Local Content Parliamentary Inquiry January 2018 - By Patuxolo Nodada - Group CEO
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Local Content Parliamentary Inquiry
Presentation
January 2018
By Patuxolo Nodada - Group CEO
Problem Statement
Busmark IDC onRelationship
Local Content
Are we meeting Local Content requirements Our core focus is
compliance beyond the declaration, we have gone beyond to develop
an• integrated
Patuxolo bus,
approached
which IDC for the
exceeds acquisition of 100%
requirement both
R100m in 2010, deal was concluded at Market Value of
atbody and
R130m
chassis
in 2011 See
as defined.
Dec,notes
whereondeal was changed to 49%
the iBus product and video on
acquisition at R63,7m
• Salient features
independent of thepack.
engine/power deal Refer to various delivered projects
• Matsheloni Automotive (Patuxolo) bought
29%
with various for R37,7m IDC Prefs R35m Loan from
OEM‟s
Pat R2,5m
• Kuvula
How do Prefs
(Workers Trust) 10% or R13m IDC
R12m Loan from Pat R1,m
we ensure suppliers meet local content Requirements??
• Scarelt
We audit Sun (Management
our suppliers up to materiel Trust) R13m
sources, IDCfurther
we are
Prefs R12m Loan from pat R1m
developing
• FurtheranIDC
Industrial Park,Busmark
provided which seeks SEZ status to lower cost of
directly
• R118m
production & Revolving
logistics. Facility
See notes on WestDTI)
City Heavy Commercial
• R30m Guarantees (SARS, CoCPT,
• In 2013 we restructured the funding
Hub
• Reduced revolving facility to R50m
• Took a building Loan of R48,2m for Cape Town Plant
What• Supplier
ReducedDevelopment
& RearrangedInitiatives
our guarantees to West
–referfrom IDC City Heavy
– Declared R25m Dividend in 2013 & 2014 FY
Commercial Hub
ProblemBusmark Statement IDC onRelationship
Local Content
cont..
What are challenges of compliance? : Whilst we pride ourselves as black owned and
South African Local content manufacturer, with a solid funding partnership with IDC, the
market seem not ready
• Patuxolo to accept our IDC
approached role asfor
weacquisition
have seen the following
of 100% challenges
at
R100m in 2010, deal was concluded at Market Value of
R130m as in 2011 OEMDec,bywhere deal was changed to 49%
• acquisition1stattierR63,7m
No recognition DTI officials therefore disqualified on any incentive
• Salient
schemes, features
ranging of the
fro AIS, Black deal MCEP Direct
Industrialist,
• Matsheloni Automotive (Patuxolo) bought
29%Audit for treated
R37,7m as a IDC Prefs formR35m
with no Loan from
•
Pat R2,5m
Local Content box ticking monitoring eg SABS
• Kuvula
delegated (Workers
to perform audits Trust)
forces suppliers 10%
to pay, or R13m
therefore IDC
impairing the reliance of
certificate,Prefs
with someR12m Loandoing
manufacturers fromfalsePat R1,m
declarations.
• Scarelt Sun (Management Trust) R13m IDC
• PrefsnotR12m
Local procurers Loanprinciple
understanding from ofpat R1mor externalising RSA cash
importing
• Further IDC provided Busmark directly
reserves, by buyingRevolving
foreign products
• R118m Facility
• R30m Guarantees (SARS, CoCPT, DTI)
• In 2013
• Procurement weofrestructured
cylce the government
BRT buses by Local funding value chain fraught with no co-
• Reduced
ordinated revolving
planning resulting egfacility to R50mfunding buses whilst infrastructure
Taxi operators
• Took a building Loan of R48,2m for Cape Town Plant
delays
• impact link to &
Reduced manufacturing.
Rearranged our guarantees from IDC
– Declared R25m Dividend in 2013 & 2014 FY
TABLE OF CONTENT 1. Background on Busmark 2. Production Facilities & Capacity 3. Plant Investment in WC 4. Growth Path 5. West City Commercial Hub (Industrialising)
Background
Busmark on IDC
Busmark
Relationship
Busmark is a 40 year old bus manufacturing company, based in Johannesburg in
Randfontein, Western Cape, represented countrywide with satellite branches, whilst is
striving to consolidate
• Patuxolo its presence inIDC
approached all major provinces, currently
for acquisition targeting
of 100% at KZN as its
R100m
additional hub. in 2010, deal was concluded at Market Value of
R130m in 2011 Dec, where deal was changed to 49%
acquisition at R63,7m
The• company
Salientif historical
features of theowned
a family dealbusiness, and now it prides itself as
a black
• Matsheloni Automotive (Patuxolo) bought
empowered entity. Charles Collins, Herman Staude were previously primarily
29% for R37,7m IDC Prefs R35m Loan from
Pat R2,5m
shareholders and Patuxolo Nodada, Manco Trust & Staff Trust are primary shareholders
• Kuvula (Workers Trust) 10% or R13m IDC
of the business, employing approximately 1400 people countrywide.
Prefs R12m Loan from Pat R1,m
• Scarelt
We focus Sun
on being bus body(Management Trust)
builder partner of choice R13m
to OEM‟s IDCOptare,
include
Prefs R12m Loan from pat R1m
Mercedes Benz South Africa, Hino Trucks SA & Toyota Tsusho Africa, Isuzu Trucks SA,
• Further IDC provided Busmark directly
Ashok •Leyland SA, Revolving
R118m Scania SA, Volvo SA, MAN, Irisbus/Iveco, UD Trucks , VDL/DAF,
Facility
• respective
with their R30m Guarantees (SARS, CoCPT, DTI)
dealership networks.
• In 2013 we restructured the funding
• Reduced revolving facility to R50m
2017 marks launch
• Took a of iBus & iBox
building Loanthrough RAW & CSIR
of R48,2m partnership,
for Cape Towntide is changing.
Plant
• Reduced & Rearranged our guarantees from IDC
– Declared R25m Dividend in 2013 & 2014 FY
Background
Busmark on IDC
Busmark cont
Relationship
• The key features of our business are as follows
• Manufacturing Bus & Coach bodywork, for 18 to 100 seater, from standard commuter to luxury finish.
• Patuxolo approached IDC for acquisition of 100% at
WeR100m in 2010,
are ISO 9001/2008 dealcertified.
Quality standard was concluded at Market Value of
R130m in 2011 Dec, where deal was changed to 49%
•
acquisition at R63,7m
We have capacity to build 200 buses per month.
• Salient features of the deal
• •Our Matsheloni Automotive
bodywork is up to 96% local (Patuxolo)
content, complying beyond bought
local content legislations
29% for R37,7m IDC Prefs R35m Loan from
• We Pat R2,5m
build custom made vehicles and buses, and also do aftermarket repair and refurbishment to carry a 15
• Kuvula (Workers Trust) 10% or R13m IDC
year lifecycle
• Prefs
We keep 20year R12m
body parts Loan from Pat R1,m
• Scarelt Sun (Management Trust) R13m IDC
• Prefs
Our international R12m
partnership with theLoan from
likes of Optare, CAIOpat
& othersR1mare focused to transfer technology to our
• Further IDC provided Busmark directly
factories allowing us to localise manufacturing and create jobs directly and indirectly across the value chain.
• • R118m Revolving Facility
In our proud 40 year history, we have produced more than 8000 bus bodies for the South African market, which we
• R30m Guarantees (SARS, CoCPT, DTI)
support on a continuous basis.
• In 2013 we restructured the funding
• Reduced revolving facility to R50m
• Took a building Loan of R48,2m for Cape Town Plant
• Reduced & Rearranged our guarantees from IDC
– Declared R25m Dividend in 2013 & 2014 FY
OUR MANUFUCTURING CAPABILITIES We currently have operations in Gauteng and Western Cape, in which we have the following dedicated production facilities, with relevant capacities • Flexible Model Plant : 40-50 units per month. • Standard Model Plant: 40-80 units per month. • Custom Build Plant : 12 working bays & 3 Spray booths. (25 units per month) • Western Cape Plant : 40-50 units per month In addition to these plants we have Offline Fibreglass and Steel Components Plants, further supported by dedicated seat manufacturing partnership with Ulrich Seats.
OUR QUALITY ASSURANCE • Busmark buses comply to all South African legal requirements. • Busmark buses comply to the European quality and safety standard for BUSES ECE 20107. • Busmark has adopted a unique Quality management system, which is certified to the ISO9001:2008 international quality standard.
THE BUS VALUE CHAIN
The Retailers The OEM’s/Chassis Sup After
(mostly Mercedes, Scania, Volvo, Market
OEM) Man, Isuzu, VDL, Iveco etc (mostly OEM’s)
Dealerships Bus body builders Dealer Fleet
MAN, Busmark, MCV, ships Owners
Dubigeon, Marcopollo, Busco
Finance & Repairs,
Service Refurbishments
Auxiliary Suppliers & Service
Windows, Seats, Aircons,
Floors, etc
OUR PRODUCTS & SERVICES We mainly focuses on the following products and services • City Buses (BRT Low Entry & Low Floor Buses) • Commuter Buses • Specialised Buses & Overlanders • Repair, Refurbishment and Maintenance of buses • Sales and distribution of bus parts and components As defined above our core is to build bus bodies suitable for African market, having studied the local landscape, including customisation according to the client requirements.
SOME OF OUR PRODUCTS
OUR RECENT BRT / CITY BUS DELIVERIES
CUSTOMISED CLIENT BREIF
CUSTOMISED CLIENT BREIF
CURRENT
RECENT DELIVERIES
DELIVERY - VOLVOWITH -
MERCEDES
We aredelivering
We are currently currently the
delivering city Floor
Volvo Low busesbuses
with Mercedes to Ekurhuleni,
to City of Cape Town, and Tshwane
we also (Preto
COJ Metrobus
have articulated buses in production.
These buses launched our new plant in Cape Town, developed under an automotive
industrial park concept.RECENT DELIVERY - SCANIA We are currently delivering the Scania High Floor buses to City of Cape Town, and we also have articulated buses in production. These buses launched our new plant in Cape Town, developed under an automotive industrial park concept.
RECENT DELIVERY - MERCEDES BENZ We are currently delivering the 68 buses to City of George, with Mercedes Benz buses delivered from our Johannesburg plant
KTVR (Ekurhuleni) • The launch for the operator was successfully concluded on The IRPTN System Launch is on Wednesday 8th February 2017 at 7:30 a.m , venue is at the Kempton Park Civic Centre.
RECENT DELIVERY - 9M OPTARE (unique bus) We have delivered 221 Optare buses in Cape Town, and these are world class 9m buses, unique to the market, with a combination of Cummins Engine, and unique floor and demountable engine pack. This bus is ideal for city feeder routes.
BUSMARK CAPE PLANT AT WORK 2014 Busmark is market leader it maintains 40% market share and target more than 50% market share in the future
Bus Market Share
SA Bus Market & Market Share
979
806
741 808
724
[CELLRANGE]; [VALUE] [CELLRANGE]; [VALUE] [CELLRANGE]; [VALUE] [CELLRANGE]; [VALUE]
[CELLRANGE]; [VALUE]
2011 2012 2013 2014 2015
YEAR
Busmark OthersBus Market Share
Busmark City Bus Production
Year
2011 2012 2013 2014 2015 2016 YTD TOTAL
Customer
Ethekwini 50 30 80
CoCT 109 112 69 37 327
George 64 4 68
Ekurhuleni 26 26
TRT (Tshwane) 82 2 84
Metro 50 100 150
Busmark TOTAL 50 139 112 133 199 102 735
Competitors 40 143 134 90 65 0 472
Total SA Market 90 282 246 223 264 102 1207
Market Share 56% 49% 46% 60% 75% 100% 61%Market Focus for City Buses/BRT
BRT / IRT Forecast
Year
2017 2018 2019 2020 2021 TOTAL
Area
RRT (Rustenburg) 93 157 151 259 340 1000
Ekurhuleni 210 290 250 1250 500 2500
George Municipality 120 150 130 200 150 750
Cape Town 250 450 350 350 350 1750
TRT (Tshwane) 150 300 400 400 250 1500
Rea Vaya (JHB) 300 500 500 500 200 2000
Nelson Mandela Bay (PE) 500 250 250 250 500 1750
Ethekwini (Dbn) 500 700 800 1500 1500 5000
Mbombela 100 100 100 100 100 500
Buffalo City 350 250 250 250 400 1500
Mangaung 400 500 200 700 450 2250
Msunduzi 200 250 500 500 500 1950
Polokwane 100 150 350 300 350 1250
TOTAL 3273 4047 4231 6559 5590 23700PLANT INVESTMENT MADE
POSSIBLE BY CONTRACT
CAPE TOWN
OCTOBER 2013INTRODUCTION BUSMARK PLANT CAPE In 2011 Busmark did not exist in Western Cape, through winning the City of Cape Town project we initially rented a 10,000 sqm factory in Eliesriver, where we assembled the CKD kits of the initial Optare buses, in which we conceptualized an automotive industrial park, which is illustrated below. We created 260 jobs and 442 indirect jobs during all our phases.
BUSMARK CAPE PLANT CONCEPT
BUSMARK CAPE PLANT AT WORK 2014
BUSMARK CAPE PLANT AT WORK 2014 This plant is a R200 million investment into which we are growing daily as the company is delivering buses for the City of Cape Town, giving us presence in Western Cape, also locating the business for export potential to other countries. We have an existing agreement with Optare to export parts back to the UK>
BUSMARK CAPE PLANT AT WORK 2014 This plant is a R200 million investment into which we are growing daily as the company is delivering buses for the City of Cape Town, giving us presence in Western Cape, also locating the business for export potential to other countries. We have an existing agreement with Optare to export parts back to the UK.
Local Content our core to Industrialisation
The Market Understanding
Sensitive as may be, but ask yourself or your team,
• What is your product and service ? Yes at Busmark we have the right mix of products,
• City Buses (BRT Buses) in for of iBus and bodies supplied to OEM‟s
• Commuter Buses
• Repair & Maintenance Service
• Special Vehicles
• iBox (New Product)
• Training & Entreprise Development (New Product)
• How relevant is it in the market t?
• The market is rapidly changing, as its highly transforming
• Taxi Operators becoming Bus Owners and funded by DFI eg DBSA (TRT & KTVR)
• Cities (Durban, City of Cape Town, Tshwane, & CoJ Metrobus)
• Private Operators (Golden Arrow, Unitrans, Algoa, Putco etc)
• Government Departments (RT57)
• Parastatals (Transnet, SANPARKS, etc)
• Whilst the market is rapidly changing we have been used being a shadow of major oem‟s
• Do you have right conditions to sell? Yes, we are the only Black owned entity and only truly
South African entery
• Do you have a right team in place to sustain your orgnisation? Yes, the Exco is committed, GM
is transforming, non existent middle management, workforse exist but have limited skill base want to
transfor tp full artisans.The Hydrogen Fuel Cell Bus Partnership
”iBus”
What is the iBus :
• The iBus is an integrated, intelligent bus.
• Busmark has adopted the latest in world class design and manufacturing philosophies
by removing the traditional “chassis and body” and replacing it with an integrated
structure, allowing maximum integrity and flexibility.
• This allows us an extremely high degree of flexibility regarding the choice of power
source for the bus.
• The „integrated‟ bus can be powered by various energy sources or combinations of
sources. For example, diesel engine, natural gas or biogas engine, electric & diesel
motor with batteries, electric motor & batteries or electric motor & hydrogen fuel cell.Traditional way of building buses Chassis (mostly imported) & Body (mostly local):
”iBus” Integrated structure (100% local):
”ibus” Integrated chassis with imported component:
”ibus” Integrated body (>90% local):
”ibus” Integrated bus:
”iBus drivetrains”
Power source options:
DIESEL ENGINE DIESEL HYBRID ELECTRIC MOTOR & ELECTRIC MOTOR & BATTERY
WITH HYDROGEN FUEL CELL
BATTERY
HYDRO
GEN
FUEL
CELL
CNG/BIOFUEL ENGINE GAS HYBRID
FUTURE
?”iBus drivetrains”
Power source options:
ELECTRIC MOTOR & BATTERY WITH
DIESEL ENGINE DIESEL HYBRID ELECTRIC MOTOR & BATTERY HYDROGEN FUEL CELL
Pros Cons Pros Cons Pros Cons Pros Cons
No dependence on Large investment in
Current Tech Old tech Newer Tech fossil fuels infrastructure
Expensive eletric No dependence on Large investment
Dependence on Relative Affordable drivetrain fossil fuels in infrastructure 0 Emissions Expensive eletric
Affordable fossil fuel Little infrastructure drivetrain
needed Cost of batteries 0 Emissions Range
No Extended range Cost of fuel cell
Environmentally Healthy Expensive eletric
infrastructure Environmentally Utilization of
friendlier Health hazard environment drivetrain
needed unfriendly wasted renewable
Less fossil fuels used energy through
Serviceable Health hazard per km Cost of batteries hydrogen storage.
CNG/BIOFUEL ENGINE GAS HYBRID
Healthy FUTURE
Pros Cons Pros Cons environment
Newer Tech Availability of gas Latest Tech New tech
FUTURE
Large
Relatively infrastructure Relative Large investment
?
Affordable needed Affordable in infrastructure
Environmentally
friendly Cost of batteries
Environmentally Not completely
friendlier emissions free
No dependence
on fossil fuels if Expensive eletric
biofuel available. drivetrain
Health hazard Health hazard”iBus”
What is the iBus :
• The „intelligent‟ bus comes from the fact that this bus has the capability to gather a
myriad of data and transform these data into useful information. For example, safety
related information, operational information, information to ensure capex retention and to
support environmental considerations and in general to be used in maximizing the
service to the customer.”iBox ” the brain behind an efficient public transport system” Intelligent box – information collection device:
”iBox ” the brain behind an efficient public transport system” Intelligent box – information collection device:
”iBox” the brain behind an efficient public transport system
Information collection (for example):
SAFETY: OPERATIONAL CAPEX ENVIROMENTAL
Passenger safety camera footage Passenger safety camera footage RETENTION: CONSIDERATION
Driver safety camera footage
Driver safety camera footage
Front view traffic monitoring camera footage Emissions data
Front view traffic monitoring Rear Rearwards trafic monitoring camera footage
Driver communication
view trafic monitoring Driver behaviour Fuel consumption
Fare collection monitor camera footage
Fare collection monitor Accident notification Route planning Brake wear data
Accident notification Tyre condition monitor Fleet utilization Route planning
Brake usage Axle overloading
Tyre condition monitor Harsh braking
Multi model payment platform
Brake usage Maintenance planning Gas consumption
Harsh acceleration
Harsh braking Harsh cornering Scheduled maintenance Customer usage per route
Harsh acceleration Axle overloading Driver identification Route utilization during peak times
Speeding Seat occupancy
Harsh cornering Fair collection tracking
Depot bus movement monitor
Axle overloading Engine protection systems monitor Access control
Speeding Vehicle tracking Passenger interface
Fuel consumption Wi-Fi
Station docking interface
Axle overloading
Door opening and closing safety Engine temperature
Gas usage monitor
interlock Turbo air temperature Gas leakage detection
Ramp deployment safety interlock Emissions Battery charge monitor
Exhaust temperature No of passengers vs payment
Busstop brake
Accelerator operation
Retarted disconnect during ABS Gearbox temperature
received
activiation Retarder operation Customer usage per route
Fire detection warning Diesel level Route utilization during peak
Diesel theft times
ABS malfunction warning
Add Blue level
Day time running lights Add blue theft Seat occupancy
Route deviation
Stoppages”iBox” the brain behind an efficient public transport system - implementation
Gauteng City Region
Retrofitting existing fleets
AreYeng
Putco
Rea Vaya
Gautrain
Metrobus
Harambee
Gauteng
CoachesGauteng City Region Gauteng Transport Authority • For this to exist GTA (Gauteng Transport Authority) needs an intelligent transport solution. • Current BRT systems comprise of at least 6 suppliers of sub systems that have to be integrated into 1 system. No vehicle information can be monitored and recorded. • All systems are imported and are not adapted to South African conditions and local requirements. • These systems have limited opportunity to be expanded. • Busmark understands that there are a number of existing fleets operating at the moment and have therefore made the iBox to be a stand alone unit, which can be retrofitted to older vehicles. The iBox will however have limited functionality.
W E S T C I T Y H E AV Y C O M M E R C I A L H U B
WestBusmark
City HeavyIDC
Commercial Hub
Relationship
• Patuxolo approached IDC for acquisition of 100% at
R100m in 2010, deal was concluded at Market Value of
R130m in 2011 Dec, where deal was changed to 49%
acquisition at R63,7m
• Salient features of the deal
• Matsheloni Automotive (Patuxolo) bought
29% for R37,7m IDC Prefs R35m Loan from
Pat R2,5m
• Kuvula (Workers Trust) 10% or R13m IDC
Prefs R12m Loan from Pat R1,m
• Scarelt Sun (Management Trust) R13m IDC
Prefs R12m Loan from pat R1m
• Further IDC provided Busmark directly
• R118m Revolving Facility
• R30m Guarantees (SARS, CoCPT, DTI)
• In 2013 we restructured the funding
• Reduced revolving facility to R50m
• Took a building Loan of R48,2m for Cape Town Plant
• Reduced & Rearranged our guarantees from IDC
– Declared R25m Dividend in 2013 & 2014 FYQuality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
Quality, Safety, Reliability & Innovation (www.busmark.co.za)
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