After more than half a century as a family business, the ailing company has reached out to an outsider to turn it around and focus on its future
There is an irony of sorts, given the history of South Africa, that a company started by an Afrikaner engineer at the height of apartheid in the mid-1960s will next month have a black man and an outsider at the helm for the first time. Former MTN SA CEO Mteto Nyati will take over as CEO of ailing Altron from Robbie Venter, son of Bill Venter – who started the company in 1965 – on April 3.
Under the Venter sons, Robbie and Craig, the Altron group has lost its way and this has caused the Venter family to relinquish control, step aside and look for someone else to run the company for the first time in more than 50 years.
The change comes as Altron made losses in four out of the past five years – in 2016, 2015, 2014 and 2013, including a loss of almost R1 billion in 2013 and a record loss of R1.1 billion in 2016.
Venter senior and Robbie will remain on the Altron board as nonexecutive directors.
The Venter family still has an 18% economic interest in Altron and a 25.1% voting position.
Last month, Altron shareholders backed the end of absolute control by the Venter family via a voting structure.
Nyati said during an interview this week that he had first been approached by an executive search company in July last year.
When the discussions started, Nyati learnt what the company was looking for and he discovered that he could “add value”.
It was indicated to Nyati that Altron was looking for a new CEO that had local and international experience and a track record of success running large enterprises.
It was also important that the new leader of Altron would connect with the family values of the business, he said.
The selection of the Altron CEO was a “very long” process that concluded in February this year, he said.
Nyati said the process included numerous interviews, including with Venter senior, who in February was replaced as Altron chairman by Mike Leeming; Robbie Venter, who is the outgoing Altron CEO; Altron board members; as well as the private equity fund Value Capital Partners (VCP), which is headed by Antony Ball and Sam Sithole, who are formerly CEO and chief financial officer of Brait, respectively.
VCP has a 15% stake in Altron.
He said that the mandate from the Altron board was that the group would focus on information and communication technology (ICT).
Altron consists of Allied Technologies, Bytes Technology and Power Technologies, which are invested in the telecommunications, IT and power electronics industries respectively. The plan would be to firstly turn around the group, Nyati said; then retain Allied Technologies and Bytes Technology; and sell Power Technologies, before doing acquisitions that would augment Altron’s ICT focus, he said. Once the Altron turnaround had been completed the focus would be on “accelerated growth”, he said. “We first need to stop the bleeding. “It won’t be an easy transformation. There needs to be a change made to the company structure and the way people are incentivised,” he said. “The challenges are going to be huge. “The transformation of the business will make it relevant in a digital world,” he said. Currently, Altron’s various units operated in silos and the challenge was to make the group’s companies more customer-facing. Nyati said a “big opportunity” in the ICT space was the use of cloud computing – which is the use of a network of remote servers hosted on the internet to store, manage and process data. Altron would look to become the preferential provider of ICT services to local business and government, he said. Once he starts at Altron, the key issue for him would be to conduct a review of the group. “We need to look at the mission of the group, strategy, focus and new areas of ICT,” Nyati said. The review would take up at least the first 90 days. Nyati said that his ambition for the Altron business was to retire at the company and leave it operating at a really important ICT place. He would also like to see Altron increase its business outside South Africa, including the rest of Africa, and elsewhere in the world to ensure a balanced position, given his experience at MTN. Nyati (52) is from Mthatha in the Eastern Cape. He holds a Bachelor of Science degree in mechanical engineering from the University of KwaZulu-Natal. He has worked for Afrox, Tastic Rice, Nampak, IBM SA, Microsoft SA and MTN, which included being Microsoft SA managing director and MTN SA CEO. He has previously served as a nonexecutive director of AdvTech and Blue Labour Telecoms. In 2004, he was named one of Yale University’s world fellows on global leadership. In 2013, he won the male business personality of the year at the Oliver Transformation and Empowerment Awards. In 2014, the Institute of Information Technology Professionals of SA made him its IT personality of the year.