Namibia’s “White Gold” is going places

By Prime Focus Reporter
February 2014
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The sea is not just about marine products which have transformed the face of the Namibian economy and the empowerment of Namibian people thanks to the Ministries of Fisheries and Marine Resources. Nor is it about the ongoing debate on the phosphate exploration, or the exploration of oil.

 

Quietly for the past 50 years sea water is pumped from the Atlantic Ocean, evaporated, concentrated, crystallised, harvested and processed, and then you have Namibia’s “white gold” called sea salt. Between 700 000 to 750 000 tonnes of sea salt are produced every year, leaning on the sun, wind and technology. Over 80% is destined for the export market while 20% is consumed locally.

 

Walvis Bay Salt Holdings recently sent the biggest shipment in its history to Belgium. This shipment of 52 000 tonnes is a first of its kind in the Company’s history, appropriately coinciding with the Company’s 50th birthday. Established during 1964 the Company has broken in on the international scene and is planning to stay there and be a dominant player in future.

 

Plans are at an advanced stage to increase production from 750 000 to a million tonnes, and this will see the Company creating more employment opportunities by expanding the current workforce from 150 to 200. The recent addition of Ekango Salt Refiners has added more muscle to the Company’s strategy of local value addition. Ekango Salt Refiners has a BEE component through Nammic, EVI, EHI and Pamwe Trust who hold a 25% stake in the Company.

 

The Company is seen as  a significant contributor of the economy through its corporate social responsibility which is close to N$1m. On the local scene they are seen as one of the biggest contributors to the Walvis Bay broader economy. 

 

André Snyman, a former teacher but now a seasoned Namibian industrial expert, recently took over the leadership of Walvis Bay Salt Holdings. As a hands-on strategist and people’s person he is setting his eyes on making the Company an international player and this is not only a wish but action is already visible. He is keen on identifying stumbling blocks and getting them out of the way for efficiency and effectiveness to prevail. Enjoy the exciting interview.

 

PF: From a maths and science teacher to a leading industrial expert and leader, how did you do this?

 

AS: It was a normal transition from the science field. During the late 80’s I obtained a B.Sc degree in chemistry and mathematics at the University of Stellenbosch, and thereafter I was teaching Grade 12 science at Jan Möhr Secondary School in Windhoek. In order to obtain practical analytical chemistry experienceI then joined the chemical laboratory at a phosphate mine in Phalaborwa, South Africa. Before long I realised that the laboratory environment was not challenging enough and I wished to engage in leadership roles. I enrolled for a MBA degree, moved into the production environment, and in no time I became Production Manager at Fedmis Phalaborwa, where phosphoric acid is produced.

 

Soon afterwards a senior management position within the Kynoch Feeds Group in Kimberley arose, and I became Technical Manager. After about 5 years in the phosphate producing animal feed industry I accepted a position as Factory Manager at AFGRI which is an agricultural company in South Africa.

 

During my stay of nine years at AFGRI, where we mainly produced animal feeds for the broiler industry, I was involved in a number of challenging projects and factory upgrades. I was ultimately appointed General Manager for AFGRI in the Free State region, based in Bethlehem. One of the bigger achievements was in 2003, when our Kinross factory was awarded International Feedmill of the Year by the International Feed Industry Federation.

 

During 2005 I accepted the position as Managing Director for Feedmaster in Windhoek. The Company indicated that one of the critical forward integration strategies was to establish a broiler industry in Namibia. I accepted the position bearing in mind that this project would attract a lot of new, exciting projects such as a monogastric feed mill. After all I am Namibian, and obviously always wanted to return to our beautiful country. In 2005 I finally made a transition back to Namibia which I am certainly very happy about.

 

PF: How has it been since you joined Walvis Bay Salt Holdings, a leading salt company manufacturing salt using unique combination of nature and technology?

 

AS: In leadership terms, it is more of the same for me because I am dealing with high level matters and a lot of principles remain the same. Primarily it remains basic principles of sound strategic thinking, strategic business management, continuous improvement, a focus on efficiencies, and people management. Ultimately it is about the investment in people, talent management, the development of people, setting targets and making sure your team is happy and motivated at the end of the day.

 

At operational level the salt business might be regarded as a simple operation, but if you dig deeper it becomes rather technical because different markets have different technical and chemical  specifications and the challenge is to meet these ever changing market needs.

 

We have to be competitive in terms of the international market, 80% of what we produce is exported and therefore we compete in the international market. If we are not on top of our game in terms of efficiencies and costs we won’t be able to be viable over the long term.

 

PF: How do you then bring all the strategic elements to fruition as you strike a balance between internal and external demands to stay competitive?

 

AS: It all relates back to the strategic plan. The team gets together prioritising company strategic initiatives and objectives, and determines where the Company has to be in three years or five years, and even longer term. You do all this with your management team, formulating your strategic plan and then fill the gaps by asking what we now have to do in order to meet these goals.

 

Although we cannot underestimate the importance of the formulation of strategic plans, we should equally be awareof the fact that strategic formulation and execution are worlds apart. You may have the best strategic plan in theory and on paper, but it is another issue to have it efficiently and effectively executed.

 

Normally there are a number of different hindering factors that must be identified and removed timeously to avoid the derailment of the strategic plan implementation. On that note, as a leader, my role is to listen to your people and remove the obstacles which are holding the team from being star performers. That is my role, to be an enabler.

 

PF: Salt, Namibia’s “white gold”, briefly how do you produce this salt?

 

AS:We are one of Africa’s largest solar salt evaporators and our operations comprise 4,500 hectares, we process about 50 million cubic metersof sea water in order to produce between 700,000 to 750,000 tonnes of high quality sea salt per annum.

 

Now, the solar evaporation process I alluded to is dependent on three factors, which are, wind, the sun and management input. But management input is the smaller part in terms of the volumes of the salt that we produce. Production volumes depend heavily on how much wind and sun we experience.

 

From the moment we pump in sea water into the pans until the time when we have the final product (called coarse salt) it takes about 18 months and this continuous process comprises of five phases.

 

The first phase iscalled “evaporation”, water is pumped into evaporation pans for a period of about five months. During these five months the concentration of sodium chloride increases, resulting in increased brine density.

 

Thereafter the brine is pumped into another stage, called “concentration”. During this stage the brine is concentrated for another four months up to a certain density level. At this stage the product is called “maiden brine”, and is used for feed stock to the crystallisers, where it lies for another ten months.

 

After about ten months in the crystallisation phase, the product is harvested, using a harvesting machine that lifts the crust which is about 15 to 18 centimetres thick. The harvested product is then brought to the main plant for further processing. During this “processing” phase, the product will be washed because it might contain some impurities. According to client needs, certain products might also go through an iodating phase.

 

Finally the salt is shipped for export purposes, or you might decide to refine it for human consumption. This is at this stage when the product is taken to the local refinery (Ekango Salt Refinery) which focuses on processing the salt for human consumption, before packaging into various pack sizes.

 

PF: People would like to know where the over 700,000 tonnes of the salt is going to?

 

AS:As indicated earlier, about 70- 80% of our product is destined for the export market, our biggest markets being into Africa, specifically Nigeria and Cameroon, Zambia, Angola, and the DRC. We are now opening up certain Southern European markets, and also regard South Africa as an export market, mainly for the paper making industry. We are also working on exports to Brazil and possibly OMAN. These are our main export markets.

 

PF: What can you say about the local market and is salt a good business?

 

AS: The Namibian market is relatively small, if you include the local animal feed industry it is only a couple of hundred tons per month, in size.

 

Market size for salt is quite dependant on the market size of the population. On the other hand, if there is a recession, salt is one of the few products that is relatively recession proof. If there is recession people are not going to consume less salt, because salt is cheap, people will not cut on their salt intake, salt will be unaffected because it is a necessity. If there is recession they will cut on their beer intake, they will cut on their meat intake but they won’t cut on salt.

 

But also the opposite is also true, if there is an economic boom, people will double the beer intake, they will double the meat intake but salt intake won’t necessarily double. Salt consumption remains stable during both difficult times and booming periods. The biggest challenge is that salt remains a low margin business because you make cents per kilogramme, and therefore it’s a volume game.

 

PF: To what extent is your company contributing to the economy of this country?

 

AS:Obviously through our exports the Company is contributing significantly to the national coffers directly and indirectly. This includes an annual CSR budget of about N$800,000.

 

Our CSR initiatives are focused on annual sponsorships to various schools in the region. We provide financial support to the Sunshine School for mentally and physically disabled kids. In addition, we also support students for further studies in certain cases of merit.

 

We are actively involved in the financing of the Coastal Environmental Trust, including various bird count initiatives. In general solar evaporation fields provide a good breeding habitat for birds, which is important because our operation is situated within a RAMSAR environmental protected site.

 

PF:  You are regarded as one of Walvis Bay’s biggest economic contributors. Can you elaborate on this?

 

AS: Our biggest direct contribution is in terms of job creation. If you look at our work force, we have 150 employees that on its own is an economic boost for the Walvis Bay area. We are also considering alternative ways of increasing our workforce based on our strategic plan, but also as part of Government’s efforts to reduce unemployment in the country.

 

PF: At what stage are your plans of expanding at and what is influencing your expansion?

 

AS: As mentioned, our current capacity is between 700000 to 750000 tonnes of salt annually. We are currently penetrating new markets. We are competing with international competitors and we have seen that we can compete very well on the international scene.

 

Our strategy within the next two or three years is to expand our capacity from 750,000 to a million tonnes. We are at a stage where the “public participation process” as part of the environmental impact studies has been completed. The application was submitted to the Department of Environmental Affairs, we are waiting for feedback within the next three or four months.

 

Once we have obtained EIA  approval then we will start with our engineering design phase. Certain preliminary engineering design studies are already being conducted. What is holding us back for now is that we don’t want to spend resources on a project which we are not sure we will get environmental clearance for.

 

So, step one is to develop the ability to produce more salt. The other critical factor is to secure our future expanded market. Recently we were successful in sending the first shipment of salt to Belgium which is the biggest shipment in the history of the Company being 52 000 tonnes.

 

PF: This is a big achievement, how did you do it?

 

AS:My view is that there is no better marketer than the MD or CEO of the Company. You need to be actively involved in the marketing of the product as it builds high level strategic relationships.

 

In all honesty, I must admit that my predecessor did a lot of good work in this regard. When I started, we identified the stumbling blocks, addressed the issues, finalised the deal and we sent a big vessel in order to reduce freight costs. By so doing we were able to supply at a competitive price to the customer. The fact that Namport was able to handle such a big ship was of great help to us as well.

 

PF: What is the status of infrastructure in the country, is it enabling or disabling your business operations?

 

AS: In general, a country’s infrastructure is of critical importance to ensure success for many companies.  I can commend Namport in this regard because they appear to be effective and efficient, but unfortunately, in cases of certain parastatals I cannot say the same for example, our railway system is neither competitive nor efficient at present.

 

A low cost commodity like salt is currently transported via road to Southern African markets whereas we could have used rail transport. I am sure Government can assist more to ensure that industries in Namibia are being made more effective by addressing this perceived ineffective critical resource in our country’s infrastructure.

 

PF: How is Government playing its part in enhancing growth?

 

AS: I must admit, Government in line with Vision 2030, is really working hard to ensure an enabling environment, and for example, the issue of work permits was addressed.

 

In general we also need to compliment the Government for what they are doing in assisting industries in Namibia. Certain tax grants, including manufacturing status and export incentives surely result in tax reliefs, specifically for manufacturers making new investments.

 

Skills levels in Namibia are not at the levels at which we have always wanted them to be. It can be improved by sourcing skills from outside Namibia and ensuring that skills transfer is happening from an expert to a Namibian. My view is also that Namibians must be offered the first opportunity and skills transfer must happen forthwith. We also need to ensure that the education system is delivering the required skills and knowledge.

 

PF: In reference to skills shortage, what are short term and long term goals, in view of expansion drive?

 

AS: As mentioned earlier, my teaching background gave me the firm view that people management and people skills are critical key success factors in business. Training in functional and leadership skills are critical! I want skilled and committed people, unfortunately you can’t teach someone commitment. Either you have commitment or you do not have it, but skills you can teach most people.

 

Training, people development and talent management remains the most critical investment in any business. The training levy to be introduced by the Government through the National Training Authority will assist in this regard.

 

PF: What kind of a Walvis Bay Salt Holdings Company are we going to see under your leadership?

 

AS:If I look five years into the future, we want to be a Walvis Bay Salt Refiners that is able to meet market demands, a company which is effective and efficient and managed for Namibians by Namibians for the benefit of Namibians and for the shareholder.

 

If I look five years into the future, we want to be a Walvis Bay Salt Refiners that is able to meet market demands, a company which is effective and efficient and managed for Namibians by Namibians for the benefit of Namibians and for the shareholder.

 

Under my leadership I want to see Walvis Bay Salt Refiners increasingly develop as being an international player. Currently we are more of a regional role player but we want to move towards being a truly international role player and we are on the right track with this recent shipment to Belgium.

 

PF: Looking at your shareholder structures, how are you incorporating the element of Black Economic Empowerment?

 

AS:It is important that the shareholder structures also incorporate Namibians. Again I want to reiterate whatmy predecessors did, in the case of Ekango Salt Refiners a 25% shareholding already exists, through EVI and EHI. EVI (which includes Nammic and Pamwe) owns 16.6%, and EHI the remaining 8.4%, bringing the total to 25%. The Chairperson of the Ekango board is from EHI.

 

PF: What are some of the potential risks your company is facing?

 

AS:We know that global warming is likely to cause sea water levels to increase in the next 50 years. Because Walvis Bay is on low level it can potentially be affected from recent reports. But you never know how accurate these reports are.

 

The other risk factor of cause is electricity, or the lack thereof. This critical issue of cause relates back to our earlier discussion regarding infrastructure issues, alongside with the railways. The power issue is a threat to us just as to other industries in Namibia. The real issue is both the cost of power and the availability thereof.  It is a real issue with us I had a meeting with Erongo Red recently and they indicated that they might soon introduce load shedding in Walvis Bay. That might have a big negative effect for most industries in the area.

 

For us industry players we want to grow the economy and employ more people. But if we are dealing and fighting our issues of power and railways issues it will derail all our efforts. What we need is a platform where we can look at these issues broadly concerning power and its availability.

 

For many years Namibia has been getting power from South Africa, one might ask, wherethe planning was.

 

PF: Is there anything that you want the public to know about your company as you are turning 50 years?

 

AS: The good news is that in the next 50 years Walvis Bay Salt Holdings Company will still be there. Many other companies come and go but we will be here in 50 years, we will be bigger and we will be better. We are a proudly Namibian company and we will be an international role player.

 

PF: Thank so much, it was a pleasure talking to you.  We look forward to engaging with you as we go along.

 

AS:You are more than welcome. PF