Wednesday, September 11, 2013


On the plane three months ago, I enjoyed an article entitled "BEE firms need to take a leaf out of PSG’s book" by the talented Phakamisa Ndzamela (@phakie101) at the Business Day. Perhaps in mixed emotion of frustration and awe of the details behind the listing of another Afrikaner-led listed company, it reminded me so much of my "Afrikaans Capital, African Consumption" blog I wrote a while back,.

Phakamisa talks about his experience of the PSG Shareholders Meeting he attended at Stellenbosch, and concludes that Black business people can learn a thing or two from their Afrikaner counterparts. A view I have held for a long time. Here is an extract of his piece:

“CALL me a "native assistant", the favourite words of erstwhile commentator Ronald Suresh Roberts. Do you remember him? What an intellectual joker.

Anyway, I admire some of the ways that the Afrikaners do their business. Their successes easily shine out on the Johannesburg stock market.

I think the Afrikaner business model is one that black economic empowerment companies in South Africa need to look into.

It looks simple and is based on bread and butter issues with no obsession with mining, a laborious and capital-intensive exercise that does not guarantee healthy margins. How do I know this?

Last week, I took time to travel to the land of the "Stellenbosch mafia", if there is such a thing.

The idea was to get a glimpse of how business was done in that part of the world. On arrival at the PSG Group annual general meeting held at the Spier Wine Estate, I walked in with an indoctrinated mind thinking that the Afrikaans elite did not admire luxury goods.

Boy, was I wrong!

I expected to see a parkade full of 4X4 Toyota bakkies and maybe an odd tractor or two on the side.

Clearly, I had delusions of grandeur! The parking was an assembly of high-end German cars reminiscent of the African National Congress’s Mangaung conference.

We walked into the hall and the house was packed with Afrikaans-speaking investors who were anxious to know about the future of their investments at PSG.

The meeting resembled a Stellenbosch version of the annual meeting of Warren Buffett’s Berkshire Hathaway in Omaha in the US. No surprise that PSG founder Jannie Mouton is often described as the "Boere Buffett".

The difference here was that proceedings were mostly done in Afrikaans. This did not irk me much, remember that I am a "native assistant".

Besides hearing the bad news that Mouton’s daughter had been locked up by criminals in a basement while her house was ransacked, what also touched me was the poor representation of black investors in a company whose goods are highly consumed by black South Africans. PSG is the largest single shareholder of Capitec, which made a great deal of money from low-to middle-income earners, most of whom are black.

The group also owns agribusiness Zeder, which is behind consumer brands such as Weetbix, White Star maize meal and Liqui Fruit, to count a few.

But if you look at the shareholding structure, PSG’s major shareholders are its directors who own a 36.6% stake.

Steinhoff, the furniture manufacture led by Markus Jooste, owns 19.6% of PSG, other friends and family own 10.1% and Thembeka Capital owns 5.2%.

Thembeka is led by Zitulele KK Combi, the only "Black Stellenbosch mafioso" that I know of.

Excluding Mr Combi and his Thembeka Capital, there were less than a handful of black investors.

By the way, Thembeka Capital is 51% black-owned and the remainder is owned by PSG.

When one looks at PSG’s market performance over the past 17 years, its share price has been climbing like the Spider-Man.

If one had invested R100,000 in November 1995, today this would be worth about R130m if you had also invested your dividend.

PSG believes that "performance should be measured on the return that an investor receives over time; not on the size of the company," says PSG CEO Piet Mouton, and one of Jannie Mouton’s sons.

Although Piet Mouton understands that the next 17 years will be hard to match he is confident of the company’s prospects.

PSG has a limited war-chest for now to make acquisitions.

But it has many companies in the development phase which present growth opportunities.

Curro, the private education provider, is one of the investments that should boost PSG’s investment portfolio in the next few years.

One of the lessons here is for a black-led consortium to create their own PSG Group; a black-led consumer goods company whose proceedings are partly run in Nguni, Tswana, Venda or any other local South African language. South Africa’s population keeps on rising. The sub-Saharan African population is estimated at 900-million.

Black businessmen and women need to roll up their sleeves and look at the value of agriculture, instead of obsessing about the bling of mining. One of the ways to do this is to redress the injustices of the Native Land Act, 100 years ago.

The act killed the rise of a black farming business class, a situation which has also contributed to the squalor houses in Khayelitsha, which is only a few kilometres from Stellenbosch.”

Thanks Phakamisa. It's comforting to know I'm not the only crazy one!


  1. Thank you Mntungwa for once again giving us food for thought.

  2. I really don't know what is wrong with us because we have the advantage of numbers. I have previously toyed around with a notion of a n investment strategy whose capital would be derived from taxi fares. To put rather simple: with the help of SANTACO, we get 1 rand from everyone who who uses the taxi from anywhere in south Africa for a whole year. With ghat leverage we start buying back our own country from foreigners.
    Imagine if this could be possible. It would be like e-toll on a national scale with us reaping the rewards.