Wa­ter a bet­ter propo­si­tion

Finweek English Edition - - Business strategy - SIKONATHI MANTSHANTSHA

THE JSE-LISTED RARE GROUP went into An­gola four years ago to seek op­por­tu­ni­ties in the petro­chem­i­cal in­dus­try but found a di­lap­i­dated so­cial ser­vices in­fra­struc­ture rav­aged by decades of civil war. The group quickly re­alised that wa­ter and san­i­ta­tion would of­fer bet­ter growth op­por­tu­ni­ties than the en­ergy sec­tor. It iden­ti­fied An­gola as a strate­gic growth area and started op­er­a­tions through Rare An­gola En­ergy in 2003, ser­vic­ing mainly the oil and gas sec­tor.

Al­though Rare An­gola En­ergy has won many lu­cra­tive con­tracts in its three years of op­er­a­tions, in less than 12 months Rare An­gola Wa­ter is al­ready half the size of its en­ergy sis­ter com­pany. It’s set to over­take the en­ergy busi­ness. Chief ex­ec­u­tive David Scheep­ers says the com­pany has con­verted more op­por­tu­ni­ties in wa­ter than in petro­chem­i­cals. “No one else has re­ally wo­ken up to the wa­ter sec­tor in­fra­struc­ture op­por­tu­nity,” says Scheep­ers. “For­eign en­ti­ties go in to fo­cus only in the petro­chem­i­cals side.”

“We are as­sist­ing the An­golan gov­ern­ment put to­gether a plan for wa­ter and san­i­ta­tion in­fra­struc­ture,” says Rare Wa­ter mar­ket­ing di­rec­tor Al­lis­ter Ba­lutto.

“The po­ten­tial is enor­mous, for wa­ter and sewage projects alone we are work­ing in five prov­inces with the gov­ern­ment. The scales are tilted in our di­rec­tion as one of three lo­cal bid­ders in a US$40m (R296m) con­tract that will be awarded soon.” Ba­lutto says a for­mal gov­ern­ment bud­get for the wa­ter and san­i­ta­tion in­fra­struc­ture in­vest­ment is a work in progress. Al­though the An­golan wa­ter di­vi­sion started only in June 2006, it has won US$1,1m (about R8m) in busi­ness from the gov­ern­ment for projects in Malanje prov­ince. Rare is also in the run­ning to sup­ply 79km of pipes also in Malanje for a new hous­ing de­vel­op­ment.

Count­ing Sa­sol as its big­gest cus­tomer, Rare Hold­ings was es­tab­lished as Van Leeuwen South Africa in 1975 to be a sup­plier of pip­ing ma­te­ri­als in the petro­chem­i­cal, chem­i­cal, en­ergy and in­fra­struc­ture sec­tors. It evolved into the Rare Group in 2002 af­ter an in­vest­ment by BEE en­tre­pre­neur and Real Africa In­vest­ments founder Don Ncube’s Sun­shine Street In­vest­ments, which gave it a 29% BEE sta­tus. Ncube is chair­man of the com­pany.

To­day the Rare Group is or­gan­ised into three di­vi­sions cov­er­ing the en­tire fluid con­veyance cy­cle.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.