FreeFlow Magazine
December 2013
INSIDE THIS MONTHS ISSUE:
THE BBQ AWARDS
NATIONAL BUSINESS AWARDS
ECR & SLG BIG FAVOUR
ECONOMIC REFLECTIONS FOR 2013
ECONOMIC OUTLOOK FOR 2014
PERFORMANCE IMPROVEMENT
FREQUENTLY ASKED QUESTIONS
Tel +27 31 266 3865 | Fax +27 865716345
AECOM House, 2 Maryvale Road, Westville, 3630 | PO Box 929, Westville, 3630
www.slgas.co.za | Visit our Facebook page.
SOUTH AFRICA’S PREMIER BLACK BUSINESS AWARDS,
THE BBQ AWARDS 2013.
Spring Lights Gas proud sponsor of the 2013 BBQ
CSI Ubuntu Award, which was presented to Nedbank
at a gala dinner as one of ten Motlekar Holdings
BBQ Awards.
Currently in its thirteenth year, the awards are aimed
at encouraging and promoting black business and
are widely regarded as South Africa’s most
prestigious BBBEE event. Nominees are required
to demonstrate true commitment to South Africa’s
transformation agenda.The awards consist of 10
categories and are open to individuals, black-owned
and empowered companies and organisations in
South Africa. Finalists and winners are selected by
a panel of independent judges.
3 BOOKS UP FOR GRABS!
This year’s event, which was held on 25 October,
was a glittering affair held at the Emperor’s Palace
in Ekurhuleni. MC for the event, Nik Rabinowitz, had
people roaring with laughter whilst the awards were
presented, and following the dinner, guests partied
into the early hours to the sounds of Mafikizolo, one
of South Africa’s best loved bands.
Congratulations to the readers who won books in
our last FreeFlow competition, there are another
3 books up for grabs!
Email your name, address and the words “Billy
Selekane” to olivia@slgas.co.za, to stance a chance
to win this inspiring book.
THE BBQ AWARDS
{From left to right}
Deon Dhlomo, SLG Director
with Kone Gugushe, Divisional
Executive for CSI at Nedbank
and Lindsay King, Editor of BBQ
& Leadership Magazine
NATIONAL BUSINESS AWARDS
Spring Lights Gas
was shortlisted as a
finalist in the ESG
(Environmental,
Social and
Governance
Category) in the
prestigious 11th
National Business
Awards which took place at a ceremony on the 15th
November 2013 at Emperors Palace in Johannesburg.
The annual platform allows for corporate leaders to
be acknowledged on a global scale - celebrating a
success in South Africa’s business and government
sectors. Prestigious icons, business leaders and
government heads such as Ansie Ramalho (Institute
of Directors), Pumla Ncapayi (General Trade &
Investment South Africa), Thulani Nzima (SA Tourism),
Honourable Minister Elizabeth Peters (Department of
Transport) and Geoffrey Qhena (Industrial
Development Corporation) were present at the event.
Karla Fletcher, Awards Director at TOPCO Media,
said: “It is apparent to me more than ever that
competitive businesses are key drivers to our economy.
Companies at the top see the importance of constantly
challenging themselves against the very best in the
industry and this keeps us as a nation innovative,
more productive and having a global competitive edge.
The initiatives and innovations seen by this year’s
entrants are ground breaking!”
A highly esteemed panel of judges gave the closing
nod of approval towards this year’s winners list. Judges
included Lulama Mokhoba (SABC Limited), Raj
Dhanlall (PricewaterhouseCoopers), Ms Nomaxabiso
Majokweni (BUSA) and Mr Dennis Dykes (Nedbank)
- to name but a few.
UPCOMING EVENTS!
Next event:
CORPORATE GOLF DAY, MARCH 2014.
{Date and venue to be confirmed.}
ECR & SPRING LIGHTS GAS,
BIG FAVOUR
LETTER TO ECR BIG FAVOUR
Hi guys
I would like to start by thanking you, 'The East Coast
Radio Family' for the impact you’ve made in my life.
My name is Millicent Kubheka and I am writing to
you as I am in need of a personal computer to help
me complete my UNISA Finance studies. I have
heard that East Coast Radio helps change people’s
lives by giving them hope and a new start. It is my
belief that you will make a difference in my life too.
I recently received my study material for the year
and one of my modules (Practical Accounting - Data
Processing) requires me to have a personal
computer. The note in the tutorial letter reads:
PLEASE NOTE: It is essential that you either acquire
or have the pastel partner manual at your disposal.
As per course requirements you must have access
to computer with a printer and you must have at
least 20 hours access to the internet.
As I only work as a casual at Edgars, I don’t have
enough funds to go to internet cafes and I would be
forever grateful to you if you could help me own my
own personal computer.
Although 2013 should have been my last year of
studying, it is not due to various complications.
Nevertheless, I believe that God has given me this
chance, and am doing my best to utilize it wisely. I
hope that East Coast Radio will help me achieve
my dream of becoming a chartered accountant
someday.
Your help would make a big difference in my life.
Once again, thank you for making my day each day.
I hope to meet some of the East Coast Radio family
members one day and get a chance to be on air.
God bless you all,
Millicent Kubheka
BIG FAVOUR
Olivia Almanza, Spring Lights Gas
and Damon Beard, ECR with
Millicent Kubheka proud recipient
of the computer.
REFLECTING ON 2013
ELIZE KRUGER
ECONOMIC CONSULTANT TO SLG
SOURCES USED: SA RESERVE BANK & OWN OPINIONS
As we entered 2013 there was a fair degree of
optimism globally and locally, informed by a number
of bold policy measures that had been implemented
in the latter part of 2012 and early 2013 - in particular,
the launch of the Outright Monetary Transactions
programme (OMT) in the Eurozone and the fact that
the US had managed to avert the fiscal cliff. †Both
had significantly boosted confidence, restored calm
and helped to contain the most immediate threats
to the global financial system. There was hope that
this would couple with reduced volatility in the
financial markets to affect the real economy and
provide for a more durable recovery. In South Africa,
the economy was expected to benefit from these
global developments as well as the ACN’s adoption
of the National Development Plan at its elective
conference in 2012, which was seen as providing
a degree of clarity in respect of policy positions
around nationalisation in the mining industry. Growth
was expected to continue at a moderate pace (after
a growth rate of 2.5 percent for 2012).
The IMF’s World Economic Outlook (WEO) released
in January 2013 stated that “Global growth is
projected to increase during 2013, as the factors
underlying soft global activity are expected to
subside.” However, it also warned about downside
risks that remained.
Based on available data, and recent information and
developments in the global and domestic economy,
a stronger recovery in 2013 will in all likelihood turn
out to be rather more elusive than what we had
hoped for. This is borne out by the latest release of
the WEO which shows a downgrade of global growth
forecasts.
As we moved deeper into 2013, some of the
headwinds identified by the IMF did indeed
materialise, in particular, expectations of an earlier
than anticipated withdrawal of unconventional
monetary policies by the US Federal Reserve, and
slower recovery in the Eurozone.
In addition, sluggish Chinese growth rates, lower
commodity prices, a fluctuating global economy
and moderated emerging market economies all
contributed to limit the year’s initial optimism.
More recently some positivity has been generated
by the Eurozone’s exit from a recession in the
second quarter. Led by Germany and France, this
follows six quarters of economic contraction. The
Spanish economy also exited two years of
recession in the second quarter, growing by 0.1
percent despite tough austerity measures which
ignited street protests throughout the country. The
US has been one of the more convincing bright
spots in gathering momentum towards economic
growth throughout 2013, although, like Japan, the
country’s fiscal outlook continues to weigh on its
future prospects.
On the domestic front, the risk of spreading
industrial action this year (in the wake of wage
negotiations in centralised bargaining agreements
that were up for renewal) also came to pass and
damaged growth prospects for the country. A
dismal growth rate of 0.9 percent was recorded in
the first quarter of the year on account of a severe
contraction in the manufacturing sector. Although
this was followed by a growth rate of three percent
in the second quarter, it was mainly related to
normalisation in the manufacturing sector, and
was not reflective of improving underlying economic
conditions. Economic growth in the third quarter
of this year will probably be almost as bad as Q1’s
figures, given the impact of widespread strike
action, particularly in the vehicle manufacturing
sector. The SA Reserve Bank (SARB) has recently
downgraded its economic growth forecast for 2013
to a mere 1.9%, compared to expectations of 2.9%
at the beginning of 2013 - a disappointing outcome!
The rand exchange rate has been somewhat slow
to act as an adjustment mechanism that can
provide support to the country’s trade account and
its Balance of Payments.
South Africa’s current account deficit widened from
2.8 percent of GDP in 2010 to 6.3 percent in 2012.
The trade deficit grew on account of increased
imports related to the infrastructure investment
programme, and lacklustre exports, as well as
declining terms of trade. The depreciation of the
rand exchange rate resulted in a deterioration in the
Bank’s inflation outlook, and the targeted measure
of inflation increased from just below 5.0 percent in
August 2012 to 6.4 percent in August 2013. Despite
this, there was little evidence of any demand
pressures, with much of this increase driven by cost
push factors.
It was the improvement in growth prospects for
advanced economies, in particular the US, that saw
the rand again recouple with global developments
on talk of asset purchase tapering in the US.
Expectations of tapering had a profound impact on
the financial markets of both advanced economies
and emerging markets, they were more so for the
latter as it was deemed that such a withdrawal of
stimuli would negatively impact on portfolio flows to
emerging markets. Indeed, capital inflows retreated
somewhat, and in South Africa we witnessed a pullback, especially in bond inflows. During May and
June this year, we witnessed a net outflow of over
R17 billion from our bond market, although this was
partially offset by equity inflows. From the beginning
of May the rand exchange rate depreciated from
R8.90 against the USD to R10.40 in August, and
following a number of wild swings reached similar
levels again as recently as 12 November.
Central banks in emerging markets reacted quite
differently to these movements, with some tightening
monetary policy despite an evident slowdown in
growth, others intervening in the foreign exchange
market and still more draining liquidity in local
markets.
In April this year, the central bank of Brazil increased
its policy rate by a total of 225 basis points to 9.5
percent to shore-up the currency and limit capital
outflows that had been affected by inflation
pressures, while it also lifted previous taxes on
capital inflows. Similarly, the central bank in
Indonesia increased its policy rate by 150 basis
points to 7.25 percent, although in emerging Europe
there were various interest rate reductions.
The People’s Bank of China (PBoC) reacted by
initially tightening liquidity conditions, only to relax
these soon thereafter to reverse a substantial
increase in money-market rates and resolve liquidity
issues.
Although markets have retraced following the Fed’s
decision not to taper just yet, it should be
remembered that this is only a delay, and has helped
to buy time for emerging markets to prepare as best
as they can for when tapering actually does take
place.
OUTLOOK FOR 2014
ELIZE KRUGER
ECONOMIC CONSULTANT TO SLG
SOURCES USED: SA RESERVE BANK & OWN OPINIONS
Although asset purchase tapering by the US Fed has been put on
hold for now, this will surely commence at some point in 2014. The
relevant question that keeps economists awake at night is: “Is there
a need for alarm over emerging markets in light of tapering, and is
the slowdown in emerging markets really that severe?” The IMF’s
latest Global Financial Stability Report (GFSR) poses the question
of what would happen if flows reversed more sharply in emerging
markets. The report suggests that while emerging markets may have
become more vulnerable, they are also in a much better position
they were in during the 2008 crisis. In the 12 weeks following the
reversal of risk sentiment during May 2012, assets under management
for emerging market fixed-income funds fell by 7.6 percent (or USD19
billion), which is a much smaller figure than in 2008, when assets
under management fell by 36 percent (or USD26 billion) during the
first round of the asset sell-off in September-October 2008, although
the impact on local currency bond yields was similar across the two
episodes.
Emerging market countries have come a long way in the last two
decades and are not as fragile as they would have been in the past
given similar conditions. Foreign exchange reserve levels are much
higher; monetary policy has greater credibility and there is a better
track record of managing inflation; while fiscal positions are healthier
than in many advanced economies; and they are less vulnerable to
sudden stops given that there are less dollar liabilities. Macroeconomic fundamentals have also significantly and while emerging
markets may be slowing, they remain the biggest contributors to
global growth. This may well be a correction to more sustainable
levels of growth after period of somewhat spectacular development.
It must be pointed out, as we witnessed at the time of tapering talk,
that emerging markets did react. Exchange rates weakened, yields
on fixed income instruments spiked and equity markets sold off. It
is likely that there will be a further reaction when tapering eventually
becomes a reality, and while some of its effects may already be
priced into markets, we cannot be sure of how much is priced in and
therefore how much remains to be reflected in asset prices.
Unfortunately, South Africa’s economic performance has lagged
behind other emerging market economies through the crisis, and
continues to reflect lacklustre growth. Most analysts, including the
SARB, have repeatedly raised their inflation forecasts and lowered
their growth forecasts for 2013.
The SAR’s 2013 forecast for average CPI inflation
was raised from 5.5 percent in December 2012 to
5.8 percent currently, while the forecast for 2014
was raised from 5.0 percent to 5.7 percent over the
same period. Real GDP forecasts for 2013 were
lowered from 2.9 percent at the end of 2012, to 1.9
percent more recently, and from 3.6 percent to 3.0
percent for 2014. Given this environment, the Bank’s
Monetary Policy Committee (MPC) has found it
prudent to keep interest rates steady throughout
2013, as despite the rising trend in inflation, it has
deemed inflationary pressures stemming from the
demand side of the economy to be subdued, which
means that inflation pressures are largely related to
supply shocks and the weaker exchange rate.
Investors have shifted their focus to macroeconomic
imbalances and have become increasingly
concerned about countries with high current account
and budget deficits (the so-called twin peaks), which
rely heavily on international capital flows. Along
with monetary policy slowly turning the corner in
advanced economies, a fundamental reassessment
of the emerging market investment case appears
to be underway, as the recent impact of the
announcement of the Fed’s intentions to soon
embark on a withdrawal from unconventional
monetary policy seems to have exposed
vulnerabilities in certain countries (such as South
Africa) that may have been previously
underestimated.
In its most recent statement, the MPC points out
that the upward drift in core inflation in the absence
of any obvious demand pressures suggests that
there may be emerging underlying pressures owing
to lagged effects of the exchange rate depreciation
as well as higher unit labour costs. Although the
rand has appreciated again from around R10.40 in
mid-November 2013, it remains vulnerable to
changes in the global and domestic environment.
Furthermore, while inflation expectations appear to
be anchored and relatively stable, the SARB deems
expectations uncomfortably close to the upper end
of the inflation target range.
Although the recent breach of the inflation target
was temporary, and we recently saw CPI inflation
decelerate from 6.4 percent in August to 5.5 percent
in October, there are significant upside risks, not
least of which relate to wages and the exchange
rate.
Growth remains below potential with a widening
output gap and is expected to average only 1.9 per
cent in 2013 and 3.0 percent in 2014. The Bank’s
leading indicator suggests that moderate growth
rates are set to continue, while protracted work
stoppages in the mining and manufacturing sectors
are likely to detract from growth going forward.
Consumer spending is also expected to remain
modest, capped by high household debt levels, low
employment creation, low confidence levels and
rising administered prices.
More recently, concerns over the current account
deficit have been heightened by the deterioration in
South Africa’s terms of trade, the failure of exports
to react sufficiently to the weaker rand, and the global
environment, which is not only transforming, but has
characterised for the best part of five years by easy
liquidity.
While there appears to be reason for optimism
overall in 2014 as the global recovery gathers
momentum, we will have to contend with an
environment that continues to be characterised by
uncertainty and extreme volatility. The extent of the
impact generated by the US exit from
unconventional monetary policy measures remains
unclear. Given the many uncertainties in the global
environment that are beyond South Africa’s control,
there is little room to get wrong that which is within
our control, such as the implementation of reforms
and policies that can improve our competitiveness
and enhance our attractiveness as an investment
destination. It is crucial that labour representatives
and employers take full ownership and responsibility
for restoring orderly industrial relations, and that
we maintain credible fiscal and monetary policies.
2014 is likely to be another challenging year for
South Africa, especially in light of the potential
impact of global developments (not necessarily
only negative), and the National Elections, which
are likely to impact on Government’s priorities in
the next few months and potentially change the
shape of the future.
PERFORMANCE IMPROVEMENT
COMPILED BY KENNETH DANKS
In addition to providing energy management
improvement initiatives relating to the cost of
production, Spring Lights Gas strives to provide
support that is aligned to its customers’ objectives.
OPPORTUNITY ANALYSIS
In doing so, the company considers the cost of
energy per unit produced, the quality of the product,
process improvements and the safety of the
operation.
E
CA QU
LI IPM
BR
EN
T
M ATI
AI O
NT N
EN
AN
OP PL CE
ER AN
S
A
CH TIO
N
AN
A
GE L
EX S
RE
T
SO ER
UR NA
CE L
S
In general, the findings highlighting ‘Probable causes’
(To potentially address the improved energy
management or Safe use of pipeline gas), relate to:
INCIDENT RECALL
S
GA S
GE
AN
CH N
G
SI
S
DE GE
AN
CH
EN
OV GN
SI
DE ER
RN GS
BU IN
TT
SE R
E
RN TY
BU ACI
P
CA
ER
RN MS
BU OM
C
Key to this process is understanding the customer’s
needs, which is a collaborative endeavour that often
requires the prioritisation of initiatives in order to
take advantage of potential opportunities. Specific
actions are then undertaken by the task group
assigned to the project. Both ‘soft’ and ‘hard’ initiatives
are assessed, and those of lower cost, higher
immediate gains or improved safety, are generally
given priority. The entire process requires a carefully
managed review and may include an investigatory
action.
‘Soft’ opportunities:
Work procedures
- Operating procedures
- Maintenance procedures
Engineering opportunities:
- Design
- Initial design
- Improvements and traceability thereof
- Production constraints or energy management
The process undertaken is ‘Successful’ if:
- it is informative
- provides an opportunity for collaboration and the
setting of common goals
- it develops an understanding of the customer’s
specific needs
- improves knowledge transfer
- develops a closer partnership (synergy) between
Spring Lights Gas and its customers
SEQUENCE OF STEPS
1st step
2nd step
3rd step
Customer next steps prioritization
based on RISK management
FREQUENTLY
ASKED
QUESTIONS
HOW DO I GET CONNECTED TO A GAS
PIPELINE?
Customers will need to appoint a registered gas
contractor to install an internal pipeline from a
metering station on your property to our distribution
pipes. Some of the equipment may need to be
changed and we'll recommend equipment suppliers
and guide you every step of the way.
CAN I USE ANYONE TO INSTALL MY GAS
PIPELINES AND EQUIPMENT?
A registered gas contractor should install your gas
equipment and convert any existing equipment as
needed. When selecting a contractor, make sure
that they are licensed and experienced at installing
gas equipment.
HOW DO I KNOW GAS IS SAFE TO USE?
Its distinctive rotten egg-like smell, due to an odorant
that is added to it called mercaptan, makes leaks
easy to detect. Most gas equipment now also has
built in safety features. For example, it is first
necessary to purge the equipment to remove any
combustibles prior to start up. There is also a flame
failure device to allow your appliance to automatically
stop the flow of gas if the flame extinguishes and
even automatic re-ignition to allow the appliance to
relight itself if the flame is extinguished. Gas leaks
can also be detected using the soap test method.
WHERE DOES MY POINT OF RESPONSIBILITY
BEGIN?
We are responsible for maintenance and repairs to
the gas service line that extends from the streets
and the meter station into your property. As a
customer, you would be responsible for maintaining
the gas piping that extends past the meter into
your factory.
HOW DO I MAINTAIN MY GAS EQUIPMENT?
Regular inspection, cleaning and maintenance
ensures your safety and helps keep your gas
appliances operating at their best.
WHAT SYSTEMS AND PROCEDURES ARE IN
PLACE TO MAINTAIN THE PIPELINE TO AVOID
INTERRUPTIONS?
A SCAFA system to monitor line pressures, flows
and temperatures 24 hours a day, 365 days a year
- A state of the art cathodic protection system
- Monthly helicopter and ground patrols conducted
to check erosion, stability and third party activity
near the pipelines
- Highly visible pipeline markers on the entire
pipeline infrastructure
- Period internal pipeline inspections using highly
sophisticated electronic equipment
- An ongoing vegetation management programme
along the pipeline route to ensure visibility of
pipeline markers
- Regular mock emergency drills to test the
response plans and emergency procedures,
Provincial Emergency Preparedness, as well as
the provision of public and land owner awareness
information.
FOR MORE INFORMATION:
Please visit our website, or phone one of our technical staff on 031- 2663865.
CONTACT US!
FreeFlow has a new look! If you have any comments or article
suggestions, please email us at olivia@slgas.co.za or
info@slgas.co.za.
We look forward to hearing from you!
EMERGENCY NUMBERS:
Emergency tel: +27 800 212 260 (24 hours)
Whistle Blower tel: +27 800 007 036
Tel +27 31 266 3865
Fax +27 865716345
AECOM House, 2 Maryvale Road, Westville, 3630.
PO Box 929, Westville, 3630
www.slgas.co.za
Visit our Facebook page.