Afripolitan Opportunities for UK design consultancies in South Africa by nikeborome

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									Afripolitan

Opportunities for UK design
consultancies in South Africa
AFRIPOLITAN

Design Scoping study
REPORT

This report covers the findings of a scoping mission to Johannesburg and Cape Town
commissioned by Trade Partners UK in view to assessing the export opportunities for UK
commercial design agencies. The Scoping mission was undertaken by Maxine J Horn, British
Design Initiative and Sally Cox-Mulvenney, Director of leading British brand consultancy
ATTIK and with the support of Janet Usher, Commercial Officer British Embassy Cape Town
and Zaida Enver Trade Development Adviser, British Trade and Investment Johannesburg
            th                th
between 24 February and 4 March 2003.

The report aims to provide design agencies with a clear picture of the most appropriate way to
develop an export strategy for South Africa should the findings presented inspire them to
pursue the market opportunities identified.

This Scoping Study is one of a series and forms part of an on going strategy of the industry
working group, Design Partners, set up by Trade Partners UK to assist UK design agencies to
win export business.




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Contents

1. Summary of opportunities ………………………                   p3

2. General Market Overview ………………………                    p7

3. Design Culture …………………………………...                      p10

4. Creative Industry overviews …………………….                p13
      4.1      Design and Advertising
      4.2      Film
      4.3      Craft

5. Training and developing the creative industries ..   p18

6. South African Inventions ………………………….                 p19



APPENDICES

A. Useful Contacts …………………………………….                      p20

B. Key Issues …………………………………………..                        p22

C. SA Global Companies ……………………………..                    p25

D. Case Studies ……………………………………….                        p27
       1       ABSA Bank
       2       MG Rover
       3       Pick&Pay
       4       Delmonte
       5       Canal Walk
       6       Transport Ministry




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1. SUMMARY OF OPPORTUNITIES

1.1 Multimedia, Broadcast and web programming

Short-term opportunities focus on partnerships between UK graphic design, advertising
and/or brand communication agencies and SA multimedia agencies, web developers,
programmers, motion graphics and film production companies.

Such partnerships would not gain exports for the UK design/IT sector in the short-term but
may place UK companies in a position of strength as the South African indigenous companies
grow and look towards affordable international branding expertise. An SA partnership would
defiantly improve a UK agencies competitiveness if it committed to developing a genuine
company rather than just an out-source post.

One UK creatively-led company that has set-up a SA subsidiary and is doing extremely well
paying in Rand but charging in sterling is Octagon. Octagon is the sports and event marketing
division of the Interpublic Group of Companies headquartered in West London. It has
established offices in South Africa in Cape Town, Durban and Sandton and from those
locations produce and distribute over 4000 hours of quality televised sports programming a
year to broadcasters in more than 200 countries.

Vince Gibbons, Directors of Octagon CSI is provided with marketing collateral and templates
for all territories from London HQ to ensure brand consistently world-wide. However,
Broadcast design is largely executed by an in-house creative team, and an exclusive deal
with Tokyo Design, a Cape Town based motion graphics design agency.




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Developing a partnership
To assess the partnership opportunity and gain an insight into the creative communities’
views on forming partnerships with UK agencies a debate was held with representatives from
some of South Africa's design agencies.

A number of issues were raised and whilst these agencies are certainly open to partnership
arrangements there remains caution and in some instances cynicism - with genuine reason-
towards the ‘spirit of partnership’.

1.1.1 Creative control
Significant leading-edge, original design talent exists in South Africa that deserves to be seen
on a global platform and competes admirably with the creative outputs of many British
agencies. That talent should be respected, nurtured and developed not viewed as second
rate.

1.1.2 Billings
Agencies are fully aware that UK agencies are significantly increasing their competitiveness
when paying in Rand but charging European, USA or Global clients in Sterling, Euro or
Dollars. They respectfully ask not to be treated as cheap labour or to be taken advantage of.

1.1.3 Local awareness and international perspective
SA agencies have the advantage of knowledge of the whole of the ‘African continent’ and a
healthy understanding of global brand perspective. UK agencies engaged by global clients
where Africa forms a fundamental part of their global territory can directly benefit from an SA
agency’s’ knowledge of local and wider African markets.

1.1.4 Partnership Spirit
Agencies were cynical towards the spirit of the partnership fearing that a UK agency would
not give them real creative partnership or credit. They are as dedicated and passionate about
their work and talents as any UK designer and would like to see the partnership spirit truly
applied not just be viewed as a cheap outsource post.

1.1.5 We are doing very well ourselves.
A surprising amount of small and young SA creative agencies in brand design, multimedia,
broadcast and advertising are already under their own steam exporting to the UK, USA and
Australia. They are enjoying higher rates of pay and gaining creative respect through their
work for clients direct and/or through true partnerships that recognise their talent and equal
contribution.




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1.2 Product design development

Short to mid-term opportunities appear to exist for UK product design development
agencies if they can find a business model that works in respect to the cost barriers. The
Department of Arts and Culture (DAC) recognizes that front-end creativity can only be
harnessed and useful to SA's economic development if they engage with those who turn
ideas in to products, those who market and those who provide outlets for products to be seen
and sold.

DAC and other organizations both public and private openly acknowledge that design is the
most exciting area in relation to technological development but that they are not strong on
industrial design in South Africa which is often derivative or unoriginal. It is also recognised
that technological innovation is a natural spin off of the design process and there is every
good reason to concentrate on South African design in order to maximise this potential.

However, there is a critical skills gap in the South African market for product design
development both in-house and external. Product design agencies prepared to reduce fees in
favour of royalties may do very well longer term.

Further research is required to assess the best way forward for product design agencies.




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1.3 Urban regeneration and transport consultants/engineers, architecture and interiors.

Longer term opportunities may exist for the UK's large urban regeneration, transport and
infrastructure engineering consultants and architects. However that is only likely to become
an opportunity if funding for those specific developments is provided to South Africa from
Overseas Development Funds.

In addition UK companies would be subject to the Tendering Procedures which now insist
upon the partnership of a BEE company and investment in local skills and training. The
French transport and consulting engineers (and other European nations) are already investing
in feasibility studies in South Africa funded by their own government's overseas development
initiatives.

The Department of Arts and Culture is undertaking developmental projects including
developing local content policy and participation in the Spatial Development Initiatives
particularly around cultural tourism and craft development. Additional projects include the
identification of new monuments and cultural elements with the Legacy Project and the
building of forty-two community arts centres as part of the Reconstruction and Development
Programme.

In all instances knowledge of the local market is imperative and a local partnership approach
is vital.




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2. GENERAL MARKET OVERVIEW

Located at the southernmost tip of the African continent, South Africa presents easy access to
the countries comprising the Southern African Development Community (SADC), the islands
off Africa's east coast, and even the Gulf States and India.

SADC has a combined gross national product (GDP) of US$161,5 billion and some 185
million people.

South Africa also and serves as a trans-shipment point between the emerging markets of
Central and South America and the newly industrialised nations of South and Far East Asia.
South Africa has enormous potential as an investment destination but at present in relation to
UK Creative Industries it is not a quick win export market. (See short, mid and long term
opportunities in this section.)

People, without first-hand knowledge of South Africa, might still hold perceptions of it as a
nation with dusty roads, wild animals, spear throwers and a third-world economy. That is far
from the truth. South Africa is, in large areas, a sophisticated and promising market with a
unique combination of highly developed first world economic infrastructure, a growing market
economy and is arguably one of the most advanced and productive economies in Africa.

In some areas South Africa is still carrying the burden of the apartheid years. Unemployment
is at 40%, crime and corruption is a major problem in inner-cities, suburbs and townships, HIV
is said to affect 30% (and possibly more) of the entire population and in particular amongst
the ‘previously disadvantaged’ who also account for high levels of illiteracy and poverty. Over
3 million homes remain without electricity and despite SA claims to a first-class transport
system – roads and airports are of a high standard -, rail and bus services are not. The
country does not really have a public transport system, to speak of. The rail network (which
runs from 6am to 7pm) is predominantly used by poorer South Africans traveling in to find
employment and inner city workers traveling between work in the city and homes in the
suburbs.

However, South Africa is well aware of these problems and has instigated initiatives to tackle
the problems head-on through environmental design and urban regeneration programmes,
training and education initiatives aimed at previously disadvantaged, and the support of
industry in adopting Black Economic Empowerment (BEE appendix) principles to employment
and company ownership.




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2.1 Economic Factors

South Africa has a real competitive advantage in that its exchange rate makes it one of the
least expensive countries in which to do business.

The exchange rate makes commercial and residential property, labour, quality hotels and
restaurants inexpensive by world standards. The International Monetary Fund (IMF) predicts
that if South Africa retains its economic management, the country is poised to achieve 3%
economic growth in 2003.

The exchange rate depreciated sharply toward the end of 2001. The exchange rate, however,
regained all of this lost ground during 2002. Currently (March 2003) the rand is 12.5 R to £1
and is expected to remain fairly steady for the foreseeable future.

The rand was the best-performing currency against the US dollar during 2002, gaining 38%.
Interest rates are high at 17% and whilst they remain at those levels, the property market
remains a cash investor’s paradise. In comparison with the low cost of property, residential
rent is high. This causes another obstacle in South Africa’s attempts to provide housing for
the disadvantaged. Those provided with better housing often remain in their shacks and rent
out the property.

With a weak rand, UK companies that outsource services or manufacturing to South Africa
are enjoying higher profit margins, when billing in £ sterling. The Cape has become a
preferred film location choice for dozens of film production companies and advertising
agencies. It is not just the climate, costs, and scenery that attracts them but also the immense
post-production talent that exists in South Africa. (See Film, Section 4.2)

The Rand may be an advantageous to boost SA exports (including Creative Industries) but
does not offer economic advantage to UK companies paying salaries in Sterling but being
paid in Rand. The immediate short term opportunity to UK creative companies is in reverse –
outsource work to SA and pay in Rand whilst invoice in Sterling.

2.2 Financial Markets

South Africa has a sophisticated financial sector, with well-developed financial institutions
(see Case Study ABSA Bank, Appendix D) and the Johannesburg Securities Exchange ranks
among the top exchanges in the world.

A third of SA’s top performing global companies are in the financial services sector. The
banking sector of South Africa compares favourably with that of industrialised countries.
Foreign banks are well represented. Electronic banking facilities are extensive, with a
nationwide network of Automatic Teller Machines (ATMs) and Internet banking facilities are
viewed as a growth opportunity in this sector.

Internet banking whilst arguably a growth opportunity, has experienced problems. Several
leading SA Banks launched internet banking brands in the recent past but most failed. The
view is that they were too early for the cautious and cynical consumer market.

South Africans are brand loyal and when it comes to money many still want to see and visit a
high street brand. Trust is a key issue and in a market beset with corruption problems several



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demographic consumer groups need their financial institutions to have high brand visibility
coupled with a physical presence. As consumer confidence grows internet banking will almost
certainly grow with it.

2.3 Technology

South Africa has developed leading technologies particularly in the fields of energy and fuels,
steel production, telecommunications, textiles, deep-level mining, telecommunications and
information technology.

Whilst SA can lay claim to impressive technology development it has done little to apply that
technology to the creation of original industrial or consumer product development. With
caution, research and the right approach this could prove to be a genuine opportunity for UK
product design agencies.




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3. DESIGN CULTURE

In a nation where many remain cautious and cynical, developing brand trust is paramount to
customer acquisition and retention. South Africans already fully understand and embrace
brand culture and are evidently very brand savvy.

In the developed cities and nearby residential suburbs, interior design and architecture
standards are high throughout the majority of offices, retail outlets, hotels, restaurants, public
buildings, arts and leisure facilities, etc., and domestic interior design in both cities and
suburban dwellings can be as sophisticated as other developed countries.

3.1 Retail Design

Canal Walk, Cape Town has over 400 stores and restaurants, as well as entertainment and
business centres making it the largest retail outlet of its kind in the country. Inspired by similar
projects in the UK Mickey Radowsky, Managing Director and Design Champion, had a vision
for Canal Walk and drove it through from beginning to end with attention paid to every design
detail.

South African architects, Bentall Abrams, together with Mall Designer, Jan Lopcher were
appointed to design and deliver Radowskys’ vision. The result is a truly eclectic mix of
architectural styles and design influences including 150 different shop-front designs
introduced to break up the uniformity so often seen in shopping centre environments.

With a development budget of 1.3 billion Rand, Canal Walk covers 500,000 square feet and
has experienced 8% growth in the retail sector since it opened 3 years ago. It has managed
to attract global brands including Levis, Diesel, Woolworth and Sony.

On a national level, Canal Walk finds it harder to attract brands headquartered in
Johannesburg, as the 1000 mile distance is perceived to be a barrier to business and security
management.

In the retail sector the highest growth is an emerging trend for home décor and lifestyle
stores, which are out-stripping fashion.

3.2 Product Design

Product design needs a boost. Understanding the role that industrial design plays in the
development of the national economy and manufacturing base is fully evident in brochures
and reports produced by the 33-year old, government-funded, South African Design Institute.

However, the Institute's 'Product Design Award' results demonstrate much room for
improvement both in terms of innovation and aesthetics. Low cost electrical goods are basic
and lack the robustness and ergonomic design of similar European products.

There may also be opportunities for product design agencies to assist with the development
of 'Made in South Africa' products and brands in sectors such as telecoms and electronics;
though it should be noted that at present (possibly only due to lack of benchmarks) SA
manufactured goods are perceived to be less credible than imported brands. European
design development skills could change that.



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3.3 Brand communication

On a national level, brand communication, multi-media and broadcast design are extremely
well served by a commercially-aware set of very talented young agencies with a positive
attitude and respect for an organisation's business issues. UK partnerships and acquisition in
this sector are already evident, a good example of which is Enterprise IG and former
Johannesburg agency, Pentagraph.

ABSA one of South Africa's leading financial services brands formed by the amalgamation of
four banks is very brand driven. Brand Management is headed up by, Johann de Jager Senior
Consultant: Corporate Identity and Riana Prins Marketing Manager.

When seeking to appoint an agency to develop the ABSA brand the company appointed a
local and well-respected agency Pentagraph whose knowledge of ABSA’s local target market
and demographic mix was crucial.

Pentagraph were later taken over by 'Enterprise IG' whose global client base and experience
in the financial services sector provided ABSA with the opportunity to develop award-winning
brand communications recognised worldwide, whilst remaining local. The ABSA brand was
successfully launched by Enterprise IG in 1998. Just 12 months post launch 90% brand
awareness was measured nationally, making it one of the most recognised brands in the
country.

Ad agencies Saatchi and Saatchi and Oglivy and Mather also bring local and global presence
to South Africa's major cities. They both have offices with design units in Cape Town and
Johannesburg and O & M own South African ad agency, Brian Slingers Partnership, which
has a global client list in its own right.

Brand Communications agency, 8 Seconds, with offices in Cape Town & Johannesburg and
Cape Town based multimedia agencies Redshift and Wireframe have developed partnerships
with British agencies or sales teams and are rapidly building a global client base.

Suzanne.Ackermann-Berman, brand champion at family owned supermarket chain
Pick'n'Pay, would not look outside of the home market for design skills whilst they exist
locally. Culturally they do not wish to as the call to action is still very much ‘buy South African’
and financially they could not afford to.

The Pick’n’Pay brand philosophy is built on providing for the needs of all South Africans at the
most affordable price irrespective of demographic group. And it reinvests profits in staff
development. The majority of its employees are from previously disadvantaged backgrounds
and 10 years ago illiteracy amongst Pick’n’Pay employees was at 60%. Through the
provision of literacy classes open to all employees Pick’n’Pay has reduced that figure to 10%.
Its brand, like many others in South Africa has been built on its understanding of and care of
its people and customers.

Conversely, Piet.Rademeyer, Managing Director of MG Rover based in Johannesburg
acknowledges the benefits his office has derived from shared marcoms materials with the
European HQ. MG Rover is selling a British aspirational lifestyle. Interestingly, those buying
into the brand in SA are not ex-pats but the rising black middle management of South Africa



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who have contributed significantly to a 4% growth of market share. MG Rover operate a
Member's Club that hosts local events designed to make the owner's feel part of the lifestyle
that they have bought in to. The job of organising and advertising such events is given to local
agencies on an ad hoc basis.

Some client organizations recognise that access to international brand development
strategies provided through SA based agencies with UK or USA based partnerships, is
beneficial but in the short-term that is unlikely to lead to the appointment of a UK brand
agency charging in Sterling and with no local base.

3.4 Craft

Craft design exudes culture and creativity. South Africa has grown up on a culture of 'making-
things'. It is known as the 'Rainbow Nation' and that is reflected in the colourful beadwork,
textiles and clothing to be found on sale at street markets as well as in leading Galleries.

More recently such talents were proved through a partnership project called LOSA. UK based
Sotheby's paired contemporary British designers with crafts-men and women in a South
African township; resulting in the creation and manufacture of product range that would not
look out of place in the Conran Shop.

South Africa is well aware of its home-grown talent which the Creative Industries, government
and industry are committed to growing, fostering and exporting as an aid to future economic
growth.

Any UK design agency that believes it will find a warm welcome in South Africa if it attempts
to go in with the attitude of 'showing them how it is done' is likely to be on the first plane home
again.

3.5 SA on the international design stage

Design Indaba, the 7th International Design Conference took place in Cape Town, February
2003 and boasted the most impressive array of international speakers including Stefan
Sagmeister (New York), Irma Boom (Amsterdam), Alan Fletcher UK, Fabio Ongarato
(Australia), Naoto Fukasawa (Japan), Neville Brody UK, Sir Terence Conran (UK) and David
Kester (UK) and attracted sponsorship from BMW and the British Council.

It was attended by 800 delegates from South Africa and rest of world and was organised by
Interactive Africa with great style and attention to detail. Both pre- and post- conference
publicity paid tribute to South Africa's design community.

South Africa has its own Agenda as regards the development of 'their' creative industries - in
particular film & TV, music, publishing, craft and design.

A year-long public-private research initiative (involving KMPG) concludes that
‘'there is a solid business case to present which demonstrates that a flourishing cultural
industry sector in South Africa will become a powerful means of defining South Africa's
distinctiveness and growth within the emerging global economy’'.
The Department of Arts and Culture is very much behind this strategy.




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4. CREATIVE INDUSTRIES OVERVIEWS

4.1 Commercial design and advertising

According to THINK, the brand name for the Johannesburg based South African Graphic
Design Council, it has over 8000 individuals and companies listed on its database varying
from one-man bands up to large advertising agencies employing over 100 people. In the main
design companies are very small and often work in small groups of networks built-up between
friends.

That does not mean to say however, that their creative skills are any less developed than
those of many Western European or American design firms. They are also in the main very
business focused, brand savvy and positive individuals, many of whom have developed
networks with designers based outside of SA.

Many South African creatives can also be found thriving within the UK creative industries,
some return home and maintain their links with the UK and others pass work from the UK to
their creative friends at home. They are loyal to their own but in a very open and generous
way, learning from each other and developing their international knowledge through shared
experience.

The value of the design sector both to the local market and to the export market is largely
unknown.

The industrial design market is also without an official value, either for in-house design or
external product design consultancy. Whilst the Johannesburg based South African Design
Institute has strong links with international design associations such as ICSID and has
funding and commitment from the Culture and Arts Department, it appears not to have
fostered the development of in-house design or product design community. Figures do not
appear to be available and the industrial make-up of South Africa does not include a thriving
industrial or consumer product manufacturing base. In the official Guide to Design Education
in South Africa, Industrial design Courses do not feature at all but may be a component of
Industrial or Mechanical Engineering Courses. Indeed the Guides editorial description of
industrial design is ‘conceptualizing and designing the visual appearance of the product’.

Whilst locally produced product development reports demonstrate a clear understanding of
the role design plays in the development of the economy industry has not taken the words on
board when it comes to new product development. That may be due to a lack of available
product design development skills or a lack of investment in product manufacturing.

The South African Product Design Awards again demonstrate commitment towards design
and innovation but lack the innovation and aesthetic style needed to win consumers at home
or abroad.

The South African Design Institute cannot cite many truly good examples of award-winning
industrial design. Controversially it lays claim to the design of the Wind Up Radio. A local
design company may have developed a new design style for the local market after the
Baygen manufacturing base was moved to South Africa (it no longer manufactures there) but
the original design of the Free Play was designed by TKO in the UK.




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4.2 Film

Cape Town is starring in commercials and feature films from all round the world, and has
become a favoured location for filmmakers keen to make use of the city and its environs'
natural beauty as well as to employ a technically advanced film industry that can compete
with that of Europe or the US for skills and savvy. Cape Town boasts over 50 highly
professional production houses.

The film production industry is maturing through an expanding infrastructure and a rapidly
expanding world-wide network.

Cape Town hosts Sithengi, the annual Southern African International Film and Television
Market, now in its seventh year which takes place every September and is attended by over
1000 delegates from around the world.

The International Public Television Conference took place in Cape Town in 2002 which was
the first time the event has taken place outside Europe or the US and was attended by nearly
a 1000 delegates.

The Jozi Summit Film Festival took place alongside the World Summit on Sustainable
Development in August 2002 with workshops and training sessions involving leading industry
players, as well as a host of screenings of more than 600 showings of over 100 movies at
venues ranging from commercial cinemas in shopping centres to township locations.

Post production technical skills are widely available but the growth of a homegrown movie
industry is held back by lack of scriptwriters and film Directors.

Filmmakers have recognized the huge potential and investment is being made in basic
infrastructure. Sasani Studio has opened at Cape Town's V&A Waterfront, while the
Longkloof Studios are being upgraded to the tune of R20-million. German equipment-rental
company CineLicht has established a subsidiary in Cape Town, and British lighting company
AFM now has a base in Johannesburg.

Movies are being made in which Cape Town stars in several: The Piano Player, featuring
Christopher Lambert and Dennis Hopper was shot in Cape Town as was Manhunt, with SA-
born Mummy star Arnold Vosloo and Borderline, staring Sean Patrick Flannery.

Pre-production work on producer Anant Singh's version of Nelson Mandela's autobiography
was all SA produced and JM Coetzee's controversial and acclaimed Booker Prize-winning
novel, Disgrace, is being produced under the direction of British director Charles Sturridge.




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4.3 Advertising commercials

Arguably, the biggest, fastest, most lucrative part of the film industry in South Africa is the
commercials industry. Over the past few years the number of foreign commercials being shot
in South Africa, particularly Cape Town, has grown and grown.

French, German, British, American, Israeli, Belgian, Italian, Scandinavian and even Turkish
commercials have been shot in Cape Town, all contributing to the estimated R2-billion total
worth of the industry in this country.

Cape Town has the advantage of fantastic location scenery and Gauteng has considerable
resources at its disposal, and accounts for a very substantial portion of local film industry
revenue due to sophisticated studios and the editing suites.

South Africa is becoming ever more a part of the international film, television and
commercials industry.

4.4 Crafts industry

More and more South Africans are making their livelihoods producing crafts, particularly the
previously disadvantaged town ship dwellers. It is estimated that at least 200,000 people are
active in the creative craft sector and up to 1.2 million people are active in the sector and
related trades. Both industry and government departments alike embrace the sector as a
means of fighting poverty and raising awareness about HIV/Aids.

The craft sector is estimated to employ 1.2 million people and contribute R3.4-billion to the
economy every year.

Funds generated from crafts are often the sole source of income for poor, usually illiterate,
people to gain access into the formal economy, according to Susan Sellschop of the South
African Crafts Council. The Council, set up in 1991, has an extensive database of local
crafters and craft-related institutions in South Africa.

According to the Cultural Industries Growth Strategy (CIGS) compiled by the Department of
Arts, Culture, Science and Technology in 1998, "craft provides an entry-point into the
economy for under-resourced groups who are then able to develop their skills through
experience, apprenticeship and mentoring. Craft activity acts as a low-cost training 'school' for
skills which can be later used in the formal sector".

This sector has also benefited from a UK/SA initiative instigated by South African Sally Story
in partnership with London’s Sotheby’s. The project called LOSA (London South Africa) has
the distinction of Sir Terence Conran as its patron and whose Conran shops now stock the
products resulting from this partnership between 700 South African craft workers and six of
London's best designers such as Tom Dixon, Kate Blee and Julia Leakey.

The creators of LOSA think that it could become a global business because it combines the
skills of Europe's top designers with the best craftsmen and women of the world's poorer
nations.




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The finished product is fetching the highest price, and that money is going back to South
African workers to support a programme of poverty alleviation through the creation of jobs.

Some 85 items were taken over to London and exhibited in five Sotheby’s galleries, and were
snapped up which enabled the team to return with new orders.

The products which include felt and mohair blankets, throws with beaded circles, woven wire
bowls, beaded belts with horn buckles, silver beaded cufflinks, wooden waste paper bins and
beaded jewellery also went on display at the 6th Contemporary Design and Decorative Art
Exhibition in London, organised by the LOSA (London-South Africa) Trust.

Some of these products are being made in Mpumalanga and the Eastern Cape. So far some
500 jobs have been created in KwaZulu-Natal, approximately 100 in the Eastern Cape and
two in Mpumalanga.

The aim of the project is not only to apply modern designs to traditional crafts, but also to
teach business skills – how to price the items and not reduce prices under pressure and how
to market the products, with the aim of becoming self-sufficient.

Such mentoring and development of business skills is vital, as craft makers often do not know
how to market and price their goods and obtaining access to funds is often a barrier,
especially for informal traders in rural areas.

In Khayelitsha a township developed in the early 1980's with a population estimated at over
600,000, has an impressive weaving and screen printing business is in operation. Resulting
products created and produced predominantly by the townships women are being sold in
outlets throughout SA’s tourist retail outlets and street markets. Khayelitsha itself where over
50% of the population still live in shacks many of which have no water, toilets or electricity,
has none the less itself become a tourist destination.

The township has a thriving crafts industry and is soon to be home to a new cultural arts and
leisure centre development which is a result of a partnership between British architect Richard
Foster and a local architectural firm who won the project via a tender process through Cape
Town’s UniCity.

Khayelitsha is also the proud owner of an Olympic sized swimming pool built in anticipation of
winning the bid to host the 2004 Olympics which it lost out to China.

Bank loans remain a problem, particularly small loans. If a crafter needs a R3 000 loan
(approx £220) to buy equipment or materials, most banks will only offer far greater amounts
that are out of reach of local traders with a non-existent banking history.

There is potential in creative work. Women in particular are utilizing their talents in weaving
and beadwork to make crafts destined for local shops as well as export markets. South Africa
wants to attract more tourists to the townships to see for themselves what the locals are
capable of and how crafts are developing rather than just making crafts available to them in
their own (non SA) retail shops. Ostrich eggs, for example, have become an export, all are
painted locally and most by previously disadvantaged and unemployed people, many of
whom are just learning to read at the same time as developing business skills through
government or industry funded training programmes.



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A Creative Industries Government Study observes that the craft sectors built mainly on
domestic demand have greater sustainability than those sectors dependant on export or
tourist markets.




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5. TRAINING AND DEVELOPING THE CREATIVE INDUSTRIES

CREATE SA
Create SA is the National Skills Fund strategic project implemented in partnership with the
Department of Arts and Culture, The National Arts Council and the National Film and Video
Foundation.

It aims to provide demand-driven relevant quality workplace-based learnerships and skills
programmes that combine educational and technical training to assist the entrenchment of
life-long learning within the South African Creative Industries.

Creative Industries are those characterized as ‘industries that have their origin in individual
creativity, skill and talent and that have a potential for wealth and job creation through the
generation and exploitation of intellectual property’.

The programme is championed at government level by the Department of Arts and Culture
and is open to every type and size of ‘creative company or individual’ in particular the
previously disadvantaged. It concentrates on providing creatives with training on technical,
business, financial, marketing, export and administrative skills.

Responding to the Creative Industries (and other sectors) needs for skills development, the
Department of Labour set-up the National Skills Development Strategy which is underpinned
by two pieces of legislation.

The first is the Skills Development Act of 1998 which seeks to develop uniform standards
which allow recognition of both informal and previous qualifications across all industries and
training institutions. This is led by the South African Qualifications Authority and implemented
by the Standard Generating Bodies who operate on a sub-sectoral level to establish the
standards that will guide and inform the development and education and training curricula in
South Africa.

The second piece of legislation which is particularly interesting is the Skills Development
Levies Act. This is a tax which is applied at the level of 1% of total payroll to all companies
with a payroll of over R250,000 collected through the South African Revenue Services. This
tax is used to fund Sector Education and Training Authorities (SARS) established by
government to oversee education and training initiatives for companies that are too small to
benefit from training levies, across defined sectors of the South African economy. In other
words the larger employers fund the smaller ones and specifically assist in the Countries skills
and training development. Create SA is funded in this way.

Create SA specifically involves industry by placing creatives in work-placement situations
within SA companies. There is strategic commitment Country wide between Government,
Industry and training and educational bodies towards developing the Creative Industries in
recognition of the competitive advantage to be gained from using that talent to create better
products, services, brands and overall enhance both the status of SA and its export potential.




                                                                                                  18
6. SOUTH AFRICAN INVENTIONS

South Africa manufactures cars for BMW as well makes the seats for Concorde. It is home to
the inventor of the automatic pool cleaner (known as Kreepy Krauly), and to the engineers
who design and make flight control technology for Britain's fighter jets. And not surprisingly
South Africa also makes very good cricket bats!

Here are some of the world-firsts it can lay claim to.

WORLD FIRSTS
Oil from coal
The world’s first and largest petroleum-from-coal refiners provide 40 percent of South Africa’s
petrol. The company Sasol now competes globally in the energy industry.

Heart Transplants
The world’s first heart transplant was performed by Dr Chris Barnard in Cape Town on 3
December 1967. Now than 50 000 have now been performed worldwide.

Military
The G5 long-range artillery piece manufactured in South Africa is exported to several parts of
the world.

Kreepy Krauly
The swimming pool vacuum cleaner that does the job automatically, efficiently powered by
the ordinary operation of the pool's filter, was invented in SA.

Dolosse
Large, unusually shaped concrete blocks weighing up to 20 tons. The structures are designed
to break up wave action and protect harbour walls and costal installations. They were
designed by Eric Merrifield and first installed in East London harbour. They are now used all
over the world.

CAT scan
The computed axial tomography scan was developed at Tufts University in the UK by South
African physicist Allan Cormack and by Godfrey Hounsfield of EMI Laboratories.
(Source: South Africa at a Glance 2001-2002, Editors Inc)




                                                                                             19
APPENDIX A: Useful contacts

South African Design Agencies

[REDSHIFT]
contact: Jacques Ventner, Managing Director
email: speak@redshift.co.za
web:     http://www.redshift.co.za



[TOKYO]
contact: Christoff Vermeulen, Creative Director
email: christoff@tokyo.co.za
web:     http://www.tokyo.co.za



[OGILVY & MATHER]
contact: Tholoana Qhobela, Strategic Planning Director
email: tholoana.qhobela@ogilvy.co.za
web:     http://www.ogilvy.co.za



[INTERACTIVE.AFRICA]
contact: Ravi Naidoo, Managing Director
email: ravi@interactive.africa.com
web:     http://www.interactive.africa.com



[00:08 BRANDING & DESIGN]
contact: Shaun Liedtke, Managing Director, Interactive
email: shaun@8seconds.co.za
web:     http://www.8seconds.co.za



[CONDUIT STUDIOS]
contact: Lyall Coburn, Creative Directpr
email: love@conduit.co.za
web:     http://www.conduit.co.za



[FORWARD SLASH]
contact: Mike Goss, Director
email: MichaelG@forwardslash.com
web:     http://www.forwardslash.com



[BRIAN SLINGERS PARTNERSHIP]
contact: Lynn Peters, Managing Director
email:
web:     http://www....



                                                         20
Useful organizations

[South Africa Graphic Design Council. Think]
contact: Celia Clucas, Director
email: think.council@mweb.co.za
web:     http://www.thinkcouncil.co.za



[South African Bureau of Standards Design Institute]
contact: Adrienne Viljoen (Manager)
email: viljoeab@sabs.co.za
web:     http://www.sabs.co.za/design



[DESIGN INDABA 6]
contact: Ravi Naidoo
email: ravi@interactive.africa.com
web:     http://www.designindaba.com




                                                       21
APPENDIX B: Key issues

1. City Regeneration
South Africa’s three major cities: Johannesburg, Cape Town and Durban, have all
implemented major strategic initiatives aimed at regenerating the inner-cities and attracting
investment. Large infrastructural projects and funding initiatives have been set in motion.
South Africa has also created a number of regional Spatial Development Initiatives (SDI) and
Industrial Development Zones that will impact on the revitalisation of its major cities.

1.1 JOHANNESBURG, GAUTENG PROVINCE
Johannesburg is situated in the Gauteng province in the north and is the economic
powerhouse of the country. The Blue IQ project is a multi-billion rand initiative of the Gauteng
Provincial Government to invest in economic infrastructure development in identified mega
projects in the areas of tourism, technology, transport and high value-added manufacturing, to
create a truly 'smart' province. It is also putting substantial resources into turning around the
troubled central business district (CBD), a victim in the 1990s of capital flight to the northern
suburbs of the city.

Results have been achieved: crime rates are down, occupancy rates are up, due to a
combination of quality properties and low rents; investment is increasing as confidence
improves; and cleanliness has improved due to an intensive campaign from ‘Pikitup’, the city's
waste collection utility. There are three major initiatives to improve Johannesburg's security:

Central Improvement Districts (CIDs)
Closed circuit television (CCTV)
Metropolitan Police Department

Johannesburg CBD is a true metropolis: it has 217 000 residents in 37 000 dwelling units, 800
000 commuters enter the city every day and over 300 000-migrant shoppers visit the city each
year. The city also has 7-million m2 of floor space, 3-million m2 of office space with office
buildings representing a R19-billion investment, a R1.2-billion capital investment in housing,
and a R3,75 billion investment in a 2,5 km2 radius of core area. The CBD has distinctive
competitive advantages:

•     Pivotal location in the city's centre
•     Major public transportation hub: all major arterials, all rail, and all bus services run into
      the city centre
•     Low rentals and property prices for high-quality offices
•     Access to a large workforce
•     Under-served markets.

Significant infrastructure
Through Blue IQ, Gauteng will invigorate its economic trajectory by attracting some R100
billion in foreign direct investment in the next 10 years – creating an environment in which
local and foreign businesses can prosper and boost job creation opportunities for all South
Africans. Blue IQ is the dynamic catalyst for funding and promoting strategic investments in
Gauteng. The focus is specifically on technology, high value-added manufacturing, transport
and tourism. Blue IQ works in partnership with business, government departments and other
organisations. A total of R1,7 billion has already been allocated by the Gauteng Provincial
Government towards this initiative, based on a well-researched trade and industrial strategy.


                                                                                                  22
1.2 CAPE TOWN, WESTERN CAPE PROVINCE
Cape Town central business district (CBD) provides investors with excellent business
infrastructure, especially in terms of communications networks, access to research and
tertiary education institutions and a wide range of financial and business support services.
Intercontinental fibre-optic link-ups are provided in the main business nodes. Cape Town CBD
continues to grow dynamically in contrast with trends in other maturing metropolitan regions.
Commercial property trends have displayed a declining inclination in the availability of vacant
premises in the city centre for the past three years.
The economic growth patterns in the municipal area are centered on a number of clusters.
Apparent clusters relate to the tourism and conference industry and shipping, ship repairs and
boat building. An important trend reinforcing Cape Town's international status is the location
of the corporate headquarters of national and multi-national firms in the city. Other growing
industries include the high-quality clothing sector and film, video and television productions.
The Port of Cape Town plays a significant role in the local and regional economy and a wide
range of services and industries are associated with harbour activities. It handles more than
13 million tons of cargo and has an annual turnover of approximately R 700 million. Even
more significant is that the resultant movement of goods, based on declared customs values,
is estimated to be in excess of R20 billion.

2. Black Economic Empowerment (BEE)
BEE is the main thrust of attempts to correct the imbalance in ownership of the economy and
distribution of wealth inherited from the apartheid era.

Its intention is to redress the exclusion of the majority of South Africans - the "Previously
Disadvantaged" - from the mainstream economy by supporting and favouring the economic
empowerment of Previously Disadvantaged people in the private sector.

Joint ventures with BEE companies and new entities controlled by the Previously
Disadvantaged have therefore become more commonplace over the past 8 years.

The government has attempted to encourage BEE by introducing legislation such as the
Employment Equity Act which obliges employees to recruit a workforce that reflects the
demography of South Africa, and by specifying empowerment conditions for state contracts,
licenses and quotas.

In 2000 President Mbeki called on the black business community to come up with a 'plan of
action' to tackle empowerment. A BEE Advisory Council is to be established and provide an
entrepreneurship advice network focusing on target groups such as youth, and will encourage
private sector participation.

BEE is particularly relevant to urban regeneration, infrastructure and transport design
consultants, architects and interior design practices seeking to tender for public-sector
contracts. All tender contracts will stipulate a balanced employment policy that meets the BEE
regulations. (See UniCity Case Study, Appendix D)




                                                                                                23
3. The New Partnership for Africa’s Development (NEPAD)
NEPAD is an initiative with a strategic framework to develop a new relationship between a
united Africa and the rest of the world. It aims to take ‘the whole is greater than the sum of the
parts’ approach to economic development and international relations. Specifically South
Africa, seen as the jewel in the Africa’s crown seeks to assist other African nations to create
modern economies with access to trade, to root out corruption and attempt to put end to the
conflicts that have devastated the continent and held back development.

Working as one continent will improve economic and political governance and subsequently
improve the climate for investment.

The NEPAD initiative will focus on eight key areas:
•    Promoting peace and security
•    Strengthening institutions and governance
•    Fostering trade, investment, economic growth and sustainable development
•    Implementing debt relief
•    Expanding knowledge
•    Improving health and confronting HIV/AIDS
•    Increasing agricultural productivity
•    Improving water resource management

The G8 summit hosted for the first time in South Africa welcomed the NEPAD initiative as a
very good beginning and the first step on the road to Africa’ renaissance. Whilst it will take
many years to achieve that goal Africa has the commitment of the G8. African countries which
demonstrate a commitment to good governance and the rule of law will benefit from increased
aid. The UK has already substantially increased its bilateral aid to sub-Saharan Africa.




                                                                                               24
APPENDIX C: SA's global companies

A decade ago, South African companies were chained to their national base. Sanctions,
political isolation and legislative constraints made anything beyond normal trade relations
nearly impossible. Much of the trade was done under the table and corruption was rife.
After the release of Nelson Mandela in 1990, both business and diplomatic relations with the
rest of the world slowly began to expand. Following the democratic elections of 1994, the
floodgates opened and South African corporations moved with alacrity into the rest of Africa
and beyond.

Mining houses led the way, followed by manufacturers and financial institutions. Trade
mushroomed, mostly in favour of South Africa. As exchange controls were eased, companies
began investing offshore and listing on foreign exchanges.

Today, South Africa-based companies are rapidly expanding their global profile and proving
that they can compete with the best multinational companies in the world. Here is a selection
of South Africa's best performing companies.

Anglo American
Anglo (R193,639m) is one of the world's largest mining groups. Although mainly involved in
gold, diamonds, and platinum production, it has extensive holdings in base and ferrous
metals, forests, coal and industrial minerals.

Richemont Securities
Richemont (R109,098m) is a Swiss-based holding company with investments in tobacco,
luxury goods and the electronic media. Some of its well-known brands include Cartier, Piaget,
Dunhill and Benson & Hedges. The group is controlled by South Africa's Rupert family.

De Beers Consolidated
Founded by the Oppenheimer family, De Beers (R95,502m) is the world's largest producer of
gem and industrial diamonds. Through its London-based Central Selling Organisation (CSO),
De Beers controls almost 65% of the world's diamond, trade.

Billiton
Billiton (R78,001m) is one of the world's leading metals and mining companies, holding
assets in base metals, coal, steel, ferroalloys, aluminium, titanium, nickel and copper.

Anglo American Platinum (AngloPlat)
AngloPlat (R76,605m) is the world's largest producer of platinum and palladium. Gold,
copper, nickel and cobalt are also recovered as by-products. The company is controlled by
Anglo American.

Dimension Data (Didata)
Didata (R69,723m) designs, supplies and implements communication networks and
information technology in 36 countries across six continents.

Old Mutual
Old Mutual, (R67,477m) together with its listed subsidiaries Nedcor (banking) and Mutual and
Federal (general insurance), is the largest financial services group in Southern Africa. One
quarter of its operating profits u generated outside Africa, mainly in the US and UK.



                                                                                             25
First Rand
First Rand (R45,686m) was formed in 1998 when Anglo American and Rand Merchant Bank
merged their financial services interests in First National Bank (SA's third largest bank),
Momentum Life and Southern Life. The group also owns listed subsidiary Discovery Health.

Standard Bank -Investment Corporation (Stanbic)
Stanbic (R44,992m) Owns SA's second largest bank (by total assets) and has a controlling
interest in Liberty Life, the upper income life assurer. Stanbic operates in 14 African
companies, as well as in the UK, US, Europe, Asia and Latin America.

M Cell
M Cell (R44,152m) is the owner of cellular phone network operator MTN, one of the largest
and quickest growing in the world. The group operates in Uganda, Rwanda, Cameroon and
Swaziland and is aggressively pursuing expansion in other parts of Africa.

Sappi
Sappi is a global forest products group, with manufacturing facilities on three continents and
marketing outlets in over 100 countries. The world's leading producer of coated woodfree
papers.

SA Breweries (SAB)
SAB has 98% of the beer market in South Africa, and operates breweries in 20 countries, 11
of them in Africa. It also has significant interests in beverages in SA, including Coca-Cola
bottling.

Barloworld
An international brand management company focussed on heavy industrial products in
Southern Africa, the UK, Europe, the US and Australia. Its best-known brand is Caterpillar.

Rembrandt
A diversified industrial holdings group consisting of the world's second largest tobacco
company (a merger of HAT and Rothmans) as well as a variety of financial services, mining
and other interests.

Investec
A major independent financial services group with activities in SA, Europe, the UK, the US
and Israel.




                                                                                              26
APPENDIX D: Case studies

The following case studies are formed from interviews with the Managing Directors or
Marketing Directors of each company.
ABSA Bank
MG Rover
Pick&Pay
Delmonte
Canal Walk
Transport Department




1. ABSA

                                ‘Today Tomorrow Together’

When four indigenous banks merged to form ‘Amalgamated Banks of South Africa’ in 1991,
‘ABSA’ was born. The brand is managed by Johann de Jager (ABSA’s Senior Consultant:
Corporate Identity) and his colleague Riana Prins (ABSA’s Marketing Manager) at ABSA
Towers in Johannesburg. Johann explained how the brand marque, designed by Enterprise
IG (who had recently bought out ABSA’s incumbent agency ‘Pentagraph’), was so
successfully launched in 1998, that only one year later, 90% brand awareness was measured
nationally, making it one of the most recognised brands in the country.

A recent survey (Deloitte and Touche Human Capital Corporation. Markinor-Sunday Times
Top Brand Survey 2002) shows that ABSA is the leading financial services brand in the
country. As well as it’s strong product and service offering, ABSA has also been recognised
for it’s investment in the development of its staff and community projects, such as:

         ‘I am the brand’
(All 32,000 contact staff have attended this internal training course, in an attempt to
‘ABSAdise’ the external communications of the staff, ensuring that all customer relations are
‘on brand’).

        Sponsorships
(The ABSA Group is currently involved in the sponsorship of various athletics programmes,
rugby competitions, entertainment programmes, arts competitions, entrepreneurship
programmes and the world's biggest company relay).

        Social Investment
(ABSA’s focus is on teacher training programmes in mathematics, science and technology,
early childhood education, promoting entrepreneurship and HIV/Aids. It is partners with 120
community development projects countrywide).

         Art and Culture
(Since 1986, the ABSA Atelier Art Competition, presented in conjunction with SANAVA
(entirely financed by ABSA) has provided a platform for emerging talent).




                                                                                            27
         Absa Group Museum
(The free-entry group museum houses the world's largest collection of money used in South
Africa, as well as historical records stretching back to the early origins of Johannesburg).

Despite South Africans being known for their brand loyalty; with 5.6 million customers,
(350,000 of which make use of the internet banking facilities at the company’s branches),
ABSA has been quick to recognise that this such loyalty is not as prevalent in the financial
services sector. Johann and Riana who lead the ABSA marketing team of 130 staff (with the
support of incumbent agency Enterprise IG) have kept tight control of the company’s branding
and marketing communications, to ensure that their long-lasting customer relationships
continue to develop.

Using the local and global knowledge of such a large brand communications agency, together
they have developed the brand personality as:- approachable, friendly, supportive,
progressive, innovative and leading; and a set of values that should see their success
continue way into the future.

Johanna & Riana stressed that knowledge of their target market was crucial to them selecting
a brand communications agency, which is why they initially appointed ‘Pentagraph’. Once
Pentagraph were taken over by ‘Enterprise IG’, they felt that they had the best of both worlds,
given Enterprise’s global client base and experience in the financial services sector (Bank of
America being one their clients). This powerful combination gave ABSA the platform to make
all brand communications consistent, award-winning and recognised worldwide. Any British
agency considering an approach would need to consider what added value they could bring
to the existing partnership in place.




                                                                                            28
2. MG ROVER

   "At MG Rover, our passion for cars is matched only by our passion for customer
                                    satisfaction"

Now well into its third year as an independent British company, MG Rover’s vision to be a
successful, profitable and respected business, continues as its business management
strategy remains in place to form a strong platform for future growth and development on an
international platform.

While MG and Rover are two very distinct brands, they have similar strengths. As Piet
Rademeyer, Managing Director of MG Rover Johannesburg explained that, “Rover stands for
the definitive British luxury car, while MG represents the definitive British sports car. What
they also have in common is value for money.”

Back in the UK, MG Rover is reinforcing brand awareness by making their mark in motor
racing again. MG has competed in the famous Le Mans 24-hour race with the MG EX257 and
is involved in touring car racing with a competition version of the MG ZS. Also, a car based on
the MG ZR is competing in sections of the World and British Rally Championships.

‘No compromise' is the message that underpins the MG Rover range. In sharp contrast to the
middle-ground territory occupied by most other manufacturers, both brands have their own
distinct character and direction, which for Piet Rademeyer in South Africa, means two distinct
audiences.

The Rover range of cars offers comfort and versatility and, as exemplified by the 1.8 Turbo
and an extensive diesel and LPG range, competitive running costs.

MG Cars, while maintaining the cost and versatility advantage, introduce levels of excitement
and pure driving pleasure unrivalled for the price.

What MG are doing is selling a British aspirational lifestyle. Interestingly, those buying into it
are not British ex-pats but the rising black middle management of South Africa who have
contributed to the 4% growth of market share.

In terms of design buying MG SA are supplied with the majority of sales collateral by the UK’s
Marketing Department. Locally MG operate a Member’s Club that hosts events which are
designed to make the owner’s feel part of the lifestyle that they have bought in to. The job of
organising and advertising such events is given to local agencies on an ad hoc basis.

The focus, therefore, seems very much on customer retention through quality of service, than
all out acquisition. British agencies considering an approach, should first consider contacting
MG Rover in the UK to discuss their global / local strategy, rather than a direct approach to
the South African business, as it is unlikely that they’d be able to compete directly with a
South African agency on the Sterling:Rand creative budgets in place.




                                                                                                 29
3. PICK’n’ PAY

                       "Ten per cent capital and ninety percent guts"

In 1967, its first trading year, Pick 'n’ Pay achieved a profit of R310 000 on a turnover of R5
million. Turnover subsequently climbed to R10 million, and doubled the following year.

Suzanne Ackerman-Berman, Director at Pick’n’ Pay’s Cape Town HQ, explained that the
company's mission is ‘consumerism’, which she defined as ‘to interpret and satisfy customers
needs by selling quality products at competitive prices, and providing courteous service in
stores which are well located and pleasing to shop in’.

Pick 'n’ Pay's history is proof that the philosophy of consumer sovereignty is no mere
platitude. Ackerman has a record of passionate lobbying against attempts by government and
suppliers to raise and fix prices, showing how seriously he took his responsibility to his
customers. Some battles have been won (e.g. the petrol price war in 1976), and some lost (a
similar war in 1993), but Pick 'n Pay has never surrendered the fight.

Pick’n Pay’s policy is to give back to the communities in which they operate through an
investment in education and literacy programmes; housing; self-help schemes; child welfare;
parent support groups; feeding schemes; relief programmes; cultural and theatrical projects;
sport development and environmental programmes.

VUSULELA – THE REBIRTH

In 1996, ‘Vuselela’ - the Nguni word for rebirth or renewal was the vehicle chosen to bring
about the need to re-energise the company and to re-affirm the Pick 'n Pay values of human
dignity and mutual respect, following a careful assessment of the company's history, current
position and future potential which revealed that the fundamental challenge lay in improving
human relationships within the company in order to provide better service to customers.

A project team was formed under the leadership of Marketing Director Martin Rosen, and
Vuselela was launched in October 1996 just prior to Pick 'n Pay's 30th anniversary year. With
the support of CEO Sean Summers, the Vuselela metamorphosis was overseen by Isaac
Motaung, General Manager of Organisational Development. His first step was to canvass
employee opinion on the existing mission statement while consulting them on the content of
the new one. The result was an emotional affirmation of all that Pick 'n Pay had stood for
since its inception.

In times of constant and fairly rapid change, Pick’n Pay’s values and principles have very
much determined how they will behave and therefore, how they will perform. Whether it is
giving food and blankets following a floor or fire in a community, or subsidising the price of
bread and meat in the face of steep price hikes, or buying forward on rising prices and holding
prices of consumers, they very much promote their people as the one’s making the difference.

•     We are passionate about our customers and will fight for their rights
•     We care for and respect each other.
•     We foster personal growth and opportunity.
•     We nurture leadership and vision, and reward innovation.
•     We live by honesty and integrity.



                                                                                                  30
•     We support and participate in our communities.
•     We take individual responsibility.
•     We are all accountable.

Very much an emotive brand, Pick’n Pay has never altered the company’s logo. With such
high brand awareness nationally, there has never been a need. Taking part in world-wide
conferences and having a healthy understanding of the global players in its sector, some of
the marketing materials and communications have been obviously influenced by Tesco and
Sainsburys in the UK but always adapted to the local market’s needs.

Internal and external communications are led from within (such as ‘Vuselela’ – see above),
following the Ackerman principles. Above the line is executed by a local advertising agency,
always following an internally-fed message. Local agencies are sourced on an ad-hoc basis.

Recently, Pick’n’Pay has also invested in approaches from design students. A good example
is the charity to support babies born with AIDS, which Suzanne Ackerman-Bermann
registered in the designers’ names (with all royalties on use of the logo payable to the
students and exclusive use of the logo for Pick’n Pay to use to advertise the charity). The icon
can be seen on all current communications material and has become recognised nationally.

Given Pick’n’Pay’s commitment to ‘Buy South African’ it is difficult to see an obvious
opportunity for British agencies. However, those agencies with clients in the British
supermarkets or fmcg sectors, may wish to explore the areas of ‘own label’ and ‘umbrella
brand’ strategies as well as interior and product design.




                                                                                             31
4. DEL MONTE

              ‘Great People. Great Brands. Great Company. Great Future’

One of the largest global producers and distributors of premium quality processed fruits,
vegetables and tomato products, the Del Monte brand has become world famous. Today, with
annual sales of over $3 billion, the San Francisco-headquartered company is taking its
American icon brand to the next level by broadening its strong centre-store presence to
include a wide array of new products, new categories, and newly acquired brands and
businesses.

During the company’s first years, a large Del Monte press ad hung on a wall in the company’s
headquarters staff room. Entitled “Out of the Spirit of ‘49”, the painting depicted early
California pioneers amidst the abundance of the state’s fabled fresh fruits and vegetables.
The ad was designed to build brand awareness in consumers and elevate the image of
canned foods. But it also served another purpose. These early Del Monte employees were
reminded daily that the company’s success would depend upon their adopting the same kind
of vision, initiative, determination and hard work that drove those pioneers who created
California’s agricultural industry when the gold ran out in the mountains. Then, as now, these
traits lie at the core of Del Monte Foods’ corporate culture, and the inspirational ad has
centerpiece prominence in the headquarters office.

The Del Monte promise of quality has remained unchanged over the past 100 years, but the
corporate umbrella under which this brand has prospered has undergone significant
modification, especially during the last 25 years of intense merger and acquisition activity
within the U.S. food industry...

In 1979 the Company was acquired by R. J. Reynolds Industries (later RJR Nabisco). In the
late 1980’s, RJR Nabisco divided the company into several pieces, selling off the fresh fruit
portion of Del Monte, now known as Fresh Del Monte Produce, Inc (this brings us to Erik
Stroebel, who we met with at Del Monte in Cape Town). The remaining core domestic
company—today’s Del Monte Foods, which owns the Del Monte name and trademark—was
sold to a Merrill Lynch investor group in 1989 and subsequently acquired in 1997 by the
Texas Pacific Group. TPG took the company public again in 1999. Del Monte Foods shares
trade under the DLM ticker symbol on the New York and Pacific Stock Exchanges.

Globally, Del Monte Foods employs over 17,000, including a work force of 7,800 full-time
personnel and 9,800 seasonal workers. The company operates 17 production facilities and 18
strategically located distribution centers in North America and state-of-the-art food and pet
food research facilities in Walnut Creek and Terminal Island, California. Additionally, Del
Monte has operating facilities and distribution centers in American Samoa, Ecuador and
Venezuela.

In South Africa, Erik Stroebel advised that 100% of the fruit produced by Del Monte is for the
overseas export market, of which the UK is the largest customer - importing 36% of the fruit
produced. It is part of their strategy to buy globally through their network according to
season. This enables Delmonte to source product on demand for their consumers. Sixty
percent of the South African market is controlled by the Trucape Group, with Dutoit being the
biggest local brand of fresh apples and pears bought locally. South Africans tend to eat fruit




                                                                                            32
seasonally as in general they are not keen to pay premium prices for imported fruits. South
Africa’s main competitor in terms of fruit export is Australia, as the seasons are the same.

To compete on a global scale and to further promote South African produce, Del Monte joined
together with other large producers in the region in 1999, to form the Fresh Produce
Exporters Forum (www.fpef.co.za) a trade organisation that has presence via a shared
exhibition stand at all of the main international food festivals.

In terms of design buying, the brand guidelines are strictly run from both the EMEA HQ in
Monaco and the Global HQ in San Francisco. Del Monte do not buy local creative services,
as the produce is facing an exterior market already familiar with the Del Monte brand.




                                                                                               33
5. CANAL WALK
                             ‘discover something new every day’

With over 400 stores and restaurants, as well as entertainment and business centres, Canal
Walk also has what is described as ‘the most sophisticated and technologically advanced
promotions court in Africa’.

Mickey Radowsky, Managing Director of Canal Walk is dedicated to providing the ultimate
shopping experience for both local and international visitors. The largest development of its
kind in the country, Canal Walk is located 10 mins drive from Cape Town's city centre. There
is also a scheduled Tourism Shuttle offering free transport from the city hotels, as well as
sedan taxis on-site.

Inspired by similar projects in the UK Mickey Radowsky, Managing Director and Design
Champion, had a vision for Canal Walk and drove it through from beginning to end with
attention paid to every design detail.
South African architects, Bentall Abrams, together with Mall Designer, Jan Lopcher were
appointed to design and deliver Radowskys’ vision. The result is a truly eclectic mix of
architectural styles and design influences including 150 different shop-front designs
introduced to break up the uniformity so often seen in shopping centre environments.

With a development budget of 1.3 billion Rand, Canal Walk covers 500,000 square feet and
has experienced 8% growth in the retail sector since it opened 3 years ago. It has managed
to attract global brands including Levis, Diesel, Woolworth and Sony. However, the biggest
growth area at present is home-ware.

On a national level, it is difficult to attract brands headquartered in Johannesburg to invest in
Cape Town, as retailers find the 1000 mile distance a barrier to managing the business.

In terms of retail design opportunities there are a number of UK designers working within
South African practices which is attractive to Retail developers. However UK-based architects
and retail designers should perhaps consider approaches to the larger developers and
architectural practices in South Africa, rather than pursuing direct to client relationships.




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6. Transport Ministry

     “It’s not our wealth that built our roads, it’s our roads that built our wealth…”

BREAKFAST MEETING WITH Dave Eadie
CITY OF CAPE TOWN (TRANSPORT DIVISION)

The current state of the public transport system in the city of Cape Town and the government-
backed initiatives being put in place is summarized as follows;

•     The joint DTI and Department of Transport initiative costing R4 billion, starting a re-
      capitalisation programme for the ‘crombies’ (the minibus-style taxis that transport
      commuters from the townships into the city centre each day) that is due to start in July
      2003 and mentioned that they were currently looking into financing options for new
      vehicles and had recently gone out to tender to 3 manufacturers, prior to which, Toyota
      (who have the largest market share in the territory) had not been short-listed.

•     Cape Town have also recently had a feasibility study carried out by the French
      (FAISEP) to build a tram link between the Waterfront development and the City Centre.
      The suggested cost of this is likely to be estimated, R360 million.

•     Due to levels of crime, the existing railway service is considered unsafe by the majority
      of the population.

•     An inner-city bus service (designed on a 3-loop circuit) has been mapped out but is yet
      to be put in place.

Given the Black Economic Empowerment policy, a BEE company automatically receives a
10% advantage on a government bid.

Whilst there is clearly a great need to significantly develop the transport system throughout
South Africa the cost of doing so is prohibitive at present. South Africa has sought commercial
proposals from international transport consultants, most of which are based on significant
funding proposals from the bidding companies where recoup of investment would need to be
derived from paid toll booths.

Even emergency situations, such as the road leading up to the famous tourist spot Chaplin’s
peak which is currently closed due to the instability of the mountain range (falling rocks have
killed a number of motorists), can only be temporarily addressed due to lack of finance.

Cape Town is without a public transport metro system and trains cease to run after 6pm.

The City pre-apartheid used to have a tram system, however the tracks have long since been
ripped out, both officially and unofficially, and sold-off or stolen. Those decisions were likely to
have been based on segregating sections of the population and preventing ease of access to
populated white areas and freedom of movement through those areas.

Post-apartheid, past decisions are causing transport problems throughout South Africa and
are a contributory factor to car hi-jacking crime.




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In terms of local design requirements, the department’s remit means that although there is no
roster and that local agencies tend to be rotated so that each one gets the opportunity to
tender for a new brief; unless a brief actually specified that an international consultant on a
team was required, it would be unlikely that an non-south African agency would be appointed.
From an international design perspective there is no short-term opportunity unless a consortia
bid which addresses corruption, BEE regulations and takes a very long-term return on
investment view is proposed.

That situation may change if South Africa secured significant overseas development funds for
the specific purpose of transport development. Even so, SA will have to take great care to
address transport crime problems and corruption if it is to boost passenger confidence in
traveling safely by public transport.

SA also has another political issue to address when it comes to developing public sector
transport. Due to the absence on transport a thriving taxi service has grown which provides
employment for previously under privilege and lower wage earners. At a time when
unemployment is running at over 40%, proposals that threaten the livelihood of these poorer
groups will not find favour with regulated taxi-transport unions.

In townships the local communities have organized their own transport arrangements. These
are generally provided by those with mini-buses or open-backed trucks that take towns
people to and from work on a shared cost basis.

In the meantime Cape Town is relying on the development of the inner-City bus system and
partnerships with the private sector mini-bus owner.

At some point SA’s public transport system will develop (particularly as tourism continues to
grow) but at this stage due to the mass of issues surrounding that development and not least
of all due to the level of funding required in a Country fraught with corruption, it is not going to
be a quick or easy win.




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