JANUARY 2011 emea

JANUARY 2011 www.bus-ex.com

BusinessexcellenceACHIEVING

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The global events industry is promoting the three elements of sustainability: environmental, social and financial

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On the day of writing, first oil had just started to flow in Ghana from the Jubilee Field, a highly anticipated event that’s projected to boost the West African country’s economic growth and in time bring an extra $1 billion per year to its economy.

It’s an exciting development; but the discovery of valuable commodities, or even a more straightforward economic growth story, can often lead to complications as authorities struggle to carefully balance maximizing the benefits from their natural resources with meeting the needs of the local population. Growing sustainably is certainly a challenge, but it can be achieved—as is evidenced by two of the companies we have spoken to this month.

Following the huge increase in the price of uranium in 2007 and 2008, there has been a marked increase in uranium exploration in Namibia’s central coastal desert region. And with mining operations being heavily dependent on water, and

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the region of interest being reliant on extraction from underground aquifers, it has presented the national water utility NamWater with something of a dilemma. “We have already reached the limit for sustainable water extraction in this area,” explains Dr Vaino Shivute, CEO of NamWater. “We are therefore looking at setting up a desalination plant to supply the needs of the mines.”

South Africa’s Department of Water Affairs has a similar issue to overcome—it must continue to support the country’s economic growth, including sectors such as energy, industry and mining, while simultaneously working towards its aim of universal access to water by 2014. So a number of desalination pilot projects are underway, seeking to create a viable freshwater option.

Sustainable development will always be a delicate balancing act; but the stories in this issue of Business Excellence show that approached responsibly, it can be achieved.

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STRATEGY:Striking the right balance Taking advantage of innovations such as video messaging and conference calls can help you achieve the right work-life balance.

OPERATIONS:Test your technology Testing electronic equipment before purchase can save you time and money—and protect you from disastrous unforeseen failures.

SUPPLY CHAIN:Reducing the risk Businesses can protect their reputation and boost their chances of survival by tightening up the supply chain.

SUSTAINABILITY:Standards in sustainabilityThe global events industry is promoting the three elements of sustainability: environmental, social and financial.

Al-Rashed International Shipping Delivering in styleKuwait’s impressive shipping industry not only handles exports but also imports materials for vital industrial and commercial development.

Trepax InnovationA service reputationThe birth of Thailand’s ‘Tiger economy’ and the rising demand for construction has laid strong foundations for this specialist contractor.

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Department of Water Affairs, South AfricaWater for everyone This government department is charged with helping to improve South Africa’s water quality, supply and security on a limited budget.

NamWater The desalination option Namibia’s water utility is rising to the challenge of nearly doubling its water supply in order to meet the country’s growing needs.

Hidroeléctrica de Cahora Bassa Energy for the future Mozambique’s Cahora Bassa Dam has delivered energy across Southern Africa for 30 turbulent years.

Eskom: Kusile King coal Biggest doesn’t have to be best but the scale of the Kusile coal-fired power station is of strategic importance to utility Eskom.

L’Oréal India More than skin deep This major consumer brand cares as much about sustainable development as it does about making women beautiful.

MTN South Africa In the back of the net The massive potential of mobile telephony is beginning to be unlocked in South Africa thanks to careful investment and marketing.

Thome Ship Management Ltd Specialist seafarers As ships get bigger, more sophisticated and more specialised, a new industry has grown up around operating and crewing them.

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PETRONAS Base Oil Beyond the basics With a little touch of alchemy, a commodity can be transformed into an added-value product with a global market.

Tata Steel Processing And Distribution Ltd. Steeled for service Pulling off a shift in focus from a manufacturing orientation to viewing service as a key differentiator is no mean feat.

General Mills South Africa The right recipe This major player in the South African food sector is responding to customer preferences by developing products to suit local tastes.

Hangana Seafood (Pty) Ltd Hake today Thanks to responsible management of shallow and deep water hake, Hangana Seafood is a sustainable business based on sustainable resources.

Dolphin Offshore EnterprisesA global visionIndia’s primary offshore oil and gas industry diving and engineering service company has a reputation for efficiency and innovation.

ATNSSky high efficiencyA major contribution to improving airline efficiency is now coming from the air traffic controllers.

Netcare The clinical touchIt takes shrewd business acumen to turn a failing business around and create a successful and dynamic organisation.

SafaricomKing of the jungleKenya’s dominant business is continuing to encourage innovation and new ideas across the market.

Cycad PipelinesBuilding the infrastructure Demand in South Africa is growing for improved water, gas, oil and power systems—good news for construction services companies.

SEHAHealth oasis The health delivery system of Abu Dhabi is providing its citizens with the best medical facilities possible.

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Giles Wake from ACT Conferencing looks at how businesses can take advantage of video messaging and conference calls to help

achieve the right work-life balance

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We hear a lot about work-life balance, but how many of us actually get close to achieving it? Clearly, people will have different points of equilibrium; however, work-life balance put simply is having enough time for work and enough time to do what we want or need to do away from the office.

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Giles Wake from ACT Conferencing looks at how businesses can take advantage of video messaging and conference calls to help

achieve the right work-life balance

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January 11 www.bus-ex.com 9

This may range from caring for elderly parents or other family members to furthering education or even spending a little more time on the golf course. But childcare is the main driver for most of us. There are more lone parents, more women in full-time employment and an increasing number of men who want to become more involved in bringing up their children. In the UK, recent legislation has helped by allowing parents to ask for more flexible hours and puts the onus on employers to try and meet these requests; but ultimately, it is up to us to take responsibility for the time we spend working and the time spent away from our desks.

So just how can we achieve this sensible balance?Technology has certainly made it easier to work

from home just as though we were in the office—we can check our emails from our mobile phones and connect to office networks anytime and from virtually anywhere. However, remote working and always-on communications means the temptation

to become available 24/7 can take over and the boundary between work and home again becomes blurred. While there is a growing belief that work experiences and obligations should be meaningful and rewarding and not take over after hours, all too often technology seems to dictate the very opposite.

Yet, the same technology that can work to swing the balance in the wrong direction can also be harnessed and used in our favour, while also increasing productivity and flexibility for employees. It should be empowering and provide positive choices. For example, developments in remote access to corporate networks using virtual private networks as well as conferencing capabilities give us the viable option to work from home securely in case of a childcare emergency or when severe weather or transport strikes prevent us from getting into the office.

And it is not just the work versus home issue that can cause a work-life imbalance. Employees who need to engage internationally with colleagues

“Remote working and always-on communications means the temptation to become available 24/7 can take over and the boundary between work and home becomes blurred”


S t ra t e g y

across the globe find that being available for conference calls is not always straightforward—if your colleagues are dotted all over the world, someone will inevitably still be in their pyjamas (or just getting into them).

To overcome this and to provide a more personal touch to interactions with colleagues worldwide, video messaging is the perfect solution. It allows staff to record a message or presentation in advance during their office hours and send to colleagues to watch at a time that suits them. These messages can be made available on a company intranet or external website for easy access. A presenter can record live using video conferencing equipment or traditional video-taping methods, add slides for presentation and package a very useful message for international colleagues. A follow-up conference call could be used for questions and answers.

That is not to say that advances in web and video conferencing can’t also be helpful in giving

employees the flexibility to plan work interactions around their schedules, rather than being dictated by everybody being in the right place at the right time. Video conferencing is the next best thing to sitting around a table and, importantly, can help avoid long haul travel, jetlag or even just sitting in traffic for teams that need to engage and collaborate but are located across different locations or time zones around the world.

Video conferencing is used increasingly for other applications such as depositions, training, telemedicine, shareholder conversations, executive hiring and product launches bringing together video, audio, web and satellite communications. And high definition (HD) now provides even greater resolution, wide presentation angles, high frame rates and a more personal experience so you won’t miss important facial expressions.

For organisations that don’t have the resources to invest in their own video conferencing suites, there are always simple web cameras for point-to-point desktop video. Web cams from any of the major manufacturers, such as Logitech, can now deliver clear and effective video at low price points; and when combined with solutions like CMAD from Polycom or Movi from Cisco/Tandberg, they allow us to enable video within our organisations in an efficient and cost effective manner. Furthermore, video conference managed service providers that conveniently offer bookable suites at hundreds of different locations around the world make it easy to set up video conferences with colleagues or clients on the fly.

More and more employers are recognising that striking a sensible work-life balance is not a nice-to-have optional extra, but a core strategic business issue that has wide implications for the quality of working life within an organisation as well as an impact on productivity, motivation and loyalty. Get the balance right and employees will bring fresh approaches and new dimensions to the physical and virtual workplace.

Technology, such as mobile communications and teleconferencing, certainly plays its part and it’s up to us as employees and employers to ensure that we are achieving the right work-life balance by making the technology out there work for us—and not the other way around. www.actconferencing.com

“Remote working and always-on communications means the temptation to become available 24/7 can take over and the boundary between work and home becomes blurred”


Neglecting to ensure that electronic equipment is thoroughly tested before purchase can cost businesses time and money—not to mention the disastrous consequences of an unforeseen

failure. Daryl Cornelius, director Enterprise EMEA, Spirent Communications, asks if your request for pricing is fit for purpose

technologyyour


The outcome of adding independent pre-testing of equipment before purchase is typically worth a reduction in overall bid prices of up to 20 per cent—equating to £1 million on a £5 million project—quite apart from the clear benefit of avoiding subsequent embarrassing in-service failures. And yet, in our experience, only one in 50 RFPs (requests for pricing) in the

network and applications technology space calls specifically for performance testing to be part of the procurement package.

What is the unfortunate procurement officer expected to do when the IT department says they need a hundred new switches, and they specify a chosen make and model costing £12,000 each? By that stage, the IT department has probably been thoroughly wooed by the vendor’s sales team and is absolutely convinced that they have chosen the optimal kit for the job. If the procurement officer starts raising questions about alternative options or the suitability of the chosen solution, it will invoke all the stock accusations about ‘meddling bureaucrats who don’t know enough about IT to make an informed decision’.

In the recent years of hectic business growth, an overworked procurement department may have been glad simply to rubber-stamp other people’s decisions. But pressure to save money is now a major issue, and the person holding the purse strings needs to be involved much earlier in the decision process. Starting at the RFI (request for information) stage, questions that focus on the product’s requirements—questions such as ‘What does your device do?’ and ‘What is its functionality?’—do

O p e r a t i o n s

Neglecting to ensure that electronic equipment is thoroughly tested before purchase can cost businesses time and money—not to mention the disastrous consequences of an unforeseen

failure. Daryl Cornelius, director Enterprise EMEA, Spirent Communications, asks if your request for pricing is fit for purpose

technologyyour


still need to be addressed but, in focusing on that detail, it is easy to forget that the object of the exercise is to find an answer to the big question: ‘Will it do what our business demands, in the context of our existing network?’ And how

can either the vendor or the buyer answer that question unless the actual product is put to the test?

Some RFPs do call for a performance matrix and on occasions this extends to asking ‘How much traffic

“The outcome of adding independent pre-testing of equipment before purchase is typically worth a reduction in overall bid prices of up to 20 per cent”


O p e ra t i o n s

can the device or application handle?’ However, without independent real world verification—i.e. performance testing in the context of a network’s actual application, traffic types and mix—how can any direct comparison between products be made? How are your technical people expected to differentiate between new technologies of which they have little or no practical experience? What is the difference between the latest state-of-the-art switch priced at £12,000 and an older, well-proven switch with comparable functionality priced at £2,000? What actual difference does the new product’s technology make in the live network/application environment and does it justify the price difference?

Given the complexity of modern networks, questions like these can only be answered by testing. So why do so few RFPs specify the need for such tests before commitment to purchase? It was suggested above that, in times of booming business optimism, an overworked purchasing function could not face the extra negotiation required and was glad simply to trust the engineers to make the choice. But the greater pressure now is to get maximum return on minimum investment. So, is the cost of pre-testing a disincentive? In our experience, the accumulated savings can amount to 50 times the added cost of the test in terms of decisions based around real test results where the risk of failure is reduced, while the ability to negotiate from a position of knowledge is increased, as is the ability to select the right technology at the right price for the job.

At what level does testing become necessary? One would hardly be expected to insist on pre-testing a simple peripheral device like a printer before purchase, and other small purchases of non-critical equipment can probably be made on trust. There are, however, really three key criteria that need

to be considered: quantity, quality and criticality.Quantity refers to the total cost of the acquisition.

A suitable rule of thumb might be along the lines of: ‘For all purchases exceeding £50,000 a budget of five per cent of the cost should be set aside

for in-context pre-testing’. So pre-testing is only mandatory when a significant amount will be spent, and so significant savings could result.

Quality refers to the quality range of the solutions suitable for purchase. How does one decide between a latest generation top-of-the-range product costing £12,000 and an older model with similar specification now on offer at £2,000? The arguments for the expensive product will focus on the quality of the vendor’s service and support—but if the device works and has proven reliable, does that really justify the extra cost? The expensive item may come from an industry-leading vendor with all the assurances of prestige, company stability and so on, but what if you simply need a cheap solution? IBM was famous for the saying ‘Nobody ever got fired for buying IBM’, and that mentality survives when the purchasing decision is made by people lacking the confidence to trust their own judgment. But solid results from thorough pre-testing provide the surest way to gain such confidence. Time and again our customers have told us that they have no regrets about going for a lower cost solution that proved itself under test.

Finally—criticality. Whereas a bad choice of printer could simply waste time and the purchase price of the equipment, a bad choice of router could bring the entire network and the business to a grinding halt. Clearly, in the second case, it should have been thoroughly tested under every realistic operating scenario before the purchase was made.

Buyers need to be better informed about the relative simplicity of operating today’s state-of-the-art test equipment, and the skills and knowledge available from test professionals. Once this is understood, and the business benefits of reliable, real world test results are realized, then we will increasingly see essential inclusions like ‘Ensure solutions are tested pre-deployment’ included in the RFPs. Contractual

negotiations can then be based on solid facts and undisputable evidence of performance.

So, before you sign that purchase agreement, just ask yourself: ‘Is this RFP fit for purpose?’ www.spirent.com

“The outcome of adding independent pre-testing of equipment before purchase is typically worth a reduction in overall bid prices of up to 20 per cent”


A solid reputation is paramount in ensuring a company’s longevity. Even when business is slow due to external financial pressures, a good reputation will stand an organisation in good stead for the economic upturn. A good reputation can result in healthy profits and a consistent flow of business—which is why there is a multi-billion pound industry devoted to

managing reputation and handling any crisis that threatens to damage it. Once the damage is done, it can be very difficult to recover.

History has produced examples of hugely successful companies who have failed because consumers and shareholders have lost faith. Pan Am airline, for example, suffered a string of terrorist hijackings in the 1970s and 1980s including the infamous Lockerbie bombing. This resulted in passengers losing trust in Pan Am’s safety record and the airline as a whole.

Businesses can protect their reputation and boost their chances of survival by tightening up the supply chain, as John Kinge, head of Risk at Exor Management Services (EMS), explains

riskReducing

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Businesses can protect their reputation and boost their chances of survival by tightening up the supply chain, as John Kinge, head of Risk at Exor Management Services (EMS), explains

riskReducing


It is very common for businesses to outsource many different services if they do not have the resources or expertise internally. It can also be a more cost effective option. The list of suppliers can be endless, including cleaners, IT engineers, maintenance, contractors, manufacturers, accountants, HR professionals and so on. When procuring external services, many buyers are concerned with how cost effective they are and whether or not they will help a business achieve its bottom line. But what about a supplier’s corporate social responsibility (CSR) and equal opportunities credentials, or health and safety record? The reputation of a supplier can have a knock-on impact

on a buyer’s reputation and if things go wrong, it can threaten to derail the entire operation.

Recently, several high street retailers came under fire when it was exposed that a factory in Leicester, UK, where some of their clothes were manufactured, was employing people under appalling conditions. Many of the textile workers were Asian students who were, in many cases, paid below the £5.93 minimum wage. One report described the workshop as dirty, cramped and poorly lit, with staff being threatened with the sack if they didn’t work quickly enough. There was also a claim that no effort was made to check employees’ legal status and right to work in the UK.

“The reputation of a supplier can have a knock-on impact on a buyer’s reputation and if things go wrong, it can threaten to derail the entire operation”


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On paper, many of the retailers were supporters of ethical business and are members of the Ethical Trading Initiative. Their efforts in using UK-based factories where possible rather than outsourcing to factories abroad was undermined by this scandal and has called the brand’s CSR credentials into question. The retailers placed the blame with the supplier who engaged with the factory but arguably, it is the big name buyer that will suffer the most in terms of reputation damage.

This rather extreme example demonstrates how buyers can be twice, or even three times removed from the supply chain—and some suppliers may even subcontract further. This opens up buyers to increased risk and it is therefore important to keep control on activity where possible.

So why do businesses outsource in the first place?Companies outsource for a number of reasons,

all with the aim of improving their overall business performance. Many outsource to reduce costs where they can and find the same quality of service for a cheaper cost. Another key reason is to improve business focus as outsourcing a particular service increases a company’s flexibility and enables it to focus on its core competencies. This relieves pressure on internal resource and increases the volume of work that can be completed.

Public sector organisations such as local authorities are obligated to fulfill government policy

that stipulates 25 per cent of contracts must be outsourced to SMEs within the private sector in order to stimulate and offer support to smaller businesses. Working with a number of suppliers can strengthen a company’s operations, providing cost effective solutions and a widened service offering. But any extensive supply chain needs to be managed carefully, so that a company can legally protect itself from a breach in conduct by a supplier.

Many companies are now waking up to the potential for major cost reduction and service improvement offered by implementing best practices in their supply chain. Supply chain management is now considered a critical business

process for companies in order to get the best results. Part of managing the supply chain should involve checking a number of compliance issues that, if breached, could threaten a company’s reputation and position in the marketplace. These include health and safety procedures, corporate social responsibility (CSR), equal opportunities policy and finance.

A third party accreditation scheme can be an efficient way in which to manage complex compliance issues. The schemes assess, review and audit suppliers, procedures and documentation. Suppliers can then be included on a database which demonstrates they have met the highest standards in the marketplace. It allows the company at the top of supply chain to have the confidence it needs to outsource vital services, removing the hassle of verification and providing peace of mind that it is adhering to regulations. Managing a complex network of suppliers can place additional strain on internal resource and may not be thorough enough; using accreditation schemes allows a business to have a strategic view of its supply chain, thereby reducing cost and risk.

In today’s uncertain economic climate, businesses cannot afford to be complacent about the activity of the suppliers they use. Legislation and compliance criteria are increasingly intricate and extensive, so organisations need to be extra

vigilant. It is clear to see the negative impact on a business when suppliers fall foul of regulations. The reputation and profitability of an organisation is more and more reliant on the practice of suppliers, so it make good business sense to ensure suppliers reflect similarly high standards in terms of quality.

John Kinge is head of Risk at Exor Management Services (EMS). EMS helps buyers reduce risk and cost by procuring services efficiently and helps suppliers win business in a competitive global market. It works with 20,000 contractors and suppliers and around 250 buyers including many local authorities. www.exorms.co.uk

“The reputation of a supplier can have a knock-on impact on a buyer’s reputation and if things go wrong, it can threaten to derail the entire operation”


Construction is a tricky business—and environmentally-friendly construction even more so. However, the real challenge lies in niche market construction, where there is a need to be ‘green’. Take the events industry and Harrogate International Centre (HIC), located in Yorkshire,

England, as an example. As one of the UK’s largest and most successful venues, HIC is continually growing and developing not just its ‘soft’ services but also the physical space on offer. At this point in time, this includes the development of two new ‘event halls’: cavernous rooms capable of holding exhibitions, lavish banquets, product launches and more. These halls will be among the most flexible on offer in the country, bringing in a host of both domestic and international delegates. They will also be among the most environmentally friendly and sustainable.

Simon Kent, head of operations at Harrogate International Centre,

considers sustainability within events

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Why, however, should people outside the event industry care what a few buildings in the north of England think about the environment? Is it really an industry with much clout? The simple answer is yes. Following the first six months of our financial year (2010/2011) our venue had a £92 million* positive impact on the economy. On a national scale, the BVEP (Business Visits & Events Partnership) identified that the industry is worth £36.1 billion to the UK economy. Both of these are substantial figures; however, it is also our ability to draw people together that makes our industry so powerful and vocal. Millions of people attended events the world over in 2010; and such captive audiences are the perfect way to educate and disseminate information on environmental issues.

People outside of the event industry ask why this sector has so swiftly and determinedly embraced all things green and sustainable. Firstly, we recognise the fact that whichever country you are in, your event sector will be one of the most important, visible and vocal. When it comes to PR and messages, we punch far above our weight and sit right up there with mainstream media. Consider the facts—IT, pharmaceutical and finance might be worth more when it comes to GDP and turnover; but they would all be very quiet if it wasn’t for the events we organise on their behalf. If a company wants to talk about improving environmental standards it needs to demonstrate its own improvement—and the best way to do so is at an event!

Secondly, as a forward thinking, global industry with partners around the world, we recognise the need to work in partnership with all other industries to ensure long term survival and sustainability of our way of life. In general (and certainly in Harrogate) we recognise that climate change is a fact (the reasons can be debated elsewhere) and we recognise that human activities have a huge impact on the planet. By doing our best to minimise that impact, we are improving the global situation for everyone.

However, it is not just the environment that


we need to consider, which is why our mantra is not that of the ‘greenies’; instead it is one of sustainability, built on a foundation of long term understanding and strategic planning. And this difference between environment and sustainability is one that every industry and every business must come to terms with, understand and embrace. Yes, it is important to be environmentally friendly, but that is not all that counts—social and economic sustainability are just as important.

Social sustainability includes our attitude and consideration for people, those around us, those we affect and those whose lives can be changed by our decisions. Social sustainability all too often focuses on the donations people make to charities or those in poverty. However, it also includes staff, stakeholders, suppliers, customers...the list goes on. By thinking long term about people, the rest of your business will benefit and you will create a legacy for all.

The final pillar in the sustainability triumvirate (alongside environment and social) is financial. We live in a consumer world where everything


has its cost—a simple statement that cannot be denied or ignored. Consequently, sustainability is also reliant on fiscal planning and long term investment. There is no point rewarding all your people, donating to a local charity, building wind turbines and cutting carbon emissions if you bankrupt yourself in the process. It is far better to provide incremental small benefits over a matter of years than fail to do anything because you planned too much too soon.

But how can we measure our success? How can businesses understand the impact of the events they organise? There are several methods to consider. ISO:14001 has of course been around for a while as the international measure of environmental standards and it is certainly useful. There are, however, a couple of others that could and should be considered.

BS:8901—the British Standard for sustainability in events was born out of the desire to create a sustainable Olympics in 2012. The standard is the first of its kind in the world and is in fact being used as the basis to create an international standard—ISO:20121. Unlike ISO:14001, these standards cover the whole sustainability mix, measuring more than just the environmental impact. As they grow and develop they will become the international benchmark for businesses planning to demonstrate their sustainability in a public way.

BREEAM—for many, particularly those focused on building and facilities management, this scheme is already the benchmark. The British Research Establishment Environmental Assessment Method provides market recognition for low environmental impact buildings and the assurance that best environmental practice is incorporated into their construction. As an organisation they also help inspire builders and facilities managers to find innovative solutions that minimise their environmental impact and improve sustainability. Above all, and vitally important from the financial and social sustainability points of view, BREEAM is a measurement that is higher than regulation and a tool to help reduce running costs while improving working and living environments.

For those considering BREEAM (including HIC in the development of our new halls, where we are aiming to achieve the highest standard), it uses a straightforward scoring system that is transparent, easy to understand and supported by evidence-

based research. When implemented early enough, it has a positive influence on the design, construction and management of buildings and it sets and maintains a robust technical standard with rigorous quality assurance and certification.

As an example, we intend to take the following steps as part of our own targeting of BREEAM certification for the new halls:

• Enhanced insulation levels to significantly reduce energy consumption

• 100 per cent recycled aluminium roof• Sustainably sourced timber• Bio-fuelled combined heat and power (CHP)

engine which uses sustainably produced fuel as an alternative to natural gas

• Extensive rainwater harvesting• Efficient automatic controls and energy metering• Extensive use of energy saving photovoltaic

roof panels• A sustainable sedum roof for insulation and

further energy savingThese will of course be balanced with our

ongoing financial sustainability and close links to the town and region, which help us achieve our social sustainability goals. In fact, one example is our recent development of a marketing scheme that provided all attendees at HIC events with vouchers for local shops and businesses. Essentially this was a cost to us, but dramatically helped local businesses, improving relationships with the lives of other local people.

But what does this mean for the future? What can we all be doing? First and foremost, we should be campaigning within our own businesses for a top-down attitude to improving sustainability. Managers and directors should be engaged and they should understand the benefits. Some will complain about extra costs but this is actually a fallacy in most situations. The sustainable solution should balance economic viability with environmental viability, ensuring long term benefits for all. And finally, anyone using events to communicate should be considering how they can become more sustainable through the use of the right suppliers and venues. Each event should be a case study in sustainability, allowing the attendees to see the benefits for themselves and appreciate how we can grow a more sustainable world. www.harrogateinternationalcentre.co.uk/

*Figure attained using official Visit Britain formulae


Al-Rashed International Shipping has established its position as a leader in shipping services in the Persian Gulf. General manager Ravi Varrier explains to Gay Sutton why the human touch is so important

Delivering


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Al-Rashed International Shipping has established its position as a leader in shipping services in the Persian Gulf. General manager Ravi Varrier explains to Gay Sutton why the human touch is so important

Delivering style

Modern-day Kuwait has come a long way from the small pearl fishing community of the early 1900s. Sophisticated and cosmopolitan, it is the world’s eleventh richest nation, boasting a free and thriving economy, a well funded education system and the second highest literacy rate in the Middle East after Israel. Its population is also very diverse, 32

per cent being Kuwaitis and the rest expatriates drawn from around the world.



development, along with goods and food for its multifaceted population.

One of the leaders of the Kuwaiti marine industry is Al-Rashed International Shipping, a division of The Al-Rashed Group—a long established trading company founded in 1911 by the highly respected Al-Rashed family.

The echoes of the old pearl fishing tradition, however, continue to resonate strongly today. With its roots firmly based in a seagoing tradition, Kuwait has developed one of the largest shipping industries in the Persian Gulf, not only handling exports but also importing the vast array of materials required for industrial and commercial

A l - Ra s h e d I n t e r n a t i o n a l S h i p p i n g


Building on the reputation it had gained over the previous 40 years for efficiency and service, the company established its credentials and expanded into all areas of international shipping.

Today, Al-Rashed International Shipping offers a wide range of services from shipping agency and charter work to warehouse & logistics, contract work and freight forwarding. Not only capable of handling all types of marine operations including chemical, military, oil, bulk and break bulk, the company also has considerable expertise and experience in air and land transportation. Operating to the highest international standards, it is renowned for the care and attention it gives to its customers.

Varrier attributes a significant element of this success to the people-oriented company ethos

Launched in 1952, the International Shipping division initially traded as a shipping agent for the materials and goods required during the earlier years of modernisation and transformation. It wasn’t until 1991 when Kuwait faced the challenge of rebuilding its devastated infrastructure following the depredations of the Iraqi invasion that the company saw the opportunity to diversify and build a much stronger and larger company.

“We saw significant opportunities to work with some of the world’s largest and most respected companies on the reconstruction of Kuwait,” explains general manager Ravi Varrier, who has been with the company for 33 years. “But at the same time, we also had to rebuild our business from scratch when we returned to Kuwait after the war.”

The two reconstructions went hand-in-hand.

“The Iraqis are essentially building their nation. Therefore we put a considerable amount of money into their families, for example by supporting the education of their children. This builds loyalty to the company and confidence in our system”


A l -Rashed In t e rna t i ona l Sh i pp i ng

of the Al-Rashed Group, and to the in-depth knowledge and experience of his own staff. “The key thing for us is the human touch. We employ 146 staff in our Kuwait office, and simply don’t have the staff turnover that many of our competitors do. Many of our staff have 10 to 12 years’ experience with the company and are prepared to work very promptly and very hard for our customers,” he says. “Moreover, if a customer, shipper or consignee is having any problems our top management will get involved and help find a solution. It is just part of our day-to-day business.”

In the weeks following the end of the second Gulf War in 2003, when urgent supplies were needed throughout Iraq, the company stepped in quickly to fill that vacuum. Managing the supply of items such as power generation and water purifying equipment as well as supplies to the international troops, it became the first company to establish a proven freight delivery system into Iraq. And this established a firm foundation for the company’s second phase of expansion.

“Operating in Iraq was challenging in those early days because much of the local manpower had

been lost, and there was a considerable amount of looting,” Varrier admits. However, the company worked hard to establish an office in Iraq and to build a stable and secure business. What began as a requirement to import and move construction materials and equipment for the international contractors tasked with rebuilding the country’s infrastructure soon developed into a full range of shipping, air and road services, and eventually included fulfilling complex projects for major multinational players in the oil and energy sectors.

Today, Al-Rashed International Shipping employs some 68 Iraqi nationals to run the Iraq office. Again, Varrier believes that it’s the human touch that has enabled the company to build a strong and loyal workforce in what is essentially a deeply troubled region.

All the usual concessions are provided for the local staff, including attractive salaries and a healthcare scheme. But true loyalty requires stronger foundations than that. “The Iraqis are essentially building their nation,” Varrier says. “Therefore we put a considerable amount of money into their families, for example by supporting the education of their children. This builds loyalty to the company and confidence in our system.”

Suppliers and contractors play a significant part in supporting the company’s reputation and influencing its efficiency, and they are therefore subject to the same principles of loyalty and honesty. “We don’t allow anything under the table,” Varrier says. Neither does he believe in beating his suppliers down to the lowest price—it’s loyalty and quality of service that matters the most. “We always demand the best service,” he continues. “But we ask for a reasonable price and we pay very promptly, and that’s a great advantage in our negotiations.”

The company continues to invest for the future, and has recently spent approximately US$150,000 on the implementation of a new ERP system. Meanwhile, the operations in Iraq were expanded in 2009 when a purpose-built 3,000 square metre warehouse was opened at a site just 10 kilometres from the Iraqi port of Umm Qasr.

“Our strategy is to invest in the growing market,” Varrier says. Apart from Iraq, though, the Persian Gulf is very much a saturated market and the company is therefore considering its options for expansion further afield. “We have initiated market reports for areas such as China and India, but such things are very much for the future,” he concludes. www.al-rashedgroup.com


service reputation

A


Tr e p a x I n n o v a t i o n

The 1980s saw the emergence of developing regions, none more so than South East Asia. This development brought a rising demand for construction and laid the foundations for Trepax Innovation. Director Paul Greenhalgh gives Andrew Pelis an insight into how the business has evolved since Thailand’s “Tiger economy” was born

service reputation

Throughout the 1980s South East Asian markets grew to such an extent that they earned the label “Tiger economies”. One of the primary beneficiaries of this period was Thailand, and

although the last couple of years of global economic downturn have impacted the country, the effects have perhaps been less severe than in other areas of the world.

“Wherever I travel in the world, I get a good reception when people know that I am representing a company from Thailand,” says Paul Greenhalgh, director at Trepax Innovation. “People have a good impression of the country and a perception of hard-working people that are very service-oriented.” It is an image Greenhalgh says is both accurate and a key selling point. “We definitely try to drive home that point in our marketing and our customer service focus is something that helps to define our business.”

Trepax is a specialist contractor, providing waterproofing, flooring, concrete repair and corrosion protection systems to a variety of customers across Thailand and increasingly throughout South East Asia and further afield. “We consider ourselves to be a turnkey company as we design, supply and crucially install these specialist systems for our clients,” Greenhalgh explains.

The company’s history dates back to the 1980s when the economic boom in the region created huge opportunities for a variety of overseas suppliers, as Thailand built an industrial infrastructure that moved it beyond its more traditional agricultural roots. The new approach created an explosion of construction projects and at the time, the country did not have enough skilled engineers who fully understood how to use and install these specialist systems.



Tr e p a x I n n ova t i o n

“We started out in waterproofing, which is where the lower value markets exist, but at that time nearly all of the products had to be imported,” says Greenhalgh. “Trepax identified a gap in the market, as the end user still required installers with a technical capability, so we saw an opportunity to establish a contracting company with a technical marketing bias.”

Englishman Greenhalgh joined the company around twenty years ago, having worked in the Middle East for a major construction company and then finding his way to Thailand through work associated with Trepax. His arrival saw the introduction of manufacturing from a 3,000 square metre factory in Bangkok, which directly employs around 90 people. “We are an SME-type of company and in addition to our permanent staff, we work with retained sub-contractors, so, depending on work loads, we could have up to 300 people working for the business at any one time.”



Trepax Innova t i on

Greenhalgh says that Thailand’s well established education system enables Trepax to employ skilled engineers from various engineering disciplines. “We take people from engineering, mechanical engineering and chemical backgrounds as the country now has a good knowledge pool that we can draw from,” he says. “The biggest change has been moving away from our dependence on imported products and raw materials as most of our needs are now met locally, thanks to the technology transfer.

“This situation came about as more international manufacturers of construction products moved to Thailand,” he explains. “People learned from them and then set up their own businesses to support the local markets. Downstream development and the growth of the oil, gas and chemical industries in Thailand has meant more of the raw materials are available locally, which has been cost-effective for us and has meant we can service the market much more quickly, and offer more choices to our customers.”

The coating manufacturing process is labour intensive but delivers quality to ISO levels that meet both Thai and UK standards. Many of the activities onsite involve chemical compounding and processing and Greenhalgh says that having four distinct markets with a wide product range makes it hard to automate, so staff are trained to multi-discipline. “Compared to businesses in Europe, we are not what you might call lean, as we take advantage of the skilled and cost effective labour pool here. As far as the final installed product goes, up to 70 per cent of our costs are raw materials, with only 30 per cent labour costs. In Europe the labour costs are generally the greater of the two in the equation.”

Trepax is one of Thailand’s leading specialist contractors, but operating in four very different areas makes market share hard to quantify, as the markets vary greatly. “In terms of volume of work, our core businesses are flooring, waterproofing and concrete repair,” explains Greenhalgh, “but while corrosion protection is a newer market for us and in terms of square metres represents less volume, it is a higher-end market and generates bigger revenues.”

Strategic investment in specialist equipment has enabled the corrosion protection services business to become highly professional and it is



Trepax Innova t i on

floor to the installation area and a lot of skilled resources to deliver the final installed product to our standards of professionalism and quality.”

The global economic downturn has had some impact on the business, with automotive manufacturers in particular suspending some of their projects, but Greenhalgh says the recovery has been relatively quick, and Trepax has seen its turnover increase during 2010 due to its diversified customer base.

This provides a solid foundation for expansion into new areas. “We work throughout South East Asia and this summer we opened a new manufacturing site in Hanoi,” says Greenhalgh. “This is a joint venture project with a local partner and we are also looking to set up similar ventures in Malaysia and the Middle East next year. The project in the Middle East is very exciting and we hope that this site will allow us to grow and service developing markets such as Iraq, Lebanon and Syria as well as other established countries in this region.”

Closer to home he says that there is still plenty of opportunity within Thailand. “This is still very much a developing country and there are lots of opportunities here; we have won many projects in the established industrial and commercial centres and are looking to penetrate other growing areas. One of the burgeoning markets for us next year will be hotels and residential developments where there has been a clamour for new innovative interior decorative systems. This is a new market we will be looking to enter in 2011.”

Greenhalgh has just come back from a visit to the Democratic Republic of the Congo where Trepax has a contract, deploying a 40-man team to supply and install protective linings to a copper mine expansion project there. It gives him the perfect opportunity to re-iterate his opening gambit. “Everywhere you go, people recognise Thai workers for their customer focus and high level of industry.” www.trepax.co.th

always on the lookout for new market opportunities. “Our customer base is quite varied and we provide services for anyone from McDonalds, Coca-Cola and Exxon to BMW. Our business is growing progressively and we are always looking to increase our share of regional markets. Our current plans are to acquire more equipment to increase our capacity to support this. That and the building of overseas partnerships is a key challenge for our company, to ensure we have the capacity to support our growth in these areas.

“Our business model is very different from our competitors,” he adds, “most of whom are multinational corporations that produce the materials but do not have the support services to install the product, so they rely on outsourcing where they lose control of quality. We are more interested in quality and we market ourselves as a contractor with integrated manufacturing services. That means we avoid the all too common disputes between the installation contractor and the product manufacturer. We can deal with these problems internally and can quickly ensure that the customer is satisfied with what we deliver.”

The biggest operational challenge, Greenhalgh says, is managing the labour intensive logistical processes associated with the transition from manufacturing to a front-ended installation business with manufacturing support. “It requires a lot of organisation to bring the product from the factory


Water affects every aspect of our lives and in South Africa it’s regarded as a precious commodity. Dr Cornelius Ruiters, from the

Department of Water Affairs, is charged with helping to improve water quality, supply and security on a limited budget. He tells Andrew Pelis

about current initiatives to provide safe water for everyone

Water everyone

for


D e p a r t m e n t o f Wa t e r A f f a i r s , S o u t h A f r i c a

Water affects every aspect of our lives and in South Africa it’s regarded as a precious commodity. Dr Cornelius Ruiters, from the

Department of Water Affairs, is charged with helping to improve water quality, supply and security on a limited budget. He tells Andrew Pelis

about current initiatives to provide safe water for everyone

Water everyone

for

The effects of climate change have been acutely felt around the world and water management has become an ever-more pressing issue. In Africa, this has exacerbated an already critical problem and put huge pressure on South Africa to ensure its approach to water can maintain the socio-

economic development in the sub-Sahara region.That responsibility falls squarely on the shoulders of the country’s Department of

Water Affairs (DWA), one of South Africa’s oldest government departments. “Our department has existed since the beginning of the twentieth century,” says Dr Cornelius Ruiters, deputy director general, “and we cover areas of water infrastructure, maintenance and supply; our focus is very much on water management not only in South Africa but also through partnerships with our neighbouring countries.”


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D e p a r t m e n t o f Wa t e r A f f a i r s , S o u t h A f r i c a

Ruiters says that the department’s focus spans a number of different uses of water, with agriculture the biggest beneficiary, followed by domestic use, mining, electricity and power generation, forestry, recreation and other users, in a group he calls the “water pie”.

At present the DWA is working on seven major projects to build and rehabilitate 25 dams across South Africa, all aimed at improving water utilisation and bringing potable water to everyone in the country. “There is a direct relationship between health and water quality and we aim to prevent illnesses like diarrhoea and cholera, although there are other water-born diseases like malaria that are nothing to do with us,” says Ruiters.

“We represent the whole country (serving a population of around 48 million) and we have achieved our Millennium Development Goals. At present roughly 93 per cent of the population receives clean water and we are moving towards 95 per cent. The challenge is to provide for rural communities—the topography and geography often make it technically difficult to implement operations to build the infrastructure needed. We are therefore aiming for universal access to water by 2014.”

The department introduced incentive based regulation of the South African municipal drinking water business in 2008. Its Blue Drop standards assess water quality across the country and have helped to identify areas that require further improvement. The initiative has seen water quality standards improve and supplies are now regarded as adequately managed by world standards.

The global economic downturn has impacted

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Depa r tmen t o f Wa te r A f f a i r s , Sou th A f r i c a

on the DWA’s funding and Ruiters says that the department is implementing R50 billion of water resources capital projects for the next five to 10 years, funded by the National Treasury of South Africa and by open market financial institutions. “Global meltdown has affected our capability to fund all of the necessary projects and we have looked elsewhere to help fund some of the commercial projects. For example, we might go to the open market to provide funding for power industry projects or for the liquid fuel industry, and this has included issuing bonds in the past.”

The department has prioritised projects and Ruiters explains that decisions have taken into

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account a number of factors including the socio-economic impact of each project. “There are areas like the Eastern Cape Province where we need to develop infrastructure and that has an impact on business in the area also. We continue to supply water through the most advanced integrated water systems in the world for the major water users; and the dams we have built and rehabilitated have provided some of the highest stored capacity also (up to 1,000 cubic metres per person).”

The work on dams has been intensive and Ruiters says that 22 of the country’s 161 dams to be rehabilitated have been refurbished along with connecting pipelines, with projects very much ongoing. “These projects can take up to 10 years to plan and five years or more to complete thereafter. The grand scale of these has led to the name ‘Mega Projects’ and there are unavoidably long lead times to complete them.”

Plans were announced in June 2009 that South Africa would spend in the region of R30 billion over the next five to eight years on continuing construction and establishing 15 mega water infrastructure projects. The then Water and Environmental Affairs minister Buyelwa Sonjica said that these projects would increase the capacity of existing water resources infrastructure to provide water to strategic installations such as the energy sector, the industrial sector and the mining sector, as well as for domestic purposes.

“Additional infrastructure programmes include an accelerated programme for the construction of the De Hoop dam, the continued partnership with the government of Lesotho for the implementation of the proposed phase two of the Lesotho Highlands Water Project, implementation of the project to augment the supply of water to Lephalale for use by Eskom and other petrochemicals industries,” Sonjica said.

Water sustainability was highlighted as a key focus and a number of desalination pilot projects are underway now, with municipalities from Mossel Bay to Richard’s Bay looking to utilise new technologies to create a viable freshwater option.

Additionally, projects such as the Mokolo Crocodile Water Augmentation Project will provide water supply for thermal-electric (coal-fired) power generation. However, pilot projects are now underway to improve acid mine drainage in the coal and gold mining regions of the country.

Ruiters says that at present the department has


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requirements before they are awarded.So with funding in place for the future, Ruiters has

a clear mind on what the next few years will hold for the DWA. “For operations and maintenance we want to provide better infrastructure and maintain systems properly, so there is water for everyone.

“On the infrastructure side we have to unlock the social economic development for areas such as mining, agriculture, industries, forestry, nuclear, etc., and because our work affects those economies, it affects the whole sub-Sahara region. This is one of the issues that the World Bank recognised when it helped supply a loan for our work with Eskom on the Mokolo Dam.” www.dwa.gov.za

around 12,000 employees but feels more people are needed to fulfil all of its goals. “We work on a one-to-eight ratio, with one support staff individual to every eight technical people. We do have a problem attracting and retaining the right skilled professional engineers and there are lots of vacancies to fill here,” he admits.

Employment also takes into account the Black Economic Empowerment and Employment Equity initiatives which Ruiters describes as “part of the whole suite of attacking inequalities in South Africa.” This approach means the company utilises the services of black-owned supply chain partners, although projects are publicly tendered and contractors have to meet stringent


Dr Vaino Shivute, CEO of Namibia’s water utility NamWater, explains how the company is rising to the challenge of nearly doubling its water supply to meet the needs of the country’s rapidly expanding uranium mining industry. Gay Sutton reports

Thedesalination

optionN

o matter where in the world you live, water is essential for life. But for those living in the desert regions of Africa, the value of this precious commodity is even more deeply appreciated. Covering an area of some 824,000 square kilometres, Namibia is one of

Southern Africa’s driest countries, supporting a small population of just 2.1 million people, many of them scattered in isolated rural communities. To the east lies the Kalahari Desert while the arid Namib Desert, one of the oldest deserts on earth, stretches from north to south along the coastline.


N a m Wa t e r

Thedesalination

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N a m Wa t e r

“Our rainfall is so low that we have no perennial rivers that originate from and flow through our country,” explains Dr Vaino Shivute, CEO of the Namibian water utility NamWater. Only rivers that arise elsewhere, and touch Namibia’s borders, flow throughout the year. The Orange River, which originates from the Lesotho Highlands and flows through South Africa, forms part of the country’s southern border; the Okavango, which travels along its north-east border, originates in Angola and terminates in Botswana; the Kunene River in the north-west is shared with Angola; and the Zambezi river flows along Namibia’s borders for a short distance and forms the border between Zambia, Zimbabwe and Botswana. “Inside Namibia we have what we call ephemeral rivers, which flow only after we’ve had rain, but then they dry up.”

Rain in Namibia, though, is a rare occurrence, and largely occurs during the months of February and March. In the south-west it amounts to 0mm to 10mm per annum but increases in quantity towards the east and north. At the capital Windhoek, for example, it averages around 300mm per annum, and it is highest in the north-east, where between 600mm and 700mm is expected each year.

Management of these precious water resources is complex. The country has 11 dams on its ephemeral rivers, which capture the rare rainwater and store it. Water is then purified and distributed through the inhabited interior areas. There are some 18 water treatment plants located on the perennial rivers and next to the dams inland. These plants are linked to a pipe network which supplies clean water to towns and rural communities. Finally, there are boreholes drilled into various aquifers—a water source that is finite and therefore is strictly monitored and managed to ensure that the rate of extraction does not exceed replenishment.

Until 1997, water was supplied free of charge in some parts of rural areas and heavily subsidised in urban areas by the Namibian government. But following a resolution to charge for this scarce commodity, the government formed NamWater and tasked it with supplying water in bulk to all those who needed it, at cost. The company took over the existing bulk water supply infrastructure and began operating in 1998, supplying water for domestic consumption, industry, livestock

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NamWate r

production and several irrigation projects. Initially there was financial backing from government, but today the company is financially self-sustaining.

“Since 2000, we have seen very little growth in domestic demand for water,” Shivute says. “In fact, we have noticed that where people are now billed for their water they are less wasteful, and this has had a dampening effect on demand. We currently supply between 65 million and 70 million cubic metres per annum.”

However, all that is likely to change. Following the huge increase in the price of uranium in 2007 and 2008, there has been a marked increase in exploration in Namibia’s central coastal desert


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NamWate r

region, and of course mining operations are heavily water dependent. “We currently have two mines in operation in this region and both of these are expanding their production. However, we have a further 10 at different stages of exploration and development, five of which have already approached us to supply their water,” Shivute says. “Our projections indicate that demand for water is likely to rise by between 40 million and 60 million cubic metres per annum in this area alone, almost doubling our national output.”

The problem for NamWater is that the central coastal region relies on extraction from the underground aquifers. “And we have already reached the limit for sustainable water extraction in this area,” he continues. “We are therefore looking at setting up a desalination plant to supply the needs of the mines.”

Desalination is certainly not a cheap option. Two-and-a-half years ago the cost of such a project was quoted in the region of N$1.5 billion - N$2 billion, but prices have continued to rise. In the long term, the mines will cover the cost

of construction, maintenance and supply. But if NamWater is to fulfil its mandate to supply water where and when required, it will need to source the financing and construct the plant before mining commences.

Environmental studies have already been completed, and NamWater is the central authority in a government taskforce set up to deliver and manage the business plan for the project. “We aim to produce the first report in mid-December this year which will argue the business case for the desalination plant,” reveals Shivute. “Next year we will examine the funding and management options, and we expect to award the contracts at the end of next year. Then if things go according to plan, construction will commence in early 2012, continuing for around 24 months.”

The intention is to install plant and equipment capable of producing around 25 million cubic metres of water per annum initially. However, NamWater does not expect to see the demand for uranium abating any time soon. The estimates it is working on indicate that there are more than 300 new nuclear power stations


“Inside Namibia we have what we call ephemeral rivers, which flow only after we’ve had rain, but then they dry up”


NamWate r

around the world at various stage of development, all of which will need nuclear fuel at some point in the future. Therefore, the company aims to future-proof its construction work. Structures such as the seawater intake, storage facilities, pipelines and power supply will all be large enough to accommodate future expansion of the plant. The desalination plant can be expanded in modular fashion.

NamWater already has a considerable experience to draw upon. Not only has it been refurbishing the old water supply infrastructure that it inherited, but also constructing new reservoirs and pipelines to supply the remote villages. In the census of 1992 only 45 to 50 per cent of people living in rural areas had access to clean drinking water.

But after 18 years of investment and construction, that figure is estimated to be 90 per cent.

“We are very proud of this achievement if you consider the nature of the country, that our population is scattered over a large area, and that we do not have much water. And we are hoping to be able to maintain and improve on this figure into the future. But of course,” Shivute says, “providing water to this last 10 per cent of the population is likely to be really difficult, because they live in some of the most inaccessible regions of the country.” In spite of this realism about the cost and feasibility of achieving a clean water supply for all, he remains both upbeat and undaunted. www.namwater.com.na

“Inside Namibia we have what we call ephemeral rivers, which flow only after we’ve had rain, but then they dry up”


mailto:kris%40mweb.com.na?subject=

As African economies develop, many nations have learnt the value of maintaining links to their former colonial pasts. In Mozambique, the Cahora Bassa Dam has delivered energy across Southern Africa for over 30 years. Andrew Pelis explores how Hidroeléctrica de Cahora Bassa has managed to maintain supplies through a turbulent 30 years, with a little help from Portugal

theforfuture

Energy

Across Africa the legacy of a colonial past can be seen in everyday life. While many aspects of former regimes undoubtedly led to hardship and misery for millions, one enduring feature has been the infrastructure left behind.

A prime example of this is the Cahora Bassa Dam in Mozambique, built during the Portuguese occupancy in the late 1960s and early 1970s. Despite its relatively short lifespan, this icon of colonialism has survived a civil war, sabotage attempts, financial disputes and international political unrest.


H i d r o e l é c t r i c a d e C a h o r a B a s s a

thefuture


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H i d r o e l é c t r i c a d e C a h o ra B a s s a

In November 2007, a sale agreement saw the Mozambique government take control of the company which built and subsequently maintained the dam, Hidroeléctrica de Cahora Bassa (HCB), from Portugal. Mozambique paid $700 million for a 67 per cent shareholding in HCB, which later increased to 85 per cent, while Portugal retained a 15 per cent stake. The deal brought closure to a decades-old dispute between the two countries over the rights to the company.

The dam itself represents the largest hydroelectric power scheme in southern Africa and the Cahora Bassa Lake, at 250 kilometres long and 38 kilometres wide, and covering a flooded area of 2,700 square kilometres, is the fourth largest artificial lake on the continent.

The project to build the Cahora Bassa system began in 1969 and took 10 years to complete, with HCB focusing on generating, transmitting and selling clean electricity. The Mozambican Civil War raged for 15 years from 1977, and during this period the dam’s transmission lines were regularly sabotaged to the extent that 1,895 towers needed to be replaced and 2,311 refurbished over a distance of 893 kilometres on the Mozambican side of the line.

The dam’s original construction plan had involved South Africa in an agreement that decreed Portugal would build and operate a hydroelectric generating station at Cahora Bassa as well as a high-voltage direct current (HVDC) transmission system delivering electricity to the border of South Africa. As the civil war came to an end, HCB selected

“The Cahora Bassa Lake, at 250 kilometres long and 38 kilometres wide, and covering a flooded area of 2,700 square kilometres, is the fourth largest artificial lake on the continent”


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H id roe l é c t r i c a de Caho ra Bassa

South African organisation Trans-Africa Projects (TAP) to carry out construction management, quality assurance and design support service for the rehabilitation of the project. Restoration work began in August 1995 but was hampered by the combination of difficult terrain and areas populated with live land mines, while heavy rainfalls also impacted the programme to restore power lines.

Today, the dam system that HCB operates on the Zambezi river system contains five 415 megawatt turbines, with most of the electricity generated at Cahora Bassa being sold to the South African power companies.

Last March, the Portuguese prime minister José Sócrates announced that Portugal intended to sell its remaining shares in HCB. His speech was made during a visit to the dam town of Songo, where he stated: “We are thinking of selling our share in HCB, in a partnership between Mozambican and Portuguese companies.”

Sócrates explained that the move, far from severing links with HCB, would help to develop operations through corporate links that would transfer technology to Africa. “It is important that Portuguese companies remain associated with HCB, because we shall develop HCB together with the Mozambicans.”

The decision came at a time when HCB had reached record levels of hydroelectric production. In 2009 the company produced 16,574 gigawatt hours, an increase of over 12 per cent on the previous year and a level that raised 8.3 billion meticais in revenue. The improved output was very much the result of having access to more generator sets and better transmission and conversion systems—a legacy of the refurbishment work carried out at the power production station in the previous three years. HCB has also benefited from South Africa’s focus on infrastructure development which included refurbishments at its


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Apollo power station, to where almost 80 per cent of the Cahora Bassa power is delivered.

Commercially, the company is well positioned to help resolve southern Africa’s energy shortage crisis. Mozambique has the second largest capacity to produce clean energy in the region, making companies like HCB potentially attractive investment partners for Portuguese businesses, although there is room for increased production.

One area that HCB is looking for partnership in is the funding of a new project to build a North Bank Power Station. At present the maximum production capacity at Cahora Bassa, through South Bank Power House, is approximately 17,000 gigawatt hours, but the addition of another station would increase revenues for shareholders and importantly help to alleviate some of the power shortage.

Commenting on the idea, Paulo Muxanga, chairperson of the board of directors at HCB said: “The North Station project constitutes the only way for us to increase the power production capacity within our firm. The indicative figures that exist at this time show that close to 800 million dollars are needed for execution of this project, such that it is natural that we speak about it in Portugal, to the end of interesting potential partners—banks and other Portuguese firms working in the energy sector. In fact this is one of our objectives, to make known what the North Station is and in what stage we find ourselves, in order for us to see how to undertake this project.”

Initial work on the project has already begun, with two technical studies assessing the hydrological and geotechnical impact of building

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the North Station, which would add approximately 1,200 megawatts of capacity for HCB.

In the meantime, Muxanga said the company is working on other areas of infrastructure improvement: “Another project is the refurbishment of the dam spillways, (for which we have funding in place) which will continue up till 2013/14. We also have a sub-station project, which is budgeted at 100 million euros and which aims to improve the reliability, availability and maintainability of the sub-station which is responsible for conversion of the generated power and thereafter transmits it in HVDC (high voltage direct current).

“It is also necessary to determine the state of the lines. We have around 1,400 kilometres of

line—from Songo down to Apollo Inverter Station in South Africa. The state of the lines isn’t the best, because they were vandalised during the civil war in the country over their 800 kilometre length, per line (the transmission system up to South Africa is made up from two lines).”

The final word on HCB goes to Portugese prime minister Sócrates and reaffirms those colonial links. Having set aside $124 million from the purchase price of the company to establish an investment support fund, Portugal will now use the money to develop alternative, renewable energy sources. “With money from the past, we are going to build the future,” Sócrates commented. www.hcb.co.mz/eng/

“Mozambique has the second largest capacity to produce clean energy in the region, making companies like HCB potentially attractive investment partners for Portuguese businesses”



www.fracoal.co.za

Biggest doesn’t have to be best but the scale of Eskom’s Kusile coal-fired power station is of strategic importance to the hard-pressed utility: it has to catch up with ever

increasing demand from industry and South Africa’s mass electrification programme

coal 70 www.bus-ex.com January 11

E s k o m : Ku s i l e

Biggest doesn’t have to be best but the scale of Eskom’s Kusile coal-fired power station is of strategic importance to the hard-pressed utility: it has to catch up with ever

increasing demand from industry and South Africa’s mass electrification programme

coal K usile, located at Mpumalanga and part of Eskom’s $48 billion programme to build a new generation of power stations, is expected to become one of the world’s largest coal-fired power plants once it is completed in 2018. Nobody is more attuned to

the scale and importance of the project than Abram Masango, executive project manager of the Kusile Power Station Project. “Kusile is unique, not just in terms of its size but because it is incorporating some of the most advanced technology available. This means it will not just be an immensely impressive plant in terms of its extent and technology, but one of the most operationally efficient and environmentally responsible too.”



E s ko m : Ku s i l e

The project is awesome in terms of its capacity, design and complexity. The station will consist of six units each rated at approximately 800 MW of installed capacity, giving a total of

4,800 MW. Compare that with, say, the obsolescent Nanticoke Generating Station in Ontario, Canada, which is the largest coal-fired power plant in North America, delivering a mere

3,640 MW to the Canadian grid. Kusile is being built on a huge greenfield site covering 5,200 hectares of what was once farmland located between the N4 and N12 freeways

not far from the existing Kendal station.Kusile will have a prodigious appetite for fuel and is projected to consume 17 million tons over its 47 year lifetime. To supply this, Eskom has reached an agreement with

Anglo Coal South Africa for the coal to be supplied through Anglo’s empowerment subsidiary, Anglo Inyosi Coal. The first coal supplies are scheduled to

be delivered in 2013 ahead of the commercial operation of the first unit in 2014, to allow the creation of on-site stockpiles.

The coal destined for Kusile is mined from the New Largo and Zondagsfontein open cast deposits; however, these

do not currently produce enough coal and each will need to be developed. In particular, the New Largo mine, which produces about 60 per cent of Anglo Coal’s annual production of 100 million tons, is due to be massively expanded, at an estimated cost of $660 million.

Of course the decision to site the power station in Mpumalanga was dictated by the availability of coal in the vicinity. However, one of the greenest and most efficient aspects of the entire project is the ability to deliver the bulk of the 17 million tons by conveyors direct to the power station. This will save an unnecessary burden being placed on the province’s stressed road network



www.cbz.co.za

www.er24.co.za

Eskom: Kus i l e

The first 800 MW unit is planned to start commercial operation in December 2014; thereafter, the second unit will follow in 12 months with units three through six following at eight month intervals. “One of the biggest headaches we had was over funding,” Masango admits. Much of the cost is being borne by a group of French banks—and apart from any worries that may have existed over the French economy’s ability to keep its head above water during recent turmoil in the Eurozone, this and other large Eskom capital projects suffered from some uncertainty until the South African government’s announcement that it will inject R20 billion of equity into Eskom over the coming three years. This has been described as the final piece in the group’s long-awaited funding plan puzzle and has allowed the remaining contracts for the Kusile plant to be placed.

These include a $43 million contract to ABB to supply switchgear, protection, and supervisory control and data acquisition equipment. This is a big relief to the project team, which is now able to make full use of its Primavera software to bring the complex mix of partners together. “Now that the project has been given its full release, all the remaining contractors will mobilise really quickly with the people who have been working since we started work last year. The project is now on track, and the integration between the various contractors that we have been able to achieve has been one of our major successes. Our partners are playing a big role in supplementing the skills we already have within Eskom, and we

have developed an integration plan to ensure that all our different stakeholders work seamlessly together.” The Kusile Civil Works joint venture is led by Stefanutti Stocks, together with Basil Read, Group 5 and WBHO.

The construction phase has already presented some problems that have had to be overcome, says Masango. “One of the technical challenges we have met relates to the geo-technical conditions that exist across this extensive site. Building six units is not just a matter of doing the same thing

six times: for example, on unit one we needed to install piles, but only unit six will reproduce that method for supporting the unit.” Units two to five will use a different technical solution involving shallow foundations.

The project has already had to face challenges connected with its environmental performance. One of the first things that needed to be done was to construct storm management and erosion control infrastructure in accordance with site permits and environmental regulations, Masango explains. He is also particularly proud of the innovative ways this plant limits its environmental impact and points to the wet limestone flue gas desulphurization (FGD) plants that will be installed on each of the six units by Alstom.

Kusile will be the first power station in South Africa to have FGD technology, although many of these units have been installed or are under construction in different parts of the world. The FGD plant is a totally integrated chemical plant using limestone as feedstock and producing gypsum as a by-product, which, being a wet process, will significantly increase the water consumption of the station, says Masango. “In addition to the FGD, we are going to fit the fabric filter plant at Kusile to prevent coal ash contamination. This process is much more efficient than conventional electrostatic precipitators and will play an important part in limiting the plant’s environmental impact.” The boiler furnaces will be fitted with low-NOX coal burners to eliminate nitrous oxide from the flue gases, he adds. www.eskom.co.za

Fly ash handling: Clyde Bergemann Africa has been

contracted for the design, supply, construction and

commissioning of the multi vessel dense phase fly

ash handling system for Kusile Power Station. This

includes the conveying of fly ash from the bag

houses to the storage silos and conditioning of fly

ash. The company is part of the Clyde Bergemann

Power Group.

Clyde Bergemann Africa

“Kusile is unique, not just in terms of its size but because it is incorporating some of the most advanced technology available”


The L’Oréal Group cares about more than making women beautiful. Vishal Sahgal, industrial director of the Pune manufacturing facility, talks to Jayne Alverca about the importance of promoting sustainable development

thanskin

deep

More

Few consumer brands are better known than those of the L’Oréal Group. The portfolio of 23 global brands including household names such as Maybelline, Garnier and Biotherm, as well as the L’Oréal Paris brand itself, are all at the forefront of their market,

whether it be for cosmetics, skin care, fragrance or hair care. Headquartered in Paris, L’Oréal has over a hundred years’ experience in

bringing out the best in women of all ages and races. Today, the group has a presence in 130 countries and its 65,000 employees were behind sales of €17.5 billion last year.


L’ O r é a l I n d i a

The L’Oréal Group cares about more than making women beautiful. Vishal Sahgal, industrial director of the Pune manufacturing facility, talks to Jayne Alverca about the importance of promoting sustainable development

skin deep


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L’ O r é a l I n d i a

L’Oréal’s presence in India dates back to 1994. “L’Oréal has a strong belief in the value of manufacturing close to its markets,” explains Vishal Sahgal, industrial director of the company’s Pune manufacturing facility.

However, India did not begin a programme of liberalisation for foreign companies until the early 1990s, so at first, manufacturing was undertaken by a sub-contractor. “In 1998 we were finally able to move into direct production, driven by the belief that no one has more expertise than L’Oréal in the manufacture of the products that we are famous for,” he adds.

Sales of L’Oréal products in India have been meteoric. “We not only give products that are better in terms of quality and safety, we have also been instrumental in creating new markets. For example, hair colouration was revolutionised by L’Oréal when we introduced fashion shades which women had never used before. Our Colour Naturals brand is very accessible, costing close to €2, and it offers an international quality standard that was never available before. Similarly, we introduced Indian consumers to conditioners for the first time and they have quickly taken over from traditional hair oils,” he comments.

Since 2004, manufacturing for hair care, hair colour and skin care lines for L’Oréal’s Consumer Products division and Professional Products division has taken place at Pune. “We need to attract and retain the best talent in order to grow; and our first location was simply too remote,” Sahgal explains. “Pune is where all our operations are now based and we have up to 600 people working for us at any one time.”

Sahgal explains that promoting sustainable development is a fundamental tenet within all plants and distribution centres that operate under L’Oreal’s umbrella. Environmental sustainability and corporate social responsibility (CSR) are the twin pillars that support this broader aim. Even within the vigorous framework that all L’Oréal manufacturing centres operate, Sahgal believes that the achievements of the manufacturing facility at Pune are something special. “Our Pune factory stands out within the group for its environmental achievements,” he asserts. “The state government of Maharashtra where we are based awarded the Pune factory first prize in the Excellence in Energy Management category in 2009 for its various energy conservation projects.”

Within the L’Oréal Group, the Pune site has won a number of accolades. “We won the internal award for the best environmental project in 2007 for a project that involved using 320 solar cells, rather than expensive diesel oil, to heat water for washing in our processes. Two years latter, we again picked up first prize for a project that uses vermin culture to convert chemical sludge into useful fertiliser. This led to the proportion of waste being recovered from the site to increase from 95 per cent to 99 per cent,” he says.

At corporate level, the company’s Indian headquarters in Mumbai has achieved a rare synergy between its core business, which is beauty and good citizenship. A project aptly named ‘Beautiful Beginnings’, which is implemented together with the French NGO Aide et Action, aims to help girls from marginalised communities who were unable to complete their normal education


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to train as beauty therapists and achieve financial independence. “It is expensive and quite complex to organise so it is done centrally, but at present ‘Beautiful Beginnings’ is operating in Mumbai, Pune and Hyderabad and it represents wonderful opportunity for the girls involved,” he says.

L’Oréal also believes that the world needs science and science needs women. The L’Oréal India For Young Women in Science scholarships programme, with the support of the Indian National Commission for Cooperation with UNESCO, has helped young women passionate about science to achieve their dreams and aspirations of

Galaxy Surfactants Limited has developed

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pursuing a career in science. Established in 2003, it reaches out to deserving female students from Maharashtra and scholarships worth Rs.250,000 each are given to five young girls to pursue graduate studies in any scientific field. Thirty-five scholarships have been awarded to date.

The Pune factory itself has recently picked up another prize, this time the internal Citizen of the World Award, for its approach to good citizenship within the community where it is based. “We do not like one-off donations and look for long term projects which will have a long term impact in the communities around Pune, where many of our



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L’O réa l I nd i a

staff come from,” he explains. “‘Project Care’, which won us the first prize, is

an integrated project that looks at safety, health and hygiene, the environment and child education, which we deal with in turn on a quarterly basis with the aim of raising standards and improving the local quality of life. We rely on a mix of professional trainers and our own employees from these villages who feel a huge pride in our work and whose voice is sometimes more acceptable to local communities than outsiders.”

The project is ongoing and includes facets such as free medical check-ups for the elderly and a scheme to support schools with redundant laboratory and IT equipment that still has relevance in the classroom. The company is also involved in a partnership that will provide two new classrooms to a local school—at present the children have to study outside.

On the procurement side, L’Oréal extends its values by insisting on a very specific vetting process. “Suppliers must pass our stringent quality requirements and also a Safety and Social Audit. We use external consultants like Intertech who will monitor for unacceptable practices such as child labour, ensure that minimum wages are paid and that there is no requirement for excessive working hours. The government has labour laws, but not all companies comply. We only want to work with those that do.”

Meanwhile, Sahgal believes that the factory’s steady expansion creates a virtuous cycle in the local economy, as at least 50 per cent of staff are recruited from surrounding villages. “Last year we grew our capacity by 30 per cent and there is still enormous scope for L’Oréal in India. It is very important that as we grow, we give something back to the society that has contributed to our success,” he concludes. www.loreal.co.in

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Investing in technology and innovative services to drive its customer appeal, and inspired marketing to unite football with the internet, MTN South Africa is unlocking the massive potential of mobile telephony, as managing director Karel Pienaar tells John O’Hanlon

back In

ofthe


M T N S o u t h A f r i c a

Investing in technology and innovative services to drive its customer appeal, and inspired marketing to unite football with the internet, MTN South Africa is unlocking the massive potential of mobile telephony, as managing director Karel Pienaar tells John O’Hanlon

back net theof

It’s hard to think of an industry with more potential for growth than telecommunications, wherever you are in the world. The competition between the likes of RIM, Apple, Google and Microsoft to advertise the technology they are rolling out ahead of the Christmas season underlines the opportunities to capture the next generation of users.


www.concillium.co.za

M T N S o u t h A f r i c a

Telecommunications is certainly one of the fastest growing sectors of South Africa’s economy. The country is the fourth-fastest growing mobile communications market in the world with more than 39 million subscribers, or nearly 80 per cent of its population. MTN shares that market with Vodacom and Cell-C but Karel Pienaar quite likes the challenge. “It’s difficult for me to say this as an old monopolist but competition is good!”

Unlike in the United States and Europe, new technology has been as much a tool for development and commercial growth in Africa as an adjunct to people’s lifestyle. It’s not just the poor state of the infrastructure in sub-Saharan Africa that makes life difficult—mobile apps have the potential to make a real difference to people’s everyday lives. Take MobileMoney, MTN’s ‘electronic wallet’ service that provides a fast, secure, affordable and convenient way for customers to send and receive money anywhere in Uganda, no matter the network, using their phone. The service launched in 2008 already has nearly a million users and expects that to increase to 3.5 million (a tenth of the population) in 2012. Many people in South Africa also have access to the technology of cell phones, but do not have access to a formal bank account.

MTN has not had everything its own way, however. Although group revenues grew nine per

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To properly address and understand clients’ needs

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MTN Sou th A f r i c a

cent to R111.9 billion in 2009, with 70 per cent earned outside South Africa, the strength of the Rand meant that profits before tax were down 12 per cent. So the company’s performance in its home market this year was critical, and MTN demonstrated its creativity in a drive to feed the national passion for football and Ayobamise (township slang for astonish) them.

As part of its global sponsorship of the FIFA World Cup, MTN secured the exclusive mobile content rights for Africa and the Middle East. This allowed subscribers to watch matches on their cell phones, offering gaming opportunities, downloads and plenty of merchandise as well as reduced call rates for the duration of the competition. Ten golden tickets allowed winners and their partners to attend 25 matches around the country, all expenses paid, while Thulani Ngcobo won MTN’s Last Fan Standing competition and attended 38

matches to enter the Guinness Book of Records.South Africa was obsessed with football long

before it won the right to host the 2010 World Cup. The English Premier League is eagerly followed by millions; every single premier league match is shown live on South African TV and millions of rand are wagered on the results—increasingly via mobile phones. Against that background MTN signed a sponsorship agreement with Manchester United in March this year.

The deal allows MTN to offer exclusive mobile content like match highlights, player profiles and ringtones. “South African football fans from all walks of life can identify with Manchester United,” says Pienaar. And it should be noted that as one of the world’s most exposed brands in the most ‘connected’ demographic—the 18-30 range—MU makes strategic choices as to who it associates itself with. In India it has a similar deal with Bharti Airtel. According to United’s chief executive officer David Gill: “The partnership with MTN is a

very important step in the club’s plan to get closer to its family of fans based all over the world.”

Karel Pienaar was formerly CEO of MTN Nigeria and was instrumental in creating the successful business that exists there today. He understands the pan-African strategy of the group, and ultimately believes in the power of telecommunications to unite the very different economies that MTN serves. Prior to becoming MD of MTN SA in August last year, Pienaar was the chief technology and information officer of MTN Group, but now he is able to focus on the home market. “We are extremely pleased with the results we achieved this year, not just because of the World Cup but with the entire GO! Campaign that we announced in 2009 and rolled out this year with ‘Let’s go 2010’ focused specifically on the football.”

It’s tempting to think of 2010 as MTN SA’s year of marketing, but it also seems to have become its

“We are extremely pleased with the results we achieved this year, not just because of the World Cup but with the entire GO! Campaign that we announced in 2009 and rolled out this year with ‘Let’s go 2010’ focused specifically on the football”

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year for awards. It started when MTN Business was awarded the Telecoms Risk Initiative Award 2010 by the Institute of Risk Management South Africa (IRMSA). Then at the GSM AfricaCom awards in November MTN walked off with awards in three of the five categories it was shortlisted for. One of the awards went to MTN South Africa for the Best Network Improvement for the Optimal Network Coverage; another for the Ayoba! marketing campaign. Pienaar says it was a team effort. “This recognition bears testimony to the world class network that MTN South Africa rolled out when it invested approximately R14 billion in its network. The Ayoba campaign went a long way towards getting South Africans excited about the World Cup.” He stresses, however, that creativity and imaginative marketing ultimately depend upon leadership in technology and the service this drives.

A couple of days later on November 12 Pienaar received an award of his own, however, this time

for engineering and innovation when he was presented with the South African Institute of Electrical Engineers’ (SAIEE) President’s Award, the organisation’s highest honour. Another recent accolade for MTN South Africa was being chosen Best Employer in the telecommunications sector for the second year running, in the CRF Best Employers Survey for 2010/11. MTN also came first in the Top 10 Large-Sized Employers (more than 4,000 employees) category, was second in the Best Empowered Employer category and took third spot overall as South Africa’s Best Employer in the survey.

Promoting MTN SA’s commitment to being a responsible corporate citizen, Pienaar has spearheaded the company’s efforts to invest in enterprise development, human resources, skills development and the promotion of equal opportunities, something he passionately believes in. This was acknowledged by independent empowerment rating agency Empowerdex, which recently presented MTN


MTN Sou th A f r i c a

SA with an A rating for Broad Based Black Economic Empowerment (BBBEE).

He is also immensely proud of the company’s social investment arm, the MTN SA Foundation, which works to promote four key portfolios: education, health entrepreneurship and arts and culture. “We go into communities in partnership with the local clinics, hospitals and NGOs offering them screening for lifestyle diseases such as hypertension, diabetes and HIV. Those found to be in ill health are referred to hospitals where they continue to receive treatment,” he says.

“This year we opened business support centres at Moretele near Pretoria and KwaHlabisa in KwaZulu Natal to provide administrative development services to 50 selected small businesses in those communities.” This kind of support, he adds, can make a real difference to start-up businesses, enabling them to survive and grow.

Looking forward, Pienaar believes that infrastructure investment is the most significant driver for growth. “MTN invested R3 billion in infrastructure over the past year, most of it in rural projects,” he says. Ever the engineer, he is excited by the potential of technology to cut costs and connect more people. “Base station power consumption is down 70 per cent; we’re deploying solar and wind power solutions. The economics for this kind of thing are becoming so much better.”

While voice is still the killer app in Africa, one in four handsets sold in South Africa is now a smartphone. Data, whether supporting banking services, shopping or even football is the next big thing. To put it into perspective, says Pienaar, the average contribution of data to revenues across the MTN group is currently just 1.35 per cent*. “We have set a target to grow that to 20 per cent over the next five years.” www.mtn.com

*Jan to June 2010


As ships get bigger, more sophisticated, more specialised and more efficient at moving cargo, a new industry has grown up around operating and crewing them. Managing director of Thome Ship Management, Bjorn Hojgaard, explains to John

O’Hanlon how the company is handling a step-up in scale

seafarers92 www.bus-ex.com January 11

T h o m e S h i p M a n a g e m e n t L t d

As ships get bigger, more sophisticated, more specialised and more efficient at moving cargo, a new industry has grown up around operating and crewing them. Managing director of Thome Ship Management, Bjorn Hojgaard, explains to John

O’Hanlon how the company is handling a step-up in scale

seafarersSpecialist

Thome Ship Management was a general shipping services company until its present owner Olav Eek Thorstensen joined in 1977 and refocused it on its current core business. As managing director Bjorn Hojgaard describes it, the industry looks a lot like a maritime

version of land-based facilities management, whereby the running of large and complex assets is entrusted to a specialist. Thome itself offers Scandinavian expertise out of Singapore, that hub of Asian and indeed global shipping—and that, Hojgaard says, is its USP.


T h o m e S h i p M a n a g e m e n t L t d

The ship management industry was traditionally rooted in Europe, but the centre of gravity in shipping has moved and is still moving eastward, Hojgaard points out. “Around 50 per cent of the world’s tonnage is now owned and controlled by Asian hands.” Based in Singapore and with a major office and training centre at Manila, Thome has built up a serious presence and has established itself as one of the leading players in an expanding professional services niche where the relationship between agent and client is all-important.

Over 20 years Olav Eek Thorstensen built up a network of relations with shipowners large and small, and did a great deal to professionalise the ship management industry. In 1991, Thome became a founder member of the International Ship Managers’ Association (now InterManager), set up to monitor and improve standards, quality, training and qualifications. It was a defining moment for Thome when it set standards not only well ahead of the industry at the time, but of the owners’ expectations too, embracing uncommon concepts like continuous improvement and becoming in 1992 the first ship management company to be accredited to ISO 9000.

This approach was a key factor in growing the business. In the early years of this century,

from having around 40 ships under management Thome found that it had 80, and was facing problems of scale. This had much to do with Hojgaard’s appointment in early 2008. Hojgaard had been a senior director with AP Møller Maersk in Singapore and Hong Kong, and had the international background to take advantage of the opportunities that this step-up in scale offered.

Good ship management is founded on trust, and trust comes out of personal relationships, Hojgaard insists. “We have to be close to our owners and keep up an ongoing dialogue to make the relationship work.” This is done through the fleet crew managers, who are like key account managers, he adds. “Each of them runs a fleet of about 20 ships. They maintain the dialogue with the owners, and coordination between the ships, the office in Singapore and the owners’ reps wherever they are.”

This is where Scandinavian management principles really come into their own. “We don’t believe in top-down management or control: decisions should be taken as near to the rock face as possible!” This encourages leaders at every level to switch on their brains and make decisions, he says: one is powerfully reminded of the ‘flat’ management model driven by another

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Scandinavian, Percy Barnevik at ABB. Ship management doesn’t really lend itself to

centralisation, he believes, and placing too much reliance on fancy IT systems is no substitute for human decision making. “One of our key philosophies is that ships are run on board. You can’t sit in an office and control a vessel remotely! A good safe vessel that performs to charterers’ expectations is one with good people on board.” Naturally the other side to this coin is that the ships’ officers and crew need good support from the 400 shore-based staff whose job it is to make sure the seafarers have the tools and the guidance they need to make the right decisions.

Thome has something like 160 vessels under management, the bulk of them cargo ships and the remainder with two subsidiary companies. Thome Offshore, founded in 2005, manages 25 supply ships and support vessels for the oil exploration industry, and Thome Oil & Gas manages five production and storage vessels. In all, Thome Ship Management looks after assets worth around $3 billion. It’s an awesome responsibility, so it’s no wonder the company spends a lot on training the 8,500-strong pool of officers and ratings that crew its clients’ ships.

About half of this training takes place at Thome’s own training centre in the Philippines, the other half at third party facilities close to the officers’ homes in Croatia, Romania, Indonesia, China and of course Scandinavia. “Training matrices make sure that specific responsibilities and vessel types are catered for. We also have a competence management system that maps out the gaps in an individual’s skills when they are on board a ship and makes sure those gaps are closed when they come ashore again,” says Hojgaard.

This is a challenging and crucial time for the ship management industry and Hojgaard finds this very exciting. But he is very respectful of the relationship-based culture Thome has built up, and wants to preserve it. “This company has done well for 35 years and I am not so arrogant to think that the way they do things at Maersk, for example, would be better.” There are perhaps 600 players in the ship management industry, and consolidation is inevitable.

However, he thinks this will take place as the


Thome Sh ip Managemen t L td

leaders scale up and smaller players become unviable, rather than through a spate of M&A activity. Mergers are rarely an unqualified success in this business, he says, often foundering on cultural incompatibility. In any case, Thome has

no problem in growing; on the contrary, it is in the enviable position of actually having to put the brake on its potential for expansion. “We have found around 10 per cent per annum growth is manageable—much above that and you lose control. We have many owners asking us to take on the management of their ships and we can afford to be very selective now.”

In a market where many struggle to hold onto their customers, Thome Ship Management is having to disappoint potential clients keen to place their assets in the hands of this market leader in safety, competence and quality. Little wonder this former sea captain enjoys his work so much. “As a ship’s commander you make an immediate impact: in my present job I can make changes that will affect the company and the entire industry in the long term, and that is truly exciting.” www.thome.com.sg

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Joe Rousmaniere, CEO of PETRONAS Base Oil (M) Sdn Bhd, talks to Jayne Alverca about the alchemy that transforms a

commodity into an added value product with a global market

basics Beyond

the


P E T R O N AS B a s e O i l

Joe Rousmaniere, CEO of PETRONAS Base Oil (M) Sdn Bhd, talks to Jayne Alverca about the alchemy that transforms a

commodity into an added value product with a global market

basics Beyond

Since Malaysia’s national oil company was incorporated in 1974, its initial upstream activities of exploration and production have moved steadily downstream. PETRONAS now ranks as one of the Fortune Global 500 largest corporations in the world, operating as

an integrated oil and gas business that encompasses refining, marketing, trading and retail operations within a global marketplace.

PETRONAS has long integrated value-adding business initiatives to maximise synergies and returns. Five years ago, a multi-million dollar investment resulted in a new base oil refinery being added to complement and enhance the existing Melaka Refinery complex. After a long career in developing and marketing base oils in the US, Joe Rousmaniere was brought in to head a new company, PETRONAS Base Oil (M) Sdn Bhd, which operates as a wholly owned subsidiary of PETRONAS.


www.infineum.com


properties. This calls for lubricants manufacturers to innovate better-designed lubricants that cater to increasingly complex and demanding original equipment manufacturers’ (OEM) specifications.

When operating today’s vehicles at high speed, engines and lubricants inevitably heat up. Consequently, lubricants become volatile. Base oils are important to the make-up of lubricants as they affect fuel consumption and exhaust emissions. Because the chemical composition of group III base oils contains less volatile components by nature, fuel consumption is lower when formulating lubricants with group III base oils compared to group II grades. Additionally, high quality base oils can meet the lubricant manufacturers’ needs by requiring less costly additives to create new lubricant formulations.

The above considerations led to the creation of ETRO, a group III base oil at the top end of the market. Known to boost engine performance, it is the basis of high performance engine oil as well as the base for compressor and hydraulic oil formulations. It has also been proven to produce less harmful emissions and less waste. Manufactured from a proprietary wax isomerisation process and hydrofinished to a colourless liquid, ETRO exhibits superior low temperature performances and an excellent viscosity-volatility relationship—a prerequisite for excellent lubricant formulation. Current production of ETRO stands at 6,500 barrels per day.

“Branding only takes place in the top echelon of the base oil market where producers tend to be very proud of their products and want a clear identity that sets them apart,” Rousmaniere explains. “We produce three distinct product streams all sold under the ETRO brand name and most of our work over the last two years has been dedicated to seeing ETRO become embedded as the product of choice with the world’s OEMs.”

Although there are 150 base oil refineries in the world, none were previously located in Malaysia and any company requiring base oil had to source it elsewhere. The first requirement was to meet domestic demand, including that of PETRONAS’ own lubricants business which is being managed by PETRONAS Lubricants International Sdn Bhd (PLI). However, as Rousmaniere points out, the Malaysian market is relatively small; and from the outset it was imperative to develop a product that would appeal to a wider global customer base.

Although base oil, which finds an application principally within the lubricants business, is a commodity, it is technically challenging to produce and must meet very precise requirements. “My task was to head up and create a new company in an area where there was no previous expertise at all,” Rousmaniere explains.

His first challenge was to get the recipe right. Prior to moving into production in 2008, two years were spent on product development. “At the outset, no one in PETRONAS was aware of the requirements of different market segments and customers within the international marketplace,” he continues. “We also made an important discovery when we realised that with the nature of the technology at our disposal, we could create a superior group III product from Malaysian crude at the same cost required to develop an inferior grade.”

Strategically, it made clear sense to focus on the premium end of the demand spectrum. Stricter environmental legislation demands that automotive engine manufacturers construct more fuel efficient and environmentally friendly engines. These modern engines need lubricants that have higher durability and enhanced cleaning

We deliver additives that provide superior performance

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“Most of our work over the last two years has been dedicated to seeing ETRO become embedded as the product of choice with the world’s OEMs”

market environment. Sales and delivery of ETRO to worldwide destinations are streamlined by direct distribution through the end-to-end supply chain network within the company. In addition, PETRONAS Marketing Netherlands B.V. was established to cater to the European market.

As a fully integrated company, PETRONAS has all the pieces in place to market its base oils successfully—from the reliability of supply from its upstream operations to its word-class refining complex, to a global marketing and distribution network supported by logistics and technology capability. As global demand for better, cleaner lubricants grows, engine and equipment manufacturers are increasingly convinced of the technical, economical and logistical advantages that PETRONAS base oils can provide for their businesses. ETRO is well on its way to becoming the preferred high quality base oil. www.petronas.com.my

Only five or six other refineries in the world produce group III base oil, and Rousmaniere believes it was an inspired choice. “As well as the opportunity to add maximum value, demand is very strong and is growing all the time,” he states.

Rousmaniere sees the international footprint of sister companies within PETRONAS as a very important differentiator. “Our competitors in Korea, for example, are very large within the immediate region, but not present in Europe, India, Brazil or South Africa, whereas PLI operates in all of these places and is expanding its reach almost by the day. We are the only company within our competitive environment that has access to a global distribution network and also benefits from a major internal customer.”

Rousmaniere feels that his greatest achievement to date has been to create a highly skilled Malaysia team of experts who wholly embrace and understand the complexities of the international


Abraham Stephanos, COO of Tata Steel Processing And Distribution Limited, talks to Jayne Alverca about the challenges of shifting focus from a manufacturing orientation to viewing service as a key differentiator

service Steeled

When the forerunner of Tata Steel Processing And Distribution was first established in India in 1997, the company already had the highest credentials. It was originally formed as a joint venture between Tata Steel & Ryerson, who were already established as global leaders and pioneers in

the steel service centre concept. In January 2010, Tata Steel bought out Ryerson, resulting in Tata Steel Processing And

Distribution Limited (TSPDL). The company operates as a wholly owned subsidiary of Tata Steel Limited with a portfolio that includes eight processing plants and 17 sales centres across India. Last year, sales revenue stood in the region of US$260 million. “We were a first mover in the Indian steel industry, establishing the service centre concept for the first time,” explains COO Abraham Stephanos, who joined the company thirteen years ago.

Steel is integral to a multitude of manufacturing and industrial processes, but TSPDL works principally in partnership with automotive OEMs and their vendors, who account for 80 per cent of output. The remainder goes to the white goods and construction equipment industries—TSPDL is the sole supplier of FOP parts to Caterpillar in Asia Pacific.

“In the first 12 years of operations in India, we have grown to a capacity of two million tonnes per annum and we have pledged to add a further one million tonnes of capacity by 2015,” says Stephanos. “Our challenge is to match and keep pace with India’s very rapid industrial growth if we are to achieve our mission to remain as the undisputed leader within India’s steel services industry. By 2015, I anticipate that we will be double the size with three times the revenue,” he states.


Ta t a S t e e l P r o c e s s i n g A n d D i s t r i b u t i o n L i m i t e d

Abraham Stephanos, COO of Tata Steel Processing And Distribution Limited, talks to Jayne Alverca about the challenges of shifting focus from a manufacturing orientation to viewing service as a key differentiator

service Steeled

for


The automotive industry is at the forefront of the world’s most efficient and sophisticated manufacturing and production practices. Dominated by international players with a global reach, there is a relentless demand for ever increasing output. “We have to keep pace with growth rates of 10 to 15 per cent per annum in the automotive and commercial vehicle industry and up to 40 per cent in the construction equipment industry market, while at the same time making sure that we can service a host of very diverse locations,” he says.

Automotive OEMs and the manufacturers who support them expect suppliers who can match their own standards and who share their values. “Large international players expect the same service quality they can receive in Western markets. That is another key factor driving our orientation towards service. We think of ourselves increasingly as a service provider and partner, and this is what our customers most value. Managing this shift towards a service orientation is the biggest issue of all for us at the moment.

“Our core processes are not particularly complex, but customer demands are,” he continues. “We are required to offer a sophisticated and very flexible service, which makes particular demands on logistics. The basis for competition is shifting—there are many new entrants to the service market and many other players have capacity, but they cannot match our service offering.”

Steel is supplied mainly as a flat product in cold forming grades for use in subsequent sheet metal processes, but there are infinite subtle variations

according to final usage. The TSPDL service proposition begins with minute attention to critical processing requirements like length tolerance, burr height, width tolerance, shape in roll formed section variance, pickled surface quality and so forth. Stephanos considers it a huge accolade that the company’s lead plant in East India (Jamshedpur) recently won the TPM Excellence Award from the Japan Institute of Plant and Maintenance.

“The award, which was audited by experts from Japan, reflects our level of maturity and excellence in total quality management systems,” he says. “It is particularly gratifying as we are the first steel service centre globally to receive it. We found the engagement process to be an excellent operational initiative which unlocked the potential of staff at every level. Now we will extend what we have learned to our other plants.”

However, Stephanos has much less control over other factors that contribute to competitive advantage. Despite distribution offering real-time data availability controlled through an SAP ERP package linked to India Tata Steel’s SAP network, transport and logistics is an ongoing challenge. Customers demand greater flexibility and smaller quantities in accordance with just-in-time principles of inventory control, but India still presents many inherent problems not encountered in the West.

“The broad transport infrastructure is still underdeveloped and it requires a lot of time and expense to transport goods anywhere in India,” comments Stephanos. “We have remarked internally that it is cheaper to ship steel around the world than to transport it across India.”


Ta ta S tee l P ro ces s i ng And D i s t r i bu t i on L im i t ed

Keeping up with demand is another challenge. Steel itself was in short supply during the organisation’s early days; but although that is no longer the case, the cold forming grades that are the focus of Tata’s operations are still less common. “At present most steel is procured domestically because the lead times associated with imported supplies are prohibitive,” Stephanos explains. “The grades we work with are still in limited supply, despite the rapid expansion of the overall steel industry and so prices are characterised by

greater volatility. We have to take great care in maintaining our inventory levels and managing the price-to-risk equation.”

Stephanos adds that all manufacturing industries in India must also contend with a skills shortage. “Getting enough people into the organisational and management pipeline who have the necessary skills and knowledge to take us forward at a time of great growth is always a challenge. We need to ensure that critical management posts are adequately manned at all times,” he says.

“India has a huge IT industry which absorbs a lot of talent that is needed by manufacturers of all types. The IT industry itself also requires manufacturing expertise and so we are in keen competition. Our response is to offer a great deal of training and career support to develop the skills we need in people who have the right attitude,” he concludes. http://www.tspdl.com

Samco Machinery Ltd. bolsters its reputation as a

leading automotive manufacturer teaming up with

customers like Tata Ryerson Ltd. India, to produce

chassis parts for the Nano, the world’s cheapest car.

Capabilities: building fully integrated automotive roll

forming solutions with in-line pre-punching, welding

and sweep units and flying cut off systems for both

straight and swept parts, closed and open sections.

www.samco-machinery.com

Samco Machinery Ltd


www.samco-machinery.com

As South African business rides out the economic downturn, its consumer industries need to be

responsive to customer preferences. Craig Leathwhite, CEO of General Mills South Africa, tells Andrew Pelis

about the improvements being made


G e n e r a l M i l l s S o u t h A f r i c a

rightA

successful global operation is one that adapts to local customs and trends; and in the food sector, that translates to understanding regional foods and tastes. At General Mills South Africa, this particular issue has become a priority and measures are now in place to develop a range of products that best suit the local market.

The company is a subsidiary of North America-based General Mills, one of the five largest food companies in the world. The company first entered South Africa in 1993 as part of a joint venture with Food Corporation, which saw the business introduce a range of frozen vegetables. Two years later it launched its Bakeries and Food service business, including the famous Pillsbury brand. Many of the labels are instantly recognisable and in addition to Pillsbury the South African company manufactures and markets Old El Paso, Big T burger products and Häagen-Dazs ice cream.

Economic events over the past 18 months have seen the company adapt its strategy, however, as CEO Craig Leathwhite explains. “Trading conditions are still tough and I have a feeling that it will take longer yet for the country to extract itself from this crisis. We have implemented some changes over the last 14 months that are based on our philosophy of Holistic Margin Management (HMM), which revolves around improving efficiency and eliminating wasteful practices.”

As South African business rides out the economic downturn, its consumer industries need to be

responsive to customer preferences. Craig Leathwhite, CEO of General Mills South Africa, tells Andrew Pelis

about the improvements being made

recipe

The


www.thecoldchain.co.za

www.sdbsa.co.za

G e n e ra l M i l l s S o u t h A f r i c a

After a review of sales figures on its existing range of products, Leathwhite says that the business has identified trends that have prompted some changes. “We have not introduced any new products in the past year,” he says. “Instead we have refined our product range and cut a few items out. We are currently in the process of increasing the volume of products we have retained by doubling (and in some cases trebling) the volume of our top selling SKUs. We have also seen a change in consumer habits and there has been a marked downsize in the pack sizes that people purchase, with fewer bulk packs being bought.”

The company operates a facility on the Linbro Business Park in the Wendywood region of South Africa. The site has seen a number of operational changes during the last year, aimed at improving shop floor efficiency. “We have examined how we can make our manufacturing more efficient by altering our shift structures and eliminating production bottlenecks,” Leathwhite explains.

“There was some resistance initially,” he admits, “but we have seen an 80 per cent increase in productivity as a result of our efforts. We introduced staggered shifts and mapped out our processes to find out exactly where the bottlenecks existed, as it wasn’t always obvious.”

The increase in productivity has sheltered employees from dramatic cuts although Leathwhite says the workforce has reduced by about five per cent. South Africa remains General Mills’ flagship operation on the continent and while staff training has inevitably slowed a little, Leathwhite says training has undoubtedly contributed to the productivity improvements.

The business has also embraced South Africa’s Black Economic Empowerment programme and recently attained Level Five accreditation, although Leathwhite says it has always incorporated many of BEE’s core requirements, including its training philosophy. “Our focus has always been about ‘nourishing life’ and treating our employees and communities with respect. We were looking to work with communities long before the scorecards were in place and have always looked to develop

young talent. For us, the ownership aspect of BEE is a challenge but we are getting there and have also helped our suppliers to improve their ratings.”

Leathwhite says that the company is now in the process of sitting down with its key local suppliers, to discuss changes to its procurement strategy that will benefit both parties. “We have around 70 suppliers and roughly 10 of those we regard as key suppliers. We are looking to partner with our vendors in a way that will enable us to buy more efficiently so that we can develop more effective processes.

“At the moment we buy some materials on an almost daily basis while other supplies are purchased in bulk maybe once every six months. Part of our new strategy is to buy up front and to purchase at a time when our partners are slowing down, so that their own work flows are more evenly spread across the year. This will help us to build better relationships and should allow us to negotiate better rates on materials, while at the same time assisting our product development side.”

In our previous article on General Mills just over a year ago, Leathwhite told me that the South African operation would be looking to improve its forecasting; a promise he says has now been met. “This comes from our sales and drives the business—and everything emanates from that. We have made improvements to our IT systems to improve our third party warehousing to ensure that when a customer orders a product they can get it when they want it at a reasonable price.

“The next phase is to partner with our warehouse and distribution providers and we should make good progress over the next three months. This will help us to improve customer service levels by ensuring we have the right products located in the right place at the right time.”

The company also sees opportunities to introduce products with, literally, a more local flavour. “One of the areas we are starting to look at is to develop products that are more applicable to our local market,” says Leathwhite. “We have a small demographic here currently and want to increase that by attracting more middle class customers with a range of local foods and tastes.” The company is working closely with its Miami, USA-based parent to create a range of new products, the extent of which Leathwhite is not yet ready to reveal.

That sounds like a good subject for the next article in our General Mills South Africa series. www.generalmills.co.za

The Cold Chain’s ability to provide a world-class route

to market stands it in good stead with its client base

of over 20 national perishable food manufacturers.

A practical, honest, no-nonsense attitude with a

teamwork-based approach sets us apart. Coupled with

intelligent and interactive in-store representation, we

are: “Everywhere, On Time, Everytime”.

The Cold Chain


Fishing is an important industry in Namibia but unlike some other fish species, the country’s merluccius capensis (shallow water hake) and merluccius

paradoxes (deep water hake) is managed responsibly. Managing director Hendrik van der Westhuizen tells John O’Hanlon how Hangana Seafood (Pty)

Ltd remains a sustainable business based on a sustainable resource

today Hake


H a n g a n a S e a f o o d ( P t y ) L t d

Fishing is an important industry in Namibia but unlike some other fish species, the country’s merluccius capensis (shallow water hake) and merluccius

paradoxes (deep water hake) is managed responsibly. Managing director Hendrik van der Westhuizen tells John O’Hanlon how Hangana Seafood (Pty)

Ltd remains a sustainable business based on a sustainable resource

today

Walvis Bay on the Atlantic coast of Namibia is a long established commercial port and harbour, the gateway to Namibia’s 200 mile exclusive economic zone. This sea area is the playground of the shallow and deep water cape hake

(merluccius capensis and merluccius paradoxes), a white fish so much in demand from the food industry across the world that it could easily go the way of the over-fished Atlantic cod. But following independence in 1990 Namibia has taken control over this important national resource in a manner that has become a benchmark for sustainable fishing.

Managing director of Hangana Seafood, Hendrik van der Westhuizen, gives much of the credit for this to Dr Abraham Iyambo, who until earlier this year headed the Ministry of Fisheries and Marine Resources and received numerous awards for the fisheries management system he introduced. “October of every year is a closed period,” van der Westhuizen says. “Not a single hake vessel is allowed at sea because this is when they spawn—the entire hake industry’s vessels come in for maintenance at that time.”

This protects Hangana’s raw material: Hangana Seafood has a 15-year exploration right on hake and by-catches, though the tiny amount of other fish it picks up are hardly significant (95 per cent of what is landed is hake, he says). However, the company operates in an unforgiving market: 90 per cent of the product that passes through its ultra-modern wet fish factory at Walvis Bay is exported out of Africa. Recent strain on global economies pushed prices down, and that combined with the strengthening of the rand to which the Namibian dollar is tied, meant that Hangana took a hit in 2009 of something like N$60 million.

It was uncomfortable, and it called for some serious actions. “We turned our attention back into the business to see if there were any opportunities to eliminate operational inefficiencies in order to cut costs.” Fortunately there were a number of things that could be done, and turning round what could have been something of a disaster, in the last six months of 2010 Hangana managed to reduce its operational expenses substantially. “It was a tough challenge, but we did it without having to cut the workforce by a single person,” says van der Westhuizen with satisfaction.

The single biggest initiative was to alter the catching strategy of the fleet. This was driven by the market—Hangana’s retail value-added product is packaged in the customer’s brand and shipped out to Spain, Italy and a host of overseas markets, ready to go onto the supermarket shelves, he explains. “When producing value-added retail products you really need a specific size and quality raw material in order to satisfy the customer demands. But when demand for these products decreases and the balance moves towards the commodity end and ‘formed’ products, it allows us to change our fishing strategy and target areas we didn’t target before.”

By introducing a pull strategy right back to raw material, Hangana was able to supply its factory with precisely the right balance of product and in the process achieved significant savings in its landed raw material costs—the beauty of this strategy is that it can be reversed at any given time, and to the extent that the market demands, van der Westhuizen says.


www.nampak.com

H a n g a n a S e a f o o d ( P t y ) L t d

through a challenging period, van der Westhuizen is bullish about what lies ahead. “We are busy with very exciting things this year, working towards our 2017 vision when we want this company to be a fully fledged FMCG company, so there is a lot of preparation for that.” He wants to take the product portfolio to the next level by producing progressively more value-added elements to the fish, in the end making entire ready meals both under the customers’ brands and Hangana’s own.

With more competitors entering the market it will be important to keep ahead in innovation and new products, but it will be hard for a new entrant to match the relationship Hangana has with its customers for whom it is producing primary product. And Hangana has already started thinking seriously about developing and marketing its own brand, which will be trialled in Namibia and South Africa before launching onto the international scene.

Many people still think of Namibia as a bit of a backwater, and that frustrates van der Westhuizen, who would love to show them the capabilities and competencies of the Namibian fishing industry. “Whenever clients visit us in Walvis Bay Namibia, they are really surprised at the magnitude and sophistication of our business and the competencies of the Namibian hake industry,” he concludes. www.hangana.com

Over this period, two of the eight fishing vessels were kept in harbour, saving further cost—but the most significant change to the fleet itself was that four of the six vessels currently operating have been converted to use IFO (intermediate fuel oil) from Hangana’s own N$32 million blending plant, opened in July 2009. In addition to this the plant has produced and sold blended fuel to the value of N$1 million.

The reason for building the plant was to save money on the fuel Hangana’s ships use but the business has potential to sell up to 2,400,000 litres to third parties. This will be a useful contribution to the bottom line if it happens, but van der Westhuizen will not allow his resources to be diverted from the core business of catching and processing hake; and in any case, the restrictions of the depth at the business’s dock would have to be overcome first. At present it is not deep enough to accommodate the 800,000 litre barges that are interested in buying IFO from Hangana.

The fishing industry measures its catch efficiency by something called catch per unit of fishing effort (CPUE). The cost saving initiatives of the past year, including conversion of the fleet to use cheaper fuel, has increased this rating by something like 25 per cent, van der Westhuizen says. “To put it in context, we have saved the equivalent cost of two vessels.”

Hangana Seafood is already seeing some return to normality in the market, and having come

Nampak Cartons & Labels is South Africa’s leading

producer of lithographic and gravure printed folding

cartons, manufacturing an extensive range of quality

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As an award-winning packaging company, Nampak

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vision

Aglobal

Over 30 years Dolphin Offshore Enterprises has emerged as India’s primary offshore oil and gas

industry diving and engineering service company, with a reputation for efficiency and innovation. Joint

managing director Navpreet Singh talks to Gay Sutton about his strategy for expansion and development


D o l p h i n O f f s h o r e E n t e r p r i s e s

vision global L

ike most innovative and dynamic companies, Dolphin Offshore Enterprises evolved from a chance business encounter aligned with the emergence of a new and expanding market sector. As joint owner of a ship repair company, retired naval Admiral Kirpal

Singh gained his first insight into the capabilities of the diving industry while working on a salvage contract, and was quickly able to see the opportunities for the sector in the newly discovered Mumbai High oil field some 100 kilometres offshore.

Singh sold his shares in the ship repair company and formed Dolphin Offshore Enterprises in 1979. Then, by linking up with Taylor Diving & Salvage Company, a subsidiary of the Halliburton Group, he acquired the necessary expertise and experience and began to provide diving services to state-owned ONGC (Oil and Natural Gas Corporation).

The business relationship worked very well and today, Dolphin is a large national institution with a reputation for innovation and efficiency, having pioneered many new diving and marine techniques in India and established a name for developing creative and effective solutions to challenging marine problems.

The company currently employs some 250 people at its offices in Mumbai and up to 2,000 people in its offshore activities. “Our focus is still very much on the oil and gas industry although we have done underwater work for the nuclear power industry and a fair amount of floating ship repair and salvage work,” explains joint managing director Navpreet Singh. “Until recently the bulk of our work has been on the Mumbai High oil field about 100 kilometres offshore, but over the last few years we have expanded our horizons and worked further afield with contracts in China, Vietnam and Malaysia.”

The company provides a comprehensive range of services, delivering anything from a single service through to complete turnkey and underwater engineering, procurement, fabrication and construction projects on oil rigs,

Over 30 years Dolphin Offshore Enterprises has emerged as India’s primary offshore oil and gas

industry diving and engineering service company, with a reputation for efficiency and innovation. Joint

managing director Navpreet Singh talks to Gay Sutton about his strategy for expansion and development


everything falls into place and it’s pretty simple.” In 1990 Dolphin successfully repaired a damaged

spudcan (rig foundation) in-situ for ONGC, and achieved the repair at a fraction of the cost proposed elsewhere. The solution that Dolphin’s engineers came up with was based on their knowledge of construction under hyperbaric conditions, and involved isolating the damaged section on the seabed by building and installing a coffer dam and then carrying out the repair inside the coffer dam.

This year, Dolphin’s engineers developed an innovative new product to help it achieve another first for India—the first pipeline retrieval for ONGC on the Mumbai High Field. Not only was the pipeline removed, but also the associated support grout bags. “For this we designed and developed our own grabber using a mixture of hydraulic systems. This was highly effective at removing the grout bags and enabled us to complete the job quickly and efficiently.”

It’s easy to see why good people are essential to Dolphin. The company policy is to employ only experienced and fully qualified staff, the majority of whom have been trained in Australia or the UK. “But we don’t treat people as commodities. We believe if we look after our people they will come back to work with us again,” Singh says. And this is very important as staff move around frequently within the industry, picking up knowledge and experience as they go.

Looking to the future, Dolphin has plans for expansion and diversification. “We have a three pronged strategy, going forward,” Singh explains. “Firstly we’re looking to expand market share in our current marketplace by establishing a larger

platforms and pipelines. The underwater capabilities include air, mixed gas and saturation diving and underwater engineering services rolled together as the Operations division. Topside construction and engineering work, including fabrication, pipe work and hook-up commissioning, is managed through the Projects division. These are supported by in-house marine management and marine logistics support services, which have been hived off into a wholly owned subsidiary, Dolphin Offshore Shipping.

Behind Dolphin’s success lies an interesting strategy for project management. “With most offshore operations there are generally three agencies pulling in different directions: the marine vessel’s master, the diving team and the topside team. Each one perceives the project from their perspective which creates conflict and inefficiency. We’ve overcome this by managing all aspects of a project as a single operation,” Singh says.

“On each project, we nominate one division to take the project manager role, supported by a management team comprising people from all three disciplines,” he explains. “Each element of work is therefore aligned with the client’s best interests rather than the individual’s own.” The resulting project is run efficiently, even down to appointing individuals to handle elements of work for all disciplines.

Innovation is another hallmark of the company. “We have pioneered many new diving concepts in India, and find creative solutions for our clients which are efficient and effective,” Singh says. “The real challenge is finding the right solution, and this is down to the expertise, experience and knowledge of our people. Once we’ve done that,


D o l p h i n O f f s h o r e E n t e r p r i s e s

footprint in greenfield construction, pipe laying and platform installation fabrication, and by increasing our share of ONGC’s budget from the current five per cent to around 25 to 30 per cent. Secondly there is a fair amount of deepwater work underway off the east coast of India currently done by foreign companies, and we would like to become the first Indian company to become involved in that. Thirdly, we intend to expand geographically into the Middle East and near Far East.”

Closer to home, the company is already well advanced with two major new investments that form the foundation for this growth. The construction of a waterfront fabrication and ship repair yard to complement the already established array of fabrication yards, workshops and storage facilities at Navi Mumbai will enable the company to undertake much larger projects and manage them effectively. Land is currently being sought in

Gujarat with the aim of having the shipyard up and running within three years.

The second project has a visionary element to it and begins with the construction of India’s first diver training school. Final negotiations are underway to acquire land alongside Koyna dam in the state of Maharashtra, and talks are in progress with several international diver training organisations to help develop an internationally recognised training institute.

“Initially the Institute is aimed at the diving industry,” Singh says. But his vision is much more ambitious. “I would like to see the school expanded into an Institute of Technology for the oil and gas industry. Already we are seeing Indians working all over the world in the industry. I believe that by developing this area of expertise, we can do for oil and gas what India has already done for the infotech industry.” www.dolphinoffshore.com


A major contribution to improved airline efficiency is coming from the air traffic

controllers, as Jeff Daniels learns

efficiency Skyhigh


AT N S

A major contribution to improved airline efficiency is coming from the air traffic

controllers, as Jeff Daniels learns

efficiency high

On any scale you care to use, those occupations which hold the most responsibility in their hands would have to include air traffic control high on the list. They are barely given a thought until something goes wrong but those individuals who man

air traffic control centres have a lot on their plate: hundreds of airline passengers who expect to complete their journey in safety; millions of pounds worth of aircraft; and the protection of a country’s reputation to control its airspace efficiently.


Fly across southern Africa and the people looking after you belong to ATNS—Air Traffic and Navigation Services Company, from its headquarters in Johannesburg. It is the sole provider of air traffic and navigation services within South Africa, responsible for approximately 10 per cent of the world’s airspace. Anywhere between 10° west and 75° east, and between 18° south and the South Pole lies in its airspace.

“We are present at 21 aerodromes within the country,” explains CEO Patrick Dlamini, “but our services extend far beyond just providing air traffic control. It encompasses the provision of vitally important aeronautical information used for all flight planning purposes as well as alert, search and rescue coordination activities, while all along maintaining a reliable navigation infrastructure.”

“We are present at 21 aerodromes within the country, but our services extend far beyond just providing air traffic control”


AT N S

“We are present at 21 aerodromes within the country, but our services extend far beyond just providing air traffic control”


During the summer, when South Africa played host to the World Cup football competition, the whole of South Africa’s aviation industry was working to full capacity—including ATNS. The first challenge meant securing a headcount of 410 suitably skilled air traffic control staff—the highest number of ATCs ever in South Africa at a given time. “Planning for this began as far back as 2006,” says Dlamini. “Our recruitment, training and validation initiatives went some way to reaching the target but a number of exceptional steps were also called for.”

With the agreement of Solidarity—the ATC trade union—ATNS was able to buy back off-day entitlements from willing controllers and to draft in

a number of temporary international staff to cope with the peaks of just a single month’s traffic. In this respect, ATNS played its part in an event that went off without a hitch and helped consolidate South Africa’s global reputation.

The current recessionary pressures have dampened the relentless growth in air travel but it is only a matter of time before demand once again increases, so aviation authorities the world over are trying to squeeze the maximum efficiency out of the skies. RVSM (reduced vertical separation minimum) is a process of reducing the conventional vertical separation from 2,000 feet to 1,000 feet. By introducing an additional six flight levels, the density of the skies has been increased but only aircraft with the required technology that have been approved by their respective countries for RVSM operations are permitted to fly in RVSM airspace.

But in addition to carrying more traffic, air traffic flow and capacity management have become just as important in improving aviation productivity. “In future,” says Dlamini, “the management of capacity will become equally important as managing the traffic flows—but always secondary to safety.”

The responsibility for the management of air traffic flow and capacity management within South African airspace rests with the Central Airspace Management Unit (CAMU) located at the Johannesburg air traffic control centre. Here, in addition to managing the functions of the slot

allocation programme, CAMU manages the flexible use of airspace to facilitate military exercises or any other unusual event that might require the use of airspace for a particular time period.

At the heart of such work is a collaborative decision making process and complementary technology commissioned by ATNS from its partners, Thales and Metron Aviation. The resulting Air Traffic Flow Management (ATFM) tool was completed in October 2009, in time to be fully operational during the World Cup. By allowing ATNS to predict the traffic flow well in advance, proactive measures can be put in place to efficiently and safely control traffic.

This advanced technological solution—

“In future the management of capacity will become equally important as managing the traffic flows—but always secondary to safety”


AT N S

in conjunction with collaborative decision making—enables airlines to wring the maximum productivity out of the system, through the efficient management of their allocated slots. It incorporates reports from weather services and displays current and predicted activity based on reiterative flight plan activity and can identify where there is under- and over-capacity. It then interacts with the users and other operators to review the schedule in a collaborative way, allowing for better planning at both strategic and tactical level.

The objectives of the system are many and varied but essentially it aims to reduce delays whether they be en-route or on the ground. Advance warning of problems provides an informed choice between departure delay, re-routing and/or flight level selection. At the same time, it enables ATNS to balance demand against capacity of air traffic control sectors, air routes and airports.

Under normal circumstances, the ATFM tool is in use at the country’s three principal airports in

Johannesburg, Cape Town and Durban; but during the World Cup, 20 of South Africa’s airports were incorporated into the slot system. “Not only is ATFM a significant contribution to overall air transport efficiency,” says Dlamini, “but beyond the benefits of efficiency and safety, it also addresses some of the ‘green’ issues for which the world’s aviation industry is seeking practical solutions.”

By cutting down on delays and waiting time, efficiency is enhanced through timely and accurate information on any event affecting the flow of air traffic and capacity of the airspace. So much so was the contribution that ATNS and the ATFM collaboration partners were awarded the 2010 Jane’s Airport Review Enabling Technology Award for contribution to enhanced capacity and safety.

It will no doubt be some time before ATNS has to cope with traffic levels similar to those of the World Cup again; but through this experience, it has demonstrated to all concerned that it can cope with whatever challenge comes its way. www.atns.co.za


www.mzansiafrica.co.za

Fourteen years after listing on the Johannesburg stock exchange, South Africa-based Netcare is an international corporation and the largest provider of private healthcare services both at home and in the UK. Ben Sansom reports on this meteoric growth

clinical touch


N e t c a r e

Fourteen years after listing on the Johannesburg stock exchange, South Africa-based Netcare is an international corporation and the largest provider of private healthcare services both at home and in the UK. Ben Sansom reports on this meteoric growth

clinical touch

It takes a special set of skills to turn a failing business around, stabilise and consolidate it and create a successful and dynamic organisation. Interestingly, this is exactly how Netcare—one of the most successful private healthcare providers operating

across South Africa and the UK—originated. Its 21 year development into the corporation of today, however, speaks of shrewd business acumen linked with in-depth understanding of the clinical world.


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Ne t ca re

The story goes back to 1989 when a South African GP, Dr Jack Shevel, took the first lateral step from medical practice into business management and established Clin-Run, a hospital management and investment company focused on identifying financially distressed medical facilities and turning them around. His strategy was to work in partnership with supporting doctors to restructure and reengineer the facility, and establish it as a thriving enterprise.

By 1994 he had successfully turned around five hospitals—one of which was subsequently sold—and developed two new ones in South Africa, creating a portfolio of six hospitals, a total capacity of 650 beds and some 1,185 staff. Before further expansion could take place, however, significant

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components, infusion systems and accessories, and

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with Baxter International established a platform for

other partnerships with global leaders in hospital

product development, supplying Adcock Ingram with

quality, innovative products for a growing market.

Adcock Ingram Critical Care (AICC)


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Ne t ca re

capital investment would be required to raise the business to a new level. To achieve this he formed Netcare as an investment holding company. Successfully listing it on the Johannesburg Stock Exchange in December 1996, he guided the company as CEO until 2006.

Today, Netcare is an international organisation offering hospital and trauma services, emergency services and primary care in South Africa where it currently employs around 20,000 staff. Further afield, the company operates the largest network of private hospitals in the UK, as well as providing services to the HNS through Netcare UK.

Transforming Netcare from a hospital turnaround company to an international organisation on this scale began with the development of a doctor-centric business delivery model that aligned the interests of all the parties, patients, medical staff and investors. This was rolled out across all the hospitals and medical services within the business, the aim being to provide high quality healthcare services at affordable prices.

Between 1996 and 2000, Netcare acquired a considerable number of independent hospitals including 25 through the acquisition of Clinic Holdings and 10 through Excel Medical Holdings; meanwhile in 1998, the company launched Netcare 911, a private emergency ambulance service. This was followed by a period of business re-engineering and rationalisation. Five head office structures were consolidated into a single operations centre, and three hospitals were closed as the result of an in-depth study of the group’s portfolio.

With its house now in order, Netcare set out on a course of expansion and diversification in 2001. The hospitals were folded into the hospitals division while Netcare 911 became the emergency services division. In that same year, the company made a major acquisition, bringing managed health provider Medicross into the group to form the foundation of a new primary care division. Retaining the Medicross brand identity which was a household name in South Africa, Medicross then acquired Prime Cure


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Ne t ca re

Holdings, a provider of primary care services for the emerging market, in 2006.

The hospitals division grew organically as well as by acquisition. Two new hospitals—at Alberlito and Blaauwberg—were constructed and opened in 2007. And in the same year a majority black-owned entity, Community Hospital Group, became part of the company, increasing the portfolio of hospitals by a further five. Then 2008 saw the acquisition of Linkwood Clinic, a specialised 33 bed obstetrics and ophthalmology hospital.

In parallel with this rapid growth in South Africa, the company began to establish its presence in the UK market, setting up Netcare UK in 2001 to provide specialised healthcare services on contract to the National Health Service (NHS). This was followed by a second major move that established the company’s leading position as a private healthcare provider in the UK. In May 2006, the company acquired a controlling

Netcare and Kimberly-Clark enjoy a business

relationship, the foundation of which was established

at Netcare’s inception. Amongst the many factors

contributing to this successful relationship are the

people involved in daily activities between the two

companies as well as mutual recognition and respect

the two organisations share. Both organisations are

leaders in their respective fields, aspiring to values

such as authenticity, accountability, innovation and

caring. Kimberly-Clark’s commitment to providing

branded products, which surpass clinical requirements

and contribute to improved patient outcome,

concurrent with significant financial benefits meets

Netcare’s need to provide optimum patient care in a

market which has significantly rising costs.

Kimberly-Clark


Ne t ca re

interest in General Healthcare Group (GHG) which owns the UK’s largest private acute care hospital provider, BMI. By August, Netcare had successfully brought the two organisations together, running the NHS service provision of both organisations as a single service under GHG.

Still on the acquisition trail in the UK, GHG continued to expand its position by acquiring seven of the Nuffield private not-for-profit hospitals along with the Oxford Clinic, the Woodlands Hospital in Darlington and the City Medical consulting suites in London in 2008, followed by the Fitzroy Square Hospital in 2009. Since that time, the group has also opened the UK’s first 24/7 private emergency care unit and introduced a renal dialysis service.

Netcare still has its roots and heart in South Africa and continues to push the boundaries, exploring ways to provide the highest quality medical services at the best price, making private healthcare affordable to lower income groups in the community, and supporting the development of the nation.

In July 2003, the company spearheaded an initiative to form South Africa’s first multi-disciplinary managed care provider network—Netpartner Investments. In this it was supported by more than 6,000 participating doctors, specialists and dentists. By the simple economies of scale, medical schemes and managed care products have subsequently been extended into segments of the community that had previously not been able to afford private care.

The evolution of the public private partnership (PPP) concept in recent years has also enabled the public and private sectors to pool their resources and begin the rollout of healthcare to all South Africans, regardless of their background and financial resources. To date, Netcare has participated in a number of PPPs, including the Universitas Hospital and Pelonomi Hospital in Free State, the Settlers Hospital and Port Alfred Hospital in Eastern Cape, and Bronkhorstspruit Hospital in Gauteng province. And its reputation

in this field has spread beyond the boundaries of South Africa. In 2008 the company was awarded a R1.1 billion healthcare PPP by the government of Lesotho to build a hospital in Maseru.

Much still needs to be done to provide healthcare across the nation. The company therefore continues to pursue PPP opportunities in joint ventures with emerging and existing black economic empowerment companies and with community trusts in the locality of a PPP project.

Netcare has developed a number of other initiatives including the Stork’s Nest, a network of clinics located at 27 of the company’s hospitals that provide a wide range of maternity-related services such as antenatal education, well baby clinics,

postnatal education, transplant and renal dialysis services, and HIV diagnosis and management.

In 2010 the company celebrated 21 years as a healthcare training provider, not only training its own staff but also offering courses to independent students and other healthcare providers through a network of five campuses across South Africa. The training schemes include basic and advanced nursing, ancillary healthcare, general skills training and leader shop and management development.

From a purely commercial perspective, the company also diversified into a range of service areas: for example, providing medical staffing solutions for large mining, construction and oil companies operating in remote sites in approximately 13 countries around the world. It has also developed a number of innovative products such as specialised travel advice, trauma support, capitation arrangements with medical schemes, and fund management for medical schemes and corporate clients.

All of these services, developments and acquisitions within South Africa have now been consolidated into the company, and are managed as two divisions: the hospital and emergency services division and the primary care division.

Today there are 57 Netcare hospitals located around South Africa, many of them equipped with accident

“Netcare is an international organisation offering hospital and trauma services, emergency services and primary care in South Africa where it currently employs around 20,000 staff”



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and emergency units and retail pharmacies located on site, all providing a wide mix of services. Some highly specialised disciplines, such as oncology and renal dialysis, have been brought in and managed as joint ventures with specialist providers such as Adcock Ingram, which operates a national network of units treating chronic dialysis patients.

From the emergency perspective, Netcare 911 has expanded considerably since its launch and was trusted with the prestigious contract to provide emergency services for the 2010 FIFA World Cup. The service operates a country-wide fleet of 170 emergency vehicles, 70 rapid response vehicles, three helicopters and two fixed-wing air ambulances, all equipped with satellite vehicle tracking and laptop devices and crewed by advanced life support paramedics. At the heart of this extensive network lies a 24-hour emergency operations centre that not only manages and coordinates all pre-hospital

emergencies, but also hosts the largest private emergency medical training centre in Africa.

The primary care division provides medical and dental services through Medicross and managed care for the low income market through Prime Cure. In total there are 108 Medicross and Prime Cure Medicentres, 41 retail pharmacies and 12 day theatres. Meanwhile, the Prime Cure managed care business manages a network of more than 10,000 health service providers including some 3,900 contracted doctors and dentists.

The focus at Netcare continues to be on providing quality services and supporting national development. Voted one of the Top 10 Companies to Work For in 2010 in the Deloitte survey, Netcare seems to have continued Dr Shevel’s innovative doctor-centric delivery methodology, and looks set to continue its expansion in the healthcare sector. www.netcare.co.za


Jeff Daniels takes a look at the dominant business in Kenya which is encouraging innovation and new ideas across the market

the jungleKing

A quick glance by an outsider at the name Safaricom and you’d be forgiven for thinking it had something to do with animals and game parks. But look at the profit statement of £150 million and you realise immediately that no elephant-spotting business would ever be able to generate this sort of return.

of


S a f a r i c o m

Jeff Daniels takes a look at the dominant business in Kenya which is encouraging innovation and new ideas across the market

jungleJanuary 11 www.bus-ex.com 141


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S a f a r i c o m

In fact, Safaricom is Kenya’s leading telecommunications company—although one newspaper report did liken Safaricom to an 800-pound gorilla: “Hairy, burly and able to crush any kind of opposition in its way.” At the moment, there are at least three other entrants to the gorilla’s domain; but with Safaricom’s origin in 1993 as a department of Kenya Posts & Telecommunications Corporation, it has a long head start, to the point where it still holds a shade under 80 per cent of the market.

In 1997, Safaricom’s status was converted first to a private limited liability company, then five years later to a public company with limited liability, although the government still held 60 per cent of the shares. Following the sale of 25 per cent of the issued shares to the public in 2008, the government no longer has a controlling interest in Safaricom and the provisions of the

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Sa fa r i c om

State Corporations Act have ceased to apply.How things have changed in this time. Under

the guidance of long-standing CEO Michael Joseph, Safaricom has gone from a workforce of half a dozen to 10,000, with revenues of over £600 million and the proud status of being Kenya’s most profitable company.

In its portfolio of services, Safaricom offers mobile phone services, fixed line wireless telecommunication, internet and data services. It also provides general packet radio services, third generation (3G), enhanced data GSM environment and mobile money transfer solution M-Pesa.

To round off the transmission offerings, Safaricom is actively involved at retail level with the Safaricom

Shop chain selling handsets and laptops. It has also entered into various partnerships with leading communications companies from around the world to diversify and expand its service offering. By partnering with networks and handset providers, it is able to offer an integrated package / value added service to its customers.

As from November 2010, Joseph took the opportunity that going public provided to step aside and hand over the reins to Bob Collymore, who was previously chief officer for Corporate Affairs at Johannesburg-based Vodacom Group. Collymore has been given a marvellous platform from which to grow but there is still plenty of scope for him to work with. Across Africa in general,

“Future performance will be underpinned by continued dominance in the voice market and Safaricom is promoting dynamic tariffs to maintain this position”


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Sa fa r i c om

growth in copper wire communication has been overtaken by mobiles; and yet the penetration varies enormously, from Burundi at the bottom of the league table to Seychelles at the top. Kenya lies about mid-way, with a 50 per cent penetration.

Future performance will be underpinned by continued dominance in the voice market and Safaricom is promoting dynamic tariffs to maintain

this position. However, it is data transmission that is expected to make the most significant contribution. While penetration into the voice market has reached a high level of saturation—growth last year, for example, was just eight per cent—revenue from data grew by 73 per cent and now accounts for almost a fifth of the total.

Lest you jump to the conclusion that these


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Sa fa r i c om

increases are coming solely from business activity, the real driving force behind the figures is a service known as M-Pesa—an innovative money transfer service aimed at mobile customers who do not have a bank account, either by choice, because they do not have access to a bank, or because they do not have sufficient income to justify a bank account.

Kenya is the first country in the world to launch M-Pesa, created as a partnership between Safaricom and Vodafone. It doesn’t pretend to be a bank as it isn’t a deposit-taking institution, nor

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is interest accrued or credited. It simply aims to facilitate money movements through the mobile network. With it, bills can be paid and in the case of the UK, international money transfers can be made—often a vital contribution to the financial wellbeing of residents.

Customers’ money is held safely in a bank account run by M-Pesa on their behalf, although the bank itself has no contact directly with customers; and transfers to another registered Safaricom user are added to their account balance. But using a voucher system, money can also be sent to non-registered users, including those on another network. M-Pesa sends such people a one-time voucher that can be redeemed at an agent’s shop.

Like many successful businesses in Africa, Safaricom is actively engaged in trying to improve

Sa fa r i c om


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Sa fa r i c om

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living conditions for the population at large—many of whom are still surviving on no more than $1 a day. The vehicle is the Safaricom Foundation, established in 2003 as a registered charity funded by Safaricom and the Vodafone Group Foundation.

The foundation provides a formal process for charitable contributions to be made to community groups and non-governmental organisations throughout the country that are responding with sustainable solutions to social and economic development issues. The focus is on areas such as education, health, economic empowerment and environmental conservation, as well as broad-based cultural activities in the arts, music and sports.

One of the Millennium Development Goals is to eradicate extreme poverty and hunger by 2015—an objective that impacts on job creation, income generation and food security. It aims to include all sectors of the population and to develop full and productive employment for them. The foundation has partnered many groups striving for economic self-sufficiency—this way, income generating projects as diverse as animal rearing and small scale industries have been supported, including lending a helping hand so that people with disabilities can also generate income for themselves. www.safaricom.co.ke


Building infrastructure


C y c a d P i p e l i n e s

The development of South Africa’s economy over the past 20 years has been a gradual process, slowed down by the need to radically improve the country’s infrastructure. Cycad Pipelines has played in helping to develop the mining, water and power generation industries across the sub-Sahara regionBuilding

infrastructure Although regarded as the hub for Africa’s business world, South Africa remains a country with infrastructure deficiencies. As the country develops a new industrial heartland, demand

is intensifying for improved water, gas, oil and power systems, and investment continues apace—which can only be good news for companies like Cycad Pipelines.


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C yc a d P i p e l i n e s

The Springs-based company, located in the Gauteng region of South Africa, provides a variety of pipeline-related services that cover construction and refurbishment for the water, gas, fuel and sewerage industries. This gives the business an exciting basis for growth over the next few years, as the South African government recognises the need and continues to invest in infrastructure improvement.

The company formed in 2005 as the result of a merger between Cycad Construction (Pty) Ltd and Peter Oates Pipelining (Pty) Ltd. The former company had operated since 1988, the year that saw one of its earliest successes—the construction of a six km concrete outfall sewer pipeline measuring 1,200 mm in diameter. The project was carried out on behalf of Benoni City Council and proved a forerunner


to the much bigger local government contracts awarded to Cycad to this day.

The new, privately-owned business quickly established itself as a leading South African pipeline operator, receiving certification from the Construction Industry Development Board Act 28 of 2000 (RSA) in two categories covering civil and mechanical engineering.

While annual revenues have fluctuated in recent years from between R200 million and R500 million,

Cycad’s willingness and capacity to work on medium-sized projects has encouraged its growth and helped to build up an impressive portfolio of completed projects. Part of the reason has been the demand for Cycad’s range of services on jobs in South Africa, Botswana, Mozambique and Namibia—projects not large enough in size to entice the bigger global competitors.

A prime example is the recent completion of a steel water pipeline between Padda Junction and

“The company’s ability to deliver on time is critical to certain projects”


Tuschenkomst for the Pilansberg Platinum mine, situated on the western limb of the Bushveld complex, north of Rustenburg. The project was led by engineering company Thuthuka Group Limited (TGL), with Cycad responsible for building the pipeline to a strict deadline, coping with difficult weather conditions as approximately 100 mm of rain fell per day. The 30 km long, 750 mm diameter pipeline provided water to two new platinum mining sites; and Cycad succeeded in meeting its guarantees to complete this part of the project by the prescribed deadline.

The company’s ability to deliver on time is critical to certain projects. The recent prolonged period of drought badly affected the Umzinto Dam, which in October was only 18 per cent full and falling. Umgeni Water agreed to assist the Ugu District Municipality to install a 250 mm diameter pipeline from the Ellingham Reservoir to the Umzinto Water Treatment Works, a project that was fast-tracked for completion before Christmas 2010. Cycad is currently working closely with the municipality to build the 5.8 km long pipeline on time, to ensure adequate potable water can be delivered to the local population.

Meanwhile, in nearby Namibia, the company has played a key role in the development of a desalination plant for the French nuclear giant Areva at its ground-breaking uranium mine in Trekkopje. Upon completion, the site will be the world’s first uranium mine to use a process called alkaline heap leaching. The project will also require enormous volumes of water—a rare commodity in this part of Namibia. Work began on the desalination plant, located approximately 30 km north of Swakopmund, in 2009, with Cycad responsible for construction of an 800 mm diameter cast iron surface pipeline that extends 48 km, traversing the Namib Desert. The project is typical of the kind of work with which the

company is now involved; and it will not just be the mine that benefits, as domestic and industrial users in the Erongo Region are also set to use the new water supply.

Cycad also played its part in the construction of the Berg Water Project, a R1.5 billion initiative that increased the supply of water to Cape Town by 18 per cent. The company was awarded a R105 million contract to supply and construct 12 km of pipelines, with work beginning in 2004 and finishing on time and within budget in 2007.

The completed project has made an enormous difference to Cape Town. Commenting on the impact, Willie Croucamp, chief director of Infrastructure Development at the Department of Water Affairs and Forestry, said: “This is the largest dam to be completed in South Africa since the democratic government and administration came to power in 1994, a symbol of national pride. The project leaves behind a legacy that will continue to positively impact on the lives of the local people for many years to come.”

Legacy is something that is etched in Cycad’s training approach, an area that has seen the company develop raw talent through its drive to recruit youngsters and equip them with welding and installation skills via its in-house training system. It is a strategy which has also fitted in with Cycad’s Black Economic Empowerment efforts since 2003, and the company has attained Level 7 certification.

The recruitment and training initiatives now look set to pay off, given the South African government’s commitment to providing universal access to water for everyone by 2014. A study by the African Infrastructure Country Diagnostic team in November 2009 estimated that there was R700 billion per annum worth of infrastructure work needed for the next 10 years—and high on the study’s agenda was electricity, water supply and road improvements. The former two will certainly present Cycad with a wealth of potential business opportunities for the foreseeable future.

And even more new business may be just around the corner, with Cycad currently awaiting the results of a joint bid (with Esorfranki Pipelines) on an R800 million bulk water supply project in Durban. The announcement of the successful bidding team is expected before Christmas and could make for an exciting start to 2011. www.cycad.co.za


Jeff Daniels takes a look at how the health delivery system of Abu Dhabi is providing its citizens with

the best medical facilities possible

Health oasisO

ver 60 years ago, Britain helped change the health expectations of the world by introducing a universal health service to people who previously had nothing. At times, though, buildings and facilities in the NHS don’t seem to have changed all that much in half a century, so it makes an interesting comparison to see how the Emirate of Abu

Dhabi is doing it in the 21st century. Abu Dhabi is the largest of the seven Emirates or states that comprise the United Arab Emirates

(UAE), founded in December, 1971. The UAE has a population of about five million, of which only about 20 per cent are UAE nationals. With the original objective of providing a free health service to Emirate citizens, the government has invested hundreds of millions of dollars over the past couple of decades.

Not surprisingly, Abu Dhabi is investing its resources to develop a healthcare system that is comparable to the best systems in the world. As part of its long range plan, Abu Dhabi is leading the way in the UAE and the region in developing a more modern, responsive healthcare delivery system. In a series of sweeping reforms, it has introduced mandatory health insurance, creating its own government-backed health insurer, DAMAN; a standalone, government regulatory body called the Health Authority – Abu Dhabi or HA-AD; and transferred responsibility for ownership and operation of its public hospitals, clinics and blood banks to a new independent public joint stock company called Abu Dhabi Health Services Company PJSC, whose marketing name is SEHA. Seha is an English phonetic representation of the Arabic word for health.


S E H A


The government’s intention in forming SEHA is to put the public healthcare system on a financial and operational footing similar to that of the private healthcare operators in the market, thereby increasing competition, controlling costs and delivering better results to the patient long term. In doing so, it hopes to reduce the number of people who leave the country each year for treatment abroad and develop confidence and trust in local healthcare delivery.

SEHA is the recognized leader in the market at this time with around 80 per cent of all inpatients and 60 per cent of all outpatients in the Emirate served through its facilities. With the increased competition, the challenge is to retain market share but also operate more efficiently to reduce cost exposure while creating a world-class healthcare system.

“Our mission is to continually improve customer care to recognised international standards,” explains SEHA’s director of Facility & Construction, Saif Fadel Al Hameli. “Our vision is to provide our customers and communities with world-class healthcare, and quality healthcare facilities are an important ingredient in achieving that vision. It is our goal to improve the infrastructure and create a healthcare environment for patients that is competitive with the best health systems in the world.”


SEHA


www.allenshariff.com

SEHA

in the Middle East with 16,500 doctors, nurses, ancillary care and administrative personnel.

Now though, there are two exciting new developments in progress: SEHA has started the construction of hospitals at Mafraq and Al Ain. Both areas already have hospitals but they will be replaced within three or four years with new, state-of-the-art facilities. The design of both hospitals has been recognised by being shortlisted for the prestigious Hospital Build Awards in which Al Mafraq came first in the Best Sustainable Hospital Project category.

Al Mafraq is situated close to the future Abu Dhabi Central Business District. Surrounded by sensitively landscaped grounds, the 272,000

Starting with a blank sheet, SEHA has formulated its own way of working. As part of its business strategy, it seeks out partnerships with internationally recognised experts. Much of the style comes from the US—generally considered to have the best medical treatment. As such, SEHA calls on the help of institutions such as Johns Hopkins Medicine International and Cleveland Clinic Foundation; but it is just as willing to look to Europe and Asia in the shape of Medical University of Vienna, VAMED and Bumrungrad International.

SEHA owns and operates 12 hospitals with 2,644 beds, 62 ambulatory care, family care and urgent care centres and two blood banks. It’s one of the largest integrated healthcare providers

“Our mission is to continually improve customer care to recognised international standards”


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SEHA

square metre hospital does not disgrace the high standards of architecture in the UAE. Its four prominent patient towers exude contemporary confidence in the state-of-the-art healthcare taking place within.

Each tower contains no more than 30 single rooms per floor, providing 745 beds in total, all featuring large windows and ample natural light. In addition to providing enhanced patient

Al Mafraq Hospital will set the benchmark of how

healthcare will be delivered in Abu Dhabi. In addition

to providing the highest level of care and economies

of operation, and a new experience to medical staff

and patients, the hospital will become the standard

for modern healing environments. It will offer an

enhanced and comprehensive patient care program

in its delivery of excellent urgent care and general

medical services. Al Mafraq Hospital will be a state

of-the-art healthcare facility that reflects the future

of healthcare in Abu Dhabi.

Burt Hill


www.icme.com

SEHA

environments, the entire facility is designed for long-term efficiency, sustainability and maximum energy savings, with rooftop gardens and the latest energy conservation devices.

Readers familiar with construction in North America will be aware of LEED—Leadership in Energy and Environmental Design—which is driving up standards in sustainable design and construction, particularly among public buildings with silver, gold and platinum grades. In the UAE, the system is known as Estidama, which awards up to five pearls for the highest standards.

“SEHA works to recognised international standards,” confirms Al Hameli. “Engineering is carried out by specialised engineers and then independently reviewed by the project managers’ team before being submitted to different governmental departments for peer review and approval. Underlying all work is the demand to achieve at least two pearls on the Estidama scale.

“We design and supervise the construction through specialised project managers and consultants,” he continues. “We adopt a teamwork policy with all project partners, helping them to do good work for SEHA with the focus and aim of providing the best healthcare services for our patients.”

Both facilities have been designed using

ICME is a specialized management consulting

firm, and healthcare is one of our major areas of

experience and project references. ICME offers public

and private clients full service advisory and turn-

key project management solutions for healthcare

development projects.

We consider ourselves advisors and project managers

to assist our clients (health ministries, governing

bodies, advisory boards and conglomerates) in any

of the three dimensions of the development and

realization of healthcare projects, be it

1) Strategy planning (national and project level)

2) Healthcare facility planning including design

management, functional space programs, medical

equipment planning and

3) Site supervision and construction management of a

healthcare facility including ambulatory care centres,

primary healthcare centres, secondary / tertiary

hospital or a rehabilitation centre.

As ICME we have been involved in development projects

and planned and designed hospitals, specialised centers

and rehabilitative care facilities in the range of 300-

1100 beds, both regionally and globally.

ICME


www.npcuae.com

www.alshafar.com

SEHA

environmentally friendly and energy efficient design elements and will be constructed under the most stringent sustainable principles available. Wastewater will be recycled, and electrical consumption minimised through the use of low-voltage LED fibre optic interior sun lighting powered by solar panels. Passive cooling and shading will minimise the need for air conditioning, although in 50-degree summer heat, nothing will fully replace it.

“To make sure there is continuity of these critical services and a comfortable environment for patients, contractors are obliged to use only the highest quality equipment for both electrical and mechanical works, including providing electrical back-up generators and additional chillers to make sure that the services are provided continuously,” says Al Hameli. “SEHA also contracts with private specialised maintenance contractors to maintain the equipment and the facilities to a high standard.”

Finding one’s way around the vast building is aided by the incorporation of elegant sculptural elements into the building’s fabric and memorable water features that orient visitors to the patient

towers’ elevator lobbies. Local cultural sensitivities have been catered for, with a separate tower and entrance dedicated to speciality services for mothers and children.

One of the problems all hospital designers face is ensuring that in the time between when plans are first laid to the day doors open for patients, technological advances haven’t overtaken the builders and the facilities are saddled with equipment that is already outdated. By consulting with all sectors of the community—medical and engineering—the hospitals are being designed to accommodate all known equipment; but there has to be a flexibility to live with last minute changes. “We at SEHA adopted a policy to procure the medical equipment only as the end of the project approaches, to make sure that the facility is provided with the most up-to-date and recent medical equipment and technologies,” says Al Hameli.

When the new hospitals open in 2013 and 2014, they will provide a new benchmark for health services in the Middle East. www.seha.ae



JANUARY 2011 emea

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