Technology is disrupting every function, every capability, says Riaan Koppeschaar, Exxaro Resources FD
"Finance needs to position itself to make sense of all of these new disruptors and technological developments."
You have been with Exxaro for 12 years, since 2006, although you’ve held different roles. What keeps you so loyal? How different is the company now to what it was then?
“In 2006, Exxaro was formed when the then Kumba Resources Limited was split into an iron-ore focused company, Kumba Iron Ore, and a diversified mining company, Exxaro Resources. I joined Exxaro. Although Exxaro had its roots in the mining assets of Iscor, which was the steel making parastatal up to 2001, Exxaro is a growing company and there’s always something new and exciting happening here. It’s constantly evolving and looking at new areas of business interest. That’s why I’ve always been attracted to the company.”
What does your role as FD entail? Is your role focused more on strategy or day-to-day finance? Which do you prefer and why?
“I oversee various areas, including corporate finance, risk management, financial reporting, supply chain, and financial performance. Operationally, I am involved in all those areas but the biggest portion of my time is allocated to assisting with the development of the organisation’s strategy. I prefer the strategy side, identifying business opportunities and turning those ideas into reality.”
What are you currently working on?
“We’ve got a fairly ambitious project pipeline. We are implementing projects that are about 50 percent of our market capitalisation. A key focus area for me, the board of directors and executives is to ensure those projects are implemented within the timelines, within budget, and deliver as they intend to deliver.”
In your opinion, what is the most exciting thing currently happening at the company, or the most exciting part of the company’s strategy, if you will?
“There are two areas: firstly, there’s the aforementioned big project pipeline, with most of those projects focused primarily on coal. We are one of the few companies with the courage to still invest in coal. So, we believe that coal will remain very relevant into the future. Secondly, apart from coal, we are looking on a more long-term basis at other opportunities in the energy sector, as well as opportunities in the water and agricultural sectors, and in a very innovative way that will make a difference in people’s lives. Water and agri are interesting in that they are also peripheral to our mining operations. Those sectors also satisfy human needs and there will always be a requirement for them. Many of these projects are still in their infancy, so we are therefore still predominantly a coal-focused company.”
What are the greatest external factors affecting the company and its profitability, and how do you mitigate these?
“Being a commodity company, the exchange rate and commodity prices affect us a lot. Also, operating in South Africa, we are currently grappling with regulatory uncertainty. We must focus on what is in our control, i.e., being efficient and agile with our operations low on the cost curve.”
During your time at Exxaro, you’ve overseen numerous major transactions, including the new employee share ownership plan, raising a series of debt facilities, acquisitions, mergers, and so on. Which of these stands out as most memorable to you and why? What were the challenges, what were the lessons learnt?
“I was intimately involved in the formation of Exxaro Resources in 2006 and would say this is also the most memorable for me. Exxaro was a new company that was listed on the Johannesburg Stock Exchange, basically a merger of certain of the assets of Kumba Resources with the coal assets of Eyesizwe Mining, and a landmark BEE transaction at the time. Still today Exxaro is one of the most prominent BEE companies in the country.”
“With regards to lessons learnt, a multitude of stakeholders were involved in the transaction, including shareholders, government agencies and financiers, so it was about managing the expectations and complexities of all of those various groupings. In these complex transactions, trade-offs are very important as it is very difficult for everybody to be fully satisfied with the outcome.”
What do you think is the toughest challenge facing finance professionals today?
“In South Africa, it’s the integrity and credibility of the finance profession, with all the corporate scandals we’ve had lately. But globally, it’s probably more how technology is changing the world. Technology is disrupting every industry, every function, every capability as we know it. For finance, its being able to position itself to make sense of all of these new disruptors and technological developments.”
“In finance globally, there’s a lot of digitisation or automation taking place. So, the skillsets that are required of a finance professional will be different in the future. They’ll have to be more analytical to be able to make sense of complex sets of data. Collaboration will also be an important requirement in this new digital age; being able to collaborate with people across the organisation and outside the organisation, as well as working side by side with machines and robots!”
“I think the finance profession these days is also faced with an ever-increasing regulatory environment. So, it’s being able to navigate these new and complex areas, distil information and ultimately be able to come up with relevant information that can be used for decision-making, on a forward-looking rather than on a reactive, backward-looking basis.”
Considering the events of late last year with Steinhoff, and earlier this year with several other companies, what do you think finance executives most need to do to build and maintain the finance brand or profession?
“First and foremost is to win back the trust of society in general, especially in South Africa. I think it’s on two fronts: on the educational level we need to ensure the standard of finance professionals we produce is up to global standards, and secondly, finance professional should take a tougher stance and be more vocal and outspoken against unethical behaviour.”
How did you get interested in finance? Did you ever consider another career path?
“I was always interested in the finance environment. I was probably influenced by my late father’s chosen career – he was an accountant. When I studied I was also very interested in the field of investment management. If I had to choose over I might have chosen a career in investment management.”
What does the rest of this year hold for you both personally and professionally?
“This year has gone by quite quickly. I’m mainly focused on ensuring that the implementation of our project pipeline is effective, and that we meet the stakeholder’s expectations for those projects.
Personally, I like to stay abreast of all the new technological developments and how these can affect the organisation and our people. To do this I read a lot. As an organisation we invite and partner with people who can speak authoritatively on these subjects to enrich, expose and position our employees for the changing environment.”
How do you spend your downtime? What do you do to relax and unwind?
“I spend a lot of time with the family. I’ve got three school-going children, so I get involved with their school and extra-mural activities. We also like to travel and explore new things as a family. We like the bush but also more exotic destinations. From a fitness perspective I play a bit of golf here and there and cycle, although not competitively.”