Frikkie Kotzee - CFO Kumba Iron Ore: "CFOs have had to switch their focus more to efficiency and cost control"

Kumba Iron Ore Limited is a leading value-adding supplier of high quality iron ore to the global steel industry. Kumba is a member of the Anglo American plc group, of which three of its mining businesses are based in South Africa: Platinum, Kumba Iron Ore and Thermal Coal. Kumba Iron Ore employs over 6300 people, of which nearly 75 work at the financial department of the company. The company was listed on JSE in November 2006.

Anglo American is one of the world's largest mining companies. With 76,000 permanent employees and 24,240 contractors in South Africa, we are the country's largest private sector employer. As a major business player in South Africa, we aim to make a real and lasting contribution to the development of the country and its people.

Frikkie was appointed to his current position on 1 June 2012. He was the Group Financial Director of African Oxygen Limited. Frikkie previously also worked for Anglo American Platinum as Head of Business Development and Anglo American as General Manager, Corporate Finance. He has developed in-depth commercial and strategic skills across a range of industries, including mining, oil, gas and financial services. Frikkie is a chartered accountant, and also has 2 legal degrees, BProc and LLB.

What do you enjoy most about your job and why? What must you absolutely do every single day to feel fulfilled in your work and why?
I enjoy the breadth and scope of responsibilities of my job: contributing to the strategic direction of the company, working with people across all disciplines in the business, dealing with a variety of unpredictable challenges and hopefully, seeing the fruits as a result. It is not just about being conversant with every financial-reporting rule, but also about how to fundamentally increase shareholder value in a socially responsible way, so that all stakeholders are better off as result of our contribution. It's rewarding to have the opportunity to make a difference.

How do you perceive the role of the CFO has changed in the last five to ten years?
The role of the CFO has become more strategic and more of a partner role to the business. The CFO is now expected to make significant contributions in areas outside of the traditional finance role by providing strategic business advice and guidance. The uncertain macro environment and the turmoil of the economic downturn have created challenges to growth and new investment, and organizations look to finance directors for guidance on how to cope with volatility on both the micro and macro levels. Furthermore, the regulatory and compliance requirements for public companies have become more complex and CFOs have had to switch their focus more to efficiency and cost control.

How do you see the role of the CFO evolving in the next say five to ten years? Please provide practical examples of things a CFO will have to do in the future, which it did not before.
Even greater focus on the items listed above, as well as a greater focus on IT as it increasingly replaces human intervention, and an increased leveraging thereof to drive efficiencies. External stakeholder demands are likely to increase and the pressure from new regulations will not ease up. Being compliant is now viewed as a given and adding value to the organization is the new challenge, while being the economic conscience of the organization.

Each company faces unique challenges and obstacles, and there is no ideal CFO model. It is far more important to determine what your company needs to succeed and how you can contribute to that success as CFO.

Would you say that accurate forecasting and budgeting is still feasible for a financial department in today's tumultuous financial markets? How do you deal with the volatility?
Accurate forecasting is becoming a bigger challenge, and following the traditional budget process may even be unproductive at times. While there is no easy fix, scenario planning, zero-based budgeting and rolling forecasts are useful to address volatility. The budgeting cycle has to be speeded up and the CFO needs to be closely involved. The ability to allocate or withhold resources at short notice is becoming strategically important.

What do you see as the greatest challenge for South African companies in the global economic situation and for your industry in particular?
South Africa will continue to face a skills shortage and retaining high performers will have to be a focus. Companies will no longer be able to mask inefficiencies through volume growth only and being responsive to the ever changing economic landscape is imperative. The increasing expansion in other African countries as the continent's growth accelerates, is an opportunity and challenge to South Africa.

Which skill(s) do you think a finance professional should master to be most successful in his work?
People management. A finance professional must be able to balance a zero tolerance for corporate governance failures and control breeches, and at the same time add value by being a business partner (providing solutions and not only problems).

In addition, a finance professional must have initiative, intellect and a capacity to grow as part of the company, and must have very high ethical standards.

Which achievement or project in your business career are you most proud of?
In my career so far I am most proud of becoming the Chief Financial Officer of Kumba.

Please name something - a procedure or process for instance - that was implemented in your company before you were appointed CFO, which you changed after you took the position of CFO.
I was appointed to my current position in June 2012, and am currently settling into the company and have not implemented any significant changes yet.

Who is your role model in life and why?
My father, Theunis Kotzee. He has been a mentor for me in business and my personal life, having been a successful professional (ex CEO of Group Five) and also being the best father I could have asked for.

What vital piece of advice would you give young ambitious finance professionals?
Work Hard, and never compromise your reputation and values. There are no shortcuts.

If you also would like to share your ideas with the CFO community, please get in touch with us to arrange an interview with you.Please contact Jurriën Morsch on [email protected].

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