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The Maritime Economy offers blue water opportunities

Richards Bay is the site of South Africa’s largest coal export terminal. (Photo credit: TNPA)

Rarely does a country have an opportunity to start a new sector from scratch, let alone two. When the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) began in 2011 to find new sources of electricity, a strong new economic sector came into being. In eight years, investment totalling R209.4-billion was committed to the energy programme by local and foreign entities.

If anything, the potential of the Maritime Economy, sometimes called the Oceans or the Blue Economy, is even greater.

The anticipated numbers are impressive. The share of the Maritime Economy to South Africa’s gross domestic product (GDP) will by 2033 grow by upwards of 250% (and perhaps as much as 350%) compared to its current value, to a figure between R129-billion and R177-billion. A million new jobs are expected to be created.

In every field South Africa either has existing infrastructure or is in the process of creating or reviving it: ship-building and repairs, oil rig maintenance, oil and gas operations, port operations, logistics, marine engineering and bunkering.

South Africa’s eight ports are run by the state-owned group Transnet, which has a strategic plan for each port to focus on its strengths. Transnet spent R2.5-billion on new port equipment in 2019/20.

On the west coast, Saldanha is the main port for the export of iron ore. Large industrial operations already exist and the Saldanha Bay Industrial Development Zone (SBIDZ) is set to become a hub for maritime repair activities and oil rig maintenance and repair.

About 1 800 km to the east and five degrees further north, Richards Bay Coal Terminal (RBCT) is South Africa’s primary export portal. Although volumes dipped somewhat to 72.1-million tons in 2019, the fact remains that the infrastructure is in place to support expansion of aspects of the Maritime Economy through the Richards Bay Special Economic Zone (RBSEZ).

Sectors under investigation include alternative energy generation and opportunities in the gas sector. A feasibility study is being done on a gas-to-power plant and a large liquid petroleum gas import and storage terminal was recently built for Petredec by Bidvest Tank Terminals.

Saldanha Bay can offload Very Large Crude Carriers as can the Port of Durban, which is Africa’s busiest port. Durban handled more than 81-million tons of cargo in 2019, which included 2.84-million TEUs (twenty-foot container equivalent). The Durban Car Terminal handled 521 280 vehicles (Africa Ports & Ships). Durban is responsible for about 60% of the total volume of containers handled by the country’s ports.

The Port of Durban is home to many maritime companies. EBH SA has been in marine engineering and ship repair since it began as Elgin Brown and Hamer in 1878. Three South African shipbuilders (SAS, Damen Shipyards Cape Town and Nautic Africa) have agreed to pool resources on contracts to become more competitive.

The KwaZulu Cruise Terminal (KCT) consortium won the contract from TNPA to finance, build and run the new Durban Cruise Terminal.

Work underway at Durban’s drydock facilities. (Photo credit: TNPA)

The Port of Cape Town has also launched a dedicated cruise-ship terminal. A renewed focus on ship repair through facilities such as the Sturrock and Robinson drydocks is on the cards for the Port of Cape Town, which has a diverse offering through its Container Terminal, Multipurpose Terminal, Liquid Bulk Terminal and Fresh Produce Terminal.

Drilling off the southern coast has revealed vast resources in the Brulpadda field in the Southern Outeniqua Basin. If some of this gas can be recovered, the two SEZs on the Eastern Cape coast would become critical to its utilisation. The Port of East London is aligned to the East London Industrial Development Zone while Port Elizabeth has two ports, the city port being joined by the Port of Ngqura which anchors the Coega Special Economic Zone.

Fishing

South Africa has 3 000 km of coastline and the extent of the country’s territorial waters is greater than its land size. About half of the fish that South Africans eat is caught locally, and almost all of that comes from the waters off the Western Cape. The two most popular types of fish are hake and sardines, which are harvested by deep-sea trawlers.

The fishing industry earns R3.4-billion in foreign earnings annually and employs 26 500 people across 22 sectors, the main ones being deep-sea trawling and aquaculture (JSE).

The aquaculture industry is currently small, but since 2014 investment commitments of about R700-million have been made. The Coega Special Economic Zone is planning a 440 ha Aquaculture Development Zone to accommodate new projects.

One possibility is to promote import substitution, for example, with salmon, of which South Africa currently imports more than 5 000 tons every year.

The allocation of commercial fishing rights in 12 sectors that was due to happen in 2020 has been postponed to December 2021. It is likely that the quotas of larger fishing companies will be reduced in favour of small-scale fishing companies.

There have been several changes in ownership in the fishing industry, most likely linked to the upcoming determination of new fishing rights in which black shareholding will be a factor. The acquisition by black-controlled Sea Harvest Group of Viking Fishing is part of a larger trend.

Tiger Brands has unbundled its 42% stake in Oceana Group. Oceana holds the popular pilchards brand Lucky Star, which enjoys 80% of market share in South Africa, and has the highest market value of fishing companies in South Africa. The Oceana Group recently purchased Foodcorp’s fishing rights and a US fishmeal and oil company, Daybrook.

Building infrastructure is a presidential priority

Richards Bay IDZ (Credit: TNPA)

The two central planks of the South African government’s post-Covid rebuilding programme are infrastructure and industrialization.

To promote and monitor the first priority, an Investment and Infrastructure Office has been created in the Presidency. It is headed by the former Gauteng MEC for Economic Development, Dr Kgosientso Ramokgopa. In 2020 national government gazetted 51 priority infrastructure projects, with a total investment value of more than R340-billion.

Sectors targeted for intervention include energy, housing, transport, water and sanitation, agriculture, agro-processing and digital infrastructure. Some of the “special projects” that fall outside sector categories include:

  • Rural pedestrian bridges and rural roads.
  • Energy and water savings on government buildings.
  • Digitizing of government information: 10 000 young people will be employed to digitize government information, including hospital files and police dockets.
  • Student accommodation.
  • SA Connect Phase 1B, broadband expansion.

A reconstituted Council of the Presidential Infrastructure Coordinating Commission met for the first time in July 2020. With President Cyril Ramaphosa in the chair, the commission includes national ministers, provincial premiers, mayors of big cities and representatives of the South African Local Government Association. Where the council intends doing things differently is by paying close attention to:

  • Preventing corruption through transparent tender processes and strong due diligence.
  • Community involvement in planning and implementation.
  • Emphasis on local employment and procurement and targeted involvement of SMMEs.
  • Blended financing through the Infrastructure Fund to mobilise more resources from the private sector, multilateral development banks and development finance institutions.

A World Bank report has shown that a 10% increase in infrastructure spending results in a 1% growth in GDP. A study carried out by KMPG for the Gauteng Province found that spending on infrastructure resulted in additional economic activity worth R26-billion in the province and created 92 000 direct jobs.

In the country’s biggest province in terms of economic activity, the Provincial Government of Gauteng spent R30-billion on infrastructure between 2013 and 2016. The Gauteng Infrastructure Master Plan is expected to account for expenditure of about R1.8-trillion over a 15-year period.

Special Economic Zones

A key component of the strategy to boost the value of the country’s products is to develop infrastructure where manufacturing can take place, namely Special Economic Zones (SEZs) and industrial parks.

Each province has been allocated SEZs that play to regional strengths. Described as “major catalytic projects” for the northern province of Limpopo, the Musina-Makhado SEZ (MMSEZ), the proposed Tubatse SEZ and several industrial parks are central to the strategy of expanding Limpopo’s manufacturing capacity.

As of February 2020, Shaanxi CEI Investment Holdings had committed to a $5-billion investment in a vanadium and titanium smelter project at the MMSEZ and a further $1.1-billion had been pledged from other sources. The first-phase focus is on energy and metallurgical processes but agro-processing, logistics and general manufacturing are expected to follow.

Gauteng Premier David Makhura on a visit to the the Nissan plant at Rosslyn in 2020.

In the Pretoria area, already home to several Original Equipment Manufacturers (OEMs), the Tshwane Automotive Special Economic Zone (TASEZ) has been launched. It is a joint project of the Gauteng Province, the Department of Trade, Industry and Competition, and the City of Tshwane. The implementing agent is the Coega Development Corporation (CDC), the developer and operator of the Coega Special Economic Zone (SEZ).

The Coega SEZ is at the Port of Ngqura near Port Elizabeth and it too has an automotive component, recently strengthened by the large investment of the Beijing International Automobile Corporation (BIAC). East London’s Industrial Development Zone (ELIDZ) has many companies that sell to and service the nearby Mercedes-Benz plant while both coastal SEZs have a strong suite in logistics and are planning expanded aquaculture parks.

Energy is a key infrastructural requirement for the growth of any economy, and SEZs are playing a role. The Coega SEZ has been named as the site for one of two liquefied natural gas (LNG) plants to be built (if partners can be found) in terms of the national gas-to-power plan.

The Richards Bay Industrial Development Zone (RBIDZ) in KwaZulu-Natal is the other site designated for an LNG plant, with the capacity planned for 2 000 MW. RBIDZ is also the location of a new biomass plant.

The OR Tambo SEZ in Gauteng underscores Ekurhuleni’s strengths in manufacturing and logistics. The OR Tambo SEZ has launched the biggest food processing operation in the southern hemisphere (and the world’s second-largest refrigeration plant). With a special focus on export-oriented value-added industry, the OR Tambo SEZ leverages its connection to the country’s busiest airport. The focus of this SEZ is on agro-processing, jewellery manufacturing and mineral beneficiation as well as the development of hydrogen fuel cell technology. The SEZ is a subsidiary of the Gauteng Growth and Development Agency (GGDA).

Two of the largest infrastructure projects in South Africa’s history have unfortunately been delayed and are running over budget. National utility Eskom set out to build two huge power stations in Mpumalanga (Kusile) and Limpopo (Medupi). Both are near existing power stations and should have a stable supply of coal.

Eskom committed to completing Medupi in 2020 and intends finishing Kusile by 2023. Medupi will be able to feed 4 764 MW into the South African power grid when in full commission. Kusile will have a capacity of 4 800 MW and will be the fourth-largest coal-fired power station in the world. It will also the first in South Africa to use flue-gas desulphurisation (FGD), a technology that removes oxides of sulphur, such as sulphur dioxide, from exhaust flue gases.

 

Building South Africa back better in 2021

Containers at Port of Durban. Credit: Transnet National Ports Authority (TNPA)

By John Young, South African Business 2021

Build back better has become the new catchphrase. There is a lot of building to do for the South African economy after two recessions, a decade of looting of state resources and a health crisis that all but shut down the economy for several months.

The Chief Executive Officer of the Johannesburg Stock Exchange, Leila Fourie, wrote in June 2020 that she wants to “contribute towards a better, fairer, more sustainable world” (Business Day). As co-chair of the Global Investors for Sustainable Development (GISD) Alliance, a grouping of banks, bourses and asset managers, Fourie has been working to promote investment in Covid-19 bonds, the Sustainable Development 500 fund and renewable energy.

This kind of thinking informs many of the plans that were put forward by business, labour and political parties as the Covid-19 lockdown served to focus the minds of all South Africans about the need to plot a better way forward. The National Economic Development and Labour Council (Nedlac) came up with an agreement which focussed on infrastructure investment, creating a supportive policy environment and the promotion of “strategic localisation” and exports. An umbrella business body, Business for SA (B4SA), identified 12 initiatives which, if accompanied by policy reforms, would boost the economy significantly. The African National Congress (ANC) produced its own economic recovery document.

Having consulted with all these bodies, President Cyril Ramaphosa on 15 October revealed government’s recovery plan. The Economic Reconstruction and Recovery Plan (EcoRRP) names infrastructure investment and building up the country’s manufacturing base as priorities. The plan intends to unlock R1-trillion in private investment. Furthermore, a commitment is made to improving the capability of the state and to remove barriers to doing business or investing in the country.

New roads such as this link to the North West from Gauteng are important parts of infrastructural development. Credit: SANRAL

Soon afterwards, Finance Minister Tito Mboweni announced the medium-term budget policy statement where the most significant promise related to reducing the state’s wage bill. Mboweni is a former Reserve Bank Governor and Labour Minister. The President is a former miner and trade unionist. Both men have been engaged for years in drafting the economic policy of the ANC but it remains to be seen if they can persuade the unions representing workers in the public sector to accept a three-year freeze on wage increases. This will be a major test because South Africa’s debt to GDP ratio is high. The cost of servicing debt is equal to nearly 14% of revenue.

A step that President Ramaphosa took in July did not receive many headlines, but his amendment of the regulations governing the enquiry into state capture made a big difference to the work of the National Prosecuting Authority (NPA). Enabled by the amendment to work with the evidence presented to the commission, prosecutors quickly finalised cases and arrests started happening. After a decade in which it seemed that immunity was guaranteed for corrupt officials and employees of state-owned enterprises, the tide started to turn.

Prosecutions obviously do not provide certainty against future corruption, but at least the prospect of arrest might be a deterrent. One of the biggest obstacles to economic recovery is South Africa’s level of debt, and that is caused largely by the state electricity utility, Eskom, where corruption was rife for years.

The government’s directory lists 131 state-owned entities but there are said to be about 700 altogether, at various levels of government. The three biggest, all of which fall under the Department of Public Enterprises, are Eskom, South African Airways (SAA) and Transnet, with five large divisions covering ports, railways and logistics. Eskom and SAA are significant drains on the country’s finances and getting control of all of the country’s SOEs is another major priority.

Agriculture was one industry that saw some positives during the Covid-19 lockdown. Although sectors like wine suffered badly, a reported increase in maize exports, as well as greater international demand for citrus fruits and pecan nuts, helped the industry expand by 15% (StatsSA). Grain crops such as maize, wheat, barley and soya beans are among the county’s most important crops. Only rice is imported. Wine, corn and sugar are other major exports.

Basing economic growth on a devaluing currency is not always the best long-term method of boosting economic growth, but high-value agricultural exports and increased numbers of high-spending international tourists hold some promise for helping to get the South African economy back on a growth path. Horticulture in particular is seen as holding great potential not only for increased earnings, but for creating jobs.

New economic sectors

Another new area that holds great potential for the South African economy is the Oceans Economy. South Africa has 3 000 km of coastline and the extent of the country’s territorial waters is greater than its land size. And yet the country does not have a merchant marine fleet and only scrapes the surface in terms of the percentage of repair and maintenance of boats and oilrigs which could potentially bring work to its ports.

The introduction of renewable energy into the South African energy market via the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was successful, but the programme stalled.

Hopes were raised with the publication of a new Integrated Resource Plan (IRP) because investors crave certainty. The IRP is a road map for South Africa’s electricity generation and the previous administration seemed determined to push for an expensive nuclear programme. The latest plan confirms that the already hugely successful drive for renewable energy will be continued and expanded.

South Africa’s traditional strength in minerals still holds good. Although gold mining is declining in volumes (even while prices rise), the major investment of Vedanta Zinc International in a project in the Northern Cape and Sibanye-Stillwater’s acquisition drive in the platinum group metals (PGM) sector are significant economic drivers. Coal and iron ore continue to be exported in large volumes through the Richards Bay Coal Terminal on the east coast and the Port of Saldanha on the west coast.

Richards Bay, apart from being the country’s main site for the export of coal, is also a registered Industrial Development Zone (IDZ) and consequently is in a position to attract investors in a range of sectors.

Automotive manufacturing and automotive components continue to thrive, with large investments by most of the major marques and increased exports a feature of the sector. There has been inward investment in recent years, most notably by the Beijing Automotive International Corporation (BAIC) in the Coega Special Economic Zone outside Port Elizabeth. The Tshwane Automotive Special Economic Zone (TASEZ) has been launched at Silverton in Pretoria.

A new SEZ has been formally declared in the northern part of Limpopo, the Musina-Makhado SEZ. The Namakwa SEZ in the Northern Cape is awaiting its licence, as is the Tubatse SEZ in eastern Limpopo.

Geography

South Africa’s location between the Atlantic and Indian oceans ensures a generally temperate climate. The 2 954 km coastline stretches from the border with Namibia on the Atlantic to the border with Mozambique in the east. The cold Benguela current sweeps along the western coast while the warm Indian Ocean ensures that the Mozambique/Agulhas current is temperate.

South Africa’s coastal plain is separated from the interior by several mountain ranges, most notably the Drakensberg which runs down the country’s eastern flank. Smaller ranges in the south and west mark the distinction between the fertile coastal strip and the dry interior known as the Karoo.

The city of Johannesburg is located on the continental divide, whereby water runs south of the city towards the Atlantic Ocean while waters to the north drain towards the north and east. Johannesburg is 1 753 m above sea-level.

Most of the country has summer rainfall but the Western Cape, which has a Mediterranean climate, receives its rain in winter. Droughts are not uncommon and although the national average is 464 mm, most of the country receives less than 500 mm of rain every year. The Western Cape experienced a severe drought which was broken in 2018. The Orange and Vaal rivers play important roles in water schemes and irrigation and the Limpopo River defines the country’s northern boundary.

 

A post Covid-19 world – the implication for management and leadership development (Part 3)

In the previous two articles, we established that uncertainty and instability is the “new normal” and that we require different leadership and decision-making approaches to effectively navigate the complexity. In this final article, we will focus on providing practical suggestions to enable leaders to maintain momentum in these times. Here are some thoughts on maintaining momentum.

Cultivate fast feedback loops

Risk and opportunity emerge on the edges of our organisations. We cannot afford not to have diverse and fast feedback loops in place. We cannot adapt effectively if we don’t know what we are being adaptive to.

Delegate what you can (don’t waste your time and decision-making energy on complicated and unclear decisions)

We all have limited energy for making decisions. Decision-fatigue is real. Now is not the time to micro-manage and spend time making decisions that are within the expertise or mandate of others to make. Focus your efforts where it matters most, managing constraints in the complex and chaotic domains.

Find ways to step off the dancefloor and onto the balcony (slow down)

Ron Heifetz (5) writes about getting a balcony perspective. When we are in the middle of the dancefloor, things are frenetic. We are focusing on details, and immediate decisions. We lose sight of bigger patterns. It is easy to get sucked into the franticness of everyday operations. You have to take time out, take a step back and get a perspective of broader patterns that are playing out or emerging.

If you don’t, you could be heading straight for a cliff and not see it coming before it is too late. Or the opportunity of a lifetime may pass you by because you weren’t looking.

Practice self-care and don’t go it alone

Leaders are forced to make impossible trade-offs in their worlds. This is a very tough intellectual process with a deep emotional impact and undertone. These trade-offs are made on “external things” such as “do I keep staff (and not retrench)” or “do I keep costs high and wipe out dividends that support pensions?”

The psychological experience of these kind of trade-offs is called a double bind: “I am damned if I do and I am damned if I don’t…” The experience is that as a leader, I must execute a plan that feels like a lose-lose option. Very few things are as “rough” as being in a double bind. It is jarring. It leads to loneliness, exhaustion, confusion, inertia, feelings of disorientation, reactions (instead of wise responses) and deep discomfort with self and a criticism of self. Within a double bind, we experience all the most complicated human emotions, and there is no way out. We are critical of ourselves, critical of the situation we find ourselves in, critical of the government, critical of world leaders, critical of humankind for creating the conditions that got us here in the first place.

Practice wayfinding and foster “the passion of the explorer”, let go of notions of returning to a “normal”

The skills, competencies and mindsets that served us and helped us make decisions in the past, no longer work. In the past, failure became fashionable and we paid lip service to it, e.g. fail early and fail fast, which is popular in Agile circles. However, in general we still see failure and making mistakes as something to be avoided, not something to learn from.

Now, mistakes are unavoidable. We need to become explorers and way finders. We will make mistakes, so make sure the steps you take are “safe-to-fail”, i.e. mistakes are recoverable. Understand that failure is an opportunity to learn, and that there is no shame in not knowing. We come from a context where our worth was largely defined by our ability perform; by having answers and being right. Now no-one has answers, and no-one can consistently be right.

Create containment, but don’t become a certainty merchant

Leaders are seduced into becoming merchants of certainty for others. This is challenging us, not only in our work effectiveness, but on the level of identity. Who are we, as leaders, and humans, when we face the unknowable and when we are forced to make decisions where neither option seems right? Who are we when the people that follow us look to us for answers and certainties we don’t have?

A key role of leadership is providing “containment”. In psychology, containment refers to a dynamic where an individual helps others to process and endure existential fears. Leaders bring containment when they show up as human beings, communicate authentically, sets clear boundaries and provides a sense of purpose or direction. A situation that feels uncontained, i.e. not having sense of direction, clarity around boundaries and a sense of connection, that we are in this alone, creates extreme anxiety and that anxiety can lead to burn-out.

Let go of the old (and new) “normal”

We talk about business continuity in the sense of surviving the crisis and getting back to normal; instead we need to think in terms of transformation, not only about our businesses but about all the other systems we depend on. Now is the time to think radically differently about everything, not about ensuring continuity and a return to a pre-Covid-19 status quo.

Getting locked in a state of perpetual past and future thinking can be exhausting. We tend to project the past into the future in order to create a sense of predictability. While we can learn from the past, but cannot be seduced into thinking it illuminates the future; we are in uncharted territory − hindsight doesn’t lead to foresight.

Truly embrace and cultivate diversity

In our discomfort with messiness and ambiguity we have a tendency to create linear and simplistic stories not only about events but also about others. Our stereotypical views of other people, our “othering of the other” have led us to frame diversity as a problem to solve, usually with highly inadequate compliance-driven solutions. But in complex systems diversity is key to our resilience, it is not a problem, it is a strategic asset to nurture.

As we have seen now with our over-optimized supply chains, if we don’t have sufficient diversity, we have no resilience and limited adaptive capacity. We need variety, not only in gender, race and age, but also cognitive diversity, i.e. differences in perspective. Yes, diversity creates tension. But tension is creative, where there is no tension there is no change. If we stamp out all difference and tension, we undermine the adaptive process.

The Core Idea – Future Fit Management & Leadership

  • Our Value Proposition will enable decision-makers and leaders to become complexity- and future-fit.
  • Focusing on meta-skills that will ensure adaptive capacity, and the ability to respond to increasing turbulence.
  • With exponential change, technical skills and best practices have short-lived and limited value. Our programmes will aim to fundamentally shift how participants see and make sense of their contexts and equip them with meta-skills such as curiosity, learning agility, sense-making and adaptive intelligence.

Our view on Future Fit Management & Leadership

Being a Future Fit Manager or Leader will require the development of the following fitness areas:

Future Fit Management & Leadership

Digital Fitness – For managers and leaders, the key to digital readiness lies in creating awareness and stimulating interest in and preference for the digital way.

People Fitness – Self-development and appreciation lies at the heart of appreciating the value and potential that lies in diversity.

Customer Fitness – Mindsets for growth and agility is required to keep the customer at the centre of all innovation and design processes as we adapt to an ever-changing environment.

Strategic Fitness – Doing the right things and doing them right.

Functional Fitness – Developing the required technical, managerial skills.

Complexity Fitness – The ability to take on a Complexity view on all the Fitness Areas discussed above. Complexity and sense-making as “new language”, enables decision-makers and senior leaders to ensure adaptive capacity, and the ability to respond to increasing turbulence.

Strategic Partnering

As one of South Africa’s thought leaders in the applied complexity, Sonja Blignaut has teamed up with the UFS Business School for purposes of developing a range of short learning programmes in applied complexity and to facilitate the development of a Complexity View on a Future Fit Management and Leadership Development value proposition.

Sonja is a thinking partner for leaders, change-makers (individuals and teams) who need to lead in uncertainty; enable strategic agility and create future-fit organisations. She co-creates and delivers fit-for-context interventions to enable responsive and adaptive organisations.

Sonja also looks after the global Cognitive Edge network and is the South African partner for Prof Dave Snowden’s company Cognitive Edge for over a decade (Wales, USA, Singapore, UK, Netherlands, Brazil). She teaches locally and internationally on Complexity, Cynefin™ and enabling adaptive organisations. Sonja is certified in various individual and systemic coaching methods and a sought-after speaker, with experience at various conferences locally and internationally, including TEDx.

If you missed the first two parts of this series, you can find it here: Part 1 | Part 2
Please visit the UFS Business School website for online programmes available, or contact Ansie Barnard: Barnardam@ufs.ac.za

Sources:
  1. Black Swan. Taleb, N. 2007
  2. https://apps.who.int/gpmb/assets/annual_report/GPMB%20Press%20Release%2017%20Sep.pdf
  3. https://www.weforum.org/reports/the-global-risks-report-2020
  4. A leader’s framework for decision making. Snowden & Boone, 2007, Harvard business review
  5. The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organisation and the World. Heifetz, R., Grashow, A., & Linsky, M., 2009.

Mining Indaba launches brand-new Virtual Investment Programme

London: Investing in African Mining Indaba (Mining Indaba) today announced the launch of its Virtual Investment Programme, taking place 30-31 March 2021.

The Programme is a new service for mining companies, investors and analysts to raise capital, pitch their companies and originate deals.

“The highly experienced Investor Relations team will work closely with participants to ensure they are connected with an unrivalled network of elite dealmakers. Our objective is to bring together regular Mining Indaba Investment Programme clients as well as connecting new investors and mining corporates not yet taking part in any other matchmaking platforms,” says Kael O’Sullivan, Director of Investor Relations at Mining Indaba.

What can participants expect from the programme:
  • The IR experts have in-depth knowledge of the companies and assets as well as each investors’ profile to ensure deal origination and corporate access activity is maximised, presenting each participant with a wide range of opportunities.
  • The personalised concierge service will build a highly targeted and carefully curated meeting schedule, ensuring each participant is matched with delegates based on their specific requirements.
  • Full access to the enhanced online meeting platform with an easy-to-use filtering system to request one-on-one meetings directly. Participants can discover and reach out to new contacts accordingly.
  • An online mining company directory with up-to-date corporate and marketing information of every participating mining company.
  • Plus, exclusive content will be available throughout the programme including the final of the Investment Battlefield and exclusive roundtables led by analysts on the most pertinent themes.
Registration for the Virtual Investment Programme is now available.

The programme is free to attend for investors and analysts, and mining company rates are competitively priced. There are also a limited number of delegate passes available for bankers and brokers.

For more information about the service, visit the website here.

 

How AR Jones Engineering survived the Covid-19 pandemic

AR Jones Engineering is an engineering services company, founded in 2016 and located in the Marias Industrial area of Vredenburg in the Western Cape. We provide engineering solutions and equipment to a diverse range of sectors, including the steel, oil & gas and maritime industries, and to municipalities in South Africa.

We have a fully equipped workshop for all types of welding and sheet metal work. We specialize in stainless steel, aluminium, carbon steel and bracing welding, while on the sheet metal side we do all types of developments & complicated ducting works. Our equipment allows us to offer a bending & cutting service direct to the public, along with cut-to-size plates, pipes, and channels.

AR Jones Engineering specialises in the maintenance and repair of heavy-duty industrial equipment across sectors, and source and supply premium OEM pumps and valves. Our clients include companies such as Sea Harvest, Pioneer Foods, AMSA, ARMSCOR, and the local municipality.

Our workforce includes industrial and engineering specialists, boilermakers, pipe fitters, mechanical fitters, welders and semi-skilled workers. We currently employ around 20 people from the local community and our workforce include skilled female artisans.

The capability, dedication and commitment of our people ensure that we always deliver the highest quality service to our customers.

With Covid-19, we saw that the market changes constantly and rapidly – you therefore need to be able to adjust at an equal or faster pace to survive.

Over the years we’ve learned that you constantly need to market the business, and that you need to employ the right people in your business in order to grow your customer base. Fortunately we’ve managed to diversify our client based and have secured sales from the maritime sector as well as the food industry, with clients such as Sea Harvest and Pioneer Foods.

Our business success also resulted in recognition from the DTI, in collaboration with GIZ of Germany, and I was selected for a Manager Training Programme. The training was held in Cologne, Germany from 28 October until 22 November 2019. After the intense four week training, we received a certificate that stated that my company is fit for partnership with German companies. We learned a lot from the German companies during our plant visits, and gained a deeper understanding of the German culture. This training also gave me additional business tools that I have implemented in the business.

The lockdown caused almost all companies to stop production and employees had to work from home, all except the essential services. Fortunately we are a service provider for the food industry and could continue production during lockdown, although in a lower capacity. We were very lucky that we could secure orders just before the lockdown, assisting our client in the maritime industry with ship repair work.

The biggest challenge for us was the financial impact on the business – we could not cover all our overheads and suffered financial losses. Our strategy was to at least keep the business running to ensure we survive the ‘storm’. We overcame this challenge by ensuring that we improve our efficiency, by getting the job done in the least amount of time and with limited resources.

We managed to apply successfully for the TERS benefit to ensure our team could get some income to sustain their families.

Our team members’ support during this time and their intrinsic sense of accountability ensured that we could overcome the challenge. I would like to acknowledge the excellent work done by Terrence Lutchmana, who is responsible for the day-to-day operation of the business. His dedication to the company is of immeasurable value. And the team that reports directly to him contributed hugely to our survival.

During the lockdown we struggled to complete some of our orders due to company closures of our suppliers. This led us to identifying new machines we would need in our workshop. We decided to purchase a bending machine and guillotine machine, which enabled us to cut and bend plates of up to 6 mm. The results were that we attracted new business and having our own machines also ensured that we reduced project costs.

The machines now enable us to train boilermakers and to provide them with onsite working experience endorsed by MERSETA (Manufacturing, Engineering and Related Services SETA). Hopefully we will be able to take in apprentices in the future.

The biggest lesson we learned from this pandemic is that you need the right people in the right position in your business to be successful.

The second lesson is that you can never become complacent and assume that everything will run as before. The business environment is constantly and rapidly changing. You therefore always need to find innovative ideas to improve your business.

By Antonio Jones, Managing Director, AR Jones Engineering

www.arjones-engineering.com

 

Danfoss efficiencies help South African farmers to free up energy and achieve production goals

In recent years, South African energy security has been constrained, while the country is also recognised by the Development Bank of Southern Africa as being a water-scarce country[1]. The importance of energy efficiency in assisting with adequate irrigation is of paramount importance.

Danfoss, together with engineering components provider BMG, an authorised DrivePro® service partner of Danfoss, supplied a commercial maize farmer with the technology required to combat challenges around electricity sufficiency, for more effective irrigation purposes and in order to increase production capacity. This initiative has since been followed by other commercial farmers in the wider area.

The challenge: to free up existing electricity supply to increase production capacity

Sydney Govender, Danfoss Country Sales Manager – Drives SSA, says, “A joint Danfoss-BMG collaboration assisted a commercial maize (corn) farmer in Barkly West, within the Northern Cape province, to tackle the hurdles posed by an inadequate energy supply, which could not be increased by other means. The region in which the farm is situated receives little rainfall throughout the year, making effective irrigation supremely important for successful crop yield.”

Mick Baugh, Electronics Manager, Electromechanical Division, BMG, explains, “Pumping and irrigation were the largest consumers of power on this maize-producing farm. The project required assisting the farmer, who was limited by a power supply of only 200 kVA +/- 300 A, to significantly reduce the cost of irrigation per hectare. Additionally, the farmer wanted to expand his crop production to include pecan nuts, but was unable to because of these limitations. The cost of irrigation per hectare therefore needed to be reduced, and the limited power supply needed to be used more efficiently.”

The region in which the farm is situated receives little rainfall throughout the year, making effective irrigation supremely important for successful crop yield.

At the outset of the project, one of the pump sets supplied five centre pivots and some orchards.
  • The first pump set consisted of 1 x 37 kW, 1 x 22 kW and 2 x 11 kW pumps.
  • This equated to an installed power of 81 kW, with an absorbed power of 75 kW, which meant that the pump set drew a current of +/- 150 A.
  • Additionally, the pumps were started by star / delta starters, and the only form of flow control was valves.
Solution: installation of Danfoss Variable Speed Drives on all pump sets

Govender clarifies, “In this case, the energy shortage was the farmer’s main concern, with costs being a secondary consideration. We were therefore looking to free up the existing electricity supply in order to use it elsewhere and thereby increase production capacity. The use of variable speed drives on a pump set was the perfect solution to provide the benefits required.”

The proposal was as follows:
  • To install Danfoss VLT® AQUA Drive FC 202 Variable Speed Drives on all pumps.
  • To control these pumps by means of pressure transducers set to match the varying demands of the different irrigation scenarios that presented themselves.
  • To stop using the valves as a means to limit flow, as this was highly inefficient.

The use of variable speed drives on a pump set was the perfect solution to provide the benefits required.

Danfoss VLT® AQUA Drive FC 202

“Danfoss VLT® AQUA Drive FC 202 Variable Speed Drives, which offer additional energy savings when compared with most traditional variable speed drive controls, have been designed for water and wastewater applications, including irrigation,” Danfoss spokesperson says. “These variable speed drives were fitted to all pumps in this installation and controlled by pressure transducers that were set to match the varying demands of different irrigation requirements. The only peripheral component required was a pressure transducer. Pump controllers and valves were not necessary for flow-control in this system.”

Mick Baugh

Baugh adds, “There were a number of reasons why BMG chose these particular Danfoss solutions. For example, a notable feature of the Danfoss VLT® AQUA Drive FC 202 Variable Speed Drives is the inclusion of a soft start/stop facility, which prevents water hammer on starting and stopping the pumps, thus reducing the possibility of burst pipes. Wear and tear on couplings, pumps and pipes is also reduced.

“Furthermore, these variable speed drives are available from BMG in IP55 enclosures, which do not require dedicated panels for mounting, and this eliminates the need for the additional cooling and ventilation measures normally required to extract heat during operation. Furthermore, closed loop controllers mean that the only piece of peripheral equipment required is a pressure transducer – no pump controller is necessary.

“Finally, BMG, as an authorised Danfoss service partner, with accredited technical staff and an extensive spares stock holding, is able to offer farmers support all year round. With regards to DrivePro services, we stock a number of service exchange units and spare parts at the nearest BMG branch, in Kimberley.”

Results

After the installation of the variable speed drives and programming the set point to 2.8 bar, the Danfoss-BMG team were able to run this same pump set with an absorbed power of 51 kW, a saving of 24 kW or 50 A. It is noteworthy that the farmer began with a set of three variable speed drives on three pumps and, because of the energy saving, he eventually installed variable speed drives on every pump on his farm.

“At the last count,” says Baugh, “there were over 20 variable speed drives on the farm, with a projected annual power saving of 155,491 kW. After the installation of variable speed drives on all pump sets, the power supply is used more efficiently, resulting in improved crop production and expansion of the farmer’s supply of maize, which now also includes pecan nuts.

“The project was conducted under the umbrella of BMG’s Boer Slim/Smart-Farming agricultural initiative, which has been operating for some six years now, aiming to assist farmers throughout Southern Africa with the selection, installation and operation of new electromechanical systems. These projects are designed to improve efficiencies, reduce energy consumption and minimise maintenance requirements.”

Showcasing an additional practical application of this methodology

In another project that operated along similar lines, Danfoss and BMG assisted a tobacco farmer who wanted to accelerate his tobacco drying process and expand crop production, but who was also restricted by power supply limitations.

Sydney Govender

After the installation of Danfoss electronic variable speed drives, this farmer was able to run 22 tobacco drying containers at once, where previously he could only run and alternate between nine.

As a result, the farmer has more than doubled his crop production output. Further, there are no more noticeable voltage dips when the process is started up and wear and tear on mechanical components is reduced. Production is also now less labour-intensive, which additionally reduces costs.

Conclusion

Govender notes, “Maize is South Africa’s most important field crop, being both a staple food for many of its citizens, as well as making a significant contribution to the economy. At the same time, the country’s maize exports are generally inconsistent over time due to uneven surplus levels from one year to the next. To compete more effectively in global markets, South Africa has to reduce its logistics and production costs. This, however, is difficult while the country’s power grid remains constrained at the macroeconomic level.

To compete more effectively in global markets, South Africa has to reduce its logistics and production costs.

“The featured Danfoss/BMG initiatives provide an illustration of how assisting two farmers has helped to free up energy, which was then channelled elsewhere in order to increase productivity. If the farming sector were able to follow this example, this would assist individual farmers, while simultaneously allowing them to play their own incremental role in improving the macroeconomics of the country while the electricity supply continues to be constrained.”

[1] https://www.dbsa.org/EN/About-Us/Publications/Documents/DPD%20No12.%20Water%20security%20in%20South%20Africa.pdf

About BMG  

With over 70,000 customers in sub-Saharan Africa, Bearing Man Group (Pty) Ltd (BMG) is the continent’s largest distributor, manufacturer and service provider of the highest quality engineering consumables and components. BMG products and services support the productivity and production targets of the industrial, manufacturing, mining and agricultural sectors of 15 African countries via a network of over 100 branches. BMG’s established support divisions include technical resources, field services, predictive maintenance, technical and commercial training, supply contract management, and project engineering.

Danfoss Drives, a member of the Danfoss group, is a world leader in variable speed control of electric motors. Since 1968, the company has been a pioneer in the AC drives business. Now one of the largest companies in the industry, Danfoss Drives delivers on its passion for development, manufacturing and sale of the most versatile AC drives in the world. Its VACON® drives form the robust foundation for optimisation in industrial applications. VLT® drives play a key role at the sharp end of global resource management and factory automation. Danfoss AC drives adapt to any motor technology, and serve in the power range 0.18 kW to 6.0 MW.

Read more at http://drives.danfoss.com/drivenbydrives/

For further information:

Danfoss South Africa PR contact: Lynne McCarthy
Email: mccarthyl@danfoss.com

Sydney Govender, Country Sales Manager – Drives, Danfoss South Africa
Tel: +27 11 785 7603 | Email: govenders@danfoss.com

Mick Baugh, Electronics Manager, Electromechanical Division, BMG
Tel: +27 11 620 1538 | Email: mickb@bmgworld.net

2021 guide to business and investment in South Africa

Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. The journal is supported by an e-book edition, which can be viewed here.

This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy.

Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies.

South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. In 2020, the inaugural African Business joined the Global African Network stable of publications. The e-book editions can be viewed here.

These unique titles are supported by a monthly business e-newsletter with a circulation of over 23 000.

Chris Whales
Publisher, Global Africa Network Media

Flanders Investment & Trade launches the seminar series “Logistics and Distribution in Europe”

Flanders Investment and Trade is organizing the seminar series “Logistics and Distribution in Europe” in cooperation with the local Chambers of Commerce in Cape Town, Port Elizabeth and Bloemfontein, and Sakeliga in Pretoria.

Exporting and establishing a distribution business in the European market is one of the best ways to expand in the current economic climate:

There are different economic reasons to focus on Europe:
  • The European Union is the largest trading partner and most important investor in South Africa. The economic bloc has the highest income per capita and 65% of the purchasing power is located in the center of Europe, with Belgium in the center.
  • The currency rate of the Euro stayed very stable and increased more than 25% versus the Rand since the beginning of the pandemic, making exporting more valuable and making the South African products more competitive on the European market.
  • Having a business in Europe generates valuable hard currency. In order to avoid currency losses and currency exchange risk, it makes economic sense to setup operations in Europe.
  • Earned income from operations in Europe can stay in the operating company in Europe, avoiding the hassles of currency exchange control in South Africa.
  • South-Africa is one of the few African countries with an Economic Partnership Agreement (EPA) with Europe. The partnership reduces trade barriers and minimized import duties and levies on both sides. Please review the Market Access Database (www.madb.europa.eu) of the EU to see if there are any barriers in place.
  • South Africa is logistically well connected with Europe & Belgium with different international shipping lines, connecting the Port of Antwerp with Cape Town & Durban. South Africa has a direct airlink with Belgium thanks to a cargo line with Zaventem (Brussels) and the airport of Liege (TNT).
As a business, please listen to each of the relevant topics:
  • Flanders Investment and Trade provides a general overview of the Logistics market in Europe.
  • As a first step to expanding in Europe, different 3rd party logistics service providers provide an introduction on how to use these companies for product distribution.
  • A case study to optimize the supply chain is discussed by the data analytics firm Ahlers Data Analytics. The case study will explain how to optimize distribution in Europe.
  • Finally, optimizing your distribution from a tax perspective is discussed by the International Tax expert of the Ministry of Finance of Belgium.
The different events are free of charge and will take place in Covid Proof rooms. 

Separate individual and confidential meetings with the speakers are organized before or after the events (in 30 minute slots). Please reserve your time slot when appropriate.

The events in Pretoria and Cape Town will include life streaming.

Details programmes are available on the links below:

Thursday, November 19
Cape Town, Western Cape: Cape Chamber of Commerce
Seminar details

Tuesday, November 24
Port Elizabeth, Eastern Cape: Nelson Mandela Bay Business Chamber
Seminar details

Thursday, November 26
Bloemfontein, Free State: Free State Chamber of Commerce & Industry
Seminar details

Tuesday, December 1
Pretoria, Gauteng: Sakeliga
Seminar details

Flanders Investment & Trade (FIT) is the economic development agency of the Northern, Dutch speaking region of Belgium. The agency promotes international enterprise in Flanders in a sustainable way as a key factor in the social and economic development of our region. FIT does so by supporting the international activities of Flemish companies and by attracting foreign investors to Flanders.

FIT assists Flanders based companies in international business. FIT offers also tailored advice and guidance. Companies can call on our networks of contacts both at home and abroad. FIT gives also financial support to Flanders based companies and provides information on a wide range of financial incentives to foreign companies interested in investing in the region.

Contact details:

Events Extraordinaire: Pioneering CSI events in the mining and minerals industry

Events Extraordinaire has been in the business of helping their mining and mineral clients execute some of the most prestigious events in the most remote areas of South Africa. Their dedicated team, lead by Clara Mdlalose, has been able to meet the needs of their clients and responded to some of the most challenging briefs because of their understanding of the rural mining communities they operate in.

Clara Mdlalose

“It all begins with a proper understanding of the brief from the mining client and working within the allocated budget for the event ensuring that we respond to Supply Inclusive Procurement by engaging and empowering local businesses in order to make a significant positive contribution to our host communities. Effective local procurement practices then contribute to job creation and skills development by lowering logistics costs and facilitates access to critical goods and services,” says Clara Mdlalose.

Over the years, the events industry, especially in the mining and minerals space, has been challenged to bring in more local players in the form of Historically Disadvantaged South African businesses. Events Extraordinaire sees this as an opportunity to create their niche.

We specialize in creating the overall event and focus on the Invitations, Response Handling and Onsite Accreditation, Event Site and Floor Plans, JOC Committee, Infrastructure, VIP Requirements and then outsourcing the rest of the event requirements to local suppliers, managing them and assisting in overseeing the implementation of these services by acting as Community Event Specialist Advisor whereby Extraordinaire becomes the Integrator in terms of quality assurance and successful delivery of all CSI mining and mineral events within the host communities.

In many instances, they have to empower the local suppliers through on-the-job coaching and mentoring to ensure excellent execution of projects.

With her tenacity and over 20 years’ experience in the events space the leader of Events Extraordinaire, Clara Mdlalose, has helped guide many a mining and mineral client into successful events execution. From working with Presidents, Ministers, MEC’s, Mayors, Counsellors, Board Members and General Managers to local community members, this team has been able to service them all with the right amount of decorum required by each.

With the new focus that is responsive to the needs of the clients, the future does look bright for Events Extraordinaire. The fact that the company is 100% female owned does not only bring value to the clients, but it ensures that a feminine touch based on caring shines through their work.

The company has indeed responded to the needs of the mining and minerals industry and their host communities, and they are destined for greatness.

Events Extraordinaire is a 100% BBBEE (Level 1) Women Owned and award-winning event design and production company specializing in CSI Event Project Management in the Mining and Minerals Industry. In an industry that has suffered a great deal due to Covid-19, they have reinvented themselves and emerged with even a stronger and relevant service offering to the industry.

Safety and People First and always adhering to all Covid-19 Events Safety Guidelines for the event management sector.

Kathu–Taung–Kroonstad–Johannesburg–Rustenburg–Northam–Thabazimbi–Mokopane–Polokwane–Tubatse–Burgersfort–Musina, all over South Africa, call us for your next mining event:

Tel: 011 465 2994 | Email: clara@lecevents.co.za | Web: www.eventsextraordinaire.co.za | Address: P.O. Box 67208, Bryanston, 2021

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