Operational overview

CBI- electric


  CBI-electric: african cables
  (African Cables)


Cost reductions of approximately

African Cables was the largest contributor to turnover within the CBI-electric group, with increased revenues driven largely by increased copper prices compared to the prior year. This achievement is particularly noteworthy considering that demand for cable in the domestic market has declined by a quarter on 2008 levels, and there remains considerable excess manufacturing capacity in the industry in South Africa.

Productivity improvement initiatives were implemented at the Vereeniging factory over the past three years. Although less pronounced than in previous years, cost reductions of approximately 10% were achieved during 2011. To maintain market share it is important that African Cables retains its position as a low-cost producer. We continue to adopt multifaceted strategies to compete against importers of cheap product.

African Cables holds ISO 9001, 14001 and OHSAS 18001 certifications. Our ISO auditors, who are accredited with the International Register of Certificated Auditors (IRCA), certified our safety, health and environmental performance as Five-Star.

Upgrading and replacing old technology and implementing energy efficient systems resulted in energy savings of 3 457 gigajoules during 2011. Overall, we have reduced energy consumption by more than 5% since 2008. During the year, 80% of the Vereeniging plant’s water was recycled, with some 816 kilolitres discharged into the Klip River. The plant rigorously monitors adherence to the 20 criteria outlined in the Klip River Water Quality Standard. A contracted SMME supplier undertakes most of the recycling of copper, steel, plastics and aluminium at the plant.

African Cables received Level 2 BBBEE status at the end of October. To date this is the highest rating achieved in the Reunert group.

  Alan Dickson (41) 
  • Managing director: CBI-electric: african cables
  • MSc (Eng), MBA
  • Appointed to the group in 1997

In the past year we increased the investment in our services division, CBI-electric: Power Installations. We anticipate this division will continue to grow its contribution in the year ahead. Given the general shortage of skills – particularly technical skills – in South Africa and the rest of the continent - African Cables’ depth of intellectual capital holds the potential to realise significant opportunities to grow turnover and add value in our service offering.

African Cables’ prospects are largely linked to South Africa’s rate of gross fixed domestic investment. All indications are that the imperatives of job creation and service delivery will continue to drive growth of some 3% to 4% for the foreseeable future. However, the continued decline in South Africa’s manufacturing capacity remains cause for concern.

The business is likely to face increasing pressures in the periods ahead as rising labour and electricity costs and volatile raw material prices negatively impact the cost basis. Cost management will remain a core focus of the business and, coupled with the development of new markets and services, will mitigate the risk.

Primary brands, products and services Manufactures the complete range of power cable from 1 000V – 132 000V.

Designs, installs, commissions and maintains cable systems from 11 000V – 132 000V.

Brands include Zerotox and Power Installations.

Operational areas Operates throughout South Africa with manufacturing facilities in Vereeniging and regional facilities in the Western Cape and KwaZulu-Natal.

The company has access to a manufacturing facility in Harare, Zimbabwe, through its subsidiary Cafca.

Products and services are sold throughout Sub-Saharan Africa and the Indian Ocean islands.

Market sectors Services all market sectors including mining, utility, commercial, contracting and industrial sectors.

Clients include Eskom and major municipalities; gold, platinum and coal miners; Sasol, ArcelorMittal and other major industrial players.
Standards & verifications ISO 9001: 2008; ISO 14001; IRCA 5 Star, OHSAS 18001, IRCA Cap 8 Star  
Intellectual property rights Trademarks: Zerotox, CBiD (cable theft prevention system) 
Major awards past year CIDB – 9EP, IRCA best overall results achieved, IRCA Best Safety and Health Management System, IRCA Best Environmental Management System, 5 Stars IRCA grading, 4 Stars Alexander Forbes Occupational Health and Safety Management  
Current BBBEE level 2  
2012 target 2  


  CBI-electric: low voltage
  (Low Voltage)


Operating profit increased by

Low Voltage was the largest contributor to profit within the CBI-electric group and exceeded performance expectations in 2011. Revenue was up 9% and operating profit increased by 18% despite the tough conditions in markets into which Low Voltage sells its products. The operation maintains sales offices in the United States, Europe and Australia as well as a national network covering South Africa.

Export sales by region     2011  
North America     22%     17%   13%  
Europe     30%     29%   24%  
Africa     23%     27%   32%  
Australia     15%     15%   14%  
Far East     10%     12%   17%  

Maintaining our export performance proved to be challenging. The sales operation in Germany was closed and consolidated into our largest European distributor in Sweden. The move strengthened our cost advantage in preparation for increased demand from Eastern Europe. Much of the improvement in profitability can be ascribed to the continued improvement of our Australian operation, which achieved record sales that were largely attributable to expansion in mining in that country.

While the majority of exports are sold into the industrial market, Low Voltage remains linked to low levels of activity in the South African residential market.

The conditions under which Low Voltage operated during the year were successfully managed through a rigorous focus on improving exports and, in particular, cost management. Return on net operating assets improved while,
at the same time, we continued to improve product quality.

Product mix %     2011  
Residential & commercial     40%     45%   40%  
Industrial     7%     9%   10%  
Mining     12%     12%   12%  
Industrial controls     12%     10%   11%  
Retail     6%     4%   1%  
Utilities     2%     5%   1%  
ITmatic     2%     0%   0%  
Export     19%     15%   25%  

A key development in 2011 was the acquisition of ITmatic, a system integrator and solutions provider with an Africa-wide footprint and extensive technical capability. ITmatic is able to meet the need for turnkey solutions for many customers in the public and private sectors and will serve as a sales conduit for the products of other CBI-electric companies. As at the end of this review period the integration of this business into Low Voltage was ongoing. It is anticipated that ITmatic will make a meaningful contribution to revenue and profits during 2012.

On the environmental monitoring side, external audits by a number of international customers have confirmed that the company’s environmental management systems meet requirements in force in the United States, Sweden and Canada.

Various initiatives were implemented in 2011 to reduce energy consumption. At the Elandsfontein factory these initiatives included changing from mouldings produced using the thermoplastic process to the thermoset process, which requires significantly lower temperatures and pressures. Through continued expansion of our international footprint and competitive pricing, we are confident of our ability to sustain growth in the next financial year. Telecommunications and transport upgrades, as well as ongoing mining investment in Australia will be key drivers of growth, while ITmatic should enable us to capture and grow new sources of income in the international mineral resources area.

Primary brands, products and services Manufactures and trades in low-voltage distribution, protection and control equipment. Products include circuit breakers, earth leakage, surge protection, electricity meters, automation, motor control and wiring accessories. Brands include CBI, Slegers, CBI-electric Fuchs, Heinemann, Heinemann Electric, Hy-Mag, Samite Mitsibushi and Eaton-Moeller.  
Operational areas The main manufacturing facility is based in Elandsfontein, Gauteng and assembly plants are in Lesotho. Service branches are based in Cape Town, Durban, Bloemfontein and Port Elizabeth. Other export markets are served by subsidiaries in Australia and the United States of America.  
Market sectors Residential; commercial; mining; utilities; industrial; equipment manufacturers and retail.  

Standards & verifications ISO 9001:2008 and EN 29001 certification.

All products comply with local safety standards. Products destined for export markets hold safety approvals from Australia, Europe, Germany, Russia, Ukraine, China, Japan, Canada and the United States.  
Current BBBEE level 8  
2012 target 6  

  Chris Oliver (54) 
  • Managing director: CBI-electric: low voltage
  • BSc (Eng) (Elec), MBL, Certificate of Competency (Factories)
  • Appointed to the group in 1998