Sizwe Nkosi, CFO, Metmar Limited: `CFOs will need to improve their leading from the front and tap into the entrepreneurial sphere of their brains to remain relevant.`
Sizwe Nkosi is CFO of Metmar Limited, which has two main divisions: trading in commodities and investing in resource projects and companies. The commodities trading division focusses on international trading of ferrous and non-ferrous metals, plastic products and chemicals. The investment division invests in mining and minerals projects and companies with the main intention to secure long term cost effective off-take agreements to be traded by the trading division. The main office of the company is in Bryanston with satellite offices in Boksburg, Germiston, Durban and Zimbabwe. Metmar Limited is listed on the main board of the Johannesburg Stock Exchange.
Which skill(s) do you think a finance professional should master to be successful in his/her work?Communication at all levels, including board and presentation to investors, shareholders and fund managers. Skills should include: financial analysis, reporting, presentation and leadership. The financial professional must be prepared for life-long learning and networking. Keeping up to date with legislation in the financial, corporate, taxation and business specific legislation is also important.
What do you enjoy most about your job?
Working to deadlines and achieving them. Putting together and publishing financial statements. Being creative and taking initiative in coming up with new ways of doing things either personally or as a team. Improving control environment and automating financial processes.
What do you find most challenging about your position?
My biggest challenge at the moment is drafting a "brief, single" financial report that satisfies all the needs of my audience and stakeholders.
Manual processes can be repetitive and boring such that they result in errors. The ability to implement automated processes has been slow.
Communications can be inadequate at all levels, whether within your finance department or inter-department and within the senior executive team. This can result in incomplete or inappropriate analysis, reporting or decision making.
It is challenging to stick to a schedule to ensure that one complete all one's planned tasks between 8am and 5pm. A senior finance professional's advice or contribution is always required and as such you get a lot of interruptions - most times for good reasons - and in addition there are always unplanned emergencies that affect your day.
Finding time to get involved in networking events or attending training events or courses about changes to legislation to ensure you keep abreast of the changes and continually develop as a professional is another challenge.
Being a finance professional requires strict discipline that forces one to often use family time to complete your planned tasks (which presents its own challenges).
Which achievement or project in your business career are you most proud of?
I am currently the Chairman of the Board of a tin and tantalum mine in Rwanda, leading a team that is implementing a turnaround strategy to get the mine to produce more than 10 times its volume (than when we initially invested in it). This exposes me to senior government officials in Rwanda and the implementation of systems in a different jurisdiction.
As a professional coming from a disadvantaged background, in my role as CFO of the Australian Stock Exchange listed entity Firestone Energy, I put together a financial results presentation and delivered it to the public shareholders in Perth, Australia. The content of my presentation was appreciated and I spoke with such confidence that my presentation was flowing and had my fellow Australian directors impressed.
I also got involved in the global fund raising initiative where I prepared a presentation with my fellow operations director and we travelled around the world to major financial cities such as Sydney, Melbourne, New York, London, Johannesburg and Cape Town to market the project and raise finance. In this investor road show I got to meet very wealthy individuals and fund managers of global hedge funds and private equity funds.
My other achievements include leading a team to successfully raise finance from IDC and leading a team to negotiate and secure a coal off-take agreement with Eskom.
At Foskor, I spearheaded the implementation of a tax efficient group structure after I had convinced both my company and auditors that we can successfully undo a tax structure that had run its course. The tax partner at an auditing firm was unwilling to be associated with such a risk but I had conviction and stuck to my view. I saved the company in excess of R30m per annum.
Is accurate forecasting and budgeting - is that still feasible for a financial department in today's tumultuous financial markets? Why or why not?
In the commodities' trading company that I work for, forecasting and budgeting is completely unpredictable in certain components of the income statement. It is very difficult if, not impossible, to forecast and budget revenue. There are many variables which are not easily predictable. The variables include, but are not limited to: commodity price, commodity demand, commodity supply, exchange rate, commodity quality and spec; and political environment and stability at source and/or destination of commodity. This also makes trading expenses such as commissions, marketing fees and foreign exchange differences unpredictable. But overheads and office costs are can be budgeted and forecasted with more than 90% accuracy.
The degree of accuracy of forecasting and budgeting ranges between types of businesses and industries. For example, local businesses are likely to have higher degree of accuracy than businesses involved in cross border activities. Companies in retail industries are likely to have a higher degree of accuracy than mining companies.
Regardless of the real or perceived degree of accuracy, I still believe that forecasting and budgeting is one of the critical tools of any company. Budgeting enforces focus, provides guidelines, keeps the company honest in its activities and forces the company to understand and financially interpret its business environment and to enable it to put in place reasonable and realistic financial goals and plans.
How do you see the role of the CFO evolving in the next five to ten years?
While reporting performance will always be a critical component of any CFO's duties, CFOs will need to improve the speed of providing financial reports to enable quick decision making. CFOs have a terrible image of being historians i.e. bearers of historical information and therefore leading from the back.
CFOs will need to improve their leading from the front and tap into the entrepreneurial sphere of their brains to remain relevant. In future, it will not be sufficient for CFOs to be financial gatekeepers i.e. financial analysts of opportunities. But CFOs will have to lead the charge by sourcing and originating opportunities and deals which will enable the company to achieve the financial results that the organization wants to see.
CFOs will need to lead the charge by influencing the provision of not only updated systems but "almost live" systems that are available, not only at the office desk but anywhere globally at anytime of the day or night to ensure that latest information is at the fingertips to enable appropriate decision-making.
How do you perceive the status of cooperation and lifelong learning between finance professionals in South Africa? What is missing i.e. what would you add to professional development?
I believe most offered courses are not relevant or structured towards the environment (i.e. company specific activities) of the finance professional. In most cases you find that the courses have half or even less than half of what is relevant to equip a professional for his/her environment.
Information on available courses is also not shared sufficiently to enable every professional to choose courses relevant to him/her.
What do you see as the greatest challenge for South African companies in the current global economic situation - and for your industry in particular?
The greatest challenge in the mining sector is reduced demand for our minerals. This problem is compounded by the fact that we have insufficient - or in most areas - inexistent beneficiation processes which could create demand for our own minerals.
South Africa's reliance on foreign demand for our minerals makes us to be price takers and robs us of control of production and supply. In turn we import finished products at exponential escalations which do not bode well for the level of exchange rate, our current account deficit and balance of payments.
There is a reduced or even dearth of entrepreneurship in South Africa. This is compounded by unavailability of risk capital funds, an ineffective education system limiting creativity, less than friendly labour laws and a lack of information about available resources and assistance for entrepreneurs.
Who is your role model or mentor?
I have been unlucky in this regard: I do have people that I look up to but I do not have a specific person that knows me and regularly helps me get along in my profession. The first chartered accountant I got to know of was Mr Sizwe Nxasana. At that time I was already in university, studying towards a B Com degree but had never met or been inspired by a chartered accountant. Sizwe Nxasana has had the best career path out of all CAs that I can relate to given his background and what he managed to achieve. I have learned from him that you must remain true to yourself, work hard, never be afraid to try new opportunities and remain honest.
What vital piece of advice would you give young ambitious finance professionals?
Never lose sight of what you want to achieve in life. Follow your instincts and whatever path you choose give it your honest, dedicated and passionate attention. Anything and everything can work but it is up to how much time you put in, how much patience you have and how creative you are to be able to see opportunities from distractions.
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