Water a better proposition
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.