Exposure to political uncertainty and ever changing exchange rates make it tricky to run – let alone start – a sustainable business in Africa. But, although the African market is difficult to get into, it’s the next destination, even though the risks are considerable. “If we want to grow, that is where we have to go,” says Jan van den Handel, Group Finance Manager: International Operations at Business Connexion.
Van den Handel’s main battle is to safeguard the South African ICT group against risks of failure abroad. “You have to be careful not to carry all the risk for non-performance. It’s about finding a happy balance between capital versus loan funding; 100% ownership or venturing in with local partners. Structuring in-country balance sheets is key to allowing the entity to manage its own working capital through its own banking facilities and vendor credit. You want your companies to trade independently. We’re getting better at that now.”
Business Connexion has an impressive stable of existing clients with an international presence. “Penetrating the African market is a balancing act between identified opportunities and the go-to-market strategies needed to deliver,” says Van den Handel. ”We have different angles of getting into Africa ranging from establishing new companies, acquired existing companies and partnering with existing companies. Finding an anchor client is a great advantage!”
After having worked for the South African information and communications technology (ICT) company for the last ten years, Van den Handel was recently tasked with managing the finances of all international operations at the group. “This is the exciting story of Africa: managing high risks to realise high returns.” An example is Kenya, he says. “That country is a key focus area both from a Kenyan client opportunity perspective as well as its potential as a springboard into the whole of East Africa.”
Business Connexion employs 7,500 people of which currently 600 people work in international operations. “That number is growing as our international footprint expands to our targeted 20% to 30% of group revenue,” says Van den Handel. The ICT group offers complete business solutions by combining global ICT vendor partnerships and the group’s extensive technology resources to deliver high quality, high performance business solutions that meet the current and future information management needs of its clients. Solution offerings range from cloud computing and virtualisation solutions, application design to hardware sales and maintenance.
In 2011 Business Connexion acquired various UCS subsidiaries to solidify the group’s presence in the retail sector and later acquired a controlling interest in Canoa Group Holdings to incorporate office automation and managed print solutions into its stable of ICT solution offering. The recent acquisition of Integr8 has given the group a stronger foothold in the SME market which will also contribute to the group’s African expansion.
Over the last decade Business Connexion has been expanding into Africa, with offices in Nairobi (Kenya), Windhoek (Namibia), Dar-es-Salaam (Tanzania), Lusaka (Zambia), Gabarone (Botswana), Lagos (Nigeria) and Maputo (Mozambique). “Satellite offices have been opened in places like Kitwe on the Zambian copperbelt and in Tete (Mozambique), so that we can better service our clients as they move into these areas. We’re committed to our African growth which is evidenced by the performance of each of our African subsidiaries together with our client engagements into countries where we currently do not have and established presence.”
Van den Handel is driving the roll out of an Africa-wide ERP-system to allow group-wide consistent reporting of product, line of business, business unit and divisional operating performance across all legal entities. He’s currently based in Johannesburg, but is gearing up for a fair bit of travel in the future, “Skills shortages across the continent are key challenges. Where ever possible we utilise in-country skills and introduce training programs to upskill staff. In addition, South African based skills are involved in solution delivery and in so doing allow in-country skills transfer. Where necessary, expat contracts are used.”
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