“Apartheid laws and what it meant for business and the country”
Dr Iqbal Survé, a self-described "medical doctor, philanthropist,
and social entrepreneur," was born in 1963 and grew up in poverty, like virtually all non-white South Africans during apartheid.
During the 1970s and 1980s, he served in leadership positions in the ANC, struggling against apartheid. After apartheid ended, Survé served as a medical doctor to many prominent South African leaders, like Nelson Mandela, and to the national soccer team. But by the mid-1990s, Survé, like many of his comrades, grew frustrated by the huge economic disparities that existed in South Africa, even though its progressive constitution afforded all citizens equal rights. It seemed the government's Black Economic Empowerment (BEE) policies were only enriching a few.
In 1997, Survé and three of his comrades founded Sekunjalo, an investment holding company that sought to offer "a gentler capitalism" that stressed putting people before profits, and talent development as a means of raising the lives of previously disadvantaged South Africans. By 1999, the company listed on the Johannesburg Stock Exchange, making 36-year-old Survé the youngest CEO of a listed diversified conglomerate. From its inception, Sekunjalo only purchased controlling stakes in companies, hoping to empower black workers.
“Roots of Sekunjalo”
- Sekunjalo is a liberation song and the ANC slogan for the 1st democratic elections (1994)
- The freedom charter influenced the group’s thinking
- Inspiration received from people like Nelson Mandela and Albert Luthuli and his book: “Let my people go”) the first African to receive the Nobel Peace Prize and also leader of the African National Congress for 15 years.
When the founders decided to start Sekunjalo they knew that starting a company would not be easy, when you lack traditional business experience. But the group wanted to show that business could be done differently. They saw that founding a company as a platform for empowering people not a means of enriching the individuals. In 1997 the four ex-activists registered Sekunjalo, which means “now is the time” in Nguni. Sekunjalo started its operations with lots of strategic thinking, debates and burning the midnight oil. Since all members of the group were employed at time, Sekunjalo’s business would start in the evenings and proceed until the early hours of the morning.
The group’s motive was not to get rich as they saw Sekunjalo as the extension of the struggle and they did not want to follow the models that had been laid out in South Africa. They wanted to create a company that would employ black people and nurture them so that they could become successful managers and future business leaders. Sekunjalo’s motto was and still is “people before profits”, and the primary commitment was to grow black people and the economy of the country.
When the founders started work they did not have the luxury of learning incrementally. They were aware of the ups and downs that they were about to experience, because the corporate environment was foreign to them. For decades they had been so far removed from the business world.
THE FOUNDING OF SEKUNJALO
For seven months the Founders went out seeking assistance from their former activists to generate seed capital for the company. They visited every township and interacted with ex-activists, some of whom were in Parliament, but also many who were unemployed. Sekunjalo managed to raise R250 000.
1997 – 1999
DIRECTORATE: THE FIRST INVESTORS AND DIRECTORS
The First Investment was partnering with the Afrikaner Business Community
- The first one was Prospur
- Photo SA Flag and Renier van Rooyen, founder of PEP
- Premier Fishing
- Health Care, Pathnet, Prospur
- All driven by advisors, Standard Bank
- Classic Black Empowerment
- From R250 000 – R250 million in 18months
- Dr Survé was the youngest CEO on the JSE under investment sector
In May 1999, Sekunjalo listed on the JSE. At the age of thirty six years old Dr Survé was the youngest CEO of a diversified investment conglomerate on the JSE. Sekunjalo was able to leverage a small amount capital to emerge with an asset base at its listing of about R300 million. Dr Survé found himself straddling two worlds, especially when engaged in financial transactions. He listened carefully as he had to learn fast, especially about strategy. He thought many expected so little out of him, and because he had a strategic eye and sharp negotiation skills, he was able to outmanoeuvre people with much more experience.
After leaving his practice in 1997, Dr Iqbal Survé went from struggle doctor to an acclaimed businessman in just 18 months. In 1999, he received the Cape Times Editors Award for Business Excellence (Emerging Entrepreneurs) together with Johan Rupert. With Dr Survé winning this award, it further endorsed the group’s success.
In 1999, Sekunjalo had made a remarkable 360 degree turn and was named one of the Top 300 Companies in the Western Cape.
Sekunjalo, through the activities of the Sekunjalo Development Foundation was able to give meaning to the Group’s ethos and philosophy of empowerment as they supported a number of community based projects. The Group sponsored the Sekunjalo Athletics Club, the largest black athletics club in the Western Cape. This sponsorship allowed many black athletes to participate in organized racing events. Sekunjalo also sponsored the Youth Development Programme of F.C Fortune Football Club, the official youth development partner of Manchester United in South Africa.
After a tornado devastated the Cape Flats, Sekunjalo contributed to the Disaster Relief programme. After identifying the dire need for development and growth in the country, especially in the education sector, Sekunjalo sponsored bursaries to physically challenged students to pursue tertiary studies.
As a first time sponsor of black artists at a production at Spier, it contributed to Sekunjalo being nominated the recipient of the Business and Arts South Africa award (BASA) which was handed to Dr Iqbal Survé by Mrs. Zanele Mbeki, wife of President Thabo Mbeki.
BRIDGING BUSINESS POLITICAL DESIGN
The Sekunjalo Breakfast Club, established in the final quarter of 1999, had become an important medium for shareholders, management, business associates, the private and public sector to network and exchange views. It provided a forum in which the public/government and private sectors could communicate with each other. This was been very important in terms of developing public/ partnerships in the various economic sectors and for businesses to understand the issues being faced by government in their efforts to develop South Africa.
The Breakfast Club included influential people such as the former Minister of Health, Dr Manto Tshabalala – Msimang, former Minister of Transport Dullah Omar, veteran politician Goven Mbeki, Tito Mboweni, former governor of the Reserve Bank and the Minister of Finance, Trevor Manual. The Sekunjalo Breakfast Club provided a unique opportunity for facilitating networking and meaningful partnerships between the public and private sector.
2000 - 2003
MULTINATIONAL INVESTMENT PARTNERSHIP
The millennium year had been a challenging year for the South African economy as the markets of the developing world had come under increased pressure in the year of globalization and experienced the effects of a strong US economy. It had also been an important year for Black Economic Empowerment. This had an adverse impact on Sekunjalo. However, Sekunjalo rose above and made the first transaction for a Black Economic Empowerment company in the pharmaceutical sector as Sekunjalo Health Care concluded an agreement with GlaxosmithKline.
In a major strategic coup for South African health care, Sekunjalo Health Care announced a strategic co-operation and supply agreement with US Company, Becton Dickinson, one of the world’s largest and most prestigious medical device manufacturers listed on the New York Stock Exchange. This transaction was the first between a US company and a black South African health care company.
These transactions gave Sekunjalo Health Care access to international brands and markets and enhanced their operational efficiencies and positioned Sekunjalo Health Care as a significant player in the health care sector.
Sekunjalo continued to invest in corporate social responsibility and established themselves as a responsible corporate citizen as they made many contributions to schools, organisations and individuals in this year. One of the heartwarming moments in this year was when they donated a wheelchair to Mr. Higgins, who for 30 years had been without one since being injured and paralyzed in a motor accident.
2000 Launched the Manto Tshabala-Msimang Health Professionals Bursary Fund, to assist previously disadvantaged students entering their first year of study in the fields of medical and rehabilitative sciences, over a 3-year study period. Dr Iqbal Survé, the Chairman and CEO of Sekunjalo and elected Chairman of the trust, said he was very conscious of the role these bursaries played in the lives of the students. "All of them come from very challenging circumstances and have made it to university despite the disadvantages they have experienced. These bursaries have had a very positive impact on all the students he says.
THE PARTNER OF CHOICE
Towards the end of 2000, Sekunjalo was affected by the liquidation of the listed LeisureNet Group, an investment in which they were a major shareholder (with an 18% stake in the company). LeisureNet’s ambitious overseas expansion programme resulted in its ability to fund the aggressive rollout of the Healthland clubs in Europe and Australia. This caused the collapse of the overseas operation and consequently LeisureNet and its subsidiaries in South Africa.
At the same time after a painstaking selection that took place over two years, Siemens chose Sekunjalo as their BEE partner of choice. Siemens sold 13% of the issued share capital to Sekunjalo Investment Holdings. At a press conference held at Siemens Park that year, Dr Iqbal Survé said that Siemens is the most diversified technology company with entrenched roots in Southern Africa. He said that it is a blue chip investment as Siemens is a key player in reconstruction and development through technology in Southern Africa.
One of Sekunjalo’s most challenging endeavours was to take large stakes in companies that gave it active direction in its operations. Sekunjalo had a minority passive share in LeisureNet, its main income generator at the time and LeisureNet went into liquidation in late 2000. Prosper Packaging followed shortly thereafter.
Few analysts thought the group would not survive. Its net asset value was wiped out and showed a significant loss, and its share price fell dramatically. Sekunjalo was, in Survé’s own words, “almost on its knees”, while its fishing business kept it afloat as the group’s other assets were only marginally profitable at the time.
Banks, creditors and suppliers withdrew or withheld their support. Some directors and managers left the company. Survé knew that it was critical to lead from the front, and he did. To stay afloat, the group sold valuable assets. By 2003 it controlled and managed all of its businesses in IT, healthcare and fishing.
In May 2003 it was able to consolidate control of Premier Fishing from 56% to 80% through a R70-million recapitalisation. Dr Survé took a bold step by promoting some of the staff that had been working for the company for a number of years into management and leadership positions. This increased the morale and motivated the staff and their belief in Sekunjalo and its model of changing people’s lives.
RIDING THE CREST
A wave evolves from the depth of the ocean influenced by currents and climatic conditions. It appears on the ocean surface as a swell and slowly develops momentum to form a crest, so too has Sekunjalo evolved as a company from humble beginnings as a young listed entity. It has gone through learning curves and changes, rough times and churning to emerge as a proud BEE company with corporate experience, community conscience and financial prowess through riding the crest of the wave.
This was the theme that was carried out in the Sekunjalo’s 2003 Annual Report and it symbolized the life of the company at that time. Sekunjalo won two BEE awards in 2003, one in recognition of its recovery since the liquidation of LeisureNet.
In October 2004, Dr Survé personally received the ABSIP Pioneer of Empowerment Award. Survé’s invitation by President Bill Clinton to serve on the Clinton Advisory Board is an acknowledgement of his promotion of sustainable business models to overcome poverty.
The success of the group’s transformation model has also led to a number of significant acquisitions and partnerships. Sekunjalo acquired stakes in a number of technology and financial services ventures.
The company had celebrated its 5 years as a listed company in the JSE.
Sekunjalo has an extensive corporate social investment programme which is integrated with its business practices. Sekunjalo’s corporate social investment programme has a strategy of developing human capital through arts, education and sports. Its programme includes the support and development of black musicians, the hosting of the Sekunjalo Jazz Concert, support for primary and high school students from the poorest communities, and support for students wanting to study in the health sciences through the MTM Health Professionals Bursary Trust. Sekunjalo’s own employees have benefited through extensive skills development, wellness and employment equity programmes. The group has an aggressive procurement policy which supports emerging black businesses
10 YEARS OF DEMOCRACY
2004 marked a historical ten years of democracy in South Africa and Sekunjalo was recognised as leader of meaningful black economic empowerment in the country.
Dr Iqbal Survé positioned the group at the cutting edge of developmental economics and implemented a business model for the group that allowed it to remain profitable, yet help to address concerns of poverty and inequality. This model defined Black Economic Empowerment (BEE).
Dr Iqbal Survé had been appointed by the minister of Health to the Health Charter Task Team for his leadership. Sekunjalo was ranked 2nd out of 200 companies listed in the JSE in the authoritive Financial Mail Empowerdex Survey. This followed the recognition in the previous year when Sekunjalo received the prestigious Business Map Top Market Performer Award and the Black Business Quarterly Award for Top Market Performance and Productivity for the Group. The awards were in recognition by the business community of the influence and pioneering efforts that Sekunjalo’s business model had and still has on black economic empowerment.
Continuing with its strategy to maintain a responsible corporate citizen, Sekunjalo partnered a bank, the Western Province and the City of Cape Town and birthed The Business Place Cape Town to assist emerging entrepreneurs. The Business Place is a network of services, networking organisations and community based organisations clustered under one roof, with a friendly accessible referral networking and information centre at its core. It provides a range of relevant services to aspirant and existing small and micro entrepreneurs.
As part of the corporate social investment programme, Sekunjalo invested in supporting and developing black musicians from primary and high schools in the poorest communities through the Sekunjalo Edujazz Concert. This initiative is a platform in which black musicians can showcase their talents to the public.
INNOVATION AND TECHNOLOGY
This year Sekunjalo focused on developing solutions for the poor through the concept of innovation and technology. The rationale for the investments in technology was to drive sustainability, reduce poverty and empower people. Through its investments, Sekunjalo developed core competencies in a number of sectors that will continue to build in the years ahead.
There were many significant acquisitions and investments in the technology sector. Sekunjalo acquisitions in the technology sector began with a major stake in Synergy, one of the largest intelligence companies with more than 350 blue chip clients. Sekunjalo also acquired a stake in IT provider XN Corporation Africa.
Adding to their information technology and telecommunications portfolio, Sekunjalo bought financial services information company Sharenet, one of the first financial websites and vendor of JSE prices on the South African internet and is expected to provide a core component of the IP for the Financial Services and IT platforms. Since acquiring Sharenet, Sekunjalo has helped to establish Sharenet Financial Solutions, which manages the marketing of Sharenet products and leverages the Sekunjalo Capital network.
Another acquisition was Bioclones, a South African-owned biotechnology company dedicated to the manufacture of modern biotechnology products for human pharmaceutical use as well as the development of biotechnology infrastructure and skills across the African continent.
Sekunjalo and Executive Chairman, Dr Iqbal Survé always led by example and despite the excellent results posted for the year 2005, Dr Survé decided not to take a substantial portion of his bonus and salary to which he was entitled. It should be noted that Dr Survé waived his salary in order to assist the funding of employment in operations that were underperforming as a result of external factors such as the strengthened rand and cheap imports, factors over which our employees have very little control. Dr Survé’s decision prevented the closure of a manufacturing operation in Gauteng and this resulted in the continued employment of at least 80 people who would otherwise have been retrenched.
Dr Survé was the first CEO of a major South African listed company to voluntary waive part of his salary and bonus. This was an outstanding example of good financial, social and corporate governance further reinforcing Dr Survé’s deserving award of the Impumelelo Top Businessman of the Year Award for 2005.
This was an important year for Corporate Social Investment as Sekunjalo had calculated their contribution to the South African economy for 2005 alone had come to R1.6 billion. The economic contribution is extrapolated using an economic formula based on direct and indirect expenditure contributing to the GDP of the economy through CSI initiatives, learnerships, skills development, enterprise development, employment, job creation and procurement.
This year Sekunjalo held the Sekunjalo Leadership Forum, which assisted in identifying the next generation of business leaders. Sekunjalo focused more and more on one of its key themes, to empower people through profits and they launched the learnership programme at the Premier Fishing subsidiary in Saldanha Bay where the Minister of Labour, Membathisi Mdladlana, handed over certificates to 70 of our employees.
The Sekunjalo Development Foundation, along with the Abdullah Ibrahim Foundation, organized the Abdullah Ibrahim Trio USA Jazz Festival with Beldon Bullock, George Gray and Horace Alexander Young. The aim of the Festival was to raise funds for the M7 Music Academy, a music academy started and developed by Abdullah Ibrahim specifically targeted at our country’s historically disadvantaged youth, who wished to develop in the musical in the musical arts, especially jazz and African Heritage Music.
Sekunjalo made significant investments in the sports arena with the Jacques Kallis Foundation that assists top emerging talent to attain their best through the Jacques Kallis Scholarship Programme. Sekunjalo also provided support through the Western Cape Sports Academy. Sekunjalo continued with their annual projects such as the Sekunjalo Edujazz Concert and the Manto Tshabalala – Msimang Health Bursary.
Sekunjalo presented 1000 copies of Ahmed Kathrada’s Book “Memoirs” to the Minister of Education Naledi Pandor for distribution to schools in the Western Cape and Gauteng and also sponsored the supply of Zubeida’s Jaffer’s book “Our Generation” into previously disadvantaged high schools.
The President, the Western Cape Premier, Dr Survé and an appointed committee engaged to raise about R7 million from the Western Cape community for the historic cause that ensured that the rich legacy and history of African Civilization is preserved as they built an archive in Timbuktu for the preservation of the 13h century manuscripts.
2005 was also the year Dr Iqbal Survé was invited to join the Clinton Global Initiative, an inspiring initiative where President Clinton gathered a number of world leaders to turn ideas into action and to help our world move beyond the current state of globalization to a more integrated global community of shared benefits, responsibilities and values.
The Clinton Global Initiative is committed to help eliminate poverty and encourage tolerance for all South Africans through the establishment and support of the Social Entrepreneurship Foundation, aimed at creating awareness of how Social entrepreneurs are able to eliminate poverty and increase tolerance in diverse communities
TOP EMPOWERMENT COMPANY
Sekunjalo Investments has always been ranked in the Top 10 Empowerment Companies is South Africa by Financial Mail. Since the inception of the awards Financial Mail/ Empowerdex have authoritatively ranked Sekunjalo in the Top 10 Empowerment Companies. In 2004 and 2005 Sekunjalo was ranked as one of the Top Empowerment Companies (2nd and 7th respectively) out of the Top 200 listed Companies on the JSE. Sekunjalo also won the top award in its sector in 2004 and 2005.
This led to Sekunjalo being awarded the Financial Mail/Empowerdex 2006 Award for Top Ranked BEE Company. Sekunjalo won three awards: best in the sector (general industrials), best in supporting enterprise development and best overall.
Empowerment factors considered when deciding scores for companies are: black ownership, black management, employment equity, skills development, affirmative procurement, enterprise development and corporate social investment.
CEO Dr Iqbal Survé was extremely excited and proud that Sekunjalo has been recognized as South Africa’s most empowered company in SA. He said that this recognition consolidated Sekunjalo’s position as a pre-eminent empowerment company with a commitment to South Africa and its people.
Sekunjalo increased its investment in the following areas:
In 2006 Sekunjalo increased its investments in Biotechnology when it announced its R 19 million investment in Bioclones, a leading South African biotechnology company responsible for developing biotechnology products for human pharmaceutical use.
Sekunjalo bought 51% of espAfrika, the company that organizes the Cape Town International Jazz Festival. The company was in liquidation and Sekunjalo turned it into a profitable company.
In 2006 Sekunjalo invested in a number of businesses in various industries which verified how diverse their portfolio had grown. They acquired 49.9% of Bioclones and 50.1% of software solutions company Saratoga. Sekunjalo successfully acquired 100% of FIOS in February of 2006. They also invested in the automotive sector and acquired 10% stake in DaimlerChrysler and Ronnies Motors and 30% stake in TATA.
The concept of empowering people through profits was carried out in projects that we supported during the year. As a group, Sekunjalo acknowledges its responsibility to the social upliftment of the communities in which it operates. Through the CSI programme, we provide support and donations to various organizations and their works.
The staff of Sekunjalo are committed to live the Group’s vision of empowering people through profits in their own communities.
This was achieved through:
The Mannenberg Education Development Trust (MEDT) where bursaries were awarded to young disadvantaged people with potential by providing them with the opportunity to further their tertiary education.
We believe that in doing so, we are contributing to the empowerment and future of the community and enabling these young people to be role models to the youth of tomorrow.
CELEBRATING SHARED HUMANITY
Sekunjalo which is a Nguni word for “Now Is The Time“ or “It Is So”, is proudly sung by all South Africans at momentous and important events. To demonstrate the unifying character of the Sekunjalo brand, the company’s name was used as the main slogan for the FIFA 2010 World Cup Soccer Bid. The 2010 LOC asked for permission to use the song in their bid to host the world cup.
In 2007, Sekunjalo received Global Recognition by the World Economic Forum. When it received a major honour and was selected as the only South African company to be a Founding Member of the Top 125 World Economic Forum (WEF) New Champion Companies in Dalian, China.
WEF in partnership with the Government of the People’s Republic of China hosted the Inaugural Annual Meeting of the New Champions at the gathering of the founding members of fast “Global Growth Companies”. Sekunjalo was one of five companies on the African continent to receive this recognition and was the only South African company to be included in this prestigious group of international companies.
Sekunjalo received The Business Map Foundation Top BEE Partnership Award for 2007, The Financial mail Empowerdex Award for 2007 for the Top-ranked listed BEE Company in the General Industrial sector.
In May of 2007 ABSA bought a 10% stake in Sekunjalo as part of their strategy to support black economic empowerment. During the same period Sekunjalo receives the Business Map Foundation Top BEE Partnership Award.
Sekunjalo began to reap its benefits of investing in the Cape Town International Jazz Festival only just a year later. Many articles were posted in the media about how the Cape Town International Jazz Festival offered a boost to tourism, the economy in Cape Town and South Africa as a whole.
Sekunjalo concluded a deal with a ccommunications company. The new partnership will see Sekunjalo Telecoms Holdings (Pty) Ltd and Africom Telecom Holdings (Pty) Ltd each acquiring 13% of Nokia Siemens Networks Holdings.
Training and development
Sekunjalo once again invested in supporting and developing black musicians from primary and high schools in the poorest communities with a project named the Sekunjalo Edujazz Concert. This initiative is a platform in which black musicians can showcase their talents to the public.
NOW IS THE TIME FOR CONTINUED SUCCESS
2008 is the 9th year that Sekunjalo is listed on the JSE Limited and the Company remains one of the few black controlled and majority black-owned companies listed since the post apartheid period.
As Sekunjalo believes in building strong and long term partnerships that are mutually beneficial and based on sound corporate governance, Sekunjalo partnered with global company BT Communications Services, a company which is listed on the London Stock Exchange. The Groups Enterprise development group also acquired a controlling stake in Tripos Travel.
The increase in profitability for Health System Technologies (HST) is largely due to a new hospital information system (HIS) tender won in Gauteng. The Gauteng Department of Health HIS tender which entails implementing systems in over 60 Gauteng hospitals. HST entered into a joint venture with an international company, AME to implement this contract.
Sekunjalo continued with their annual CSI projects such as the Sekunjalo Edujazz Concert and the Manto Tshabalala – Msimang Health Bursary.
The Global Initiative on Sharing Avian Influenza Data (GISAID) Announcement 2007 saw Dr Survé, become the first African to form part of the Board of Trustees of the Global Initiative on Sharing Avian Influenza Data (GISAID).
RESTRUCTURING FOR GROWTH
2009 was a difficult year as we are reminded that the global economic meltdown continues to cause havoc on Wall Street and Main Street. We also approach an interesting period in our own country with interesting changes in the political landscape. In light of this, Dr Survé decided to dismantle the corporate head office, abolish the CEO post, introduce a decentralized management structure and sold Synergy. This had a significant impact on the growth of all the businesses within the Sekunjalo Group.
Sekunjalo celebrated 10 years as a listed entity on the JSE Securities Exchange.
Sekunjalo is ranked by the authoritative Financial Mail as South Africa’s Most Empowered Company