Wednesday, March 6, 2013

Billy Rautenbach in South Africa and the Democratic Republic of Congo

Billy Rautenbach is the brain behind numerous avant-garde business ventures ranging from trucking, car manufacturing, farming to mining in numerous African countries. His fortunes in a politically unstable continent have earned him a reputation as a independent unconventional business mind and—as is often the case with successful businessmen in countries where corrupt political elites and powerful foreign countries rule—a controversial reputation. After expanding the family business Wheels of Africa into the largest trucking company on the African continent, he turned to car assembling successfully upsetting the South African motoring market by growing the market share of Hyundai. Tax evasion charges were soon leveled against him by the South African authorities resulting in asset forfeiture worth millions of rands and years of economic exile. The South African asset forfeiture unit mounted a massive court battle against him on the basis of tax evasion but failed to build a convincing conclusive case despite numerous  attempts spanning over two years to have his assets frozen.  Despite carting away truckloads of documents from the business man’s offices, the National Prosecuting Authority failed to secure a conviction and withdrew the charges. Although his personal assets were returned, the legal battles against tax evasion charges cost him the Hyundai business and earned him hordes of bad press resulting in the ‘controversial’ tag against his name.
During this time, Rautenbach continued to support the South African economy with a procurement spend of R415-million (an average of US$1 million / R8 million per week over a period of one year) through mining activities. In 2006 Central African Mining & Exploration Company plc (CAMEC), a company developed by Rautenbach and listed on the London stock exchange, acquired various mining operations in the Democratic Republic of Congo (DRC). 

Mining in the DRC

In 2006 Central African Mining & Exploration Company plc (CAMEC), a company developed by Rautenbach and listed on the London stock exchange, acquired various mining operations in the Democratic Republic of Congo (DRC). [1]

With the help of his father’s trucking business contacts in transporting minerals, and using innovative mining techniques, he successfully mined state owned companies and attracted the eye of the government. “We'd been transporting in the Congo for 20-odd years, so we knew a little bit about the country. We realised that the mining was very, very simple and logical. Not ever being in the industry, we looked at it a little bit differently. It turned out that, in a very short period of time, we out-mined the main state company,” explained Billy. With the eye of an outsider, he developed a different technique: “We did it very selectively. We slowed down the process and picked it out in very high grade and with very little investment.” Billy's unorthodox approach was highly successful, and showed up the massive inefficiency of the state-run enterprises. In 1998, Laurent Kabila offered Billy a chance to lead state-owned Gecamines. Billy refused the offer two or three times, but eventually - and reluctantly - agreed to try and turn around the company. He successful turned around the fortunes of Gecamines cutting costs and improving efficiency. However, the rebel-infested country began to create trouble for the Congolese government who, in a search for funds tried to frame him by accusing him of theft of profits. Naturally, Rautenbach denied allegations of financing the DRC war, logically stating he was in business in the Congo long before the war broke out: “I started mining in the Congo about a year before the war started. So all of a sudden, the war is there because of me. It's unbelievable.' [2] “We were very active there in getting the production going, in turning around things. We were possibly affecting people's commercial interests ... I set up a little mine there, and out-produced the major cobalt producers in the world in one year. They spend billions of dollars putting up a plant and I come there as a farmer - me and my dad - and we got the stuff out of the ground.” However, stories continued circulating: allegations that he was Mugabe's right-hand man, that he'd bribed Kabila to secure his mining concessions, and that his mines were financing Zimbabwe's soldiers in the DRC. To date, there have not been any substantiation on claims of Billy Rautenbach’s links to Robert Mugabe and the European Union struck him off the targeted sanctions list in February 2012. [3]

CAMEC and sustainable development

In favour of sustainable development, Rautenbach saw to it that CAMEC created employment for over 5,000 people at its Luita plant. At an average of 5 people per household, 25,000 people are currently being sustained as a result of this operation. The operation also saw the completion of an expatriate staff village of 3000 people – fondly known as Billyville by employees and contractors – with over 200 houses, recreation facilities, staffing hostels, and a 2000m2 office complex. Moreover, millions of dollars were ploughed back into the DRC to uplift the communities surrounding CAMEC’s operations. These projects included renovations to a clinic and the provision of necessary medical equipment, and the construction of a crèche and primary school. Construction also included a technical college to educate 3,600 children in the skills needed at the processing plant such as mechanics, electronics and welding to help alleviate the skills shortages in the DRC. Further CSI initiatives included the reconstructing of local infrastructure i.e. the 80km national road between Kolwezi and Likasi previously damaged by floods more than 15 years ago; power lines of 23,4km from the town of Fungurume to Luita, and a state of the art water treatment system providing 40,000 litres of drinkable water per day was constructed in an area previously known for cholera. The company also commissioned and built two dams of 50,000m3 and 1,5 million3 litres respectively. [4] CAMEC’s mining and production operation at Luita also helped create business opportunities for local contractors such as brick making plants.

Activities in Zimbabwe - Green Fuel Investments

Rautenbach’s greatest achievement to date has been in mobilizing investment towards bio-ethanol leading to the construction of the Green Fuel Chisumbanje ethanol plant modeled along the lines of Brazil’s biofuel cane industry. The ambitious project is a build, operate and transfer partnership between government represented by the Agricultural Rural Development Authority (Arda), Green Fuel Investments (headed by Billy Rautenbach) and two other investment partners – Rating Investments and Macdom Investments. The 20-year pact was signed in February 2009. The project is the biggest so far in Africa. [5] Some sections of the media claim that the project was a land grab because of the huge tracts of land put under cane by the investors, however, repeated monitoring visits by officials from the Zimbabwean government, the World Bank and the United Nations Industrial Development Organization qualified the industrial development as necessary for the poverty stricken district (see below – creation of jobs). The ethanol project has subsequently set records for Zimbabwe as being the first African country with flexi fuel vehicle technology using blends of up to 85% ethanol and reducing the country’s fuel import bill, creating over 4,500 jobs and leading Zimbabwe to a greener economy. [6] By contributing to the production of ethanol based fuel, Green fuel has helped the country to save at least $2 million every month in fuel imports. [7]

Creation of jobs
The project, possibly Africa’s largest eco-project to date, has created more jobs in Zimbabwe than any other in the last 20 years. [8] Green Fuel says no one has been displaced by this project, which is also supplying irrigation for the first time to peasant farmers working in dry areas around the sugar cane fields. [9] It is forseen that the venture will continue to create employment for more than 8000 people. Already, the venture is chewing more than $600000 every month in salaries alone for 120 full-time employees and hundreds of contract workers from villages dotted around the ARDA estates transforming the lives of people in Chisumbanje, including others at growth points such as Checheche and in towns as far afield as Chipinge and Chiredzi. [10] Zimbabwe does not have personnel experienced in ethanol plant construction work and through job training programmes, Green Fuel has created a set of skilled ethanol plant artisans marketable worldwide thereby empowering the local people through technological transfer. Moreover, the planned construction of the Kondo Dam for increased water volumes required along the Save River will create more jobs for the rural populace. Further to this, a steel fabricating unit has been established in Harare with a staff establishment of over 100 artisans involved in the manufacture of a range of parts required for the ethanol project. 13 Local commuter bus companies in Chipinge have been contracted to ferry labour from the villages to the project site on a daily basis. More importantly, 30% of the artisans employed in the distillery and boiler sections of the ethanol plant are Zimbabweans previously based outside the country in South Africa, Swaziland and Mozambique.Community leaders in Chisumbanje said they are fully behind the project as it will uplift their livelihoods, "We really support the project as we are the first beneficiary in the sense that development will be realized in our once marginalized area. We shall benefit economically, infrastructural and even socially,” said one community leader. [11]

Community irrigation construction and rehabilitation

A priority within the ethanol investment project is to ensure the local built-in community component. Chipinge district is in climatic region 5 and this renders dry land farming futile. As the communities in this area have been enduring close to zero yields as a result of drought leading to poverty and hunger, the decision was made to anchor all social responsibility interventions on giving the rural farmers access to water from the Save river for all year round farming. [12] At Chisumbanje, a 4000 hectare new irrigation scheme is being developed for communal farming. [13] To date, 700 farmers have been allocated new irrigation plots with packages of input to kick start their operations as they are recovering from drought. This development will effectively create a commercial driven horticultural approach to farming for the rural farmer, and ensure higher yields for each homestead with surplus being available for commercial purposes. By March, 1080 farmers will be active irrigators and at project completion this figure will peak at 8000 plot holders. At Middle Sabi, 18 existing irrigation schemes have been brought back to life after a period without production. The rehabilitation work centred on repairing and replacing water pumps, drilling additional boreholes to augment water supplies and the reconstruction of water conveyance systems. This has effectively ensured that 2 861 small scale farmers have sustainable livelihoods basis producing food which they also market to Green Fuel for staff meals. A ‘community irrigation schemes water engineering department’ has been created at Middle Sabi and is operational seeing to the day to day needs of the schemes in terms of water conveyance. [14] “The amount of money invested in resuscitating the pump stations and whole irrigation system here is nothing compared to the way in which livelihoods in the community we operate in will be changed for the better,” said Rating Middle Sabi estate manager Glen Mirams. “Once there is water flowing from Sabi River into the canals, the community survives on its own and makes money through selling their produce to wholesalers of their choice… The Sabi River and a functional irrigation system is the lifeline of the area.” As a result of the project, Checheche Growth Point has since applied for town status in anticipation of a boom in business as a state-of-the-art shopping mall and a residential area is in the offing. [15]

Refurbishment of social service institutions

Green Fuel has commenced rehabilitative works on key public service facilities which include schools, roads and health centers. Work has commenced in this direction with initial focus on educational facilities on both estates and the major health referral centre closest to Chisumbanje -St Peters Hospital at Checheche, with constructive repairs and additional capacity through the construction of new structures to cater for the swelling service demand created by the volumes of staff on site. [16]

Commercial out grower programme

This programme targets individual farmers keen to grow sugarcane for supply to the mill. The farmers are supplied with all the technical assistance in the form of land preparation for 10 hectares and inputs, whose costs are deductable from their total sales after harvesting. To date 650 hectares have been developed in the pilot programme and handed over to 241 farmers for a pioneer programme.

Benefits to the Zimbabwean economy

“On completion of the project, we will produce between 2,5 million and 2,8 million litres of ethanol daily,” General Manager Graeme Smith told the Zimbabwe Independent during the tour of the project last Saturday. “We will also generate 120 megawatts of electricity of which we will use 20 megawatts and the remainder will be fed into the national grid.” The production of such volumes of ethanol would be expected to end the country’s importation of petrol as consumers convert to the use of the cheaper fuel. Excess ethanol-petrol would be exported, bringing into the country much-needed foreign currency for social and economic development. [17]

Environmental Protection

Ethanol is a clean burning fuel that reduces air pollution and decreases green house gas emissions by over 60%. Most global economies are investing in renewable energy sources such as ethanol in reaction to the concern over lack of sustainable supply from fossil fuels. Beyond that, as talks of climate change gather momentum, Zimbabwe joins countries like Brazil and China walking the talk on how to reduce her carbon footprints through investment into ethanol. [18]

    1. Madelain Roscher. "Plea Bargain Agreement Between Npa And Billy Rautenbach's Company, S.a. Botswana Hauliers Finalised". PRworx. Retrieved 2013-03-07.
    2. Derek Watts (8 April 2001). "Crook or Crucified?". Carte Blanche.
    3. "EU lifts Zimbabwe sanctions". SABC News. 17 February 2012.
    4. Chantal Riley (22 September 2009). "Billy Rautenbach Positive About Involvement in SA Business". PR newswire.
    5. Constantine Chimakure (11 November 2010). "Ethanol project set to transform energy sector". The Standard.
    6. Barnabas Thondlhana (1 March 2013). "Zimbabwe hopes for savings as it unveils ethanol-blending rules". Engineering News.
    7. Ray Ndlovu (20 February 2013). "Zimbabwe to cut fuel imports as prices soar". Business Day Live.
    8. "Locally-Produced Fuel at Zimbabwe's Pumps". Business Day Live. 10 November 2011.
    9. Barnabas Thondlhana (1 March 2013). "Zimbabwe hopes for savings as it unveils ethanol-blending rules". Engineering News.
    10. "Sugar cane lights up Middle Sabi". Radio Voice of the People. 13 July 2011.
    11. "Sugar cane project takes off at ARDA Chisumbanje". Zimbabwe News Online. 2 August 2009.
    12. "Joint Ethanol Project Committee clarifies Chisumbanje project". Zimdiaspora. 28 January 2012.
    13. "Ethanol rules outlined". Zimdiaspora. 8 December 2011.
    14. "Joint Ethanol Project Committee clarifies Chisumbanje project". Zimdiaspora. 28 January 2012.
    15. Constantine Chimakure (11 November 2012). "Ethanol project set to transform energy sector". Zimbabwe Independent.
    16. Stephen Ephraem (9 November 2012). "Chisumbanje women demand reopening of ethanol plant". Manica Post.
    17. Constantine Chimakure (11 November 2012). "Ethanol project set to transform energy sector". Zimbabwe Independent.
    18. "Ethanol rules outlined". News Day. 8 December 2011.

No comments:

Post a Comment