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Choppies remains towering on FAR Property far-reaching expansion

Botswana Stock Exchange-listed FAR Property Company (FPC) property portfolio continues to go far and its three previous financial reports show a trend of giant retailer Choppies being the mainstay of its evergreen growth.

In FPC latest abridged financial results released this week; Choppies is shown as a towering figure in the company’s property portfolio dominating the FPC portfolio. In the portfolio by Gross leasable area (GLA), industrial property holds majority of 53 percent and it is dominated by Choppies. Also, Choppies takes Grade A of Segment Split by Tenant Grade while local tenants takes Grade B and new start-up companies got Grade C.

“The development and growth of our portfolio was initially fuelled by Choppies’ growing footprint as well as mounting demand for commercial and industrial properties in Botswana,” says FPC. Owners of retail giant Choppies formed FPC in 2010 and according to the property giant this was with a view of establishing a portfolio of properties that could answer the requirements of the ever growing Choppies Group. Former President Festus Mogae, wealthy billionaires Ramachandran Ottapathu and Farouk Ismail on the boards of the two companies; Choppies and FAR Property.  

In 2016 before FPC listing on BSE, stockbrokerage firm Motswedi Securities said the company was positioned to grow with the help or benefit from “Choppies rapid expansion” and the recently released financial results shows the same move. A year after Motswedi Securities horoscopic financial view, FPC and Choppies Chairman Mogae also put the retail giant forth as FPC’s anchor in the property segment.

“FPC has continued to grow its property portfolio. There has been sufficient investment into the land bank for continuing development growth into future years. This, in addition to other tenanting, will assist meeting the needs of the prime tenant, Choppies, particularly with regard to its infrastructural requirements as well as retail outlets,” said Mogae.

According to the recently released financial results, six commercial and two industrial properties are close to completion at the current date these. According to FPC, these will add to revenue growth in 2019, meaning the company’s growth is expected to continue to the next financial year.

FPC revenue increased from P121.8 million for the year to June 2017 to P134 .8 million for the year to June 2018, according to the latest financial results.  This means the revenue increased by 11 percent. FPC profit after net finance cost improved by 6 percent from June last year to June 2018.  While rent yield increased by 7 percent, property portfolio also grew by 5 percent from the last financial year.

FPC PROPERTIES

The investment property portfolio is estimated to have increased to close to P1.3 billion in the current financial year with considerations of new prospects. FPC has in the last financial year expanded out of Botswana borders to Zambia and South Africa. Top properties for FPC include the 10304m2 GLA industrial building called ERF 2282 base in the Rustenburg in South Africa. According to FPC, this is the largest development outside the boundaries of Botswana and it was custom built to cater for the needs of Choppies Warehousing Services (Proprietary) Limited. Last valued at R46 million, is dominated by occupancy of Choppies.

Another development in Rustenburg is the much anticipated ERF 2288 which whose extension must be up by now because in the last financial year as the building was said to be facing completion in this current financial year of 2017/2018. The development is also valued at R46 million.

In August 2017 FPC expanded to Lusaka, Zambia with an acquisition of a USD2,3 million shopping centre which is anchored by giant retailer Choppies. Other tenants of the Lusaka mall are Standard Chartered Bank Zambia Limited, Stanbic Bank of Zambia Limited, Finance Bank of Zambia Limited, First National Bank of Zambia Limited, AB Bank of Zambia Limited and List Café.

In an interview with BusinessPost FPC Director Ottapathu confirmed that the company has reaped better this year because of their new developments. In discussion was also the company’s mall in the country’s second city of Francistown. The 2150 square feet mall was built on the banks of Tati River in the last financial year. “It is doing well and its tenant occupancy is almost 80 percent. It has surely added value to our portfolio as we continue to expand,” said Ottapathu.

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The Bulb World starts operations in South Africa

8th April 2021

Homegrown LED light manufacturing company, The Bulb World, has kick started operations in South Africa, setting in motion the company’s ambitious continental expansion plans.

The Bulb World, which was partly funded by Citizen Entrepreneurial Development Agency (CEDA) at the tune of P4 million, to manufacture LED lighting bulbs for both commercial and residential use in 2017, announced last year that it will enter the South African market in the Special Economic Zone (SEZ) of North West province under the auspices of North West Development Corporation (NWDC).

The company has already secured a deal with South Africa authorities which entails production factory shells and tax incentives arrangements.

The company founder and Chief Executive Officer, Ketshephaone Jacob has also previously stated that the company is looking for just under P50 million to finance its expansion strategy and is reaching out to institutional investors such as Botswana Public Officers Pensioners Fund (BPOPF) and government investment arm, Botswana Development Corporation (BDC).

However, Jacob told WeekendPost that instead of sitting and waiting for expansion funding the company has started hitting the ground running.

“We have decided to get in the streets of SA, start selling lights from door to door, ” said Jacob who is in currently in Rusternburg to oversee the introduction of The Bulb World products in the market.

Jacob explained more brand activations will be undertaken in South Africa. “The plan is to do it the whole of North West and Limpopo province, through hawkers, we give the hawkers the lights to sell at a factory price and they put a mark up and make a living,” he said.

The Bulb World operates from Selibe Phikwe, it currently employees 65 young people, 80 % of which are Phikwe youth. The company plans to add 100 jobs this year alone as it forges ahead with its regional and continental expansion plans.

In July this year Bulb World products will hit South African Shelves:  Pick n Pay, Checkers and Africa’s largest retailer Shoprite.

The Bulb World has been registered as a company in South Africa; the company will start producing lights from Mogwasa after striking a special economic zones deal with North West Development Corporation in North West Province South Africa.

“Over the next 10 years we are looking to create over 5,000 jobs in Africa. Through our expansion into all of Africa we will be able to create employment for various individuals in different sectors namely; manufacturing, distribution electronics and retail,” Jacob told this publication earlier this year.

Jacob said if all goes well, the plan is to have taken over Africa or rather penetrated, and have prevalent presence in the African market.

“We are gunning to have at least 30 percent market share by then. According to a 2016 Market Survey, the total valuation of sales for LED Lighting was 57BN, a portion of which we plan to have taken over by then,” he said.

 

While the company has set its eyes on Africa, Jacob said, the company has not fully exploited its local growth, indicating that there could be strategic factories built to supply neighbouring countries of Angola and Zimbabwe.

“There is potential for further local expansion as well to other areas of Botswana if things run smoothly as anticipated. Hopefully in the long-term if our fellow Africans and all these markets receive us well we are planning to build another factory,” he said.

“We are looking to build another factory in the Chobe/Ngamiland Area that will give priority to markets in Zimbabwe and Angola,” he said

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‘Oil exploration will have minimal impact’

30th March 2021
Okavango-River-Basin

The Maun based Okavango Research Institute (ORI) has downplayed the impacts of oil and gas exploration in part of Okavango delta arguing that given the distance proposed the likelihoods of negative impacts drilling these exploration wells on the surface water systems is likely to be negligible.

The Institution released a position paper titled ‘Proposed Petroleum (Oil and Gas) Exploration Operations in the Petroleum Exploration License (PEL) No. 73,’ with findings stating that, in the event of discovery of economically viable hydrocarbon deposits, much more careful consideration of the impacts and economic benefits of development of the resource will be needed.

For example, the fracking process for gas and oil extraction is known to require large volumes of underground water.

It further argues that increased extraction of the underground water is likely to affect the water table level and further affect the overall water availability in the river-basin.

“The effect on water availability and use may become worse if surface water is reticulated or sourced by any means from the Kavango River. Should the exploration and fracking for oil and gas expand to Block 1720, 1721 and 1821, the impact on water availability and quality will be significant, especially if the wastewater is not well managed,” said the paper.

The research unit recommends close communication between the relevant Basin State Ministries (Mineral Resources, Environment) and the Permanent Commission on the Okavango River Basin, OKACOM, and other stakeholders must be facilitated.

This will facilitate sharing of the correct information on the desired intentions of the basin states and compromises sought for the sustainability of the ecosystems in the downstream of the Cubango-Okavango river Basin, states the position paper.

ORI as a key stakeholder with scientific information says it is positioned to provide scientific advice and guidance to decision-makers on the potential impacts of both exploration and development and operation activities.

It also recommends that while the impacts might be minimal at the exploration stage, environmental impacts during the development and extraction process are significant.

Findings also state that the SADC Protocol places a mandatory duty to make a notification of planned measures undertaken in any riparian state in cases where such measures hold the potential to cause ‘significant adverse effects.’

It further states that where the planned development is trivial and not expected to cause any significant harm, the development state is not under duty to notify other riparian states.

Given that the drilling in the Kavango Region in Nambia is merely for exploratory purpose and the possibility of harm is minor, it is therefore not surprising that the Namibian government did not inform Botswana.

However, should it be found that the oil can be profitably or economically exploited, the Namibian government would be under a duty to notify both Angola and Botswana.

The institution further states that to ensure sustainable development in the Okavango Delta the following in the context of exploration for and potential development of hydrocarbon deposits within the Cubango-Okavango River Basin, it must be considered that the Okavango Delta is a World Heritage Site listed in 2014 by UNESCO and one of the binding requirements of the listing is the non-permissible commercial mining of any mineral, gas or oil within the World Heritage Site.

It states that the Okavango Delta is also a RAMSAR site in which mining is not allowed.

Should the exploration for minerals, oil and gas be allowed, there is a high chance that a mineral, oil or gas may be found given that the Delta is sitting on karoo sediments and shale rocks which in other parts of the world have been found to be sources of oil and gas deposits. Should oil or gas be discovered, there will be a strong socio-economic pressure to mine oil or gas and create jobs for the masses.

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Business

Pakmaya yeast penetrates local market

30th March 2021
Pakmaya Africa Sales Manager: Cem Perdar

Manufactured in Turkey, Pakmaya Instant Dry Yeast can be used in the production of various fermented products, as it is suited for both traditional and industrial baking processes. All kinds of breads, buns and fermented pastry products are typical examples of applications.

Pakmaya Africa Sales Manager Cem Perdar says Pakmaya has 4 plants in across the world, further indicating that all of the plants have the highest standards of quality certificates and approvals. Regarding raw material, molasses is the main ingredient for yeast. Concerning production activities, yeast manufacturing requires high know-how and capability. Pakmaya has all those capabilities and aspects more than 45 years.

According to Perdar, Pakmaya has been existent in African markets since 30 years. From South to North, Central to East and West, a consumer can find Pakmaya in nearly every part of Africa continent.

“With its high quality, rich product selection and good service, our brand has become the favorite yeast of many Africans. On the other hand, our distributors in African countries are working very hardly and loyally in order to promote our products in their markets. After some time, we are becoming like families with our exclusive distributors in Africa and this enables both parts to work harder and keeps our product sustainable in market,” he said in an interview this week.

The yeast manufacturing giant made its way to Botswana market. The company has been smoothly working with Kamoso Distribution, a local distribution company. Perdar told BusinessPost that two entities have been working hard to earn is market locally.

“At the moment we have a good market share with them in Botswana market. I’m sure during 2021 long, we will be increasing our sales and market position. Soon we are going to start a marketing campaign in Botswana, so that means Batswana will see and recognize Pakmaya more and more. Pakmaya wants to be the best friend of bakers in bakeries and ladies at homes in Botswana.”

As per global COVID-19 regulations to curb the spread of the COVID-19, Botswana just like other country closed borders. Providentially, the restrictions did not affect the company destructively.

Perdar says “Kamoso Africa is a very important and strong partner in Botswana territory. With Kamoso’s hard work and strict measurements, we have done a very good job. So as Pakmaya, we have not suffered any distribution problem. Our partner is doing the needful at the reaching our products to end users.”

He further said “We are doing well in Botswana market and hoping to make much more. Our aim is to enter every single corner in Botswana territory. With our new marketing campaigns, we are planning to be the most preferred yeast in Botswana market.”

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