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While the Nelson Mandela Bay BusinessChamber smoothes the road ahead...We’ll make sure the wheels ofcommerce keep turning.Our affiliation with the Nelson Mandela Bay BusinessChamber proves that our commitment to the localeconomy is as solid and dependable as our tyres.E+I 16791www.continental.co.za

THEREALTOURISMSTORY8BRANDING16THE BAY20THE REALESTATEBUBBLEGOES GLOBAL3038AVOIDINGLOSTTENDEROPPORTUNITIES425456The Nelson Mandela Bay Business Chamber’s Voice Solution is sponsored by2 September 2012 Infocom40Top 40 under 402012Join the Bay’s Business ConversationThank you forgiving your67 minutes!#Mandela DayRBAAEntrepreneurWinnersEVENTSCALENDARInnovators andEntrepreneursIS THISYOUR YEAR?www.puregroupsa.co.zaEditorial TeamEditorNicole Klokowmedia@nmbbusinesschamber.co.zaCommunication AssistantSandra Pow Chongcommunication@nmbbusinesschamber.co.zaAdvertising and SalesNeil Terblanchesales@nmbbusinesschamber.co.zaPrintingCadar Printers PEDesignerCarl VenterTelephone0027 41 373 1122Fax0027 41 373 1142Websitewww.nmbbusinesschamber.co.zaADVERTISERS LISTAccess Management • 041 408 8900 • www.nmbstadium.comAlexander Forbes • 041 392 8300 • www.alexanderforbes.co.zaBIZBOX • 041 586 1616 • www.bizbox.co.zaBridgestone • 011 9237501 • www.bridgestone.co.zaCecil Nurse Business Furniture • 041 405 1000 • www.cnonline.co.zaCoca Cola • 041 404 1106 • www.cocacolasabco.comContinental Tyre • 041 406 5189 • www.continental.co.zaCrackerjack Advertising & Design • 041 586 1362 • www.crackerjack.co.zaEskom • 043 703 2302 • www.eskom.co.zaETC (Conference) • 041 456 1616 • www.etc.org.zaGMSA • 041 403 9111 • www.gmsa.comGoba • 041 373 6552 • www.goba.co.zaGoodyear • 041 505 5474 • www.goodyear.comGrant Thornton (iQuad) • 041 374 3222 • www.gt.co.zaHeadhunters • 041 374 1728 • www.headhunt.co.zaIDC • 041 363 1640 • www.idc.co.zaIquad Global Trade Solutions • 041 391 0600 • www.iquad.co.zaIsango Gate • 041 811 2225 • www.isangogate.co.zaJGS • 041 396 9200 • www.jgs.co.zaKhanyisela Training • 041-364 0224 • www.khanyisela.co.zaKPMG • 041 395 1500 • www.kpmg.comLion Roars • 041 502 9400 • www.lionroars.comMarsh • 041 392 8700 • www.marsh-africa.comMazars • 041 501 9700 • www.mazars.co.zaMohair SA • 041 487 1386 • www.mohair.co.zaMr Bin • 072 971 9707 • veronique@qerm.co.zaMSC College • 041 585 3246 • www.msccollege.co.zaMustek • 041 397 8740 • www.mustek.co.zaNMMU Business School• 086 1504 500 • www.leadersfortomorrow.co.zaOrganisation Development International • 012 665 0999 • www.odi.co.zaPE College • 041 585 7771 • www.pecollege.edu.zaPE Golf Club • 041 374 3140 • www.pegolf.co.zaPricewaterhouseCoopers • 041 391 4421 • www.pwc.com/zaShow Me PE • 041 366 1845 • http://showme.co.za/port-elizabeth/SNG Security • 041 373-2140/7 • www.sngsecurity.co.zaTop Personnel • 041 373 7733 • www.toppersonnel.co.zaValmac • 041 484 2728 • www.valmacofficenational.co.zaWorkstation • 041 586 0258 • www.workstation.co.zaWright Surveillance • 041 585 6688 • www.wrightcms.co.za

CEO’sLetterFrom the desk ofKevin HustlerPhotography: Sandy Smyth CoffeyHave you nominated a rising star to this year’s Top 40 under 40? We takegreat pride in our members, and the Top 40 Under 40 serves as an annualshowcase of dynamic young businesspeople who choose to build theirlives, careers and businesses in Nelson Mandela Bay. This year we’re focusingon innovators and entrepreneurs. Nominate your Top 40 Under 40achiever today and join us in celebrating the contribution of a growingforce of young people under the age of 40 who see Nelson Mandela Bay’spotential to support their career and business aspirations. See the 2011achievers in action on page 20, and learn more about the nomination processon page 56.We take our mandate to act as the voice of business very seriously. Thelast few months have seen the Nelson Mandela Bay Business Chamberstand up on behalf of business to engage with the relevant stakeholders intackling various issues, most notably the question of the Integrated PublicTransport System (IPTS).In a letter addressed to members in July, I statedemphatically that the IPTS should support and not deter business in theCBD. Reports from business owners in the Govan Mbeki and Kempstonroad areas pointed to the exact opposite effect – members reported widespreadloss of access to customers and deliveries and an overall negativeimpact on business operations in the area. The letter, and subsequent communicationto the media, outlined the Chamber’s stance and recommendationson the issue. We advocated an efficient and effective IPTS, to delivera valuable service to the community at large. We called for all parties, includingtaxi owners and the Algoa Bus Company, to be properly consulted,and urged the municipality to address the matter with urgency, to avoidthe loss of rate-paying businesses and future investors.The original launchdate of 1 July was shifted to October this year, and the Metro initiated aseries of public meetings in areas located in proximity to the initial sevenIPTS routes. Statements released by the municipality at the time indicatedthat the implementation of the IPTS would take Nelson Mandela Bay “significantlycloser to its vision of becoming a world-class city and will providecommuters with a safe, reliable, convenient and affordable public transportsystem”. As representatives of organized business, we will keep a watchfuleye on the process as we are deeply concerned at the delays in implementationand the negative impact on the city as a whole.We welcomed a series of good news reports around job creation in thecity. Eveready is getting ready to be the first South African company tomanufacture energy-saving bulbs. This will mean employment for about150 more employees once manufacturing begins. Ford Motor Companywill add 800 new positions to increase production at its Silverton AssemblyPlant and its Struandale Engine Plant, and a R120-million investment byCaltex East Cape Marketer not only holds enormous potential for job creationin the Eastern Cape, but increases access to fuel.The Business Chamberwelcomes its new membersBay West City (Pty) Ltd • Dullabh Investments cc t/a Delbro• IEMAS Financial Service Co-Operative LimitedImagio ProductionsIvor Markman Photographer • LasertechM28 Trading Enterprize • Newbreed TradingRantsane Mario (Pty) Ltd • Wiki Village (Pty) LtdWilke Weiss Van Rooyen IncGold MembersSilver MembersBlue MembersThe Nelson Mandela Bay Business Chamber is powered byInfocom September 2012 3

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Learn more aboutWayne Harrison onlinenotesfrom the topBRANDINGTHE BAYBoomtown’s new MD Wayne Harrison shares theagency’s perspective on branding Nelson Mandela Bay.Strategic insight brings you the benefit of behavior change andcreative execution. Boomtown is arguably one of the strongest destinationbranding agencies in Africa. What we’ve managed to do is harness theexperts in different fields and use their skill in branding destinations andbuilding tourism brands. We have been engaged not just with developingthe Nelson Mandela Bay brand, but also Namibian tourism. We’ve engagedwith Johannesburg tourism, and do work for Dubai and Mauritius.There are many things that go into building a destination brand. It’sabout finding that magical essence and discovering what differentiates adestination. We are really looking forward to taking that next step with theNelson Mandela Bay brand, through the municipality and through thetourism board.The process of building a brand is a complex one. It’s a process ofengaging with many role players, from the tourism trade, to the municipality,to provincial stakeholders. It’s a process of discovery - where does thecommon ground lie on an emotional level?A strong brand has a single, strong emotive proposition that draws people infrom the heart to the head. And it’s on that level where we need to take ourtourism message, first and foremost to our locals. We need to instill brandloyalty and build advocates in our own community.Harrison worked in the SouthAfrican advertising industry since1989 gaining experience in small,award-winning specialised brandagencies as well as large globalnetworks. Hand-picked to head upthe Ogilvy operations in Namibiafrom 2009 to 2011, Harrison hasalso worked as Creative Director atPrimaplus and Creative Director atPam Golding Property Group.Port Elizabeth is the friendly city. That is true in every sense of the matter.Building the Nelson Mandela Bay brand is about converting what we do bestcollectively into an attractive proposition. The tangible benefits of NelsonMandela Bay are here – the beautiful beaches, the wonderful game reserves,the history that breathes on every street corner, the cultural dynamics of ourcosmopolitan community – it’s just about bringing it to life.Written by: Nicole KlokowI’ve enjoyed just seven months in Nelson Mandela Bay, but twentythree in the advertising industry. I’ve been fortunate to work for someamazing agencies and some really strong brand-building specialists andunits. I met up with Neil Hart (Boomtown founder and now chairman) inCape Town, and he came with an inspiring story and an intriguingmethodology of Boomtown’s vision for the industry. What was refreshingwas hearing Neil explain a philosophy that centred around a dynamic mix ofcreativity and strategy – ultimately, that’s where you get the magic of hugeimpact and great change.8 September 2012 Infocom Join the Bay’s Business Conversation

Photographer: SuppliedUpskilling in tourism managementWith tourism continuing to grow as a priority sectorin South Africa, Boomtown has focused its efforts tobecome more knowledgeable and leading regardingcurrent tourism trends as well as the variouselements that play a role within the industry. Throughthe University of Cape Town’s, Get Smart Learning Co.,Boomtown’s Luvuyo Bangazi, Director and StuartInnell, Brand Strategist, completed an intensiveten-week tourism management course. Thoughfocused on regional tourism, the agency is alsoresponsible for country tourism brands like Namibiaand Dubai tourism through its international links.Infocom September 2012 9

Read more onlinetourismfocusPERCEPTIONSOF THE BAYAlan Straton, founder of MyPE.co.za Port Elizabeth is aplace that people leave after school only to return to when theirchildren are of school-going age. Our citizens will go out of their wayto assist complete strangers - no wonder we are known as the friendlycity! We are experiencing growing pains and the old die-hards such asmyself want to cling to the fading myth that PE is a ten minute town.PE offers the best beaches, the best water sports, the best sailing, easyaccess to major harbours, malaria-free game reserves on our doorstep,exciting dialogue between societal groups, a rich and varied history,and a humble, yet proud, populace.Only in PE do we still hold great faith in business on a handshake, faceto face business and a can-do attitude. I can run my business fromanywhere in the world but choose to stay here in Port Elizabeth.Michelle Brown, owner ofBrown’s PR. PE has always heldwonderful memories - from my yearsgrowing up here and forging wonderfulfriendships, to attending the formerPE Technikon and then, after a stint inJo’burg, returning to the city that I grewup in and fell in love with.PE, and the communities in it, has supportedme and my business and charityinterests over the years, and all it takes is a phone call to get people involved!Visiting celebrities, corporates and sports people all commenton the city’s ‘gees’, and the sense of goodwill that abounds. I will remainin this city, despite some out-of-towners denigrating what we havehere. I firmly believe that we all need to work together to make it work!Neil Hart, Chairman of BoomtownStrategic Brand Agency,Deputy President of the NelsonMandela Bay Business Chamber.Nelson Mandela Bay is being hopelesslyundersold: we have some of the bestlifestyle environments in the country, yetwe are doing very little to capitalize onthis. Global research shows that people arefar more attracted to cities with created attractionsthan natural ones. Think Disney World, the Eiffel Tower anduShaka Marine World. What do we have to offer? Without a unified citybrand, no-one in Nelson Mandela Bay has a clear call to action, a clearreason to begin to invest in attractions and activities that we can sell onto visitors of the city. We need to get the processes and people in placeto create a unified and compelling city brand. We need incentives anda call to action to inspire development around this vision. We have totell the world about it with clarity and consistency.Too many inhibiting factors dig the city deeper into a pit: insufficientand randomly allocated funding for tourism, a political and municipalsystem that does not appear to understand the importance of thesefactors to the city’s future prosperity; lukewarm offers that attract veryfew people, and unskilled marketing managers unable to execute professionalcity marketing.We can only create change if we are led well, funded well and haveprofessionals who will commit to making a difference.Shena Wilson, PEMBBA. Boththe Public and Private Sectors need tounderstand that tourism has the potentialto uplift all sectors of society.The time of pointing fingers from bothsides must end, and we need to all worktogether to ensure Nelson Mandela Bayhas a world-class ‘Must See’ attraction,together with the will to improve existingattractions and creatively developnew ones.Tourism andmarketing industryinsiders tell us whatNelson Mandela Bayholds for them.10 September 2012 InfocomJoin the Bay’s Business Conversation

South AfricanAutomotive WeekSA AUTO INDUSTRYTO SEEK“HIGH ROAD”AT SAAW CONFERENCESouth Africa’s automotive industry will be mapping the way to the “high”road at the Automotive Industry Development Centre (AIDC) conferenceto be held as part of the third South African Automotive Week (SAAW) tobe held in Port Elizabeth in October.“If we don’t nurture South Africa’s automotive industry, we will see it decline,”warns Alfred da Costa, chairperson of the SAAW Working Group.The conference comes at a time of increasing competition from countriesin the former Eastern Europe, Turkey, North Africa, China and India.In the face of this, “we have to work hard at retaining and growing theindustry,” says da Costa.“The industry certainly faces challenges. Every time an original equipmentmanufacturer announces that they will be producing a new modellocally we breathe a sigh of relief,” adds Roger Pitot, executive directorof the National Association of Automobile Manufacturers of South Africa(Naacam).SAAW is the only auto industry event in 2012 to be supported by all themain automotive organisations – Naacam, the AIDC, the Retail Motor IndustryOrganisation (RMI), and the National Association of AutomobileManufacturers of South Africa (Naamsa).One of the keynote speakers at the conference is Naamsa president andmanaging director of Volkswagen South Africa, David Powels.The conference is expected to be attended by over 300 leading automotiveexecutives and government policy decision-makers.It is centred around a ten thousand square metre components industryexpo.“It is being held at a pivotal time in the South African industry’s history- with the Motor Industry Development Programme making way for theAutomotive Production and Development Programme (APDP), whichushers a new era for the automotive sector,” says Lance Schultz of theAIDC Eastern Cape.Other speakers at the “Keys to unlocking automotive growth … Securingthe automotive sector’s high road” conference include strategist ClemSunter, Dr Martin Zimmermann, managing director of Mercedes BenzSouth Africa, Naacam President Mpueleng Pooe and MIDP specialist, DrAnthony Black.Day one of the interactive conference will be facilitated by Jeremy Maggs.“The conference, which is built around the AIDC’s principle of ‘for industryby industry’ is heavily focussed on dynamic panel discussions which allowfor rigorous debate and interaction from the floor,” says Schultz.Chief Technical Advisor at the United Nations Industrial Development Organisation(Unido), Arthur David, Dr Raymond Patel of merSETA, TransnetCEO, Brian Molefe, Original Equipment manufacturer Procurement CouncilChair, Stefan Haasbroek and Pitot will also contribute to the debateand direction.Day 2 will consist primarily of two break-away streams focussing on SupplierDevelopment and Supply Chain and Skills Development respectively.South African Automotive Week is made possible by the Eastern CapeProvince, Nelson Mandela Bay Municipality, Coega, the East London IDZ,merSETA, the IDC and Transnet.Bookings for the Automotive Industry Conference can be made online atwww.saaw.co.za. For more information contact Fred Weatherall-Thomasat 041 393 2100, fweatherall-thomas@aidcec.co.zaInfocom September 2012 13

tourismfocus: OpinionTHEREALTOURISMSTORY“Destination marketing is oftenthe most complex and challengingpart of tourism marketing.”Tourism specialist and Chairman of theNelson Mandela Bay Tourism IndustryAssociation Peter Myles offers possiblesolutions to the Metro’s key tourismchallenges.Without hesitation the four challenges are integrated andrelated to destination marketing. These include an effectiveinstitutional arrangement, a multi-disciplinary approach, theprovision of quality research information and a sustainable performance-relatedfunding mechanism.A destination is a place consisting of primary and secondaryattractions and supporting amenities that entice people to visit;it is where offerings designed to meet tourist needs are located.The marketing of a destination brings together all aspects oftourism: marketing, transport, attractions, and accommodation.The destination is, after all, where the most significant elementsof tourism occur and where the inbound tourism industry islocated. Destination marketing is often the most complex andchallenging part of tourism marketing. In many ways, the destinationis the catalyst for all the other industries in the tourismsector. Unless visitors want to go somewhere, the provision oftransportation, accommodation facilities, restaurant facilitiesand entertainment will be absolutely pointless.Generally, for tourism to develop in a sustainable manner, anappropriate physical, regulatory, fiscal and social framework isrequired, and this can only be provided by government.Government usually provides the basic physical infrastructurenecessary for tourism, such as roads, airports andcommunications,and creates the legal framework within which the industryoperates. This is the enabling environment in which the privatesector can flourish.Over the past decade, there have been increasing signs of disengagementfrom tourism by the public sector, notably at nationalor central government level.This has resulted in the relinquishing of a number of traditionalgovernment responsibilities and activities in the field of tourismin favour of both local authorities and the private sector. Concernshave been expressed in some countries that the effectof government assuming a tourism promotion and marketingrole, which in other industry sectors is seen as a private sectorresponsibility, may be a misallocation of government funding.Moreover, it could result in a marketing organization that is lessresponsive and entrepreneurial than it should be. As a result,these countries are looking more and more to the private sectorto take on some of the promotion and marketing functionstraditionally assumed by local government, usually in some kindof partnership with the public sector.Most destination marketing organizations which havepartnerships with the private sector rely on industrycontributions mainly for marketing, advertising and the fundingof special promotional campaigns. But others also count onprivate sector funding for their core budgets. This generallyresults in private enterprise having a greater say in the developmentof tourism policy and local operational strategies, as wellas in how the overall budget is spent. Significantly, the trendtowards public-private sector partnerships in tourism managementand marketing is not only apparent at national level, but isincreasingly spreading to provincial and municipal levels.16 September 2012 InfocomJoin the Bay’s Business Conversation

“A strategic alliance needs tobe forged between the key roleplayers.”40Top 40 under 4040organizations and they work together to implement joint ventureprograms.To market a destination effectively for trade, investment andtourism, requires a Brand Identity and a Corporate CommunicationsStrategy that is endorsed with local pride by all businessesexporting a product whether it be tourism products, manufacturedgoods, agricultural produce, services or a sports team.Tourism is an invisible export earning for South Africa more foreignexchange than gold.Visit our website for NMBT CEO Mandlakazi Skefile’stake on the challenges facing local tourism.The city of Amsterdam, for example, generates around 50% of itsrevenue from commercial activities involving the private sector.In the USA, the states of Virginia and Oregon passed bills in 1995to privatize, or part-privatize, their tourism departments withindustry-backed funds. There are also public-private sector partnershipsin the area of tourism promotion and marketing in Hawaiiand Colorado, and moves are underway to try to introducesimilar schemes in other states, such as Florida and California.In Nelson Mandela Bay, a strategic alliance needs to be forgedbetween the key role players i.e. Nelson Mandela Bay Municipality,Nelson Mandela Bay Tourism, Nelson Mandela Tourism IndustryAssociation and Nelson Mandela Bay Business Chamber. Thisalliance should meet regularly to identify, discuss and supportjoint marketing initiatives for tourism, trade and inward investment.Collectively this alliance needs to build a Joint MarketingFund and an implementation strategy for destination marketing.Although it is difficult to identify trends on either a worldwideor regional basis, it is clear that bed night taxes (bed levies) arefairly widespread, especially at the local level. The New ZealandTourism Board (NZTB) for example sets out to generate matchingfunds from the private sector for specific campaigns but inpractice, it usually leverages a much higher level of funding fromindustry than targeted. Tourism is a system and for the systemto function effectively it requires the public and private sectorsto work together by forging mutually beneficial cooperative alliances.The ideal partnership should be built on a foundation ofcooperation and coordination. The main reason why New Zealandand Australia have built such strong tourism economies isbecause the tourism system in those countries is fully functional.Both countries have strong public and private sector tourismiHave you heard about the Red Location BackpackerTrain Tour? Read more about it on the Chamber’swebsite“Over the past decade, there have beenincreasing signs of disengagement fromtourism by the public sector.”Infocom September 2012 17

tourismfocusTAKE YOUR A-GAMEOUTDOORSteams of five, or walking teams of three, to cover a 4.2km lap aroundthe Nelson Mandela Bay Stadium and North End Lake. Each participantis required to complete one lap of the course. The relays take place onthe first Thursday evening in June through September.• Spar Redhouse River Mile An open water swimming event for thewhole family. 2013 will celebrate the Mile’s 89th anniversary, ensuring itremains Africa’s longest-running open water swimming eventWhat participants say:The Investec Night Relay offers local business a great team buildingopportunity and fantastic networking for company employees whilstgetting fit and having fun. - Michael Zoetmulder, Zports[Participation] encourages us as a team at Kingfisher FM. This plays outin our relationships at work, with our listeners, our clients, the community!All round benefits! - Steven Lancaster, Kingfisher FMThe Investec Night Relay is the perfect team building platform for companies.It provides an opportunity to get to know your colleagues in amore social forum, simultaneously offering a friendly yet competitiveelement against our clients and industry rivals. - Justin Roberts, KPMGSports tourism holds promise as an area of growth for NelsonMandela Bay. Our city offers corporates many an opportunity totake their A-game outdoors.Hundreds of corporate individuals look forward each year to the VodacomCorporate Triathlon Challenge. This year’s event in April saw arecord sold-out field of 429 individuals, 445 corporate teams, and 13school teams. Competitors swim, Bike and Run ten percent of the fullSpec-Savers Ironman South Africa distance.Ironman South Africa heads into its ninth year on Sunday, 14 April2013. This event draws international participants and worldwide mediacoverage, and incorporates three sporting disciplines into a seventeenhour cut-off time: a 3,8km swim, a 180.2km bike ride and a 42.2km runalong the Bay’s beautiful coastline.Other sports events in the Bay include:• Herald VW Cycle Tour A weekend-long festival of cycling events whichstarts off with a mountain bike challenge in Addo followed by roadevents in Port Elizabeth on the Sunday.• The Urban Run Exciting, but tough, with urban obstacles designedto get participants running, scrambling and climbing through parts ofthe CBD they probably haven’t seen in years. The Urban Run consistsof a 10.5km urban obstacle race for social fun runners who are lookingfor something different. This year’s event is scheduled for Sunday 16thSeptember 2012• Investec Night Relay Aimed at companies, educational institutions,schools and social clubs or groups. This racing event is for runningOther popular sportsevents hosted in the Bay:Ocean Racing SeriesSwim SafariEast Cape SwimKenton ExtremeKing and Queen of Nelson Mandela BayNMB Bellbuoy challengeNMB Surf ski challengeZports trail runsWoody Cape MT B18 September 2012 Infocom

Read more onlinecsi report:Mandela dayThank you for giving your67 minutes! #MandelaDayThe Business Chamber’s collaboration with its member companies in celebration of Mandela Day on 18 July 2012 was an unqualifiedsuccess! Just over one hundred volunteers from local business spent their 67 minutes (and in many cases, more!) helping local communities.Their efforts benefitted the Khanya and Siyahluma Child Care Centres (through Community Chest), and the Save-a-Pet charityWe thank the following companies for their time and sponsorships:Siyahluma Day Care Centre • Alfresco Graphics and Signs • Headhunters • S4 Integration • Cummins • Producer AllyJaytee Trading • Builders Express • Khanya Day Care Centre • Pumeza Bono Attorneys • Strategy AdvertisingS4 Integration • Strategic Edge Solutionsm • Producer Ally • Cummins • Transport ComponentsAfrican Brick (Lenasia) • Jaytee Trading • National Plumbing Services • Builders Express • RPS Builders and PlumbersSave-a-Pet • Rohlig-Grindrod • Willard Batteries • Kempston Group • Producer Ally • Wenza PromotionsAssignments on ContractAuditing services provided by Grant ThorntonBranding services provided by Boomtown Strategic Brand AgencyLogistical support provided by Mandela Bay Cares.Refreshments provided by Auspex PropertyRPSBuilders & plumbers20 September 2012 Infocom Join the Bay’s Business Conversation

Photography by: Strategy Advertising / SuppliedThank you to Warren Fry ofKempston EmploymentSolutions for his invaluableassistance, acting as projectleader on the Save-a-Petproject. Our thanks also goesto other Top 40 Under 40achievers including PumezaBono, Jenni Lawrence, SharaCape, Luvuyo Bangazi, WarrenUpton and Matthew Swarbrick,as well as Ryan Haworth andZoe Waters of the Chamber.40Top 40 under 40The 2012 Top 40 Under 40 achievers will have the chance to giveback to their community. Turn to page 56 for detailsInfocom September 2012 21

profilePhotography: SuppliedThe Alliance Française is a multifaceted organization andforms part of a growing network, founded in Paris, France,1883. This network aims to strengthen global relationshipsthrough language proficiency, support and developmentof French language programmes in universities as well asschools, and through technical expertise.Currently, there is a network of over 6000 students within the17 Alliance Française branches located in major cities of SouthAfrica, namely, Johannesburg, Pretoria, Cape Town, Durban andPort Elizabeth.The Alliance Française of Port Elizabeth was founded in 1960.It offers a variety of services including translation services, certificationsendorsed by the French Department of Educationwhich validate the language levels attained by non-Frenchspeakers, a fully equipped modern library with a wide range ofbooks, DVD’s and magazines, and regular cultural events.The Alliance Française’ missions are, primarily, to teach French,promote French and Francophone cultures and to promotecultural diversity. These are achieved through interaction duringweekly events and by teaching the local language, Xhosa,and creating an even wider web. The regular, weekly events focusmainly on culture, by intermingling both local and Frenchculture through with, exhibitions, movies, live performancesand many more.France-South Africa Seasons 2012-2013:July-November 2012. This is the firstFrench Season locally endorsed by bothSouth African and French heads of state.Culture, creativity and innovation inboth South-Africa and France are celebrated.More information can be foundon: www.france-southafrica.comWith the Alliance Française - Port Elizabeth motto, learn morethan just a language, we maintain our slogan and stand by ourmissions for eager success.Infocom September 2012 23

smefocusThe Nelson Mandela Bay Business Chamber SMEHelpdesk is supported by Standard BankPhotography by: Sandy Smyth CoffeyThe SME Helpdesk is a huboffering business support tostart-ups and established smallbusinesses. Make the SMEHelpdesk your first stop whenyou need access to information,markets and finance.SME HELPDESK SERVICES• Finance referral services• Specialist support organisations referral services• Business skills training workshops• Business networking opportunities• Mentorship programmeSME HELPDESK FACILITIES• Internet and email facilities• Photocopying and scanning services• Library of business publications• Brochure display boardsFezeka Matshoba is the Chamber’s SMEHelpdesk co-ordinator. She’s there tosignpost the way to company growth forSME owners.Contact Fezeka onsme@nmbbusinesschamber.co.za or041 373 1122SMESUPPORT ORGANISATIONSCoega Development Corporationwww.cdc.co.zaOffers business investment opportunities as a catalystfor socio-economic growth in South Africa.AIM: To provide a competitive investment location supported withvalue-added business services that ultimately enable sustainable socioeconomicdevelopment. The Coega Development Corporation providescustom developed space to global and local businesses who wish tomake the most of investing. 11 000 ha of sector specific zoned land withpurpose built infrastructure is available.Small Enterprise DevelopmentAgencywww.seda.org.zaThe Small Enterprise Development Agency (Seda) is an agency ofthe South African Department of Trade and Industry (the dti).AIM: Seda’s mission is to develop, support and promote small enterprisesthroughout the country, ensuring their growth and sustainabilityin co–ordination and partnership with various role players, includingglobal partners, who make international best practices available to localentrepreneurs.The Business Chamber’s SME Helpdesk offers information on development funding. Contact sme@nmbbusinesschamber.co.za24 September 2012 Infocom Join the Bay’s Business Conversation

iFor more information about organisations that canhelp your business grow, visit the SME Helpdeskpage on the Business Chamber’s website.smefocusEast Cape Development Corporationwww.ecdc.co.zaThe ECDC is an economic development agency working to implementthe economic development policies of the Eastern Cape provincialgovernment. AIM: The ECDC aims to attract new investors andposition the Eastern Cape as the investment target of choice; Stimulateexports; Facilitate economic development; Build existing businessesand; Facilitate start-up businessesIndustrial DevelopmentCorporationwww.idc.co.zaThe Industrial Development Corporation is a national developmentfinance institution.AIM: To promote economic growth and industrial development andcontribute to the creation of balanced, sustainable economic growth inSouth Africa. The corporation aims to serve as a catalyst for balanced,sustainable development. It does this by identifying and supporting opportunitiesnot addressed by the market and providing risk capital inpartnership with the private and public sector.National Empowerment Fundwww.nefcorp.co.zaThe National Empowerment Fund’s role is to support Broad-BasedBlack Economic Empowerment (BB-BEE).AIM: The National Empowerment Fund implements its mandate inthree ways, namely through asset management, fund management, anda strategic projects fund. Funding is available from four funds: The iMbewuFund supports black entrepreneurs wishing to start new businessesas well as existing black-owned enterprises with expansion capital. TheuMnotho Fund is designed to improve access to BEE capital. Also availableare the Rural and Development Community Fund, and the StrategicProjects Fund.Business Partnerswww.businesspartners.co.zaBusiness Partners Limited supports entrepreneurial growth byproviding financing, specialist sectoral knowledge and added-valueservices for viable small and medium businesses.AIM: To facilitate wealth creation, job creation and shared economic development.Business Partners aims to invest capital, skill and knowledgeinto viable entrepreneurial enterprises in South Africa, Africa and othermarkets.The Business Placewww.tbp.co.zaThe Business Place is a network of small businesssupport centres with branches across South Africa and Botswana.If you aspire to start your own business or you are running a businessand want to grow it, The Business Place can assist you byproviding information, referrals, training, workshops, networkingand business opportunities. AIM: To promote entrepreneurship; topromote procurement preference toward small businesses and; to providean accessible resource which small business can access for capacitybuilding and general business support.Khula Enterprise Financewww.khula.org.zaKhula Enterprise Finance is a development finance partner.AIM: To provide finance, mentorship services and small business premisesto SMEs through a network of partnerships and to encourage thesustainable development of SMEs. Khulaoffers mentorship programmes,loans and credit guarantees. The organization’s property portfolio offerssubsidized rentals to SME owners.Your ChamberTechnology Innovation Agencywww.tia.org.zaThe Technology Innovation Agency stimulates technologicalinnovation in order to improve economic growth by developingand exploiting technological innovations.AIM: TIA’s core business objective is to support the development andcommercialization of competitive technology-based services and products.It provides Financial and Non-Financial Support to its stakeholders,namely, Science Councils, Public Entities, Higher Education Institutions,private research institutions and entrepreneurs.National Research Foundationwww.nrf.ac.zaAs an independent government agency, the National ResearchFund promotes and supports research in all fields of knowledge.AIM: The objective of the National Research Foundation (NRF) is to supportand promote research through funding, human capacity developmentand the provision of the necessary research facilities, in order tofacilitate the creation of knowledge, innovation and development in allfields of the natural and social sciences, humanities and technology, includingindigenous knowledge systems.26 September 2012 Infocom Join the Bay’s Business Conversation

Read more SME Success stories online!smefocusMentoringsuccessPhotography: Sandra Pow ChongThe Nelson Mandela Bay Business Chamber’s SME Developmenttask team runs a mentorship programme to help entrepreneursclear the hurdles to successful small business ownership.What drew you to the Chamber’s mentorship programme?I learned of the Chamber’s mentorship programme through readingan article about the programme in the first edition of Infocom thatreceived after joining the chamber as a member. The article brieflyprofiled the mentors – all with a wealth of business acumen and experience.I love to read biographies and glean business and life lessonsfrom such stories, but it is seldom that the opportunity presents itselfto interact with an accomplished business person on a one-to-one basisand draw from their experiences to shape one’s business.How does your mentor assist you?Rene and I meet once a month for an hour. I always look forward toRene’s anecdotes about her business experiences. I appreciate that sheis willing to share difficult situations and I greatly value the lessons thatI am able to learn, and apply to my business. Although we have a clearidea in terms of the topics to be discussed, our sessions are relaxed.Rene often sends me additional information and resources.I wanted help in identifying appropriate marketing interventions, hiringstaff and personal development. I have learned through the mentorshipprocess that networking is of paramount importance. Rene hasgiven me good tips. It is evident that she has given my marketing strategymuch thought and wants to see my business succeed. Currently,I work by myself, but the administration of my business often consumesmuch of my valuable time. I have been giving some thoughtto hiring administration assistance, but was not too sure where tobegin! Self-improvement will translate into heightened levels of serviceto my clients. Rene gave very practical advice in this regard andrecommended two very sound subjects for consideration includingemotional intelligence, which is becoming more and more importantin the workplace. Rene, as a small business owner, acutely understandsmy challenges.Name: Wendy FisherCompany: Strategic EDGE Solutions,OwnerMentor: Rene de Reuck, Top PersonnelYour ChamberThe best piece of advice my mentor gave me was to follow yourintuition.The most valuable aspect of the mentorship programme is theopportunity to draw on my mentor’s years of experience and insights.greatly value engaging with a businesswoman, as Rene acutely understandsthe challenges of being a woman in business and has shared(sometimes hilarious) situations which have enabled her to be a betterbusinesswoman.28 September 2012 Infocom Join the Chamber’s mentorship programme. Contact Fezeka Matshoba on sme@nmbbusinesschamber.co.za

RBAA EntrepreneurCategoryFINALIST: Shara Cape,HeadhuntersYour ChamberWINNER: Madelé Ferreira,Mooihoek BoerderyMadelé Ferreira is the owner of Madelé Ferreira Mooihoek Boerdery situatedin Backhouse Hoek, Hankey. The company consists of a permanent,well trained and enthusiastic staff of sixty people. The company started asa dream for Madelé as a little girl. She always dreamt of starting her ownbusiness that would create job opportunities and would better the qualityof living of the farming labour force .She has a Home Economics degreefrom the University of Stellenbosch. Madelé co-owns the company withher husband, Johan, who holds a 40% share. Her faith and determinationallow her to strive to bigger and better heights within her business.Mooihoek Boedery currently produces spinach, leeks and strawberries on40ha in the Hankey area of the Gamtoos Valley, Eastern Cape. MooihoekBoedery currently delivers strawberries to chain stores in Durban, as wellas to the Fresh Produce Markets in Johannesburg, Bloemfontein, Durban,Pietermaritzburg and Port Elizabeth.I’ve been in business for seven years within Headhunters, and thirteenyears collectively.As an entrepreneur, one is generally a broader-stroke, strategickind of risk-taker, therefore the areas of compliance, administrationand finances are not inherently one’s strengths. However, businesshas taught me that if one does not have proper control and understandingof these areas, this lack of knowledge and understandingwill then nullify the positives of your skill in any great opportunityundertaken. The longevity of your business will be at risk. I have learntthat even by putting professionals around me to support me in theseareas, that the responsibility is still mine, and mine alone. So, I haveput systems that I understand and can work with - from a practicalperspective - in place.The success I’m most proud of is my family. They are my priorityabove any business opportunity. Career-wise, however, I am mostproud of our team having been instrumental in finding over 1200people wonderful jobs! What an incredible and privileged positionto be in.I became an entrepreneur because I didn’t think I had another option.I needed to start earning a living. My Father was an entrepreneur, andhe encouraged me to just do it. I am now a fanatical entrepreneur. Ilove business, and encouraging people to push the lid off the box.My network is important to me because. A recruiter’s value can’tbe found within the process of a single successful hire. The backgroundrequired for long-term recruiting success involves the deepstudy of companies, products, markets, assessment, and professionscoupled with a kind of brute force stamina to doggedly pursue thetalents of other people. This is the process that forges the recruiter’stalent. This makes networking critical to our business’ success.Business in Nelson Mandela Bay needs to start operating as a firstclass city, offering first class service and delivering first class results.We have a dream as a team – we don’t want to be the biggest agencyin Port Elizabeth, we want to be the best. That dream keeps us motivated.Our core mission is to find GREAT people, GREAT jobs. It’s notabout “filling seats”; rather, we give our utmost to finding the bestpossible people available, adding value to support our client’s employeeretention strategy and ultimately, business success! We wantto be the industry benchmark for recruiting excellence.30 September 2012 InfocomJoin the Bay’s Business Conversation

The Nelson Mandela Bay BusinessChamber supportsthe Entrepreneur category of the2012 BusinessWomen’s Association’sRegional Business AchieversAwardsFINALIST: Michele Lehy, BizBoxPhotography by: Sandy Smyth CoffeyI’ve been in business since Grade seven. I used to make Macramé’s when Iwas in junior school. My mother would then sell them at work, and I wouldsupplement my pocket money this way. I have always had extra jobs: duringschool, at Technikon, and even once I had started full time employment,be it waitressing, or working as the Revlon Girl at Checkers. My motherwould fetch and carry me, but charge me petrol money for this service sothat I would understand the concept of Cost of Business!My first few years in business were tumultuous to say the least. Two businessfailures, and very hard lessons learnt.My biggest challenge has been myself. Keeping myself motivated, to alwaysensure that I don’t become complacent when times are very good;to maintain my vision for my business and keep inspiring my staff to stayon the path that I have forged for us; staying open to opportunity, keepingahead of the competition and reinventing the business when needed.I’m proud that BizBox has remained a viable, vibrant business, and that itis constantly evolving and adapting to the market requirements as well asstaying relevant in our field of business. I am proud that we are growing andour path, through good and bad times.If you want your own business, you need to ensure that the business youare in is what you love and what you are good at. Don’t do what you thinkwill just make you money. If you reverse the process and do what you aregood at, the money will follow. You need to practice tolerance, be innovative,stay focused and don’t do stupid things like buying expensive cars andliving the life of Riley while still establishing your business.I became an entrepreneur because it’s the only thing I’m good at. Itwasn’t a career that one could study for when I was looking at options formy life. However, I found that when I started working for myself, it seemedlike everything I had studied, learnt or enjoyed had led me to this path, andit was totally natural and easy. I cannot imagine not getting up and goingto work, and doing it for myself is a total privilege.My network is important to me because it fuels everything I do. It feelslike I have a constant safety net, because I have a trusted and extensivenetwork around the country.Business in Nelson Mandela Bay needs more interaction and co-operationbetween all the role players. Everyone seems to want to hold onto theirtiny little piece of the pie, jealously guarding their interests. People needto realize that through co-operation with each other, the bigger market isavailable to all in the BayMy vision for my business is world domination.Infocom September 2012 31

iFind out more about Trade PointSA Nelson Mandela Bay onlinetradefocusYOUNG ARTISTSDEVELOPED ASEMERGINGEXPORTERSTrade Point got in on the arts to develop artists for the US market.July saw a group of Chicago based art buyers tour the Eastern Cape insearch of talented artists to showcase their artwork at an exhibition at Chicago’sGuichard art gallery later this year.Andre and Francis Guichard met with local township artists across theregion who specialize in fine art, ranging from painting to sculpture andbeadwork.The aim of the two-week trip, which was initiated and arranged by Tradepoint,was to expose young local artists to the opportunities offered in theUnited States art market and to develop them as emerging exporters. 40%of the Chicago population are of African origin and the Guichards are keento strengthen their linkages back to the continent.“The artwork that we have seen has been above my expectations in termsof quality and diversity”, said the Guichards, who admired the artists’ use ofvarious mediums and themes to capture social issues in their art.Tradepoint identified a need to create an international appreciation for localproducts to assist export ready businesses and products with exportpotential for global trade. David Hamer, Manager of Tradepoint SA NelsonMandela Bay said, “This visit from Chicago is just the tip of the iceberg.Local fine artists produce work of a standard that ranks high on the worldstage. Their work is immensely appealing to international buyers and ifTradepoint can facilitate that process, enabling local artists to exhibit theirwork and by doing so raise the profile of South African art, then it can onlybode well for the future in terms of both the art work and internationaltrade.”“Tradepoint enabled us to immerse ourselves in the culture of the EasternCape in a way which wouldn’t have been possible if we had planned thistrip on our own,” said Andre Guichard. “We are looking forward to the reactionof the US audience when they feast their eyes on the talent fromNelson Mandela Bay.The trip culminates in the selection of 16 local township artists who willhave selected works from their art pieces exported to Chicago for an exhibitionin September. The exhibition in September will include up to fourtownship fine artists from the Eastern Cape who will represent different artisticdisciplines such as sculpture, collage and paint, both representationaland expressionist. The art will depict traditional, activist and contemporarytownship life or integrated South African life.34 September 2012 Infocom Join the Bay’s Business Conversation

usinessadviceGOVERNANCE,SUSTAINABILITYAND ETHICSWhat matters most? And does it matter to SMEs?Korien Sander is a CA (SA) currentlyworking on her PhD entitled “The moralcharacter of entry-level charteredaccountants in South Africa” and is therecipient of an Erasmus Mundusscholarship.Over the past decade, the terms governance, sustainability and ethicshave become part of mainstream business language. The increasein prominence was, in part, driven by the publication of the third KingReport on Corporate Governance in South Africa. When King lll waspublished in 2009 it stated that it would be applicable to “all entities, regardlessof the manner and form of incorporation or establishment andwhether in private, public or non-profit sectors”. This was met with resistancefrom the non-profit sector specifically because of the absence ofconsultation. SMEs may well also resist the concept with the argumentthat the principles and practices are aimed at large entities (includinglisted companies) and therefore not applicable.Compliance with King lll is not legally required (except for listed companiesregulated by the JSE’s listings requirements), but corporate governancepractices, like legislation are often considered to be a constraintto performance. The tension between conformance and creating valuewhile utilising scarce resources becomes even more acutely felt in difficulteconomic times when there are increased pressures. The same couldbe said to apply to sustainability which requires consideration of economic,social and environmental factors or the three P’s: people, planetand profits. Both governance and sustainability are operationalised definitionsof ethics –action or behaviour that is good not only for the self,but also for others. Good ethics will not make a bad business plan work,but bad ethics will negatively impact a good business plan.The typical ethics management program includes codifying ethicalstandards in a code of conduct, communicating the contents of thecode to staff and stakeholders, training of staff in particular on the applicationof the code, implementing reporting lines (so-called whistleblowinglines) and reporting results in the integrated report. An extensiveand expensive program does not have to be the point of departurefor the SME owner. Consider the following as a start:1. Leadership: The origin of the saying that the fish rots from may be uncertain,but no one doubts that the tone is set from the top. Rememberthat your employees are more aware of your conduct - both at work andelsewhere - than you may be comfortable with. They will follow your lead.2. Integrated reporting: With even financial reporting becoming increasinglycomplicated, it may seem absurd to consider an integrated (triplebottomline or sustainability report) for SMEs practical. Rather than thinkingof the integrated report as “one report”, reframe it in terms of thinkingin general. Consider a “one pager” - literally a one page integrated report.Focusing your thinking to the extent that you can fit every material issueonto one page would be a valuable exercise.Part of the reason for the current challenging economic climate couldeasily be ascribed to a failure of ethics. Make sure to learn and apply allwe have learned from this painful lesson.36 September 2012 Infocom Join the Bay’s Business Conversation

usinessadviceRead past columns in Chamberpublications onlineiPhotography by: SuppliedDavid Honeyball is Tax Partner at Grant ThorntonBUSINESSRESCUEPOINTERSThere has been substantial interest in the business rescue provisions ofthe Companies Act of 2008, which was introduced with effect from 1May 2011. Several companies have elected the option of business rescueas opposed to liquidation. Some have been successful, and others not.At the meeting to approve the business plan creditors are entitled tovote in favour of the plan or against it. Secured and unsecured creditorshave a voting interest equal to the value of the amount owed tothat creditor by the company. A concurrent creditor who would be subordinatedin the event of liquidation has a voting interest equal to theamount that he would likely receive in the event of liquidation. This valueis independently and expertly appraised at the request of the practitioner.Thus, if a shareholder has subordinated his loan account in favour ofother creditors then his voting right is reduced to the liquidation value.The plan is approved if a majority of 75% of the voting rights were votedin favour of it and the votes in support of the proposed plan include atleast 50% of the independent creditors voting rights that were voted. Ifapproved, the business rescue practitioner is mandated to implementthe plan. If it is rejected, he has the following options:• Seek a vote of approval from the holders of voting interests to prepareand publish a revised plan • Advise the meeting that the company willapply to court to have the vote set aside on the grounds that it was inappropriate.If the practitioner does not this action then any affected personpresent at the meeting may:• Call for a vote of approval from the holders of voting rights requiring thepractitioner to prepare and publish a revised plan or• Apply to court to set aside the result of the vote on the basis that it wasinappropriate or• May make a binding offer to purchase the voting interests of one ormore persons who opposed adoption of the business plan at a value expertlyand independently determined at the request of the practitionerto be a fair and reasonable return which that person is likely to receive ifthe company were to be liquidated.The business rescue plan needs to be supported by the majority of thecreditors by value. There are some other difficulties from a legal perspectivethat are being encountered in the business rescue process as our lawis still “new” and has not been subjected to any test cases in the courts. Itseems that there are often different possible interpretations of how thevarious sections of this chapter of the Companies Act should be implemented.Eventually time will tell which the correct interpretation is as westart to see case law coming though.Infocom September 2012 37

iRead past columns in Chamberpublications onlinebusinessadviceAVOIDINGLOSTTENDEROPPORTUNITIESGovernment and the private sector have identified a sustainable SMMEsector as key to stimulating economic growth and transformation inSouth Africa.As a result, SMME’s have received significant attention and investment,ranging from the establishment of state-initiated projects to supportivelegislation, a variety of funding institutions and government incentivesthrough the Department of Trade and Industry.Procurement by government in South Africa constitutes approximately21% of GDP and arguably represents the single largest opportunityforpromoting SMME’s.Despite this, and the ever increasing number of SMME’s being established,there has and continues to be an inability on the part of SMME’sto grow their businesses.A significant contributor to this state of affairs is the inability of SMME’s tofully use the opportunities presented to them in the form of tenders. Aplausible explanation for this is no doubt that SMME’s do not fully understandand appreciate the tender process, the regulatory environment inwhich it finds application and their rights.The Regulatory Environment: The Preferential Procurement Policy FrameworkAct (PPPFA) sets out a framework according to which points forprice and preferences must be awarded on tenders above or below acertain value. In this way, government balances the cost effectiveness ofthe procurement with the need to transform.Previously, points for preferences were awarded in an inconsistent mannerin the discretion of the government organ inviting the tender.The promulgation of the new regulations to the PPPFA on 8 June 2011,effective from 7 December 2011, has aligned the award of points for preferencestothe B-BBEE status level of the tenderer.Whilst the new regulations are intended to simplify the award of points,SMME’s have traditionally found it difficult to adapt to the changing regulatoryenvironment and align their conduct accordingly.Warren Parker is Equity Director at JoubertGalpin SearlePractical tips:1. Points for preferences are awarded based on the B-BBEE status levelof the tenderer. Joint ventures are required to submit a combined certificateto claim the preference points. Failure to strictly comply with thenew regulations you result in no points being awarded for preferences.2. Tender documents must be carefully read to determine what the criteriafor responsiveness are. It is not uncommon for a tender offer to bedeclared non responsive simply because, by way of an example, a certifiedcopy of an identity document is not provided.3. A complete set of the tender submitted should be retained to verifyany allegations that may be raised by the Government organ regardingcompliance with the tender responsiveness criteria.4. The Government organ is obliged to tell you that an award of a tenderhas been made. It is incumbent on you to request the reasons forthe award of a tender to a tenderer other than you. Without his informationyou will not be able to assert that a tender award should have beenmade to you.5. The Supreme Court of Appeal has held that “Not every slip in the administrationof tenders is necessarily to be visited by judicial sanction”.This means that an award of a tender by a Government organ contraryto the tender responsiveness criteria may not necessarily be sanctionedby a court. The adage “you win some, you lose some” will no doubt playitself out in this regard.If you feel that a tender should have been awarded to you but was not,then you are entitled to request why the tender was awarded to someoneother than you and to access the evaluation and adjudication reports.Unless you submit acceptable tender offers or dispute incorrectawards you will never capture the opportunities which exist in the awardof a tender to you.38 September 2012 InfocomJoin the Bay’s Business Conversation

usinessadviceTAX DEDUCTIBILITYOF CORPORATESOCIALRESPONSIBILITYMany businesses are committed to being responsibleand contributing corporate citizens. Corporate socialresponsibility (CSR) is the continuing commitment bybusiness to contribute to the economic developmentwhile improving the quality of life of the workforce, theirfamilies, the local community and society at large.Your ChamberThe tax deductibility of CSR expenditure has been the subject matter ofmuch debate over the last few years.Donations made to organisations are deductible for tax purposes providedthat the organisation receiving the donation is approved as a publicbenefit organisation (PBO) by the South African Revenue Service (SARS)to issue section 18A certificates.However, social responsibility extends beyond contributing to PBOs.Many businesses incur expenditure on CSR programmes but are not ableto claim a deduction in terms of section 18A of the Income Tax Act, No58 of 1962 (the Act) as they are not in receipt of section 18A certificates.The question that arises is whether a taxpayer can claim CSR expenditureincurred as a deduction?The Act does not contain any specific provisions which provide for a deductionof CSR expenditure. Accordingly, in order to establish whetherthe expenditure would be deductible for income tax purposes theamounts expensed must be incurred in the production of income, notbe of a capital nature and must be laid out or expended for the purposesof trade. The CSR expenditure does not have to produce income, howeverthe expenditure should be inextricably linked to the business operationsof a taxpayer in order for the expenses to be deductible.In Warner Lambert SA Pty Ltd v CSARS, the court in 2003 had to deal withthe deductibility of social responsibility expenditure that was incurredby a subsidiary of a US company that adhered to the Sullivan Code. Theprinciples of the Sullivan Code were very similar to the current principlesgoverning empowerment in South Africa. The court held that the linkbetween the company’s trade and the CSR expenses was not as close asother expenses, but, nevertheless, the connection was not too remote;the specific expenditure does not, itself, have to produce profit and theexpenditure was bona fide incurred for the performance of the company’sincome producing operation and therefore formed part of the costof performing it. The expenditure was held to be deductible.SARS has issued two Rulings dealing with similar types of expenditure.In Binding Class Ruling BCR 2 (12 May 2009) it was ruled that expenditureincurred in respect of Corporate Social Investment programmes forpurposes of earning BEE scorecard points were deductible. In BindingPrivate Ruling BPR 113 (15 March 2012) it was indicated that expenditureincurred in respect of a Equity Equivalent Programme in attaining therequisite points per the scorecard prescribed in association with BroadBased Black Economic Empowerment is deductible.It must be noted that the rulings relate to specific set of facts and are onlybinding between SARS and the relevant taxpayers to which it was issued.Nevertheless, it is an indication that SARS will regard expenditure on CSRTanette Nell Associate Director at KPMGTax Servicesprogrammes as tax deductible in appropriate circumstances.The burden of proving that CSR expenses are deductible rests with thetaxpayer and therefore before any expenditure is claimed as a deduction,the link to business operations is required to be considered. Where thereis marketing or advertising exposure arising from the CSR programmeor a legal requirement to incur the expenditure, the amounts expendedmay be allowed as a deduction.40 September 2012 Infocom Join the Bay’s Business Conversation

usinessadviceTHE REALESTATE BUBBLEGOES GLOBALUp to 2008, nearly everyone (except the savvy few) believed ineverlasting real estate growth – you simply could not lose investingin property. Enter the US subprime crisis, and most know now thatit is indeed possible – house prices can collapse – and when theydo, bad things happen.There are many that believe that this was merely a US and UKphenomenon (with perhaps a few European culprits thrown in),fueled by silly economics, greed and banking indiscretions acrossthe sea.James Paynter is Head Market Analyst withDynamic Outcomes.3. Two of the most spectacular rises in property prices have been Australiaand New Zealand . But note the change in trend with Australianprices – the bubble has likely burst here too.The SA market has outperformed all these other markets with its hyperbolicgrowth in house prices.Your ChamberBut, the real estate bubble is a global phenomenon.And here’s the proof:The above Chart of Global House Price Indices puts the US real estatebubble into perspective with the rest of the world – if the US bubble wasbad, the situation is far, far worse in the rest of the world.1. For a start, the Japanese real estate mania is a window for the future– an incredible mania in the 1980s which finally peaked in 1991. It hasnot recovered since, falling back to levels seen before the mania started– which is characteristic of a market bubble.2. While the US real estate bubble attracted a lot of attention, the situationwas as bad across in Europe, especially with three of the PIIGS – Ireland,Greece and Spain. The Euro area has managed to maintain houseprices at relatively constant levels, but this only because the housingmarkets in richer member states have matured later than the weakerones. But these, too, will soon follow suit, and signal a plunge in Europroperty values as a whole.But there is a very significant pattern that has developed – an ascendingwedge pattern (see dashed lines). This is an ending pattern, and oncethe market breaks below the lower support line, the whole move is over– which it HAS DONE.The verdict: Expect SA real estate to fall spectacularly over thecoming years.And if we need any more proof, ABSA Bank suffered their biggest dropin share price in almost a decade, following the announcement of an“increase in credit impairments on the group’s mortgage legal book.Property prices and distressed customers remained pressured resultingin higher impairments requirements on our mortgage legal book.”Does this not sound familiar? Remember the term sub-prime lending?Wait until the market prices start to fall and the change in trend is firmlyin place. The bottom line: Expect a lot more of this bad property news –locally and internationally.42 September 2012 Infocom Join the Bay’s Business Conversation

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iVisit our website for regularupdatesbusinessin focusPhotography by: Sandy Smyth CoffeyThe Business Chamber’s InformationCo-ordinator, Melanie Dolan, tracksdevelopment and investmenthighlights in Nelson Mandela Bay,as reported in the local media.DATE SOURCE DEVELOPMENT28/6/2012 The Herald Eastern Cape Economic Development, Environmental Affairs and Tourism MEC Mcebisi Jonas has madeR3 million available for a feasibility study for a waterfront development at the Port Elizabeth harbour.29/6/2012 Metro Minutes The Final Scoping Report for the new tank farm in the Coega IDZ has been released. It states that it is hopedthe environmental authorisation process will be completed by the end of this year. Construction wouldtake 16 months thereafter. Oiltanking Grindrod Calulo (OTGC) will construct and operate the facility for 20years, thereafter all assets will be transferred to Transnet National Ports Authority. This R900 millioninvestment will create betweeb 400 and 1,600 employment opportunites.2012/04/07 Metro Minutes Habata Boerdery has been granted environmental authorisation to expand its citrus operation by78.5 hectares. An additional 70 permanent and 300 seasonal employment opportunities will be created.2012/06/07 Metro Minutes The approval for a major development at Parsonvlei has been granted. The development will include 3,600housing units and provision for a number of business sites.2012/09/07 Metro Minutes Eskom is to fund a feasibility study for waster-to-energy projects in Nelson Mandela Bay. It is anticipatedthat the study will start beginning of September and be completed in Frebruary next year.2012/09/07 Metro Minutes Walmer is to get a new sub-station which will replace the one that blew up in 2008. The total cost of thenew sub-station is R40 million and it is hoped that it will be operation in four years time.2012/11/07 The Herald The Opera House will be given a R29 million facelift including a new contemporary extension. Constructionis expected to begin in the first quarter of next year.13/7/2012 Metro Minutes A positive Record of Decision has been received by Electrawinds Wind Energy Facility for the constructionof 12 wind turbines generating 37.5MW, as well as for further sub-stations and 11 to 66kV undergroundcables and road servitude cables. Electrawinds was the company responsible for supplying the stadiumwith power from a single turbine during the 2010 World Cup.23/7/2012 Metro Minutes A Basic Assessment Report for a highway rest and service facility along the N2, 13 kilometres to the west ofthe N2 Gateway Project, shows that there is a need for the development. The development would includea building house, convenience store, toilets, restaurant, takeaway shop, information centre, storage area &offices, a play park “touch-farm” and eco-educational facility. In addition there will be a waste treatmentplant and a full interchange consisting of on and off ramps and a bridge.26/7/2012 Metro Minutes The EIA for Casa Steel Trading to build and operate a 70,000 tons a year galvanising plant in Zone 6 of theCoega IDZ has been completed and submitted to the Department of Economic Development,Environmental Affairs and Tourism. Plant construction will take 12 months, and approximately 80-90% ofthe finished product will be exported, mainly to African countries.27/7/2012 Metro Minutes The Human’s Settlements Directorate has recommended the development of a mixed residential schemeon Oak Road, Fairview, which will include houses, flats, doctor’s rooms, a retirement village, a meeting halland coffee shop-style cafeteria.27/7/2012 Metro Minutes First in Spec Biofuels (FIS Biofuels) has initiated an environmental impact assessment for a biodiesel refinery,the second biofuels plant planned for the Coega IDZ. The proposed facility will use waste vegetable oil asfeedstock, and will have a production capacity of approximately 170,000 tons a year.30/7/2012 Metro Minutes ID Control Biotech is planning to construct and operate a devulcanisation plant in Zone 6 of the Coega IDZ inwhich rubber crumb derived from scrap rubber and tyres will be recycled using devulcanisation technology.16/8/2012 The Herald Battery manufacturing giant Eveready will be spending R15 million on upgrading its New Brighton plant forthe full manufacture of energy efficient lights by 2014. An additional 150 jobs will be created.13/8/2012 Metro Minutes The Coega Development Corporation is aiming to have secured a cumulative total of R50 billion totalinvestment by the end of 2014 with 100 businesses operating in the IDZ and the Nelson Mandela Bay LogisticsPark.13/8/12 Metro Minutes Minister Molewa has approved REDISA, meaning that producers, transporters, dealers and processors of tyresmust align themselves and ensure compliance with the plan by September 21. In terms of the plan a levy ofR2.30 is payable per kilogram on all tyres.16/8/2012 Metro Minutes A positive Record of Decision has been issued to Universal Wind to construct an 80MW wind energy facilityin Zone 12 of the IDZ. The company plans to construct 20 turbines which will feed into the national grid oralternatively a new sub-station proposed for construction in the IDZ.Brought to you by the Business Chamber’s Information Desk. Subscribe to the ‘Business in Focus’ electronic newsletter for information on developments, legislation and economic indicators.info@nmbbusinesschamber.co.za48 September 2012 Infocom

Since its inception on the 1st of October 2011, Bay TV has grown exponentially,servicing the community of Nelson Mandela Bay by providing quality entertainment,education, and information through the visual medium.Reaching Port Elizabeth and its surrounding areas including Bethelsdorp,Uitenhage, Despatch,Humansdorp,Jeffrey’s Bay, Motherwell,KwaNobuhle andbeyond, making our current target market size approximately 1.5 million viewers.Over the past year the station has made great strides in providing quality viewingentertainment to all facets of demographics residing in and around the Bay area.Broadcasting languages include English, Afrikaans and Xhosa, making it a diversecommunications platform. General content covers local news, sport, youth,children, women’s issues, current affairs, education, music and local culture.Bay TV can be found on the UHF bandwidth at 735.25 MHz.The station is planning to go national via DSTV before the end of this year.This denotes huge growth now and in the future. Thus we are in a position toshare this potential with local and national businesses.

iBook for Chamberevents online!BANQUET BOOKINGS ARENOW OPEN!eventscalendarPamper your PA:An afternoon ofcheese and wineMore great photos on Facebook!Contact Buysiwa Yaya onevents@nmbbusinesschamber.co.zato enjoy the premier event on the Bay’s business calendar.LADIES’ BREAKFASTYour ChamberThe prestigious Nelson Mandela Bay Business ChamberAnnual Banquet will be held this year on Friday,9 November 2012. More than 650 business leaders gather tocelebrate the end of the year with a superb dinner, qualitymusic, dancing and sophisticated entertainment. The banquetcombines elegance and fun, the chance to relax withcolleagues and clients, and the opportunity for high-levelnetworking.Sponsorship packages available.Contact Lesley Domingo onfunctions@nmbbusinesschamber.co.za DATE: 14 September 2012CLEM SUNTERBUSINESS BREAKFASTMore great photos on Facebook!Madonna has made a career out of reinvention.You can too.TIME: 08:00 for 08:30 – 10:30VENUE: Running Waters, Kragga Kamma RoadCOST: R250 (Members only)CONTACT: Buysiwa Yaya onevents@nmbbusinesschamber.co.zaJoin the Business Chamber and guest speaker, CEO ofRichards Bay Coal Terminal, Nosipho Damasane, as she sharesher insights on the power of reinvention.SPEED NETWORKINGThe Chamber’s first speed networkingsession was a great success!More photos on Facebook.54 September 2012 Infocom

The ChamberrespondsRead more Business Chamberpress releases onlineiPhotography: SuppliedTHE NELSONMANDELA BAYBUSINESSCHAMBERRESPONDS TOCURRENTBUSINESS ISSUESRELEASE DATE: 21 May 2012Business Chamber Statement:Coega welcomes Project Mthombo studyThe signing of a joint study agreement by PetroSA and Sinopec is a significantmilestone on the road to securing the Project Mthombo oil refineryinvestment in the Coega IDZ.The Business Chamber has played a pivotal role in convening a broadstakeholder interest group to lobby locally and nationally to secure theproject, and to work jointly on the skills development and the city’s stateof readiness to host such a mega-project.We believe Project Mthombo has the potential to be a major catalystfor socio-economic transformation of the Eastern Cape, through employmentcreation, up- and downstream business opportunities, andthe development of the associated infrastructure which will place theregion in a much stronger position to attract investment. The signing ofthe agreement – and the decision to sign it at Coega – is a strong signalthat PetroSA and the national government are moving forward with theproject, and in its favoured location in the Coega IDZ, which PetroSA CEONosizwe Nokwe-Macamo noted in her address today offers “very goodconditions” for the development of the refinery.RELEASE DATE: 19 July 2012Business Chamber statement:Integrated Public Transport SystemKevin Hustler, CEO of the Nelson Mandela Bay Business Chamber, madeclear the Business Chamber’s stance on the Integrated Public TransportSystem in Nelson Mandela Bay in a letter to members of the Nelson MandelaBay Business Chamber. The IPTS should support, not deter, businessin the CBD, says Hustler.“While we are certain that the city needs an improved public transportsystem that is safe, efficient and affordable,” says Hustler, “we are deeplyconcerned at the delays in implementation and the negative impact onthe city as a whole.” Following the Chamber’s most recent stakeholderengagement and consultative action on the IPTS, the letter outlined thechallenges faced by business in the Govan Mbeki and Kempston roadareas, as per the results of a survey conducted among its members earlierthis year. “The survey of our members and our interaction with SAPOAhas informed our position on the issue. A small number of members respondedto the survey, almost all of whom agreed that the city neededan improved public transport system, while they were divided on howto achieve this.”Hustler says the Chamber advocates a pragmatic, two-pronged approachin pursuing the IPTS issue. “Firstly, the Business Chamber calls for all parties,including taxi owners and the Algoa Bus Company, to be properlyconsulted. Secondly, we believe strongly that the infrastructure put inplace should not limit access to deliveries, customers or clients. We makethis appeal on behalf of property owners and businesses operating in theGovan Mbeki area and on Kempston Road… We believe the municipalitymust address this as a matter of urgency, in order to avoid losses ofrate-paying businesses and future investors. The metro must put everyeffort into creating a transport system of an international standard for thecity. They must ensure that the national funding is unlocked, and that acompetent team is in place to bring these plans to fruition.”Hustler committed the Business Chamber to continued engagementwith the municipality on the issue. “Our next steps include meeting withthe consultants to develop a clear understanding of progress and stumblingblocks, and to continue to participate actively in any and all forumsand committees set up to drive the project.”Photography: SuppliedInfocom September 2012 55

4040Innovators and EntrepreneursIS THIS YOUR YEAR?Top 40 under 402012The Nelson Mandela Bay Business Chamber’s Top 40 Under 40 is ashowcase of dynamic youngbusinesspeople who choose to build their lives, careers and businesses in the Metro.The list seeks to celebrate the contribution of thegrowing force of young people under theage of forty who see Nelson Mandela Bay’s ownpotential to support their career and businessaspirations. Nominate your company’s achieverstoday!Innovators push the boundaries of their industry.They think out of the box. Innovators demonstrateleadership in their environment and lead their teamsto greatness.They explore new ideas, increasing productivity andraising company profiles.• Gain access to exclusive networkingopportunities.• Stand as the young voice of business inissues-driven business forums.• Work with the Chamber to give back to thecommunity.•Raise the profile of business in NelsonMandela Bay.Submit your nominationYour ChamberiRead full terms andconditions online• Nominations close 21 Septembers 2012• Nominees must be under the age of 40 as of the closing date• Nominees must be members of the Nelson Mandela Bay Business Chamber, either asa business owner, or as an employee of a member company. If not a current member, asigned membershipapplication form should accompany the nominee’s acceptance of nomination.• 2011 Top 40 Under 40 achievers are not eligible for nomination this year.• Nominees should be of good standing in the community.• Nominees will be required to sign a declaration of truth.• Contact Nicole Klokow on media@nmbbusinesschamber.co.za or 041 373 1122“This has been an incredible opportunity toshowcase young entrepreneurial talent”See what the 2011 achievers have to say about their Top 40 Under 40 experiences online.Submit your nomination today56 September 2012 InfocomJoin the Bay’s Business Conversation