneeRInG FIRM ARq                 058
                  PRoCess PRojeCts Bringing SA companies into the future               066
                  A good seed: AdVAnCed seed has grown into a leading SA seed producer 074
                  seMbeL-It Concept to kitchen in eight days                           090

 AssoCIAtIons     the soUth AFRICAn AeRosPACe MARItIMe And
                  deFenCe IndUstRY Association                                         106


   ResoURCes      VeeCRAFt MARIne The future of shipbuilding for
                  the oil and gas market                                               114
                  ContInentAL CoAL Existing reserves,
                  infrastructure and export capability                                 122
      074


                   028




       008



             106


090
Sino-Symbi
By AnnA Guy
              Entering a new era of Chinese-Afri
ioSiS
ican relations
10   Sino-SymbioSiS Entering a new era of Chinese-African relations




     AT The sOuTh Africa-China Economic and Trade Co-operation Forum Signing
     Ceremony, held on March 31, 2010 in Pretoria, Rob Davies, the SA Minis-
     ter of Trade and Industry, toasted to the signing of a monumental, multi-
     billion dollar, strategic business partnership between the two countries.


     “Our relationship with the People’s Republic of China
     is deeply rooted, historical and we enjoy excellent
     relations at political and people-to-people level. Our
     economic relationship is underpinned by a bilateral
     Trade and Economic Cooperation MOU, Reciprocal
     Encouragement and Protection of Investments
     agreement and the record of understanding between
     the DIT (Department of Trade and Industry) and the
     China-Africa Development Fund,” he said.
The occasion cemented contracts that would          and resources, of which Africa is abundant.
see Chinese companies sourcing over R2 bil-         China needs to secure oil to supply its economic
lion worth South Africa products (such as wine,     growth, and many new oil fields are being devel-
copper and granite blocks) and marked the           oped across Africa.
strengthening of mutually beneficial economic           China’s net is cast wide over the African
relations between the China and Africa, on the      continent. It has spent billions of dollars secur-
whole. The partnering has immediate benefits        ing drilling rights in Angola, Nigeria, Sudan and
for Africa in terms of economic injection and       Angola, and has exploration or extraction deals
trade, but the initial enthusiasm that has greet-   with Chad, Gabon, Mauritania, Kenya, the Demo-
ed Chinese investments in continental Africa is     cratic Republic of Congo, Equatorial Guinea and
not universally shared.                             Ethiopia, as well as a large stake in the cop-
                                                    per industry in Zambia and Congo (China is the
Fuelling China                                      world’s largest consumer of copper and has
China is hungry for food, land, and energy;         invested uS$170 million in the Zambian copper
it accounts for one-fifth of the world’s            mining sector). It is also buying timber in Gabon,
population, and its consumption needs are           Cameroon, Mozambique, Equatorial Guinea and
growing exponentially at a rate that it cannot      Liberia. In fact, China’s overall trade with Africa
internally meet. Take, for example, China’s oil     rose from $10.6 billion in 2000 to $106.5 billion
consumption; in the past decade, it has shot        in 2009.
up 35 per cent. The city of Beijing singularly
accounts for 80 per cent of the world’s supply of   Infrastructure development
steel, copper and aluminum.                         For Africa, this investment boom, in particular,
    In its search for resources and new export      has manifested in the essential rebuilding of its
markets, China has turned to Africa, which has      decrepit infrastructure. In November 2009, the
vast natural resources, including oil and gas,      World Bank Report articulated the economic
metal ores and cotton. So the trade partner-        reality of Africa’s infrastructure, saying “The poor
ship seems a natural one; China needs land          state of infrastructure in Sub-Saharan Africa—its
12           Sino-SymbioSiS Entering a new era of Chinese-African relations



electricity, water, roads and information and         cant development, and it is no wonder why they
communications technology (ICT)—cuts national         are welcomed.
economic growth by two percentage points every
year and reduces productivity by as much as 40        Chinese roots
per cent.” Thus, Chinese investment in Africa’s       China’s presence in Africa is becoming more and
infrastructure plays a massive role in closing the    more rooted. Since worldwide food shortages and
infrastructure gap.                                   a boom in bio-fuels in 2008, investors have been
    And the trend is only picking up. Across          turning their sites to farming. Given this economic
Africa, Chinese companies are beating out             light, Africa is looking quite attractive to investors
Western and other foreign companies, win-             who are coming in droves to lease some of the
ning major infrastructure contracts, thereby          cheapest arable land on the planet, at approxi-
paving highways, building hydroelectric dams,         mately $800 per hectare. A conservative estima-
upgrading ports and building pipelines that are       tion postulates that at least 20 million hectares
vastly underfunded. In November 2009, China           of African land has been leased by foreigners, the
pledged to offer African countries $10 billion        majority of whom are Chinese companies.
in low-interest loans over the next three years,          Besides leasing land, China is more depen-
to set up a $1-billion loan facility for small- and   dent on Africa for its oil and has many stakes in
medium-size firms, and to forgive debt on some        African oil production. Through the three major
interest-free loans. The pledge is nearly 10 per      state-owned Chinese corporations—the China Na-
cent of the total trade between the two blocs,        tional Petroleum Corporation (CnPC), the Chinese
and is mostly to secure raw materials for China,      Petroleum and Chemical Corporation (Sinopec)
the world’s fastest-growing large economy. Ac-        and the China National Offshore Oil Corporation
cording to a Wall Street Journal report, Chinese      (CNOOC)—China has been securing strategic as-
companies have paved more than 80 per cent            sets and rights for exploration, development and
of the main roads in Rwanda. For a continent          production in Africa’s petroleum industry, which is
with poor infrastructure and limited interregional    greatly needed to fuel China’s energy demands.
trade, investments like these constitute a signifi-       As recently as April, a Chinese mining
company signed a contract to buy 100,000
tonnes of coal a year from Namibia, and, to
sweeten the deal, also promised to buy up all
the marble produced by a local stone plant that
was struggling to stay afloat. The applications to
Namibia’s ministry of mines and energy reveal
that Chinese mining interests have applied for
70 per cent of exclusive prospecting rights in the
country for iron, magnesium, copper, lithium and
uranium. All of this is in keeping with China’s
quest to keep raw materials flowing to China.


Proceed with caution
China’s presence in Africa is incontestable.
Chinese companies have interest and, more
importantly, influence, ostensibly in every major
industry sector. Nevertheless, China’s engage-
ment is increasingly being seen as odious and
rapacious. In Namibia, for example, local mining
executives can be very speculative of China’s
mining interests, and cannot ignore that the
country has the world’s worst record of mining
accidents, environmental degradation and little
experience in mining anything but coal. unfortu-
nately, Namibia’s dependency on mining activity
to fuel its economy is not greater than its ability
to pick and choose between customers.
14          Sino-SymbioSiS Entering a new era of Chinese-African relations



    In this sense, Namibia is a microcosm for         predatory dealings elsewhere in Africa, and have
the greater issue. The injection of mining activity   been involved in illegal business practises, such
will have short-term gain, but whether this will      as engaging in the illegal export of precious min-
be in Namibia’s long-term interest remains            erals from the eastern Democratic Republic of
to be seen. There has been a general lack of          Congo. Chinese companies do not seem averse
transparency in these business relationships,         to dealing in corruption and bribery, as well. In
which has generated suspicion over Chinese            a recent report, Transparency International said
presence in Africa.                                   Chinese businesses are the world’s second-big-
    The concerns have been compounded by              gest bribe-payers, after their Indian counterparts.
China’s close association with African regimes            China’s only declared condition to prospec-
that have been singled out for human rights           tive partners is the recognition of its “one-China”
violations. A telling example is that China buys      policy, by which African governments are expect-
the vast majority of Sudan’s oil and is also their    ed to break off diplomatic relations with Taiwan.
majority partner in the consortiums extracting        One-third of the countries that recognised Tai-
the oil; nevertheless, to date, it has refused        wan were African, including South Africa. But in
to open its records or participate in debate          return for development assistance from Beijing,
on whether their payments are reaching the            many African countries have severed diplomatic
intended destinations.                                links with Taipei.
    The Brussels-based International Crisis
Group (ICG) accused China of having a vested in-      The future of Sino-African
terest in the continuation of “a low level of secu-   relations
rity” in the war-ravaged Darfur region of Sudan       Reactions from the international community are
as it “enhanced its business opportunities.” The      mixed, but a pervasive view is that China, by
report alleged the Chinese government of having       agreeing to work with corrupt government and
“an almost total disregard for the human rights       rebel groups, could stem the progression in eco-
implications of their investments.”                   nomic and political sanity to impoverished and
    Chinese companies have a reputation of            conflict-ridden communities in Africa. There are
also concerns that China’s success in reducing      advancement of Africa so much as their own
hunger for millions of its population in the last   interests. At a time when African countries are
three decades without an electoral democracy        experiencing more elections and democracy
and a free press may offer a model of develop-      than in the past 100 years, caution must be
ment for African governments that differ from       exercised when dealing with a non-democratic
Western governments.                                country as huge and influential as China, who,
    What Chinese investment will mean for the       thus far, has not hesitated to work with rebel
future of Africa is a complex question. As we       groups and regimes. Attention must be paid to
have seen, many African countries are thriving      the ethical actions of all companies who wish
under China’s participation. What does Africa       to come and do business in Africa. The pattern
get in return? Some of the benefits are obvious.    must be established early that only companies
A boom in trade with China provides the push        who work with democratic, elected governments
that some African countries need to grow their      will be rewarded with contracts. Due diligence
economies (Zambia’s copper industry and the         must be paid on our part in enforcing local rules
DRC’s cobalt industry are examples).                and regulations. And once that has been done,
    Something that we must watch, however,          companies who wish to work in Africa should be
is an inextricable entrenchment in trade with       welcomed. TAB
a country whose interests do not lay in the




                     戰略
16   EXCLuSIVE InTERVIEW • Avril Cole, Macleod Dixon




      016
      The AfricAn Business JOurnAL:
      Interview with avril
      Cole, associate,
      Macleod Dixon
JunE 2010 • The African Business Journal   17
                           sPeciAL rePOrT
18    EXCLuSIVE InTERVIEW • Avril Cole, Macleod Dixon

AVriL cOLe is an associate in the private capital,      for gold especially is leading the mining sector’s
banking and mining groups of Macleod Dixon              revival in places like Ghana and Tanzania. The
LLP. Avril also works closely with the securities       recently released 2010 Fraser Institute Survey of
group, acting primarily on behalf of agents and         the mining industry captures the optimism within
underwriters on a variety of transactions, includ-      the industry about the economic recovery. Al-
ing private placements and public offerings. Ma-        most twice as many mining companies surveyed
cleod Dixon LLP is a global law firm with offices in    said that they expected to increase exploration
Canada (Calgary and Toronto) and four emerging          budgets in 2010 as those who said budgets will
markets with natural resource based economies,          remain the same or decrease.
Venezuela, Brazil, the Russian Federation and               Notwithstanding the recession, in 2009
Kazakhstan. The firm is known for excellence in         around $2.6 billion in equity capital was raised
the natural resources arena, primarily mining           on the Toronto Stock Exchange and the Toronto
and oil and gas. Nine lawyers from Macleod Dix-         Venture Exchange for mining projects in Africa.
on were ranked as leading practitioners by Who’s        According to the TMX Group, there were 169
Who Legal, Mining 2010—the highest number of            companies listed on the TSX or the TSX-V operat-
any Canadian-based law firm.                            ing in Africa in 2009 developing 681 properties,
     TABJ: Please describe, in your assessment,         active in 44 countries across the continent.
the current landscape for foreign investors                 The traditional mining destinations in Africa
interested in investing in the mining industry in       have been places like Botswana and namibia
Africa.                                                 and, in the last 15 years, Ghana and Mali and
     Avril Cole: Now is a good time to invest in the    they continue to be the most attractive mining
mining sector of a number of African countries.         investment destinations in Africa.
Commodity prices saw record drops in 2009                   However, a number of African countries that
(compared to the prices we saw during the “bull         prior to now have been seen as too risky to con-
run” between 2005 and 2008) but are expected            sider investing in are making progress in those
to normalize at 60-75 per cent of their all-time        areas that are necessary to attract foreign capi-
highs this year driven by growth in demand from         tal to the mineral sector, such as improved politi-
the economic powerhouses, China and India, as           cal and economic stability, improving institutional
well as depleted stockpiles. This should drive ex-      capacity and improving quality and applicability
ploration spending in Africa. The higher demand         of mining codes.
JunE 2010 • The African Business Journal   19
20    EXCLuSIVE InTERVIEW • Avril Cole, Macleod Dixon



     We are seeing an improved political and             from the 49th position it held in 2009 to 61st
business climate in places like Angola, uganda,          position and the mineral sector’s contribution to
Liberia, Burkina Faso, Rwanda, Sierra Leone and          gross domestic product fell in real terms by 1per
Mozambique. Sierra Leone has been through two            cent. This is a due to a number of factors including
successive and successful election cycles and            the impact of the implementation of its new Min-
Liberia held successful democratic elections in          ing Charter and the strength of the Rand relative
2005. Both those countries seem to be success-           to the u.S. Dollar.
fully addressing their long standing governance              Other countries in the West African sub-region
issues and their respective governments are doing        like Guinea are still struggling. The political opposi-
a great job of showcasing the natural resources          tion in Guinea recently announced that it will not
available. In 2009, Sierra Leone also made strides       recognise Vale’s $2.5-billion acquisition of iron-ore
in improving its regulatory infrastructure including     assets in that country if it is victorious in the elec-
the introduction of a new mining code designed to        tions scheduled for June, 2010. This announce-
attract foreign direct investment. Rwanda, Sierra        ment has sent a negative message to investors.
Leone and Liberia have also improved steadily in             TABJ: Please quantify the advantages
the World Bank Doing Business rankings in the            emerging from Africa in terms of business and
last three years. Rwanda was ranked the world’s          investing in the mining sector.
top reformer in the World Bank’s Doing Business              AC: Africa is a highly prospective continent. A
2010 report as it climbed from 143rd place in            number of countries on the continent have a very
2009 to 67th place in 2010. Sierra Leone im-             strong mineral potential that remains underex-
proved its overall ranking in the same report by         plored and underdeveloped because of the global
climbing 8 spots from 156th place to 148th place         perception of the risks involved in investing in
during the same period. We are seeing increased          these countries.
confidence in some of these countries from estab-            With respect to other advantages, it is difficult
lished investors.                                        to generalize. Africa is a diverse continent with 53
     At the same time, South Africa, a traditional       different countries at various stages of economic
mining destination, is increasingly being viewed as      development. Some countries like Botswana have
less attractive. In fact, in the 2010 Fraser Institute   a competitive tax and fiscal regime and most oth-
Survey rankings, South Africa fell by 12 places          ers do not. A few countries on the continent (Bo-
                                                                JunE 2010 • The African Business Journal      21



tswana and Ghana) have a pool of skilled labour          the resource development cycle, investors require:
that is available on a price competitive basis. Most     stable, peaceful, “corrupt-free” democracies;
do not.                                                  effective and transparent legal and regulatory
       TABJ: What, in your opinion, needs to be          frameworks which clearly define the rights and
done to help African countries prosper as attrac-        obligations of investors; macroeconomic stability;
tive investment locations for the mining indus-          competitive fiscal and taxation conditions; infra-
try?                                                     structure services and freely available geological,
       AC: The challenge is to identify those policies   economic and fiscal data.
that will replace vicious cycles that feed off pover-        TABJ: What is your prognosis on the poten-
ty, corruption and mismanagement with a positive         tial for governments to reform internally?
cycle of mining led development.                             Developments across the face of Africa sug-
       The role of national governments cannot be        gest that there is a downward trend in conflict,
overstated to provide the political climate, infra-      poor governance, mismanagement and corruption
structure, security of tenure and taxation legisla-      and an upward trend towards democratisation
tion which are required to attract investment. In        and reform. These trends augur well for develop-
this regard, they can be assisted by their multilat-     ment of the mining industry across the continent.
eral partners (World Bank, IFC, unCTAD and oth-              As I have said, Botswana and namibia have
ers) and bilateral partners (DFAIT is very active in     been able to improve their risk profile. Four de-
Africa), donor agencies and others. These institu-       cades ago, Botswana was one of the poorest na-
tions can provide the technical expertise to sup-        tions in the world and it is now the most attractive
port capacity building measures to improve the           country in Africa for mining related investment be-
regulation of the mining sector and institutional        cause Botswana found the political will to improve
strengthening to improve the management of the           the investment climate for the mining sector and
sector.                                                  to use the sector as a springboard to diversify its
       I am of the belief that the desire to reform      economy.
cannot be imposed from outside Africa, and that              TABJ: it sounds as though capital invest-
national governments have to lead the way.               ment in the mining sector might be the catalyst
       The decision to invest in a mining project is     required for the management of so-called “fron-
based on risk-return considerations. To kick start       tier countries” to become more stable.
22    EXCLuSIVE InTERVIEW • Avril Cole, Macleod Dixon



     AC: Capital investment in the mining sec-          have to conduct business in a manner that sup-
tor can definitely be the catalyst if it is properly    ports the communities where they operate, with
managed. Mining can serve as a springboard              a focus on environmental stewardship and sus-
and foundation for sustainable development in           tainable development. The expectations of local
Africa if local governments can provide the infra-      communities, national governments and others
structure to support the sector and allow that to       about the effectiveness of the mining industry in
happen. We have seen this successfully imple-           addressing environmental and social concerns
mented to varying degrees in Botswana, Ghana,           have risen significantly over the last decade
namibia, Mali, Burkina Faso and South Africa. It        and they are reflected in changing policies and
can lead to faster economic growth, increased           regulations. There is increased scrutiny on both
tax revenues and corresponding increased pub-           the local and international level resulting from
lic investment in human capital and infrastruc-         networking among local communities and civil
ture and a growing economy which allows other           society groups in Africa and beyond. The more
industries to flourish. But governments must            substantive costs arising from an environmental
take a holistic approach and deal with the dif-         or social impact problem a mining company may
ficult dynamic of having to respond to the short        have caused, advertently or inadvertently, will
term aspirations and needs of the electorate            often be the damage caused to its credibility and
while at the same time implementing policies            the resulting erosion in trust.
which may only deliver the needed benefits in               As the head of our global mining group,
the long term.                                          Richard Lachcik, stated in a recent interview with
     TABJ: How are Western businesses re-               the National Post, the reality now is that a west-
sponding to local civic and political challenges        ern mining company cannot get a mining project
in the countries in which they are invested?            financed without being squeaky clean and meet-
     AC: One cannot paint all Western mining            ing all the international standards with respect to
companies with the same brush. There are                environmental and social regulations. If you do
good actors and bad actors and I am not going           not, international banks and institutions like the
to name names. What I can say is that mining            IFC and the EDC will not lend to you.
companies recognize that social responsibility              We are corporate counsel to a number of
is fundamental to their business strategy. They         mining companies that have ongoing projects in
                                                              JunE 2010 • The African Business Journal    23



Africa and our advice across the board is that they    horns, most notably South Africa. As part of the
employ best practices in the area of community         South African government’s program to acceler-
relations and social mitigation by engaging with lo-   ate the advancement of historically disadvan-
cal stakeholders (local press, local communities),     taged South Africans (a category that includes
contributing to improving the living conditions of     women), mining companies were required to
affected populations, honoring commitments to          have women represent at least 10 per cent of
communities, respecting cultural and religious         their workforce by 2009.
sites and following voluntary codes of practice            There are some high profile female execu-
(such as the PDAC’s E3 Plus initiative) and com-       tives in the industry. You probably are aware that
mitting to higher environmental standards than         the current CEO of Anglo American is a woman.
might be required by the host country.                 Her name is Cynthia Carroll. Debra Valentine is
    TABJ: Please speak to the role of women in         the Group Executive, Legal & External Affairs at
mining and for the future of Africa.                   Rio Tinto. Leslie O’Donoghue is the Chief Legal
    AC: Women are historically under-represented       Officer and Senior Vice President, Business De-
in the mining industry. The reasons for that are       velopment at Agrium Inc.
multifaceted, stemming from the industry’s his-            There are a few female CEOs of junor mining
tory as a male-dominated workforce, its image as       companies as well. I can point to Kim Harris, the
providing very physical, masculine-oriented roles      CEO of Midland Minerals and Mari Ann Green,
and its ingrained corporate culture that makes men     the CEO of Formation Metals Inc.
feel more comfortable and prepared to succeed              In most of sub-Saharan Africa, women pro-
than women. I think that this is changing though.      vide the backbone of the rural and informal
The recent bull run in commodities put a spotlight     economies and can play a significant role in the
on the skills shortage in the mining industry. Com-    development of the formal economy, including
panies realize that combating the skills shortage      the mining sector, if given the opportunity. When
means increasing female participation in the indus-    you remove the social, economic and legal con-
try. Women are also perhaps more willing to avail      straints on women, you take a giant step towards
themselves of opportunities in the industry today      development of the economy. TAB
than in the past.
    Some countries are taking the bull by the
     news in reView angola

AnGOLA PArTiciPATes in wOrLD ecOnOMic fOruM
On AfricA
Angola’s minister of Industry, Geology and Mining
attended the World Economic Forum on Africa,
taking place in Dar es Salaam, Tanzania. The
Minister was representing the head of State, José
Eduardo dos Santos, under the topic “Rethinking
Development Strategy for Africa”. The Angolan
government official was accompanied by Angola’s
ambassador to Tanzania, Ambrósio Lukoki.


nAMiBiA AnD AnGOLA PArTner TO BuiLD $1.1
BiLLiOn DAM
namibia and Angola partnered to finance and
build a uS$1.1 billion hydropower plant on a river
that runs along their common borders in a joint
effort to end power disruptions that have plagued
their economies for decades. In May, the head of
namibia’s state-utility firm namPower announced
the project, which includes a hydropower station
and a storage dam in the Kunene river, is expect-
ed to be ready by 2017. The cost of the joint ven-
ture project between the two countries will be spilt
equally between namibia and Angola and environ-
mental with feasibility studies of the 400-mega-
watt (MW) Baynes hydroelectric project which are
                                                              JunE 2010 • The African Business Journal     25




expected to be ready before the end of the year.           Angola, which rivals Nigeria as Africa’s big-
Both nations will then look for contractors to build   gest oil producer, relies primarily on hydroelectric
the power station.                                     power for its energy needs and is undergoing a
    The plans to build the dam 15 years ago at         muti-billion dollar infrastructure development
the Epupa Falls, which lie approximately 40 kilo-      program which includes rebuilding dams that were
metres north of Baynes, were put on hold after         destroyed in the civil war.
protesters raised fears it would threaten the envi-        The officials at Angola’s Energy Ministry say
ronment and the nomadic Ovahimba community             that only 5 per cent of an estimated 18,000 MW
who lived nearby.                                      of hydroelectric power is being used in Angola.
26    nEWS In REVIEW • Angola



AnGOLA exPeriences recOrD hiGh ecOnOMic
GrOwTh in nOn-OiL secTOrs
In early May, Vice President of Angola, Fernando
da Piedade dos Santos, announced exceptional
progress in the country’s non-oil sector. The Vice
President reported that the oil rich country’s non-
oil sector presently accounts for 58 per cent of the
Gross Domestic Product—a rapid increase from
the 5 per cent it accounted for in 2002. Angola
has 35 million hectares of land classified as being
potential arable land for development of agricul-
ture which is founding the basis of a renewed
focus on agriculture.
     While attending the opening session of the
26th Confederation of the un Food and Agricul-         50 Per cenT DrOP in AnGOLA BuiLDinG Licences in
ture Organisation (FAO) for Africa, the Vice Presi-    2009
dent promoted Angola’s water resources including       New building licences in Angola dropped 50 per
47 hydrographical basins. He also elaborated           cent in 2009, precipitating a slowdown in the
on plans for the government to restructure the         country’s once thriving property market. Accord-
agrarian research system and to recuperate Zoo-        ing to reports, only 569 thousand square metres
technical and Agronomic Research Stations in           were approved for construction in 2009, down
the country, in order to appropriately make use of     from 1.06 square metres in 2008. Analysts say
these natural resources and to diversify the Ango-     that although home and office sales in Angola
lan economy.                                           have slowed down in recent years, real-estate
     The FAO director-general commended the            prices remain high in a city where a two bedroom
Angolan President on the agriculture development       apartment can still get around $1 million.
policies being carried out by his government with a
view to ensuring food security.
                                                              JunE 2010 • The African Business Journal   27




AnGOLA’s ecOnOMY sTiLL On PAce fOr fAsTesT             plans to pump 1.9 million barrels per day in 2010,
GrOwinG ecOnOMY in The wOrLD                           up from 1.82 million in 2009, according to its
The World Bank reported in April Angola’s econ-        2010 budget. New loans from the International
omy is expected to expand between 6.5 and 7.5          Monetary Fund and China should also help
percent in 2010 due to higher oil prices from          bolster the economic recovery after a slump in oil
around zero last year. A Senior World Bank econo-      prices in 2008 and 2009 ended several years of
mist said higher oil prices should help the oil-pro-   double-digit expansion. The government predicts
ducing nation recover a drop in some of its foreign    the economy will expand 8.6 per cent this year,
exchange reserves. The economist said Angola’s         up from 1.3 per cent in 2009. The African nation
economy is expected to perform much better in          signed three new credit lines with China at the
2010 compared to 2009 and preliminary data             end of 2009 worth $10-billion, according to the
suggests that oil revenues have improved espe-         World Bank report. Chinese loans to Angola since
cially compared to same period in 2009.                the end of the civil war in 2002 are now at around
    After emerging from a civil war in 2002 to rival   $14.5-billion. TAB
Nigeria as Africa’s biggest oil producer, Angola
     cOunTrY Profile

The rePuBLic Of Angola, or República de Angola            gola expelled a great many Congolese diamond
as it is said in Portuguese, which has been this          thieves back to their neighbouring native country,
nation’s official language since its spell as a Por-      the Republic of Congo. Sadly, this resulted in the
tuguese overseas territory came to an end in just         Congo expelling approximately 20,000 Angolans
1975, is a central South-African country. It is the       in retaliation.
second largest oil and diamond producer in sub-               We have seen plenty about Angola’s re-
saharan Africa, and its economic growth centres           sources industries in the headlines over the past
almost entirely on its oil industry.                      year. Perhaps the most startling and media-dom-
    Following Angola’s independence from Portu-           inating was the attack on the Togo football team
gal, the country suffered a famously bloody civil         as they travelled by bus when Angola hosted the
war which continued up until 2002. Some 25                African Nations Cup. The attack was carried out
years of civil war left the nation in a rather precari-   by Cabinda activists, a separatist guerilla group
ous, fragile state, and its resources industries,         from the Cabinda exclave in the North, the region
although undeniably bountious, took quite a hit.          which plays host to roughly 65 per cent of An-
    The year 2004 was a pivotal one for the               gola’s oil. This group is known as FLEC, Front for
resources industry in Angola, when the country            the Liberation of the Enclave of Cabinda.
reached one million parrels per day oil produc-
tion, and cracked down on thousands upon thou-            Cabinda
sands of illegal diamond miners which, according          Within the nation of Angola, the Cabinda province
to the government in December 2004, totalled              is a vital region for resources, but also regrettably
30,000 individuals.                                       instrumental in the violence which takes place
    In September 2008 the first parliamentry              within the country. Home to roughly 357,576
elections for 16 years took place, again marking          people (at last count by 2006 figures), it is sepa-
another great amount of progress and further              rated from the main bulk of Angola by a strip
stability for the country. In 2009, akin to the           of land belonging to the Congo. Oil exploration
illegal diamond mine measures of 2004, An-                began with the Cabinda Gulf Oil Company back
JunE 2010 • The African Business Journal   29
30   SECTION • Delmar Commodities




in 1954, and today the region produces approxi-     tated 10 per cent of oil revenue tax should go to
mately 900,000 barrels per day of crude. Despite    the land, many of its native people feel that they
this booming resource hub, the region remains       do not see much, if any, of the profits made. The
largely below the poverty line. Despite acts to     majority of Angola’s oil comes from the world-
support taxation and financial beneficiation from   class Block Zero, which has been in operation for
the oil industry, such as the 1996 act which dic-   over 20 years now.
                                                             JunE 2010 • The African Business Journal      31




    “Cabinda is a small, rich, open economy with      subsidiary Sinopec Overseas Oil & Gas (SOOG).
self-reported crude oil reserves of about 130         SSI’s stake in Block 18 is 50 per cent.
billion barrels,” the website for the Federal Gov-        On April 7, 2010, both Eni and Sonangol an-
ernment of Cabinda says. “Cabinda continues its       nounced that they have made two new oil discov-
discussions with foreign oil companies to develop     eries in Block 15/06 by continued exploration at
fields in the country.”                               the nzanza-1 and Cinguvu-1 wells. Production
                                                      estimates for the Nzanza-1 well previously cen-
Angola in the news                                    tred at around 1,600 barrels per day, however in
Getting back to the wider nation of Angola            light of these discoveries each well is expected to
proper, there have been a few promising an-           reach 5,000 barrels per day or more.
nouncements lately. Over 75,000 weapons                   On April 12, 2010, Anibal Octavio da Silva,
have been recovered in a current disarma-             Angola’s deputy petroleum minister, announced
ment programme run by Angola’s police forces.         that they expect the nation’s petroleum output
These weapons have been recovered from                to rise by 16 per cent by the end of this year. It
native civilians and are part of an increasing        was also announced that the country expects to
inclination towards targeting public violence         attract uS$50.6 billion in investment between
and weapons possession by the authorities. In         2009 and 2013.
military news, a landmark co-operation accord             These news items, and the many others
in pursuit of united defence between Angola           which arrived are reported along with them,
and Guinea Bissau was signed on April 15,             serve to support government estimations for a
2010. Cândido Pereira Van-Dúnem, Angola’s             wealth of investment in Angola, and prove the
Defence Minister, and Aristides Ocante da Sil-        lucrative and well-recognised oil reserves within
va, his counterpart from Guinea Bissau, signed        the country. This mix of military and public au-
the accord in Luanda.                                 thority crackdowns on violence and actions for
    On April 1, 2010, Sinopec, a subsidiary of the    peacemaking, combined with what is clearly
China Petrochemical Corporation, signed a deal        overwhelming interest in the oil industry, spell
for a stake in Block 18. In this deal, Sinopec will   great promise for the future of this, a country
take a 55 per cent controlling stake in Sonangol      which has endured more than its fair share of
Sinopec International (SSI) from Sinopec Group        war and instability. TAB
     MArkeT sPOTLiGhT eskom




nO DOuBT YOu’Ve seen the name Eskom popping             is in the process of building additional
up in your newspaper headings recently. The             power stations and backup generators at an
company is South Africa’s electricity public utility,   estimated cost of R300 billion over the next
and is the largest electricity producer in the          five years.
continent. Eskom plays a vital role in the lives of         Eskom’s Medupi Power Station is the project
South Africans, supplying as much a 95 per cent         that is gaining considerable media attention,
of the country’s electricity.                           both positive and negative. The Medupi station
    Eskom is dealing with the challenge of a            is a coal fired power station being built in
growing population and electricity demand. The          Limpopo province, SA, and will be the largest
2007 electricity blackouts were a consequence           dry-cooled coal fired power station in the world
of this, and when Eskom could not meet the              upon completion. The power station itself has
country’s electricity demand, billions of rand          drawn the ire of critics who argue that the
were lost in the wake of work stoppage. Not             building is too closely tied to political interests
wanting a repeat of these blackouts, especially         and the AnC party would stand to profit billions
during the 2010 FIFA World Cup, the company             of rand from it. Environmental groups have also
                                                            JunE 2010 • The African Business Journal    33




voiced their criticism of the plant for using coal   confirmed the positive record of decision at the
as its fuel.                                         beginning of May 2007.”
    According to the head of Eskom’s generation          “The Medupi Power Station units are
business, Medupi (and a second coal-fired power      scheduled to be commissioned at nine-monthly
plant called Kusile) will be able to meet the        intervals, in line with international practice.
demand of electricity for 2010 and the company       However, power plants have been constructed
is “upbeat” about the World Cup.                     and commissioned in shorter periods. The first
    And despite environmental objections,            unit is scheduled to be commissioned in 2012,
Eskom maintains “The environmental impact            with the last unit scheduled for commissioning by
assessment for this station was undertaken           2015,” says the company.
and a positive record of decision was issued             This project will include the supercritical plant,
by the Department of Environmental Affairs           which is able to operate at higher temperatures
and Tourism in 2006. The Minister of                 and pressures than previous generation boilers,
Environmental Affairs and Tourism considered         and importantly operate with greater efficiency.
the appeals lodged against the decision, and         The supercritical design is a first for Eskom.
34   MARKET SPOTLIGHT • Eskom




Medupi financed in part                               We look forward to the mutually beneficial
by World Bank loan                                    relationship that will result from this support.”
Eskom has been struggling to pay for the                  “The World Bank loan significantly
enormous project. In April, the World Bank            contributes to the provision of baseload power.
agreed to provide uS$3.75 billion loan to co-         Improved energy security will advance South
finance the Medupi power plant and Eskom’s            Africa’s development agenda for economic
proposed concentrated solar project and wind          growth and human upliftment in South Africa and
energy projects.                                      the region,” it continued.
     Eskom’s company statement says “This loan            Eskom’s Finance Director also explained
is a vote of confidence in South Africa and Eskom.    that the World Bank loan is part of a multi-
On behalf of the Board of Directors, I welcome        year investment programme that provides
this commitment to South Africa and to the            the foundation for the necessary electricity
regions’ future development. Eskom is thankful to     expansion in South Africa. In line with existing
all the role-players for making this loan possible.   multilateral funding, these funds combine
                                                           JunE 2010 • The African Business Journal      35




favourable financing rates with a structured        cooled power plant in the world, and Africa’s
repayment profile, thereby making it an             first plant using “supercritical” technology; and
economically attractive option to contribute to     will provide 4 800 MW of power—an addition
South Africa’s future economic growth.              of more than 10 per cent to South Africa’s
    Eskom’s position is “The completion             existing baseload.”
of Medupi is a matter of urgent national                “Our challenges are great and we have solid
interest, as the energy demands have grown          plans to address the needs. In addition to the
considerably in the past 15 years and are           capacity that this loan will help fund, we need
projected to grow further as the economy            to rise to the challenge of using energy more
expands. In particular, as the electricity system   efficiently whilst planning responsibly for future
remains critically tight between 2011 and           energy infrastructure development. We are very
2012. Construction is progressing well and          pleased that the World Bank has agreed with our
the first unit of Medupi is expected to come on     planning and granted this substantial loan,” says
line in 2012. Medupi will be the largest dry-       a company spokesperson. TAB
   036
exPLOrinG Our BA
Baroque Medical brings world class educational ins
                                    sPeciAL rePOrT




AckYArD:
stitute and medical devices to Sa
Some gambles are worth taking; buying a lotto ticket, for
instance. But there are a great many things one should never
take a risk on, and your health is at the top of that list.
South africans may not know it, but one of the leading world
medical training facilities is in our own backyard, providing
world-class medical devices and training to minimise risk
and better the lives of their patients.
40   HEALTHCARE • Baroque Medical




sOuTh AfricAn-BAseD suPPLier of medical devic-          As distributors of medical equipment, Ba-
es and pharmaceutical products Baroque Medi-        roque Medical has aligned itself with only world-
cal supplies medical equipment for cardiology       class companies such as Abbott Vascular and
and neurosurgery departments to South Africa,       Integra Life Science. The Baroque Medical ob-
the Indian Ocean region and certain countries in    jective is to provide customers with relevant and
Africa. For this company, headed by CEO Albert      innovative products that will improve (and pro-
Denoon, training, testing and trials are the core   long) quality of life. Denoon credits the success
of the business. Denoon’s stalwart dedication to    of Baroque Medical to focusing in on the best
the three ‘T’s’ have made Baroque Medical the       providers and being extremely selective. “In
single-most respected brand within the industry.    many ways, I think that has been the key reason
JunE 2010 • The African Business Journal   41
42    HEALTHCARE • Baroque Medical




for our success—having been able to focus and      ment makes the computer industry look slow
be selected rather than take all comers.”          in comparison, Baroque Medical is perpetually
     “I have always sought to work with recog-     upgrading its equipment. To keep up with the
nized, reputable companies that have products      rapid pace of advancement in the area, Denoon
which are FDA approved and which have obvi-        took the great initiative to set up a world-class
ously passed all their testing and trial periods   training facility right in Johannesburg.
to make sure they are safe and effective to
perform the operation they are designed to do,”    Crossroads
Denoon continues.                                  Crossroads is one of three world-class insti-
     In an industry where technological advance-   tutes of its kind. The institution (a joint initiative
44   HEALTHCARE • Baroque Medical



between Baroque Medical and Abbott Vascu-           in real-time, explain the techniques he or she is
lar) was started 10 years ago in Brussels and       using, and give tips and tricks on how to per-
set out to be a didactic, peer-to-peer, hands-on    form the procedures when they go back to their
training facility which enable physicians to keep   own institution. “It is a multi-faceted centre that
up with the magnitude of new clinical data and      offers didactic lectures, peer-to-peer interaction
surgical techniques. Crossroads’ primary pur-       and a virtual reality facility where one is able
pose is to provide ongoing continuing medical       to practise a new procedure on the simulator.
education of an international standard to in-       And you can do it over and over again until you
terventional cardiologists, especially those just   get it right, because the simulator will tell you
starting out in the discipline.                     what mistakes you have made or how well you
     Denoon was impressed by the quality and        have completed the procedure,” says Denoon. It
thoroughness of the training at Crossroads          virtually takes the risk out of the operation, and
and was instrumental in establishing the facil-     gives doctors virtual experience in the field.
ity in South Africa. “After attending Crossroads
in Brussels for a number of years, I felt there     Love of South Africa
would be an opportunity to create a centre like     Baroque Medical is planning on expanding its
this in SA. We set up a Crossroads Institute in     borders to bring excellent medical care to more
Johannesburg to have international and well as      Africans. Denoon expressed great pride and
local experts training in cardiology.”              enthusiasm when detailing the company’s plans
     The foundation of Crossroads is education,     to reach out and expand past their niche and re-
and physicians are exposed to a four-tiered         ally delve into generic pharmaceuticals as well.
educational program that incorporates theory,       The Baroque Medical by-line is “Affordable, safe
discussion, practise, apprenticing and then,        medicine for Africa.”
eventually, operating. “For example,” explains          “We are using our Crossroads Institute and
Denoon, “We televise live cases being done in a     will be taking that facility on the road, so to
hospital, and stream it into our auditorium. This   speak,” says Denoon. “We will do training lo-
allows us to have two-way discussions between       cally in hospitals in the African continent where
the surgeons and the audience.”                     we can bring experts not only from SA, but from
     The doctor performing the operation can,       around the world, to improve the expertise and
JUNE 2010 • The African Business Journal   45
46   HEALTHCARE • Baroque Medical
       JunE 2010 • The African Business Journal     47



the knowledge of the local physicians.”
    You can hear the passion Denoon has for
this educational project in his voice. “This is
certainly one way that one is able to give some-
thing back to the medical fraternity. By upgrad-
ing skills and teaching people and imparting
knowledge, we are able to make a difference to
people’s lives. That, to me, is the most the re-
warding part of everything that we do,” he says.
    This local, wholly-owned SA company has
used their experience to take training, educa-
tion and supply of medical equipment to the Af-
rica continent. It is a world class facility, right in
our backyard, and growing a new generation of
highly skilled professionals and top class medi-
cal devices. TAB


www.BArOque.cO.zA
48   SECTION • Goldenglo




                                    04
                           GLOwinG wiT
                                 Golde
              JunE 2010 • The African Business Journal   49
                                         cOMPAnY fOcus




48
Th GOODness
 englo
50   SECTION • Goldenglo




                           If there is anything that customers are not lacking
                              Shelves are bulging with soaps and detergents, b
                             The global economy has evolved at such a rapid
                               country’s geography. north america products
                             It’s hard, given the circumstance, to distinguish o
                                             manufacturers are challenged mor
                                                         JunE 2010 • The African Business Journal   51




g on their trip down the detergent aisle, it’s choice.
brightly coloured packaging and bold promises.
 pace that products are no longer limited to their
 flood our grocery stores, just as ours do theirs.
 one product from the other, and for this reason,
 re than ever to sell their products.
52   SECTION • Goldenglo




in This currenT environment, it is essential to        takes very seriously.
be the standout on the shelves. Customers need             The Goldenglo management team prioritise
information to be able to make a quick decision        the “buzz” of a brand. While most manufacturers
at the grocery store; it should not take a doctorate   only take care of producing and distributing
degree in chemistry to pick out the products one       a product, Goldenglo furthers its brand by
needs. Rather, the customers should be able to         considering its after market needs and pushes
distinguish a trustworthy brand name and finish        it to be a success. Since the company began in
shopping in minimal time.                              1980, Goldenglo has had products boldly enter
     Goldenglo South Africa understand the             the market with effective launches a recognizable
shopping experience better than almost anyone          and trusted brand.
else; it is their job to do so. The company’s focus        Products launched by the company were
is on ensuring their brands capitalise on adapting     received so warmly, that the company decided
and re-inventing themselves to gain the market         to create an even more dedicated and focuses
recognition they need in order to survive. “Be         business. From this, Goldenglo’s in-house
distinct or extinct” is a philosophy the Goldenglo     brand Sunola Oil Mills was born. Readers will
JunE 2010 • The African Business Journal   53
54   SECTION • Goldenglo




surely recognize the brand name from their own       Goldenglo business. The company makes it
grocery and confectionary stores. It’s franchise     their job to know the ins and outs of what is out
products has been 100 per cent super micro           there on the market and how it does or does not
refined Sunflower Oil, of which the company is       meet the needs of buyers. Goldenglo’s research
especially proud. Since then, Sunola Oil Mills has   indicates that new products are typically well
listened to the market and responded to customer     received by customers who are excited to try
demand for margarine to “exacting international      the latest and greatest. Research also shows
standards”, according to the company, which was      customers will readily switch brands in this
launched shortly thereafter.                         competitive consumer atmosphere, and the
                                                     impulse purchase becomes the ideal opportunity
Toilet Soaps                                         for the trail of a new product.
Market research constitutes a large part of the          This was the philosophy behind the launch
JunE 2010 • The African Business Journal   55
56   SECTION • Goldenglo




of the Goldenglo Beauty soap, a product that            the key in creating excitement within the industry.
was introduced “for maximum freshness that              Innovations not only draws in new consumers, but
lasts all day, balanced with moisturizing cream         also stimulates multiple purchases by the current
to take care of your skin.” The product’s appeal        user base. Goldenglo’s laundry soap offers the
was made greater by Goldenglo’s attention to low        most effective ingredients for maximum impact.”
price points and branding sensitive to its target
demographic.                                            Dishwashing
                                                        Goldenglo products are quick to respond to the
Laundry                                                 changing needs of its customers. Case in point:
“A million bubbles in every bar.” That is the tagline   today’s families are increasingly dual income,
for Goldenglo’s laundry soap bar, which is targeted     and more families need to rely on so called
by customers for its value, superior quality and        “convenience products” to help busy families
the fact that it effectively treats laundry stains.     get their chores done. Because of the changing
According to the company, “Product innovation is        lifestyles of customers, the liquid dishwashing
                                                                           JunE 2010 • The African Business Journal    57




        FR Waring enjoys an enviable reputation as one of the foremost trading
        organisations in Southern Africa. The company has been successfully
        trading and shipping various agricultural commodities and by-products
        for more than 80 years.

        FR Waring was one of the first organisations to offer Palm Oil and it’s
        derivatives into the South African market. The organisation is today one
        of the largest privately owned, independent trading houses specialising
        in the trade of oils and fats in Southern Africa.

        In addition to considerable expertise in International Trading, the Group,
        through it’s local subsidiary acts as stockists and distributors of various
        oils and fats into the downstream end user market in South Africa and
        the region. We look forward to hearing from YOU, prospective new




                                                                                                                       ZA Marketing-FRW002
        clients and suppliers, who would like to take advantage
        of the FR Waring network.


        F R Waring
        (I N T E R N A T I O N A L) (Pty) Ltd


        Trading Products from the Earth to the World
        57 - 6th Road, Hyde Park, Sandton, Johannesburg | P.O. Box 681, Parklands, 2121, Johannesburg, South Africa.
        Tel: +27 11 759 0840 | Fax: +27 11 325 6937 | e-mail: trading@frwaring.co.za | www.frwaring.co.za




market, in particularly, has grown tremendously                   different candle is what makes this product
and been reflective of the morphing needs of                      essential in every single household,” says the
buyers. Goldenglo’s Dishwashing Liquid brand                      company. Candles are available in the company
name marries, once again, innovation and pricing,                 brand labels “Goldenglo”, “Kings” and “Goldenglo
and has been a real gem in the Goldenglo crown.                   Superior”.


Candles                                                           Goldenglo
Goldenglo soaps’ fragrances are the company                       By fostering a close relationship with its buyers,
trademark, and are a favourite for consumers.                     Goldenglo is able to launch products that are
Given their popularity, it was a natural progression              tailored to the needs of its customers. Price and
for the company to harness that fragrance in                      quality are of the utmost importance, and have
household candles. “The “Goldenglo Candle”                        garnered Goldenglo loyal, lifelong customers. TAB
has achieved similar brand awareness in South
Africa. A reliable, versatile, trustworthy and visibly
58   EnGInEERInG • ARQ




         058             cOnsuLTinG
              JunE 2010 • The African Business Journal   59
                                         cOMPAnY fOcus




   MAkinG BeTTer, BesT:
G enGineerinG firM Arq
60   EnGInEERInG • ARQ
                 JunE 2010 • The African Business Journal   61




award winning consultancy engineering firm arQ have
been a cornerstone in the South african engineering
industry since its establishment in 1993. The company
is making an even bigger name for itself with pioneering
and exciting new works in gravity dams outside China
and South africa.
      62   EnGInEERInG • ARQ



      sPeAkinG wiTh quenTin Shaw, Managing                       “We have always focussed in specialist
      Director of ARQ, reveals the progression made          areas, working in many countries around the
      within the company as its expertise broadened,         world, and consequently we have expertise
      seeing ARQ emerge as pioneers in RCC dams.             in technologies such as RCC dams that is
      For those unfamiliar, RCC stands for Roller-           unparalleled in Africa,” says Shaw.
      Compacted Concrete, a unique blend of concrete
      that has a much lower cement content than              RCC arch/gravity dam
      traditional cement. This makes RCC ideal for           ARQ is currently completing the design of the
      concrete dams because the lower cement                 world’s first RCC arch/gravity dam outside
      content causes less heat generation during             China and South Africa, which is presently at an
      the curing phase. ARQ has made its mark with           advanced stage of construction in Panama. It will
      RCC technology and has brought South African           be a dam that curves upstream (ergo “arch”),
      engineering to a new level of achievement.             thereby ostensibly using a combination of the
             BR JV Ad Half PageFA.pdf 1 2010/04/28 5:25 PM




           Another successful bridge launch

                                                                        The BRCD Joint Venture is proudly associated
 C                                                                      with the Gauteng Freeway Improvement Project
                                                                        (GFIP) commissioned by SANRAL as part of the
 M
                                                                        2010 Roads Improvement Project. Basil Read, in
 Y
                                                                        a Joint Venture with Roadcrete, Dip Civils and
CM                                                                      Chavani has been awarded two packages on the
                                                                        National Route N1 through Pretoria, including
MY
                                                                        improvements between Brakfontein to Flying
CY                                                                      Saucer interchanges and improvements between
CMY
                                                                        Atterbury and Scientia (N4 Interchanges). The
                                                                        value of these projects equates to R2.2bn.
 K



                                                                        This project is currently on track for completion
                                                                        on time.
                                                             JunE 2010 • The African Business Journal   63



advantages of an arch dam and a gravity dam.           ARQ designed the 105 metre high RCC arch/
A gravity dam is usually praised for its simplicity,   gravity dam. The Changuinola project is a
with its great weight and size being the source        hydroelectric dam on the river of the same name,
of stability. The arch dam uses compressing            and will be 325 feet tall and 2,000 feet wide
and pressure of water as its source of strength.       upon completion.
The two engineering principles put together will          “We are also working with the Department
equal strength greater than the sum of its parts—      of Water Affairs’ Dam Rehabilitation Project,
exciting and progressive work that ARQ team is         which involved engineering increased spillway
proud to be a part of.                                 capacity by fourfold in two instances,” says
                                                       Shaw. ARQ handled a number of bridges
Current projects                                       and geotechnical work the Gauteng Freeway
Other major projects on the ARQ roster include         Improvement Project and is also playing a
the Changuinola 1 HEPP in Panama for which             significant role in the foundation design and
64   EnGInEERInG • ARQ



                         construction supervision for Eskom’s high
                         profile Medupi and Kusile power stations.


                         International work
                         ARQ’s reputation for quality work and ensuring
                         that compliance and quality standards
                         always reach the highest levels has earned
                         the company many projects outside of South
                         Africa. “Every project tends to be different.
                         We consider it critical to be able to adapt our
                         quality control systems to function best in
                         every circumstance,” says Shaw. “However,”
                         he continues, “we do not deviate from our
                                                              JunE 2010 • The African Business Journal     65



core value of ensuring quality is maintained               ARQ is looking forward to pioneering newer
through internal reviews and frequent technical        and smarter solutions for its clients’ needs. The
discussion of applied solutions. Working with          company is also tackling the omnipotent challenge
different international standards is always a          of ensuring adequate power supplies for a growing
challenge and we find that it is important to          demand. “We operate in a cyclical industry, and
back up the administrative quality control with a      this means that it is frequently necessary to
continual awareness and open communication;            assess, adapt and re-focus,” says Shaw. “However,
taking nothing for granted.”                           the ever-increasing demand for electricity world-
                                                       wide is not likely to abate and we see this as a key
Diligence and innovation                               potential growth area for ARQ. To this end, we are
This marriage of diligence and innovation has          in the process of forming strategic associations
made ARQ leaders in their field and a source           that will enable us to test new waters.”
of great pride for South Africa. The catalyst for          These challenges are what drive the ARQ
the success of the company, says Shaw, is “the         team. The reward is the work itself. “One of the
desire to always identify the best solutions in        reasons that I am a civil engineer is that I like to
combination with an aspiration to continually          see the physical product of my labours,” Shaw
develop and innovate. When a client can see            says. “I take particular satisfaction in seeing the
the true value of the services that you offer          benefit of innovative ideas being implemented.
through intelligent engineering and innovation,        Every time we are able to deliver a solution
you develop relationships that go from strength        faster, or with a lower implementation cost, we
to strength.”                                          allow our clients to benefit more people and to
    To date, ARQ’s dams and hydropower work            lower the cost of services to their customers.”
has been the principle area of international               Through identifying and superseding the
activity for the company, something which Shaw         needs of clients, and by building a world that
would like to expand upon. “While we intend to         is most conducive to a high quality of life, ARQ
continue to build on our successes in this area,       is recognized as leaders in the specialist civil
we are looking specifically at trying to increase      engineering consultants in South Africa. TAB
our international activity in our other key areas of
expertise,” he says.                                   www.Arq.cO.zA
66   ENGINEERING • Process Projects
            JUNE 2010 • The African Business Journal   67
                                       coMPANY FocUs




          067
 Process Projects
Bringing SA companies
    into the future
68   EnGInEERInG • Process Projects




                                      Many of South africa’s most prodigious and progr
                                      designs to facilitate their operations. Since 1973, Pr
                                      companies with the gamut of disciplines and talents
                                      mechanical challenges.
                                                         JunE 2010 • The African Business Journal   69




ressive companies depend on complex engineering
rocess and Projects have lead the charge, facilitating
s required to overcome constructional, electrical and
70   EnGInEERInG • Process Projects
                                                                   JunE 2010 • The African Business Journal   71




                                                      BIG ON STAINLESS

     We’re not a metals producer.
     We’re not a project house.
     But, when it comes to stainless steel design
     and fabrication, we’ve been around the
     block . . . and then some.

     Since 1956, Styria has committed to growth
     through client satisfaction. And its blue chip
     clients keep coming back - entrusting Styria
     with major projects.

     Quality & Delivery for 54 Years


     Styria Stainless Steel Fabrication (Pty) Ltd
     40 Snapper Road Wadeville South Africa
     PO Box 9748 Edenglen 1613 South Africa
     Tel: +27 11 824 1322 Fax: +27 11 824 1326
     E-mail: sales@styria.co.za




PrOcess PrOJecTs hAVe stayed leaders in engi-            a management buyout in 2001 to became Pro-
neering consultancy for over thirty years by con-        cess Projects,” says Rex Zietsman, Sales Direc-
sistently maintaining a stalwart focus on providing      tor for the company. The bulk of the work done
the best tailored solutions for its clients’ engineer-   by Process Plant falls under the umbrella of
ing needs. Changes in market, industry, man-             building and designing chemical plants for the
agement and technology have never caused the             petrochemical, pulp and paper, mining, chemi-
company to veer from its main task, which is to be       cal, nuclear and fertilizer industries in southern
South Africa’s most trusted process engineering          Africa.
and project management company.                              “We have a track record of what we’ve been
                                                         able to do in our history. It comes down to the
History                                                  fact that we build plants that work,” philoso-
“When the company started in 1973, it did so             phises Zietsman. “We have an established repu-
under the name Process Plant. The IMS Group              tation.” The numbers bear this out: The bulk of
bought that company in 1998, and then we did             the work comes from a group of about 15 clients
72    EnGInEERInG • Process Projects



who give Process Projects approximately two              in that there is a greater call for contractors to do
thirds of the work they do each year.                    the work rather than doing it in-house.”


Counting on Process Projects                             Plant operations
Process Projects has thrived as an external              “Historically, we will always be available to our
engineering consultancy firm because it allows           clients to do the same thing we have been doing
their clients the ability to focus on their core busi-   for the past 30 years—to design and build chemi-
nesses; conceptual designs, feasibility studies,         cal plants on behalf of our clients,” says Zeits-
cost estimates, project management services              man, However, this year will mark another exciting
and so forth, are taken care of on behalf of the         milestone for the already established consultancy
client. Since the end of the apartheid era, com-         gurus. Says Zietsman, “We are getting more
panies have been outsourcing their engineering           involved in downstream processes, and taking an
challenges to consultancy firms such as Process          interest in the ownership of the technology, and
Projects. “now that technology is accessible to          of the plant. We are designing and building plants
South Africa, companies have, to a large degree,         on the basis that we will be operating some of the
cut their internal project teams way down to             plants ourselves.” It’s an exciting new challenge
much smaller sizes than they ever were,” says            for the company, one that will further free their
Zietsman.                                                clients from operations that take away from their
     Wisely, these companies have taken to hiring        core businesses.
experts. “They’ve taken a decision that, instead
of doing work in-house, they come to us, who do          Renewable
it for a living. We are a process engineering and        In a feat of innovation, Process Projects is taking a
project management company; we do this every             leading role in SA renewable fuels. More and more
day, all day,” says Zietsman. “The last two major        clients are coming to the company to learn about
projects we did, the previous major project done         how they can benefit from technology in renew-
by the company internally was ten years ago, so          able energy. Process Projects provides solutions
they would have lost all that skill and experience,      (beginning at the feasibility study stage all the way
hence they came to a company that does it for a          through conception) for steam ranking and organ-
living. There has been a change in the industry          ic ranking cycles, gasification, plastic to oil, and
                                                                JUNE 2010 • The African Business Journal    73




concentrating solar thermal, to name a few.              ating my own, once that is paid off I have much
    The current economy has opened the door for          cheaper power than I would otherwise have.”
the exploration of renewable energy by making it             It’s a rare company whose history is as re-
relatively affordable in comparison to traditional       vered as its future is bright. That is what we have
energy forms. “We identified renewable energy in         found in Process Projects. Zietsman is so eager
all its forms as a strategic direction,” says Ziets-     to continue the success of Process Projects, he
man. “And, slowly, with oil prices rising and the        “jumps out of bed to go to work in the morning.”
cost of electricity having effectively tripled in four   With an expanded service operation and headed
years, many companies are asking for a way to            in new (and immanently mainstream) renewable
generate electricity or fuel for themselves. That        technologies, Process Projects will continue to be
change in the energy balance within SA has cer-          the support successful SA companies need. TAB
tainly made those projects come to the front,”
says Zietsman. “A lot of alternatives are viable at
that price. If I’m going to pay utility versus gener-
74   AGRICULTURE • Advance Seed




                                           A
          074                     into A leAd
              JUNE 2010 • The African Business Journal   75
                                         coMpAnY Focus




           A good seed:
Advance Seed hAs grown
 ding sA seed producer
76   AGRICuLTuRE • Advance Seed




For over a century, South africa has had a thriving private seed industry. and as an estimated
90 per cent of food consumed in the world traces its genesis to seed, the importance of the
industry, and South africa’s role therein, cannot be underestimated.
JunE 2010 • The African Business Journal   77
78   AGRICuLTuRE • Advance Seed




A MAJOr PLAYer in the South African seed indus-      it serves. With operations throughout Southern
try is Advance Seed. Veterans in the field—the       Africa, a highly skilled team and a meticulous
agricultural farming company has been in exis-       logistics operation, Advance Seed has thrived
tence since the late 1940s—Advance Seed are at       by providing consistently meeting and exceeding
the forefront of the production and exportation of   clients’ needs in quality and service.
seed to global importers. To remain competitive,         Leaving no segment of the market
Advance Seed ensure efficient and reliable prod-     unattended, Advance Seed is thoroughly
ucts, and have maintained a continuous supply        involved in every aspect of the agricultural
of their products for the diverse customer base      sector, including cleaning, grading, processing,
                                                                                        JunE 2010 • The African Business Journal         79




                                                                             From Producer to the World




Advance Seed
  A key partner
   in Africa




 Alliance Grain Traders wishes to congratulate Advance Seed on its expansions
      and continued success. As a leader in the agricultural sector in Africa,
      Advance Seed is a key partner in pulse and grain exports to the region.
 Alliance Grain Traders is a global leader in the production of food and food ingredients including value-added processing of pulses
 and grains. Our company was founded on the principle ‘From Producer to the World’, buying pulses and specialty crops from farmers
 around our twenty facilities in Canada, the U.S., Turkey and Australia, and processing and exporting our products to over eighty-five
 countries around the world. We create value for producers, quality products for our customers and growth for our shareholders.
                      Find out more about Alliance Grain Traders, by visiting us online at alliancegrain.com.




                                  Find AlliAnce GrAin TrAders on The ToronTo sTock exchAnGe under The symbol AGT.
80   AGRICuLTuRE • Advance Seed




production, and marketing and sales. Taking        has a seed division which supplies seed for
full advantage of the diverse nature of the seed   planting purposes for the South African and
industry, Advance Seed products are distributed    southern African markets. The company also
throughout 50 countries internationally to         has divisions for the production of popcorn for
customers in a variety of industries, and have     worldwide distribution, the production of seed
a well tuned logistics chain to facilitate the     for North American and worldwide distribution,
process.                                           and production of legumes and pulses for world
     Brian and Brad Lever (Managing Director       markets.
and Director of Advance Seed, respectively,            “Our customers are major chain stores,
and, incidentally, father and son) oversee the     major bakers, NGO government organisations,
operations for Advance Seed. The company           large industrial manufacturers...the list goes
JunE 2010 • The African Business Journal   81
82    AGRICuLTuRE • Advance Seed




on,” says Brad. But what is it that makes Ad-        quality seed for the past 15 years, Advance
vance Seed the top choice for so many com-           Seed is also the only company that custom
panies? Advance Seed’s main processing and           coats seed for both the turf and forage markets
bulk storage facility in Chamdor, west of Johan-     to incorporate antacids, insecticides, nutrients,
nesburg, is equipped with state-of-the art pro-      growth stimulants and fertilizers.
cessing equipment that allows for a finely tuned
operation and an efficiency of process that is       World class popcorn
unrivalled. The facility has a capacity of 20 met-   The attention and care paid to the quality of
ric ton per hour, along with a bulk silo facility.   the Advance Seed product is second to know;
     Besides state-of-the art processing             it is (if you pardon the metaphor) the kernel of
equipment, and an internationally recognized         the business, and it has served the company
seed laboratory which has been supplying             very well. Readers will be well familiar with
JUNE 2010 • The African Business Journal   83
84   AGRICuLTuRE • Advance Seed




Advance Seed’s popcorn line sold under their        size and packaging requirements with its
house brands (BIGG Elephant Popcorn, King-Pop,      customers who wish to sell the snack in
Freshpop and Corona Popcorn, for examples).         individual packages, but also accommodates
Quality is absolute paramount, and is ensured       high expansion movie theatre gourmet popcorn.
“from planting to process” due to strict monitor-   “Every load is test-popped several times before
ing. Skilled staff oversee that only the top tier   it is shipped to our customers. If it does not
popcorn makes it out of the silos for selection,    meet our standards we do not ship it. Owing to
thereby assuring a consistently superior product    our diligently following our quality procedures,
that guarantees its customers profitability every   Freshpop Popcorn customers are 100 per cent
time they choose Advance Seed.                      satisfied,” says the company.
     Advance Seed is happy to discuss pack
JunE 2010 • The African Business Journal   85
86   AGRICuLTuRE • Advance Seed
                                                          JunE 2010 • The African Business Journal   87




Best in the business                               everyone can do that.”
    The results speak for themselves. “Happy           Advance Seed fosters its employee
clients will come back to you year after year,”    relationships with the same care and attention
beams Brian. Evidence of this is not hard          it pays its client relations. With 150 people
to find: many Advance Seed relationships           working for the company, Brian says a source
have been established for over 25 years.           of pride for him is the fact that “within our staff
To continually support these relationships,        you will find a lot of family members, and even
Advance Seed has a reliable logistic support       second generation partners.”
chain which meets the needs of their                   Having over 70 years experience in the
international clients. “A lot of the business is   industry, Advance Seed is showing no signs
so demanding because of large volumes and          of slowing down. The company is capitalising
tight delivery schedules,” he continues, adding    on new markets to significantly expand the
Advance Seed has “the ability to produce           business three-fold. “We aim to achieve
2-3,000 tonnes over a four week period. Not        this expansion by increasing our footprint
88   AGRICuLTuRE • Advance Seed




      Product range
      The group supplies both domestically and internationally to Co-operatives,
      Traders, Packers, Wholesalers and Retailers as well as Government and NGO Aid
      Organisations, the following product range:

      seed                                           Grain
      •	 Open pollinated Seed Maize                  •	 Peas, Beans & Lentils
      •	 Open pollinated Sorghum                     •	 Groundnuts
      •	 Forages                                     •	 Popcorn
      •	 Legumes                                     •	 Microwave Popcorn
      •	 Field Seed                                  •	 Confectionery Sunflower
      •	 Turf Grasses                                •	 Spices
      •	 Coated Seed                                 •	 Seed for Baking Industry
      •	 Winter Cereals                              •	 Dehulled Sesame & Sunflower




      Operations
      Advance Seed is a well established business, with operations throughout Southern
      Africa. With the vast capacity at our fingertips, and a highly skilled and motivated
      management and work force, Advance Seed can assure you that whatever your
      requirements, they will meet and surpass your expectations.


      •	 Chamdor - Krugersdorp, South Africa         •	 Processing & Cleaning Facilities in
      •	 Illovo, South Africa                           Potgietersrust
      •	 Killarney Gardens Cape Town                 •	 Processing & Cleaning Facilities in
      •	 KZN-Seed Production in                         Klerksdorp
         Pietermartizburg                            •	 Associated company and cleaning
      •	 KZN- Trading & Bakery Supplies in              facilities in Harare, Zimbabwe
         Durban
       JunE 2010 • The African Business Journal   89



throughout the whole of sub Saharan Africa
and worldwide,” says Brian. The company has
done extensive market research on facilities
as a winter nursery, and aims to diversify into
that market, as well. “SA has a really good
reputation for reliability and seed control
because we are an English speaking country
with central logistics, good infrastructure and
good climatic conditions.” he continues. And
as SA industry leaders, Advance Seed is the
ideal southern hemisphere producer to do for
northern hemisphere companies.
    With geographical presence strategically
extended over much of the African continent,
the company is ideally positioned for ease of
operations both locally, and internationally.
“From a small seed, a mighty oak may grow.”
The adage is fitting for Advance Seed. Its
contributions have helped lead SA as global
leaders in the seed industry, and will continue
to do so under the very capable current
leadership. Advance Seed has shown a stalwart
dedication to trading in only the highest quality
agricultural products, and supply crops and
products to its customers effectively that
will see them become leading international
agricultural trade and suppliers. TAB


www.ADVAnceseeD.cOM
90   COnSTRuCTIOn • Sembel-It




                         090    Concep
                JunE 2010 • The African Business Journal   91
                                           cOMPAnY fOcus




                seMBeL-iT
pt to kitchen in eight days
92   COnSTRuCTIOn • Sembel-It
                                               JunE 2010 • The African Business Journal   93




Good things come to those who wait. unfortunately, too
many people unnecessarily adhere to this adage when
renovating or upgrading their kitchen.
94   COnSTRuCTIOn • Sembel-It
JunE 2010 • The African Business Journal   95
96   COnSTRuCTIOn • Sembel-It




seMBeL-iT is BrinGinG good things to those who     to browse and use the products in action.
don’t like to wait. As a leading South African     “People come into our showrooms and see
manufacturer and distributor of fitted kitchens,   everything they need to see in terms of
Sembel-It combines the luxury of customisation     refurbishment,” explains Eastes. “We have a
and the ease of factory built kitchens with its    highly skilled, trained team of salespeople who
range of pre-fabricated customised kitchens to     take clients through the motions. We measure
its clients. Headed by Managing Director Brian     the kitchen on-site, and prepare a presentation
Eastes, and Trade and Export Director Colin        with a computer-generated drawing. Once the
Oberem, Sembel-It has become a leader in           presentation is done, the order is secured,
premium quality kitchens for consumers, agents     processed through our factory, delivered and
and contractors.                                   installed.” Clients choose from everything up
     Readers may very well be familiar             to an including the kitchen sink; cabinetry,
with Sembel-It showrooms fitted with fully         flooring, appliances, colours, hinges, door
functioning kitchens, where they are welcomed      knobs, layout, and so on.
JunE 2010 • The African Business Journal   97
98    COnSTRuCTIOn • Sembel-It




New kitchen in eight days                             Eastes. “That is production time from receipt
It is a rare enterprise that has more than one        of order, to delivery onsite on the seventh day,
outstanding selling feature. So one might be          with installation commencing on the eighth
surprised to learn of the difficulty this writer is   day. That is one of our top selling features.”
having in weighing out the most distinguishing        The installation process usually takes less time
factor of this company. Surely it seems obvious,      than it takes customers to decide on the design.
thus far, that the ability to provide customised,     Additionally, Sembel-It guarantees its products to
tailored kitchen options is the greatest selling      be free from defect and of the highest standard
point for Sembel-It. Eastes believes, however,        of quality, to add value to your home and to
this factor is rivalled by the company’s ambitious    ensure customer’s absolute satisfaction.
turnover time.                                            For the installation of a new fully fitted
     “One of the really unique selling features       kitchen, Sembel-It will co-ordinate with other
that we pride ourselves on is the fact that we        suppliers such as electricians, plumbers and
turn [our delivery] around in seven days,” says       tiling to complete the process for its clients.
JunE 2010 • The African Business Journal   99
100 COnSTRuCTIOn • Sembel-It




Professional consultants then ensure a                homeowner in a flat-back form for ease of delivery
streamlined process for the delivery, storage         in and around SA.” The product is assembled by
of the units prior to fitting, “right down to which   Sembel-It fitting crews on site who assemble the
days you may need to make alternative mealtime        cabinets, appliances and flooring.
arrangements for the family”.                             The company does exactly the same for its
                                                      contract department, which specifically supplies
Divisions                                             to developers and builders who are doing high-
Sembel-It kitchens come to clients in a number of     volume purchasing for condominiums, flats and
different ways. The company facilitates the needs     the like. For those customers, explains Oberem,
of its clients by creating three separate divisions   “We will do the same kind of form of delivery
to serve individuals, contractors, and agents         and installation. Both are supported by sales
abroad. “We have created a division for our South     consultants and designers who will design the
African shops where we sell to the house owner,”      products, layout and colours with the various
says Eastes. “That product is delivered to the        clients and process the order in the factory.”
                                                                                              JunE 2010 • The African Business Journal 101




                     The images shown in this advertisement have been wholly and exclusively created using 20-20 Design software.



The Right Software for Kitchen Design                                           S e m b e l - i t , S o u t h A f r i c a ’s l a r g e s t k i t c h e n
Sophisticated consumers prefer looking at 3D                                    manufacturer, began using 20-20 Design in 2000.
renderings of their ideal kitchen layout, rather                                After a comprehensive evaluation of many CAD
than try to understand plans. With technology                                   providers, Sembel-it decided that 20-20 was the
like 20-20 Design, it’s simple for kitchen designers                            best choice to meet their objectives. Since then,
to quickly produce accurate drawings, price                                     20-20 has been integrated into their information
estimates and photorealistic room views that will                               systems, providing an accurate electronic link
amaze any prospective client.                                                   between their customers, designers and factory.


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102 COnSTRuCTIOn • Sembel-It
                                                       JunE 2010 • The African Business Journal 103



   The company also supplies products           Melamine kitchens
through agents who will do trade using the      The Sembel-It kitchen has been universally re-
Sembel-It brand through a different company.    ceived and praised in large part to the company’s
For instance, in Ghana, there might be a        use of the highest quality melamine—a mate-
company named Euro-style Kitchens, who are      rial prized for its durability and used to create
Sembel-It agents identified as such through     a resin coating for wood and textiles. In 1992,
signage at that particular store. “Dealers      the company revolutionized the industry by pio-
seek to be agents for Sembel-It because         neering the “Wrap” Technology for kitchens and
of our quality and ease of assembly,” says      cupboard doors into Southern Africa and today is
Oberem, who runs this division and the export   proudly recognized as the largest manufacturer
department which supplies the product           and distributor or fully fitted melamine kitchens.
throughout Africa up to Tanzania and Kenya.         Sembel-It is very particular about its
                                                melamine suppliers so that customers don’t have
104 CONSTRUCTION • Sembel-It
                                                            JUNE 2010 • The African Business Journal 105



to be. “The buyers are chosen for the quality they   since Eastes has been at the company, Sembel-
are able to supply, because we have to guarantee     It has never replaced one of their kitchens. “In
the longevity and durability of the product under    the cases of customers considering upgrading,
the Sembel-It banner,” says Eastes.                  usually because of changes in design tastes, we
    Sembel-It has partnered the largest chip         keep the basic cabinetry and even the hinges—
board manufacturers and up-graders in the            we don’t replace them because they are per-
field of panel boards in SA. “We specifically buy    fectly good after 26 years,” beams Eastes. With
from them because the material they use on           over 4,000 successful installations every year,
the melamine surface is superior to most and         Sembel-It’s results are displayed in households
is a great deal more resistance to scratching        across southern Africa. TAB
scuffing and general wear. The density of the
boards is such that the screw retention is           www.semBel-iT.co.zA
sufficient,” says Eastes.
    “We use melamine-based products because
that surface is of a durable standard and will
have longevity,” says Eastes, who goes on to
explain the quality of his products stem from
the fact that “those products are pressed under
200ppsi (pounds per square inch) and there are
only four of those presses in SA (and hundreds
doing low pressure). In a sense, that is why we
are able to ship products to Dubai, for instance,
where we won’t get de-lamination due to the
(high storage) temperature. That is the quality
of the ‘Wrap dual’ that we supply and we
actually pioneered it, as a matter of interest in
South Africa.”
    The Sembel-It quality can be best sum-
marised with the following fact: in the 26 years
106 ASSOCIATION • The South African Aerospace Maritime and Defence Industry Association




                                 10
                THE SOUTH AFRICAN A
                  and DEFENCE INDU
             JUNE 2010 • The African Business Journal 107
                                           ASSOCIATION




 06
AEROSPACE MARITIME
USTRY ASSOCIATION
108 ASSOCIATION • The South African Aerospace Maritime and Defence Industry Association
                                                      JunE 2010 • The African Business Journal 109




aMD is the aerospace, maritime and defence industries association of South africa and has
as its primary objective the representation of the industry in matters of mutual interest and
the promotion of a profitable, sustainable and responsible industry.
110 ASSOCIATION • The South African Aerospace Maritime and Defence Industry Association
                                                             JunE 2010 • The African Business Journal 111



The AssOciATiOn is acknowledged as the only           development, job creation and retention. This
trade association of the South African defence        also assists the South African government in ex-
industry (SADI) and is mandated by its members        ecuting its foreign policy imperatives and agreed
to promote and champion the collective interests      upon international responsibilities in the region
of the industry. It comprises of a cluster of lead-   and African continent.
ing companies in the South African private and            The South African National Defence Force,
public sector engaged in industrial and trade         the South African defence industry’s primary cli-
processes of defence-related material, products       ent, operates in the diverse and exacting climatic
and services.                                         and geographical conditions of the African conti-
    AMD assists and provides guidance in har-         nent, which means that the local defence indus-
nessing the collective effort of the SADI as these    try’s offering is designed to function optimally in
companies play a key role in the defence acqui-       all conditions and is thus ideal for most defence
sition and supply chain. This ensures that cost       applications globally.
effective and sustainable solutions are offered to        The local industry also has a strong defence
its broad client base that meets the most strin-      electronics bias, making it a good partner that is
gent technical requirements, comparing or even        able to offer systems engineering and integration
exceeding international standards.                    capabilities in upgrading and customising foreign
    AMD member companies supply products              defence systems for third-party markets. Further,
and services to the Department of Defence             the industry offers a range of capabilities that in-
(DoD), government organisations and other con-        clude the design, development, manufacture and
tractors, both locally and internationally, in the    maintenance of landward, aerospace and mari-
defence and security marketplace. As the SADI is      time systems, as well as the provision of mission
one of the cornerstones of a stable and growing       specific systems and subsystems. It also provides
South African economy, AMD is responsible for         the required enabling capabilities, like training,
ensuring that a world-class indigenous defence-       modelling and simulation.
related industry capability is maintained in a sus-       The defence industry’s contribution to the lo-
tainable manner. Providing high-tech solutions at     cal economy has been consistent in providing no
competitive prices is a constant requirement to       less than 17,000 highly technical jobs in the past
secure export orders, which in turn leads to skills   five years.
112 ASSOCIATION • The South African Aerospace Maritime and Defence Industry Association



    In the past, the defence industry has been a        defence industry remains resilient and competi-
fertile ground for nurturing engineers, technicians     tive in the service of diverse client requirements
and artisans with most of these now contributing        locally and globally.
significantly in key national projects in transporta-       under the auspices of the AAD partnership
tion, construction and power generation.                comprising of the SA Aerospace Maritime & De-
    Further, the technology that has been devel-        fence Industries Association (AMD), Armscor and
oped for use in defence, has also found good use        the Commercial Aviation Association of Southern
in rail safety, as well as reducing crime through       Africa (CAASA) and with the full support of the
the use of signal and data processing technol-          Department of Defence, AAD is considered a
ogy, and improving mine safety and productivity.        premier event on the international aviation and
The defence industry also contributes high value-       defence exhibitions calendar. As a showcase of
added exports that improve the country’s foreign        civil and military aviation, land based and mari-
reserves, as well as its balance of payments.           time technologies products and systems, AAD is
    Further, all this happens within a fairly de-       also the largest exhibition of its kind on the Afri-
pressed domestic defence market that has not            can continent. With the world-class infrastructure
only experienced severe production declines in the      of South Africa, AAD remains uniquely positioned
local defence-related manufacture, but also signif-     for exhibiting companies to market their products
icant capital outflows of more than 70 per cent as      and services to the entire continent and beyond.
part of the country’s strategic defence packages.           Following on the successful hosting of the
    Growth in the industry is envisaged to be in        exhibition in Cape Town during 2008, AAD this
the areas of unmanned aerial vehicles, space            year returns to Air Force Base ysterplaat from 21-
technology, as well as passive and active protec-       25 September and will, as always, run over three
tive systems. Further, the industry can grow as a       trade days followed by two public days.
subsystem supplier through integration into the             Covering the full spectrum of leading edge
global supply chain.                                    aerospace, defence and security related tech-
    Despite the industry’s continued exposure           nologies; AAD2010 will highlight contemporary
to severe budgetary declines, as well as stra-          developments in these disciplines. Niche sectors
tegic and systemic uncertainty relating to the          incorporated into AAD2010 will cover commercial
defence industrial policy framework, the local          and general aviation, homeland security (avia-
                                                            JunE 2010 • The African Business Journal 113



tion, maritime and land based) humanitarian              The SA government considers AAD as a na-
relief, search and rescue etc.                       tional asset which it fully supports through the de-
    Building on the success of the previous          partments of Defence, Trade and Industry, Trans-
exhibitions, AAD2010 is set to again attract         port as well as Science and Technology. TAB
significant numbers of international participants
such as defence ministers, acquisition and           fOr ADDiTiOnAL infOrMATiOn PLeAse VisiT The
procurement chiefs, members of the diplomatic        AMD weBsiTe www.AMD.OrG.zA AnD The AAD
                                                     weBsiTe www.AADexPO.cO.zA.
corps, captains of industry, entrepreneurs and
representatives of local and foreign govern-
ments who seek potential trade opportunities
and future business collaboration. AAD provides
trade networking opportunities and face-to-face
business interaction which is an imperative to
ensure the success of this event as it affords
exhibitors direct access to official delegations
and decision makers.
    A comprehensive flying programme, with
ample slots for demonstration flights, will enable
aerospace companies to demonstrate their prod-
ucts to potential clients. In addition, a dynamic
vehicle track will allow for the demonstration of
various land–based products, while the close
proximity of Cape Town harbour and the V&A
Waterfront offers berthing facilities to SA naval
vessels as well as foreign visiting ships.
    The very deserving AAD Youth Development
Program will again be staged, the object being to
entice the youth of SA to pursue careers in the
high-tech world of aviation and defence.
114 OIL & GAS • Veecraft Marine




The fuTure of shiPB
OiL and GAs MArkeT
           JunE 2010 • The African Business Journal 115
                                          resOurces




                                0114
BuiLDinG for the
T: VeecrAfT MArine
116 OIL & GAS • Veecraft Marine




at first it all seemed quite straightforward
with Veecraft Marine, a boat building
company focusing on the oil and gas and
military markets in and from South africa,
based in Paarden eiland. But look more
closely at the many design and project
examples their website showcases, and it is
startling. Front gunners, ballistic shielding
and armoured-plate windows? every
conceivable ship design within 10 to 40
metres using aluminium or steel, whatever
the client desires? This company is far from
your average shipbuilder.
JunE 2010 • The African Business Journal 117
118 OIL & GAS • Veecraft Marine




“we sTArTeD ABOuT eight years ago purely on           We’ve expanded up to about 250 (previously),
boats,” Andre van Niekerk, Managing Director          depending on the size of the contracts that we
and co-founder says. “My partner and I have           have at any one time,” he says.
been in the marine industry for about 20 years            “We do everything in-house; from the boiler-
and we basically came together with an idea           making, the welding, carpentry, engine instal-
to start a new company having worked in ship-         lation, painting, electrics, you name it.” He
building and boatbuilding before.”                    says that the Veecraft team knew there was a
    Veecraft got off to a rocketing start, securing   requirement out in the marketplace for custom-
lucrative contracts with the local national ports     built commercial vessels.
authorities, which provided a great springboard           “A lot of the opposition out there ― and far
for the company to grow. “Initially we targeted the   bigger companies ― offer standard designs.
South African market and it was the only one we       Those vessels were all you could get. Basically
were really capturing because it was a bit of a       you could get a 25 metre, a 20 metre, use all
mission in the marketplace,” Niekerk says. “Then      of their layouts, their systems and there were
over the years we evolved, acquired some very         no other options,” he says. “We went to our
clever designs, ended up marketing them over-         customers and their customers in the market
seas and the rest is history.”                        we’ve been chasing, and offered a proven hull;
    Veecraft’s story is quite fascinating. niekerk    we knew that the vessels in service have par-
talks about focusing on two markets gathering         ticular hull shapes, and we were able to offer
pace, continuing to offer acclaimed expertise in      the customer a vessel that can be changed in
these markets and the next course of action for       terms of layout, different proportions, systems—
this unique and pioneering company.                   really whatever the customer wants, we can give
                                                      them.” Niekerk likens this to going into a car
What the client wants                                 dealership, saying that you’re not going to pur-
Niekerk says that at Veecraft the core team           chase a car, “unless you can test drive it, touch
does pretty much everything imaginable. “This         it and feel it.”
industry, as you’re probably aware, expands and           “The same applies for our vessels. We
has ups and downs as it goes along, so we’re          don’t want to sell a customer a vessel which is
able to keep a core team of about 50 people.          a concept boat ― a piece of paper.” Veecraft
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120 OIL & GAS • Veecraft Marine




                                                    tions today. “It’s right here on our doorstep in
                                                    Africa,” he says.
                                                        “Everyone’s now chasing for patrol boats
                                                    that have got ballistic shielding and armour-
                                                    plated windows. That’s something we’re quite
                                                    familiar with and able to offer them.”
                                                        Veecraft have sought to provide crew boats,
                                                    patrol boats and survey vessels to the oil and
                                                    gas industry, amongst other vessels. “Then in
                                                    association with that there’s the military side of
                                                    things with patrol boats into the South African
                                                    navy, police forces, the coastguards and so on,”
                                                    Niekerk says. “Those are the two target markets
has associated itself with some highly-regarded     we’re chasing at the moment.”
international architects and designers who can          Niekerk says that a couple of exciting proj-
step in and help to deliver exactly what any cli-   ects the company is contracted for today are
ent wishes.                                         with InCAT Australia. “One is for a patrol boat/
    “We really rely on their research and de-       crew boat which is recorded as a toll boat be-
velopment that they’ve done over the years to       cause they specifically call them standby safety
be able to offer our clients what they require,”    vessels,” he says.
Niekerk says. “We also realised that there were         “What these boats do is to patrol around
key markets we need to chase.” These are the        the oil rigs from a safety point of view, but they
two markets which Veecraft continues to chase       also work as a back-up to be able to take crews
today, with great success.                          across if necessary and if there’s an emergency
                                                    response they can also satisfy that requirement.
O&G and military market-focus                       These things have the ballistic shielding and the
Niekerk says that the Veecraft team perceived       structures where the passengers sit are actually
oil and gas as an expanding market, particularly    bullet proof with armoured-plate windows and
with the threat of piracy looming over opera-       that makes it quite unique.”
                                                            JunE 2010 • The African Business Journal 121



    Another is a 24 ― metre search and rescue         and quite a few patrol boats to Qatar, to the
vessel which offers something a little special.       South African Navy.”
“That has space for dropping off and recover-             So how does a company that understands
ing cargo from a helicopter ― not landing on          the value of target markets and keeping a core
the boat, but for dropping off there’s sufficient     staff which is within shifts in demand go about
space on the deck to be able to retrieve car-         expanding? “We’re definitely looking at an ex-
go,” Niekerk explains. “She can also be bullet        pansion program based on the amount of work
proofed and it’s a catamaran design so it’s very      we predict we will be getting out of these two
stable and very fast.”                                markets,” Niekerk reasons.
    If these results are anything to go by, it ap-        “That means that there has to be some clev-
pears that by successfully targeting these mar-       er planning in terms of automating some of our
kets, Veecraft has both enjoyed great contracts       systems and that’s really what we’re focusing on
and delivered on all front for these clients.         right now ― how to simplify some of the vessel
                                                      construction to make it more cost-effective, and
Expanding horizons                                    spend a lot of time on the design so that we can
Skimming through the array of examples on the         mechanise the fabrication of the vessels and
company website, it becomes clear that when           speed it up.”
Niekerk says “custom,” that is exactly what he            The company will even look to sub-contract
means. It’s as if the possibilities for vessels are   other parts of the vessels to smaller companies
endless, and he says that what we see online only     where they could fabricate them and deliver
makes up about one per cent of what is out there.     for us to assemble, further building those part-
    “That’s why you have to target specific           nerships which have served them so well with
markets. It’s very difficult to just go out there,”   flexible team members, designers and meeting
he explains. “We started the business on that         client demand. A company with great leadership,
basis that whatever people wanted, we would           the ability to shrink and grow, and the tools and
build for them. But now we need to focus our-         inclination to deliver on every project is surely
selves and because of our past experience,            bound for big things. Veecraft Marine is some-
we’ve already delivered crew boats into Dubai,        what of a revelation; how shipbuilding and boat
we’ve delivered research vessels into Ireland         building should be done. TAB
122 MINING • Continental Coal




cOnTinenTAL cOAL
existing reserves, infrastructure
                   JunE 2010 • The African Business Journal 123
                                                  resOurces




                 122
L:
e and export capability
124 MINING • Continental Coal




                          as Peter landau, executive Chairman at
                          Continental Coal, says, coal was by no means a
                          standout commodity in South africa up until
                          the last three years. Continental, an australia-
                          headquartered junior explorer-come-producer
                          active in South africa, is one of those vehicles
                          which embodies a big time of change and
                          opportunity in South africa; that moment
                          when coal really became an option for the
                          smaller players to take a crack at it.
JunE 2010 • The African Business Journal 125
126 MINING • Continental Coal




“It was only with export coal prices rising sig-    with Andrew Macaulay, Executive Chairman and
nificantly that there came the opportunity and,     Bruce Buthelezi, Managing Director, were scout-
more importantly for those who know South           ing out projects in South Africa.
Africa, the act came in where the big mining            “The guys in South Africa we’re looking
houses under the new, ‘use it or lose it,’ (act     at doing a JC listing, this was back in 2008,”
regulations) lost a lot of their good exploration   Landau says.
projects,” Landau recalls.                              “We raised around $5 million in seed out of
    “Not just in coal—platinum, gold, chrome,       Europe, then I said, let’s do it on the ASX.”
vanadium—and they were awarded to historically          Landau, Macaulay and Buthelezi, then met
disadvantaged persons in South Africa which         head on by the global financial crisis, neverthe-
predominantly meant BEE Black Economic Em-          less managed to raise between $50 and $60 mil-
powerment entities.”                                lion for Continental.
    It was around this time that Landau, along          “We’ve just announced another $20 mil-
                                                            JunE 2010 • The African Business Journal 127



lion financing with EDF, the utility, and there’s    ducing regions, which of course lends them great
probably another $30 million dollar coal fi-         proximity to existing infrastructure.
nancing that we’re about to complete this                “Getting to a rail line, in most cases, is a few
week,” Landau says.                                  hundred metres, and the rail and port allocation
    “That was the opportunity.”                      is there so that’s the uniqueness about the Conti-
    TABJ caught up with Landau on a visit to Lon-    nental assets,” he explains.
don to hear more about Continentals opportunity.         “The assets right now are in the Ermelo, Wit-
                                                     bank and Mpumalanga areas, so all in existing
Locating Continental’s stronghold                    (coal production areas).”
Landau says that while Continental does not              Continental’s soul focuses today are four
have mass tonnage assets like those of Rivers-       such mines.
dale in Mozambique or coal of Africa in a newer          “The first one is called Vlakvarkfontein. For
region, they are enviably located in existing pro-   that one, we have commenced production and
128 MINING • Continental Coal
       JunE 2010 • The African Business Journal 129



it’s a domestic Eskom coal, the local coal pro-
vider,” Landau says.
    “The second on is called Project X, then Vaal-
bank, which are almost next door to each other
to which EDF have now financed and have the
off-take too. Then we’ve got Vlakplaats, which is
a large export coal.”
    On closer inspection it is not difficult to see
why these four make up the company’s core focus
at this point in time. Landau explains that com-
bined, these assets offer mineable exportable ex-
port coal at around 200 million tonnes, and local
production coal of about 100 million tonnes.
    “The focus is to get those four assets up and
running with infrastructure, with rail and port.
And we know that with those up and running in a
run of mine operation our market cap can defi-
nitely be increased in an exponential anywhere
from five to 10, based on the known coal that
we’ve got,” Landau continues.
    “As a junior, the market edge for us is that
our assets are all adjacent to existing mining op-
erations, so we’re mining the same coal seams
as our peers.”
    The same seams, of course, also give
Continental pleasing placement close to that
all-important existing infrastructure, removing
common concerns for economical logistics and
exportation headaches.
130 MINING • Continental Coal




Continental’s port allocation                       or not the coal’s there, it’s more about logistically
Landau says that for those who seek to compare      ‘can we get it out’.
Continental to its peers, one factor which can’t        Continental has a base allocation of
be ignored is the company’s standing ability to     150,000 tonnes a month and 150,000 tonnes
export any coal their mines produce.                a month of port to work with, sitting there ready
    “The key is that we have a rail and port al-    and waiting for the company to enjoy as and
location which allows you to proceed, because       when it needs.
in South Africa it does get difficult getting the       “We’re not using it right now, but the plan is
export coal out there (because the logistics        there is always someone with a need for rail so
functions are being handled by the majors),”        they can use it while our mines come on stream—
he says.                                            and then we’ll take it back,” Landau says.
    “The uniqueness of what we’ve done is to            “That’s quite common in South Africa: in
put together very advanced brownfields assets.      terms of mixing and matching when you’re trying
Geologically, there’s no question about whether     to get things up and running.”
       JunE 2010 • The African Business Journal 131



    Going forward, the company goal to bring
these four mines into production begins with the
recently completed deal with EDF and the other
set for finalising as we go to press.
    “Completion of that allows the company to
achieve everything it needs to in the short term,
then with raising done we’ll look to bring four
mines into production which we’ve already done
with Vlakvarkfontein,” Landau says.
    Vlakvarkfontein will see first sales next
month, followed by Vaalbank and Vlakplaats over
the next two or three years.
    “Then obviously along the way depending
on how you’re travelling, you’re always going to
look at other potential coal deals in South Africa
and sub-Saharan Africa but again it’s too early to
tell,” Landau says.
    “The focus is capital raising then getting
those four mines up and running.”
    Continental’s unwavering focus on achiev-
ing production with these four mines, its highly
experienced management at the help and unique
advantages gained from existing mining, infra-
structure and proven reserves cannot be ignored.
The company has already proven what it is ca-
pable of with Vlakvarkfontein, the rest is just a
matter of time. TAB


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