Page 45 - IDC

6 CITY PRESS, 12 NOVEMBER, 2017
BE POWER

SMART

Newly electrified homes need a way to measure their

consumption and Matsotso Vuso’s meter assembly plant is

providing the perfect solution, writes Caiphus Kgosana

outh Africa has set itself loan to commence operations
an ambitious target of because of the risks involved.
electrifying every home The Infrastructure Development
by 2020. Through the Bank of Zimbabwe, which funds
National Electrification most of the projects undertaken by
SProgramme, run by the power utility of that country,
Eskom and the department of energy, came to their rescue. But their
each new installation must be financial assistance came at a cost.
accompanied by a smart, prepaid Nyamezela had to cede to the
meter that puts consumers in charge bank its entire contract and all
of their own electricity consumption payments it received from the power
and spending. utility until the full facility was
This is where Nyamezela Metering, repaid.
a 100% black female-owned “The risks were many. You almost
manufacturer of smart meters, sees had to be based there to implement
the massive potential for growth. the project. Regarding cash flow, it THE VISION Quereshini Naidoo PHOTO: EUGENE GODDARD
“We are seeing huge opportunities was a strain because we had to take
in municipalities that Eskom is not our resources in South Africa to go
supplying [with smart meters], and and implement a project there.” Clever engineers
we are working on a funded model But Nyamezela pulled it off and
to approach those municipalities. staff gained valuable experience
Most don’t have capacity and don’t from implementing a major project
have the funding,” says Matsotso in Zimbabwe. It put the company on
Vuso, managing director of the a solid footing with Eskom in South
Nyamezela Group. Africa. UNITE
Her company is in the process of “It profiled us as one of two
winding down an order with Eskom companies that can supply this type
for the manufacture and supply of of residential meter to Eskom
450 000 smart meters. The product nationally,” says Vuso.
it supplies is a split prepaid meter, When the tender was issued, the
which is smart enabled. For it to be company was ready for it. However, CAIPHUS KGOSANA immediately interested in the
a full smart meter, however, it must the scope of the South African work business@citypress.co.za transaction because it involved an
be able to send data back to the required increased capacity. In industry that it was focusing on. It
utility using a data concentrator. addition, because Nyamezela was a he story of how F&K also had an excellent relationship
Although the components are new customer, Eskom was seeking Engineering and Hlakani with Hlakani, having financed two of
manufactured in China through a full guarantees worth the value of TEngineering came together is the company’s expansions.
deal with a technical partner, the the contract it had awarded. inspirational. “Sustainable industrial
meters are assembled at Nyamezela As a result, Nyamezela needed a A veteran of 29 years in the development and job creation are
Metering’s plant in Robertville, massive cash injection, and that is engineering industry, F&K is crucial for us, mainly as [they]
western Johannesburg. when it approached the Industrial legendary in the Middleburg and ensure our continuation and ability
Vuso, a qualified chartered Development Corporation (IDC). greater Mpumalanga area for its to meet the exacting demands of
accountant, started the Nyamezela “The IDC came in handy. Eskom workmanship and delivery. industrial clients,” she said.
Group in 2009 as a group of wanted cash-covered guarantees When Hlakani was started in 2009 The name Hlakani is a clever play
companies operating in the from a bank and the IDC helped us by media personality turned on the words ‘hlakaniphile’ and
engineering and consulting space. Its with that,” says Vuso. entrepreneur Quereshini Naidoo and ‘hlanganani’, which are isiZulu for
main clients were municipalities, PLENTY TO COME Matsotso Vuso For now, its products are almost her business partner Gerhard the words ‘clever’ and ‘unite’,
including the City of Joburg’s power PHOTO: EUGENE GODDARD entirely installed in newly electrified Holtshauzen, F&K offered them office respectively
utility, City Power. That is when it homes, and Vuso believes there is space to launch their new venture. .
saw a gap on the manufacturing side since most still a long way to go in getting consumers to Hlakani was not asked to pay rent, Naidoo admits that she knew very
companies that were contracted to supply smart meters understand the value of having a smart, prepaid but to rather contribute to a charity little about engineering before
were importing them fully assembled. electricity meter. In Soweto, angry communities have of F&K founder Frans Stapelberg’s entering into a partnership with
“We contracted to cut-off customers that don’t pay for A project in often taken to the streets to protest against the choice. Holtshauzen and Hermann Brummer.
electricity. We did technical audits and, in some cases, installation of smart meters in their homes. Over the next eight years, the She attributes her success in running
installations of electricity meters for customers. That is “There is a lot of misunderstanding from consumers young company grew so fast that, this operation to her refusal to take
how we developed an interest in manufacturing these partnership in terms of what the product can do. If you use a when Stapelberg and his business no for an answer.
meters,” she said from a plush boardroom adjacent to conventional meter, you are faced with huge costs at the partner Kevin Thring decided to call “I drove 1 000km a week from
her office on the first floor of the assembly plant. with the IDC end of the month. A prepaid meter is a tool that I can it a day, there was only one buyer to power station to power station looking
The plant employs 21 technicians, but is ramping up control. If I know what my budget is, I can control what consider – Hlakani. for business. I’m not an engineer. I’m
production to meet demand and is expecting to increase and City I consume instead of getting a surprise at the end of The deal to acquire F&K marketing, admin, human resources
that number to 38 by February next year. each month. Also, with post-paid meters, if you don’t Engineering was finalised in June and and client liaison. I went out there
The staff are electrical engineering graduates sourced Press pay, they cut you off,” she says. was funded by the Industrial and I just knocked on doors and said:
from universities of technology and technical colleges in Despite the challenges, Vuso is smart enough to know Development Corporation (IDC), ‘Listen, give me a chance.’ It took
Joburg, Ekurhuleni and the Vaal. that there is plenty of growth to come for her company. which is now a strategic partner in wearing them down … I said give me
New technicians write a trade test and when they the expanded company. something small so we can prove that
pass, are sent on a two-week training course to China as The takeover makes perfect sense as we can do it.”
Vuso and her husband, a former civil engineer at LESSONS LEARNT complement each other. Hlakani is a Sunday morning show on Gauteng-
part of the contract with Nyamezela’s technical partner. the skills of the two companies Naidoo, who used to host a
Setting up such a technical operation has not been
without its headaches. welding specialist whose clients include based talk station 702, uses a video
Eskom, as well as sizeable construction
recording machine analogy to
Eskom, had to take out a bond with a bank to finance the and manufacturing firms. F&K does describe her relationship with her
purchase of the building that houses the assembly plant. ecuring funding was perhaps the biggest lesson only studying what you produce, but also work overtime to fabrications, machining and site business partners and how their
Once that was done, they had to fund their own initial for Vuso. She has learnt a lot about sourcing come up with better products to entice your client. This is services at a number of mines. F&K individual strengths work together.
assembly line and pay for research and development, as Sfunding, structuring funding deals and how to use why the company has to constantly innovate. also brings with it its range of “If a video recorder arrives in
well as raw materials, to produce their first smart meter. the resources at your disposal. “You have to innovate to remain competitive and sophisticated machinery, including a Herman’s hands with a manual, he
They then had to pay for the smart meter to be “We are still learning,” she says. remain in business. We have another product which is large Mimax milling machine, one of opens the manual, sits for five hours,
laboratory tested and prove its capability to potential “We are not where we want to be as yet.” water resistant; it is our next generation of product.” only three in the country. reads the manual cover to cover and
clients. She has also learnt that, as a growing business, you An ecstatic Naidoo said the makes the video work.
“When the tender came out, Eskom had to conduct should never take on more than you can deliver. acquisition of F&K engineering by “If the same video recorder arrives
tests of the product and do an accelerated live testing to wants. It is a constant balancing act to make sure you R3.2bn Hlakani had made them into a in Gerhard’s hands. He gets it, looks
“It came as a shock to us that too much growth can
tell them if the product would last for the duration we be a problem for a business – because you are unable formidable company. It has grown at the manual, tosses the manual
said it would last for and do what we said it would do,” to deliver the quality and quantity that a customer from just under 100 employees to away, takes the whole thing apart
says Vuso. “We had to pay for that ourselves.” 390 workers, including 110 red-seal and makes it work.
The company’s first break came in 2012, when it are not overexposing yourself or overcommitting to such certified steel artisans. “If it arrives in my hands, I look at
scored a contract to supply 250 000 first-generation an extent that the customer is unhappy,” she says. IN THE LAST FINANCIAL YEAR, THE IDC’S “We are able to offer turnkey the machine, I look at the manual, I
smart meters to the power utility of Zimbabwe. But that FUNDING OF FEMALE-EMPOWERED solutions. From start to finish, we pick up the phone and say, ‘Darling,
contract came with major headaches. Nyamezela had to CHALLENGES BUSINESSES ALMOST TRIPLED FROM can do it in the company; we don’t I’ll buy you lunch, come show me
move operations temporarily to Zimbabwe, but no South The manufacture and supply of smart meters is a highly THE PREVIOUS YEAR’S R1.1 BILLION need to subcontract any service,” she how the whole thing works.’ That’s
African financial institution was willing to advance it a competitive environment. Vuso says competitors are not TO R3.2 BILLION said. how we are, and that’s how we fit,”
Naidoo said the IDC was she said.