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Powertech, established in 1978, has through organic growth, exports and acquisitions become one of the leading suppliers of electrical and electronic equipment in southern Africa. Powertech consists of a large number of individual operations organised into five operating divisions – Cables, Transformers, Batteries, Industrial and System Integrators – which specialise in the manufacturing and delivery of world-class products, services, expertise and solutions to address diverse needs for electrical and power equipment in South Africa and beyond. Powertech is proud to be the number one or two supplier in all of its chosen markets – power infrastructure, large power users, mining, telecommunications, transport, building and construction.material issues

“Our group achieved improved profitability despite a reduction in revenue levels due to depressed demand levels, particularly in the building and construction sectors. Excellent performances from the power transformers, cables and battery businesses based largely on cost-reduction efforts, enabled an overall EBITDA margin improvement from 5.9% to 7.6%. Our Alcobre business in Portugal and Cables de Comunicaciones in Spain experienced muted trading conditions owing to the significant economic difficulties in Europe.

Our operational focus, remains on improving our manufacturing efficiency, developing new products and our advancement into Africa. In terms of transformation, an audit by Empowerdex assessed Powertech as a level 3 contributor. Availability of skilled resources and technical capability and capacity continue to impact recruiting and retaining of key resources.” – Norbert Claussen, CEO

Corporate responsibility highlights
  • Of our total South African staff complement, 75% are black and 11% are black females
  • Training spend on previously disadvantaged individuals increased by more than 50% to almost 78% of the total training budget of R28.7 million
  • The number of lost-time injuries fell by two thirds from the prior year, and no fatalities were recorded
  • Powertech is a level 3 contributor against the dti’s Codes of Good Practice
  • R18 million (8.6% of NPAT) spent on enterprise development, almost three times the dti Codes target
  • of 3% • Being the manufacturing arm of Altron, Powertech contributes over 70% of the Altron group’s total carbon footprint at 178 170 tonnes CO2e
  • Powertech IST Otokon has pioneered a service collecting and analysing consumption data for energy-intensive industries

External environment

The building and construction sectors remain under pressure due to a combination of capacity overhang and availability of funds. Consumers are still relatively overextended and the recession has put further pressure on households and smaller businesses. Lower interest rates have not yet roused the housing market, nor rekindled demand in the building and construction industry. Significantly slower demand for electrical products, combined with an oversupply in an extremely price-sensitive local power cables market, has resulted in prices and therefore as margins remaining under pressure.

This situation is further aggravated by the increased involvement of international competitors in the group’s local markets and a trend towards using turnkey solution providers rather than purchasing off contracts in the formal sector. The increased demand for fibre-optic cables in South Africa and the rest of Africa, however, offers some growth potential for the group’s telecom cables joint venture.

The strength of the rand has been a double-edged sword. While the strong rand offset the increasing international price of copper (which has reached record levels in US dollar terms), it continues to impact negatively on contributions from foreign operations, the competitiveness of exports and increases competition from foreign imports. The power infrastructure market remains active with promising demand, but characterised by intensified competition from foreign competitors. Eskom’s increased funding certainty is expected to translate into a more vigorous rollout of its capital expenditure programmes and the reactivation of its many delayed projects. Upgrading of generating capacity, transmission and distribution networks has shown a consequent increase, and municipalities are continuing their consistent spend on infrastructure upgrades.

The decision by Cabinet at the end of 2010 to discontinue the regional electricity distributors (REDs) is expected to bring greater certainty to municipal electricity utilities and enable Eskom and municipalities to reinvest in the maintenance and refurbishment of existing electrical distribution networks as well as the expansion of new ones.

The mining industry has been recovering steadily due to higher commodity prices and this, together with required repurchasing, has increased demand for cables and industrial batteries. Despite the strong rand, the automotive battery industry remains healthy with curtailed activity from importers in the short term. Trading conditions in many sub-Saharan African countries remain tough with ‘pricing’ being the major decision-making factor for the award of most tenders.

The telecoms market in East and West Africa for rectifiers and battery systems improved marginally, although the conversion to actual orders remains slow. The decision by mobile telecom operators such as Vodacom and MTN to build their own fibre- optic cable networks to link their base stations and switching centres has opened up opportunities for the sale of fibre-optic cable accessories and turnkey projects. Low-cost foreign suppliers have entered this market in the wake of Bharti Airtel’s presence in Africa.

The UK replacement battery market is relatively depressed after the buoyant winter demand, but the advent of summer should see a healthy demand restored the leisure battery market.

Income and growth

Powertech achieved improved profitability despite a reduction in revenue levels compared to the prior year. The 2% reduction in revenue is predominantly owing to the non-recurrence of certain imported and traded product revenue in the transformers business. An excellent performance from the power transformers business, as well as improved profitability in the cables and battery businesses mainly due to cost-reduction efforts, resulted in an improvement in the overall EBITDA margin from 5.9% to 7.6%. Headline earnings improved by 93% (from R97 million in the prior year to R187 million) further enhanced by lower interest and amortisation costs as well as a lower effective tax rate.

Powertech Cables has seen a 7% increase in revenue for the year ended 28 February 2011. This increase is primarily due to the higher commodity prices; volumes have remained static in the face of strong competition in the market. EBITDA improved by 43% from R113 million to R162 million. While Powertech’s international cable operation, Swanib Cables, performed well above expectations, Cables de Comunicaciones in Spain was weighed down in the second half owing to extremely difficult market conditions and the curtailment of public infrastructure spending on the high speed train network.

Powertech Transformers experienced a decrease in revenue, primarily owing to the non-recurrence of the imported product revenue sourced directly from its technology principal ABB  Ludvika, but EBITDA increased owing to efficiency gains and a favourable product mix, resulting in an increase of 42.9% from R148 million to R211 million. The outstanding performance achieved by the power transformer operation and distribution transformer operation in Cape Town was offset by the distribution transformer operation in Johannesburg where the impact of the recession in the building and construction industry continued.

Overall, Powertech Batteries delivered a steady performance with revenue increasing by 6% and operating profit by 13%. The lower growth rate can mainly be ascribed to poor demand and margin pressures experienced by Battery technologies operating in the telecommunications market. Rentech, Powertech’s solar system business, maintained the expected level of contribution to the group in terms of revenue and operating profit.

Within Powertech System Integrators (SI), four of the five divisions of Powertech IST, namely Data, Energy, Otokon and telecoms, met expectations – indeed Data significantly outperformed due to the large Eskom mobility contract. The industrial division experienced tough market conditions marked by ongoing project delays, but remained profitable due to the Northam Platinum Electrostatic Precipitator Project. TIS struggled with its projects division which experienced a project delay, while the Energy and telecoms divisions performed according to expectations.

SI improved its revenue by 26%, while EBITDA improved by 31%. Management is placing strong focus on minimising the effects of the ongoing delays in capital project approvals in order to grow revenues and improve profitability. The improvement in the services group’s results and a pipeline of additional capital projects now under consideration reflects renewed confidence in the economy and bodes well for the future growth of these operations.

Powertech Industrial reported a decline of 6% in revenue mainly due to reduced demand for standby power systems, but its operating profit remained stable owing to tight cost management. Having completed its restructuring, Crabtree Electrical Accessories SA has exceeded its profit target despite a decrease in revenue levels. Strike technologies also saw a decrease in revenue and operating profit owing to reduced income from the goldfields project compared to the prior year.

Strike Technologies’ Powertech Energy solutions business has now been restructured and merged with the electrical insulation materials business. Powertech Calidus continues to struggle with depressed revenues and squeezed margins impacting on profit.

Tridonic has been repositioned into a more sophisticated lighting systems business and has stabilised its performance in line with lower volumes and margins and has delivered a reasonable performance in very tight market conditions.


Costs and cash management

Powertech’s cash generation has been consistent, mainly due to cost controls and working capital management. Working capital saw an improvement in debtors collections and creditors. Inventory was increased to balance stock availability and improve sales, services and delivery at Aberdare Cables.

The improvements in revenue can mainly be ascribed to the increase in copper prices while increased profit can mainly be attributed to cost-reduction measures. Foreign exchange losses impacting the income statement decreased due to a more stable rand situation. Powertech has experienced no major bad debts due to efficient credit control measures. The restructure, including retrenchments, has been completed in most operations.

At Aberdare Cables, order intake has remained sluggish and was underpinned by a more cautious approach towards copper stockholding of many customers. The order book has marginally recovered, with orders, sales and inventories tracking each other, and the factories closely tracking demand. The Aberdare Cables debtors book continues to receive a high level of executive scrutiny and remained well controlled. Going forward, the cable business will remain focused on customers through improved availability and delivery, as well as balanced retention of market share. It is Aberdare Cables’ goal to keep factories loaded at 80 hours per week, thereby improving capacity utilisation and material yield. Overhead cost reduction and continued working capital management remain a priority to improve profitability and cash flow.

Powertech Transformers’ factory outputs have improved significantly, but are still not meeting the group’shigh expectations. Performance is now steady and items such as on-time delivery and test failure rates are stable at reasonable levels, but remain closely monitored and still require a reduction to meet expectations. These improvements are being recognised by customers and are evident in increased tender enquiries and the awarding of generation transformer contracts.

Powertech Batteries experienced steady demand from the automotive market and some improvement in the mining sector. Working capital was well controlled with debtors at 54 days, while the increase in inventories was offset by higher creditors.

Cash generated at Powertech IST from operating activities was R37 million. Working capital showed improvement and inventories amounted to R10 million at year end, carried by the telecom and Energy divisions. IST management is placing strong focus on minimising the effects of the ongoing delays in capital projects approvals in order to improve the level of revenue recognition.

Technology Integrated Solutions (TIS) has been restructured under a new managing director and has returned to profitability. In terms of intellectual property, it holds a number of patents for resins that are used in sealing cable joints. These patents have enabled TIS to maintain a healthy share of the cable joint market as was evident in the good performance delivered by the TIS Energy business.

Products and services

Powertech expects to exploit certain of the innovations and new products developed during the year throughout its underlying companies, including new transformer designs switchgear, Full Calcium Batteries and Itronic, a home automation system. The PT Switchgear Air Insulated Medium Voltage 22K-12 series is a range of products that will be marketed to customers such as municipalities, Eskom and the mining industry.

Powertech Batteries is exploring new technology products such as fully sealed and full calcium technology in its batteries offerings. The products received from TIS’s original equipment manufacturers are of a high quality, and the local TIS assembly process follows strict quality standards. TIS has experienced a shortage of mechanical cable connectors from Tyco Electronics in the middle of 2010 owing to manufacturing constraints at the Tyco Electronics factory in Ottobrun, Germany. This caused significant strain on relations with certain key customers. The situation has since been rectified and the backlog cleared. TIS continues to be challenged by the entry of cheap competitor products from the Far East, but it manages this through the reliability and brand status of the Tyco Raychem range of cable accessories that it offers to the market. The company also provides training in cable jointing technologies for utilities and their installation and maintenance personnel and contractors, thus improving the reliability of electrical networks. This service also enhances the credibility of TIS and improves the sales of cable joints.

Strike Technologies’ new management team is focusing on its metering business in terms of enhanced marketing and exports with some breakthrough orders now being obtained, notably from Johannesburg City Power. The company has developed the first nRs049-compliant smart meter in South Africa, scheduled for deployment in Eskom’s DSM projects. In this regard, a rebate programme has been developed to swop out E3 meters for new Enermax+ meters to stimulate purchases on new meters to create a larger footprint.

With numerous new products launched during the prior year in the electrical accessories market, Crabtree works hard to remain a frontrunner in the innovation race. One example is the Vetro range of switches, sockets and communication outlets with glass cover plates. Another innovative product from Crabtree is the slimline compact plug top. This three-pin plug and socket design is more convenient than the traditional three-pin plug and boasts an impressive array of safety features.

Tridonics’ use of lighting energy management systems and its LEDs for lighting is regarded as a major revolution in the lighting industry.

Aberdare Cables has long-standing and constructive relationships with its key customers such as Eskom, the municipalities, Anglo Platinum and impala Platinum, as well as a major wholesaler in South Africa.


Business partnerships

Powertech Transformers has a long-standing technology agreement with ABB and has also concluded an agreement with TMC in Italy for the sourcing of dry type transformers. It focuses on maintaining a sound working relationship with its B-BBEE partner Power Matla. It also has various long-term agreements in place to ensure the reliable supply of key material such as copper, core steel, oil, insulation and mild steel. Great strides have been made in securing a back-up supplier for mild steel plate resulting in Powertech transformers now having two reliable suppliers for the 2011/12 financial year offering competitive prices. Site installation contractors were appointed, and for the first time multiple contractors are available to offer additional capacity as and when required. 

At Powertech IST they have close relationships with general Electric in terms of technology, software and product support; with IBM in terms of the Maximo asset management software; with Ventyx in terms of the mobile workforce management technology, with Motorola for hardware for its mobility contract with Eskom; with Babcock & Wilcox in terms of ESP technology; with Tellabs for access networks and with Altergy and Plugpower in terms of fuel cell technology.

TIS has maintained good relationships with the OEMs that it represents in the SA market. These include Tyco Electronics, Infinera and GE Kellman.

Powertech Batteries has undertaken a factory output and efficiency project with Renoir to incorporate world-class processes into their manufacturing regime. Battery Technologies is in the process of renewing its agency agreement with Eaton on the rectifier product. Tridonic receives excellent support from its shareholder in Austria.

Customer relationships

As Powertech's clients are business entities, many common customer relationship issues, such as customer rights, are not particularly material to the business. Business to business (B2B) relationships are continually monitored, and the group aims to ensure its clients are always more than satisfied with the service they receive.


Sub-issues:
  • Customer satisfaction
  • Customer rights and protection


Customer satisfaction

Powertech's mission statement describes the importance the group places on meeting customers' requirements responsibly, honestly and with integrity. Customer needs are at the forefront of all strategic decisions, and the result is a culture where the customer satisfaction is key.

Management process
Powertech companies focus on staff skills development as well as strong vendor and partner relationships as a way of ensuring customer satisfaction. Customer surveys are conducted on a regular basis. Some of these are undertaken informally by sales executives (at Willard Batteries and Powertech Transformers for example). These surveys afford an opportunity to identify where improvements are needed.

Performance
Aberdare Cables undertook an extensive customer insight survey during 2009/2010, the results of which displayed a company with a high level of brand loyalty. Customers view Aberdare Cables as trustworthy, innovative and progressive.

There was a 30% response rate to Battery Technologies' customer satisfaction surveys, and the results showed satisfactory to very satisfactory ratings.

Initiatives
Aberdare Cables recently initiated a pilot customer programme with Agrinet involving a system that allows the two organisations to converse electronically. As a high volume customer, Agrinet procures goods from Aberdare Cables centrally for 54 of its franchises. This programme aims to improve service while saving on time and manpower.

Powertech Transformers and Powertech SA's TIS division undertook informal customer relationship building exercises by participating in the Momentum 94.7 Cycle Challenge teamed with some of their customers.

Aims
Both Aberdare Cables and Powertech Batteries will be conducting extensive client satisfaction surveys in the next financial year. Aberdare Cables aims to maintain above-average performance with regards to quality, awareness, availability and technical back-up while improving performance in service delivery and availability.

Customer rights and protection

Customer safety is important to Powertech. The new Consumer Protection Act, 68 of 2008 (CPA) dictates that customers have a right to good quality and safe products, while protecting them against defective or inferior goods. While this is of more relevance to some of the Altron group's other sub-holding companies, all Powertech companies heed these responsibilities.

Management process
Product improvement is an operational process and all Powertech businesses comply with OHSAS 18001, which requires that the health and safety impacts of products are assessed for improvement annually by a third party. Risk assessments are undertaken every three years, or in the case of an incident or any process modifications. Life cycle stages at which products and services are assessed include:

  • Product development;
  • Certification;
  • Manufacturing and production;
  • Marketing and promotion;
  • Storage distribution and supply;
  • Use and service; and
  • Disposal, reuse or recycling.

SI: Human capital


Sub-issues:
  • Employee engagement
  • Skills attraction, development and retention
  • Health and safety
  • HIV / Aids

Powertech has a total of 4 526 employees – 305 at international operations and 4 221 in South Africa. This includes 4 449 permanent and 77 temporary staff. While many of the group's human capital policies are managed at the Altron group level, Powertech companies are otherwise autonomous and deal with employee-related issues at the individual business levels. Of the total South African staff complement, 75% are black and 11% are black females. For full details on employee headcount, please refer to Appendix 1.

Employee engagement

Engaging with employees enables Powertech to identify their concerns and ensure that their working needs are catered for. Satisfied employees are more productive; creating the best environment for them is therefore not only a responsibility, but a business imperative.

Management process
At the Altron group level, all employees are engaged by management and executives twice a year at an interactive results presentation. All Powertech's subsidiary companies engage with their employees to determine which issues need addressing. From these engagements a number of issues have been highlighted for attention, and these are being addressed in various ways:
  • Morale after retrenchment;
  • Fair pay / remuneration;
  • Career development;
  • Training needs; and
  • Communication.

Employee performance reviews are used to monitor employee development and satisfaction. Communication with employees happens on a regular basis through various in-house magazines such as the PowerFlash magazine, the Altron group's Profile magazine, as well as the intranet (Alix). More specific engagement occurs between senior management and the unions.

Initiatives
During the period under review, Aberdare Cables undertook its second annual employee satisfaction survey. The survey consists of a range of statements and five rating levels for participants to choose from, from 'Very high importance' to 'Very low importance'. Topics covered include career development, remuneration, benefits, work enjoyment, facilities and perception of the business, among others.

Performance
The results of Aberdare Cables employee survey were reassuring. There were three general scoring ranges:
  • 0 - 2.9 is poor;
  • 3 is satisfactory;
  • 3.1 - 5 is good.

Aberdare Cables scored 3.5 overall, placing them on the lower end of ‘good’. They scored particularly well in the categories of job satisfaction, company image and personal development. Less than satisfactory scores were achieved in the remuneration and benefits categories. 

The results of this survey were distributed to all operations and areas of concern are being given priority. Initiatives and projects are being implemented through a continuous improvement process with short term controls to address the most pressing short-comings.

A total of 68% of all employees participated in an annual performance review, including all employees at Aberdare Cables, Powertech Transformers, Powertech Industrial, 93% at Powertech System Integrators and 21% at Powertech Batteries. Almost 50% of Powertech employees are unionised.

Aberdare Cables has implemented a 12 month call-back policy on retrenched staff, which means that if a vacancy becomes available the retrenched staff member will be given priority in terms of applying for the position.

Skills attraction, development and retention

During 2010, a skills audit undertaken at Powertech confirmed a skills shortage – an epidemic in the power and telecommunications sector. It highlighted a need for more black females, particularly at senior and top management levels, as well as at the apprenticeship level. Some of the other issues affecting the Powertech group include:
  • The need for robust leadership pipelines; and
  • The need to increase skills amongst the historically disadvantaged groups.

The third National Skills Development Strategy will be launched in 2011. It will be implemented through the Sector Education and Training Authorities (SETA), and aims to improve the effectiveness and efficiency of the skills development system.

Management process
Powertech has a number of initiatives in place to address this issue. Some of these are managed at the Altron group level, while the following are managed by Powertech companies:
  • Project Ecole at Aberdare Cables which aims to develop a range of skills for employees in positions identified as critical across the company.
  • Retention Risk initiative at Aberdare Cables which addresses the challenge of retaining key skills.
  • Apprenticeships at Powertech Batteries which up-skills incoming artisan employees.
  • Powertech IST bursaries at the University of Pretoria.
  • Skills development for employees at Powertech Transformers.
  • Powertech Development Programme (PDP), formerly known as the Powertech Leadership Programme (PLP), which aims to develop three areas of leadership talent in the business, namely senior management development, senior leadership development and executive development.
  • Technical training centres at each factory across the Powertech group to feed its internal technical skills pipeline. These include the Powertech Transformer training centre with its transformer winding school, the boiler-maker and welding training centre, and the assembly training centre.
  • Retrenchment training programme across the Powertech group which assisted retrenched employees to develop the skills required to find other work after leaving Powertech.

Employee performance reviews include an assessment of individual employee training needs to ensure personal career development of employees. Powertech aims to pay its employees competitive salaries, and therefore undertakes salary benchmarking surveys annually to determine market rates and assess how the group is performing against these

Performance
During the 2011 financial year, Powertech spent a total of R28.7 million on skills development (2010: R27.7 million), with an average training spend per employee of R6 341. Almost 78% of this was spent on black training and skills development (2010: 50%). The company trained 1 609 black males, 237 black females, 26 disabled male and 25 disabled females during the year.

CN1: The Altron group now uses headcount figures as at August 31, 2010, as per our employment equity reports to the dti. In previous reports, headcount figures were as at 28 February (year-end) and therefore these figures are not comparable for this report. In addition, the figures in this chart are not compatible with the total training spend as the time periods differ.

Powertech ensures that all salaries are above industry rates and, during the period under review, salaries increased on average by 7.8% across the group. Employee turnover stood at 17.4% for the period between September 2009 and August 2010.

Initiatives
During the period under review, the Powertech Leadership Programme was reviewed and improvements were made. This programme, run in conjunction with the Gordon Institute of Business Science (GIBS) was renamed to the Powertech Development Programme (PDP). The programme is now three-tiered and includes an executive development component. There were 41 participants on these programmes during the year. The potential to expand the initiative to international operations is being investigated.

Aims
Powertech Industrial is in the process of appointing a skills development officer in order to develop their skills attraction, development and retention programme.

Powertech’s goal is for  100% participation in employee performance reviews across the group by 2013.

Health and safety

Health and safety is an important aspect of creating a working environment in which all employees can thrive. As business with a large heavy-manufacturing component, Powertech takes the health and safety of its employees very seriously. Some of the group's major employee concerns include:
  • Noise induced hearing loss (Aberdare Cables);
  • A safe working environment; and
  • Long term health of the workforce.

Management process
Safety committees have been established and health and safety representatives elected for all Powertech businesses. Representatives perform daily checks and complete monthly reports which are discussed at committee meetings. Any issues of importance to employees are raised and addressed at these meetings.

In the manufacturing operations, health and safety is dealt with at the factory floor level. Most of the major manufacturing sites are OHSAS 18001 accredited. Relevant employees are trained as per legal requirements for the following: driven machinery, SHE representatives, first aid and fire fighting. Selected employees are trained as auditors for OHSAS 18001. Occupational health education campaigns are undertaken on an ongoing basis.

Branch visits are undertaken by risk management on a regular basis, and if a risk is identified it is reported to management immediately. Significant issues are escalated to head office level, and the board, if required.

At Aberdare Cables, medical examinations are performed on all new and exiting employees as part of a health and safety surveillance system. At Powertech Batteries lead exposure is taken extremely seriously and employees are monitored regularly.  Any contaminations identified are dealt with appropriately to prevent and/or minimise any potential risk.

Trade union representatives are kept informed about health and safety issues at Powertech. At Aberdare Cables they are also invited to Health and Safety committee meetings. The following issues are included in formal contracts with unions:
  • Lead exposure;
  • Noise;
  • Injuries;
  • Safe working procedures; and
  • Correct use of personal protective equipment.

Each one of the operations has an onsite occupational health clinic which is used predominantly by factory employees. The clinics have full-time occupational health nurses and contracted medical doctors. Employees are continually educated on health and safety, and wellness days are held each year across all Powertech businesses.

Performance and initiatives
During the 2011 financial year, Powertech experienced 111 employee injuries, most of these within the Aberdare Cables manufacturing operations. This is down significantly from the previous year (323 injuries in 2010) due to an aggressive safety training programme conducted at all manufacturing operations.

All Powertech companies underwent third party health and safety risk assessments. Most achieved a ‘good’ or ‘satisfactory’ rating, while Willard Batteries and Crabtree Electrical Accessories SA both require some corrective action to be taken before achieving a similar rating.

Employees are trained on a voluntary basis in first aid and fire-fighting, and a further 63 employees were formally trained as health and safety representatives. All staff are represented on formal joint management-worker health and safety committees. Individual companies in the group have between five and 28% of staff serving on these committees (average of 14%).

Aims
Powertech is presently in the process of implementing health and safety issues as a key performance indicator for all employees. Aberdare Cables intends to reduce the number of lost time injuries to zero by implementing an updated health and safety training programme for new and existing employees. This will include an assessment of competency, and a behavioural safety component.

Powertech Electrical Accessories will be undertaking a comprehensive risk assessment in the period under review. It aims to achieve a 25% reduction in disabling injury frequency rates (DIFR) through a number of initiatives such as improving encapsulation and ventilation in hazardous gas risk areas, and reducing the number of employees exposed to noise.

Powertech Transformers aims to obtain OHSAS 18001 and ISO 14001 certifications in the coming year.

HIV/Aids

While the issue of HIV/Aids is managed at the Altron group level, Aberdare Cables and Powertech Electrical Accessories are particularly affected by this epidemic and therefore have their own policies and manage their own HIV awareness and training programmes.

Management process
Employees are educated on HIV/Aids related issues through workshops, industrial theatre, guest speakers and employee magazines. Employees are tested at their request at the group's occupation health clinics; however, Powertech does not collect statistical data on infection rates.

Each year, Aberdare Cables runs an annual Health Week which includes a focus on HIV/Aids. Aberdare Cables and Powertech Electrical Accessories run HIV/Aids awareness and training programmes throughout the year, which include Voluntary Counselling and Testing (VCT). All medical aid schemes that operate within Powertech provide HIV/Aids counselling and awareness programmes, as well as providing cover for the illness.


Transformation


Sub-issues:
  • Equity ownership
  • Management control
  • Employment equity
  • Skills development
  • Preferential procurement
  • Enterprise development
  • Socio-economic development

Transformation at Powertech is guided by the Altron group's internal charter, Vision 2012. This sets targets aligned with the Department of Trade and Industry's Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice (dti Codes) by which the group currently abides. The Empowerment Charter for the ICT sector is an industry-driven document being developed by major stakeholders in the sector with valuable input from government (the Department of Communications and the Department of Trade and Industry). Once this has been completed and accepted by government, Powertech will be measuring its progress against this charter.

bbbee

Performance
Powertech was recently rated by Empowerdex as a level 3 broad-based black economic empowerment (B-BBEE) contributor in terms of the dti's Codes of Good Practice (the Codes). Its strongest performing areas include preferential procurement, enterprise development and socio-economic development, while employment equity remains a challenge across the industry.

Initiatives
In the period under review, Powertech purchased a tool to assist with the B-BBEE assessments of all businesses and more easily obtain its ratings. This should assist the group in improving the management and hence performance of its transformation goals.

Powertech is in the process of finalising the acquisition of Strike Technologies, and Powertech Transformers is finalising the acquisition of Powertech Calidus. These acquisitions should improve transformation performance of these companies in the next reporting period.

Aims
Powertech Batteries and Powertech Electrical Accessories plan to undertake transformation climate assessments in the coming year. This will assist in assessing what is required to improve the two companies' B-BBEE ratings. The current target is for all Powertech companies to reach a level 3 status.

Equity Ownership

Powertech's aim is for its B-BBEE investments to be advantageous to the business as well as to clients, who benefit from doing business with a transformed South African company. Powertech has completed its ownership structure at the operating companies' level as where holdings include:
  • Powertech Integrators is 25.1% owned by Izingwe Capital (through Izingwe Investment Holdings Ltd),
  • Powertech Transformers is 20% owned by Desta Power Matla, a black empowered investment consortium under the chairmanship of Solly Moloko.
  • Powertech Calidus is 25.01% indirectly owned by Mahogany Capital, a black empowered investment consortium which seeks to economically empower women.
  • Battery Technologies is 25.1% indirectly owned by Kagiso Ventures Limited, the financial support arm of Kagiso Trusts, to fund community development and true economic empowerment.
  • Aberdare Cables is 27% owned by Izingwe Capital (through Izingwe Aberdare Cables), a B-BBEE investment company led by Sipho Pityana, a former Director General of the Departments of Labour and Foreign Affairs.

equity ownership

Management control

This element of B-BBEE presents an ongoing challenge. Research commissioned by Powertech in the previous financial year, showed that the industrial sector as a whole has not managed to attract black female or disabled representation in ownership and management. In addition, as a number of Powertech's subsidiary companies are relatively small, maintaining strong scores in this element of B-BBEE proves challenging since the smallest changes have a large impact.



Management process
Powertech constantly seeks to replace exciting management staff with black candidates, and recruitment management plans are in place for senior and top management positions. Leadership training and development is undertaken and each business has a succession management plan in place, as prescribed by the Altron group policy.

Performance
In the 2011 financial year, Aberdare Cables lost one Black Male Independent Non-executive Director, one Black Female Non-executive Director (Izingwe) and one Black Male Executive Director (transfer).

During the same period, Aberdare Cables appointed an Indian female as the financial director, one Coloured Male Non-executive Director (Izingwe) and one White Male Executive Director. They are seeking a Black Female Non-executive Director.

Effectively these activities result in a net loss of two Black Non-executive Directors (one male and one female). This will have a significant impact on the next scoring period for Aberdare Cables (September 2010 to August 2011).

score control

Aims
Powertech is focussed on filling management positions with black females, where possible. In particular, Battery Technologies aims to achieve 15% black female board representation, and 25% in top management.

Employment equity

Powertech recognises that a representative workforce is required to serve the South African market appropriately. The group’s ultimate goal is to see the company’s employee profile matching the economically active demographic profile of South Africa.

Over the last few years, a number of Powertech companies suffered retrenchment and this has had some bearing on group employment equity scores which in turn could affect the ability to secure public tenders. The industrial sector as a whole finds it challenging to engage black females and disabled employees. 

During the period under review, changes to the Employment Equity Act, 55 of 1998 (the EE Act) were proposed. These are being hotly debated in the legal environment, and Powertech is observing developments around the proposed changes to ensure it understands the potential impacts and is prepared for these changes and the consequent requirements. In addition, targets for the employment equity element of the B-BBEE scorecard will be raised in 2012, and this could have the effect of lowering Powertech’s B-BBEE level if not proactively managed.

employment

Management process
Employment equity progress is carefully monitored and a number of initiatives, such as succession plans, are in place to manage this issue. Retention of black employees is a focus area and this is managed through remuneration and performance management policies.

Performance and initiatives
Battery Technologies leads its competitors in employment equity, exceeding the board, top management and senior management targets in employment equity. However, maintaining desired scores at the middle management level has proven to be a challenge as the business is relatively small and therefore any movements have a significant impact on the score.

Succession planning is a key method of ensuring employment equity targets are achieved across the business. Powertech Electrical Accessories is currently formulating their succession planning policy, while other group companies already have this in place.

Aims
All Powertech operations will be focussing on improving employment equity scores in the senior, middle and junior management levels, including employing more disabled persons.

Powertech Electrical Accessories aims to appoint a black female training officer as well as four black female apprentices in the first half of the next reporting period. In addition, the group plans to appoint at least one black female at the senior management level.

Skills development

In the ICT sector, technology is continually evolving and this requires consistent up-skilling of technical employees. Code 400 of the dti Codes prescribe that the group should focus specifically on the development of black skills. By developing black employees' skills Powertech is able to seek the redress of past inequalities.

Management process
All companies in the Powertech group have reinforced their major skills development drives. Skills gap analyses are undertaken in order to develop a skills development strategy that adequately addresses the group's needs.

Performance
In the period under review, Powertech spent R28.7million (2010: R27.7 million) on training of which R22.5 million (78%) was spent on developing black employees (previous year: 74%). This equates to 13.7% of NPAT overall and 10.7% of NPAT for black skills development.

Powertech undertakes a number of training initiatives, as addressed in the section on 'Human Capital – Skills attraction, development and retention'.

skills

Aims
Powertech Electrical Accessories is in the process of appointing a black female training officer in order to perform a skills gap analysis which will determine areas for focus in the next few years. Until then, the current training plan will continue, and more funds will be allocated to developing junior managers and up-skilling operators. Trainees with work experience will also be recruited in the engineering division.


Preferential procurement

Considering the amount Powertech spends on materials and services, it can make a pronounced difference to small black-owned businesses through preferential procurement. The biggest challenge lies in ensuring that suppliers maintain their commitment to continuously improving their B-BBEE statuses.

preferential

Management process
While the Altron procurement council manages this issue in general, Powertech companies have their own individual objectives. The group relies heavily on its suppliers' performance in this B-BBEE element and therefore aims to develop a supportive relationship, guiding suppliers to perform better and using B-BBEE performance as a selection criterion when appointing new suppliers.

Performance
Powertech spent over R1.8 billion with preferential procurement suppliers in the period under review. This is approximately 15.8% of Altron's total procurement spend.

Aims
One of the group's major suppliers, Palabora Mining Company Limited (PMC), is being rated and is expected to achieve a B-BBEE score for the coming year. Once this is completed, all purchases from PMC will count towards the preferential procurement score, significantly improving the overall score.

Battery Technologies aims to increase black supplier spend, with a focus on black female-owned businesses. Powertech Electrical Accessories plan to continue procuring at least at the level they are, from verified B-BBEE companies.

Enterprise development

Small businesses are the backbone of the South African economy. Powertech recognises that one of the most common reasons for small business failure is the lack of sufficient start-up funds. With this in mind, the group is investing resources in facilitating the growth of small suppliers. This investment in turn strengthens Powertech's relationships with suppliers.

During the period under review, changes to the enterprise development element of the dti Codes were proposed. This is being monitored to ensure the group understands the potential impacts and is prepared for these.



Management process
One of Powertech's key management strategies involves providing start-up black-owned businesses with shorter payment periods. This improves their cash flow and facilitates them growing into an economically sustainable enterprise.

Performance and initiatives
Powertech spent over R18 million on enterprise development projects in the period under review. This equates to 8.6% of NPAT, far exceeding the dti Codes target of 3%.
 
During the 2011 financial year, Battery Technologies entered into an enterprise development agreement with two of its rectifier assembly suppliers. This will require a long-term commitment in order to be successful.

Aims
Powertech Transformers is launching a new initiative whereby their kiosks business will be managed by a black-owned small and medium enterprise company.

Powertech companies will continue to focus efforts towards facilitating the sustainability of small black-owned suppliers, with a particular focus on black female-owned businesses.


Battery Technologies Successes:
One of our enterprise development supplier initiatives, DC Options, started three years ago with two staff members. This business has since grown to be
one of our most reliable suppliers (in
our top 10), now employing over 18 staff. We further expect DC Options
to grow into a QSE in the 2012 financial year.

enterprisedev

Socio-economic development

Code 700 of the dti Codes require that companies contribute to the socio-economic development (SED) of South Africa, not merely through hand-outs, but in ways that stimulate the economy and make strategic sense to the business. Healthy and prosperous communities stimulate the economy and improve business opportunities and conditions for all players.

Changes to the socio-economic development element of the dti Codes have been proposed. These are being examined to ensure the potential impacts are understood and prepared for.

Management process
At the Altron group level, SED is aligned with the core business of technology and the national social development imperatives. Powertech follows this strategy through its own SED investments, focussing on community development and skills development. The group tries to maintain involvement in the selected projects to monitor and ensure the sustainability thereof.

Performance
Powertech spent R3.43 million on SED during the year (previous year: R3.61 million). This equates to 1.63% of NPAT. The group achieved a full-point score for this element of the dti's B-BBEE scorecard.

socio

Initiatives
Powertech companies undertook a number of socio-economic development initiatives during the period under review, including:

Aberdare Cables   Aberdare Cables supports two children’s homes:
  • Yenzani Children's Home provides a safe environment to 30 children from troubled or orphaned backgrounds, and HIV positive children, aged between four and 17 years of age. Aberdare Cables recently assisted the home to relocate to Midrand by donating towards renovations on the new home.
  • Sinethemba Children's Home provides street children in Korsten, Port Elizabeth with shelter, food, general care and transport to school. Aberdare Cables provides ongoing financial and non-financial assistance to Sinethemba, including operational expenses for the facility. Aberdare Cables staff are very involved in helping out, organising fundraising events, shopping and delivering necessities to the home and transporting children to school at times
Powertech Transformers   Powertech Transformers supports the following three educational projects:
  • Maths Centre for Professional Teachers in Kwa-Zulu Natal (KZN) as part of the KZN High Schools Project, which aims to address the gaps in Maths and Science and enable Black African Learners to bridge the skills gap.
  • Education Alive in Cape Town is targeted at previously disadvantaged matric students who wish to follow a career in engineering but are struggling to achieve a matric exemption for University entrance in Maths and Science.
  • Orion Organisation that provides for the educational, training and therapeutic needs of children, youth and adults with physical, intellectual and/or mental disabilities.
Powertech Batteries   Powertech Batteries makes the following efforts towards socio-economic development:
  • Runs the Willard Road Race which raises funds for the Cheshire home.
  • Participates in and donates to Trees and Food for Africa’s arbour-day project.
  • Ad-hoc contributions where required.
Powertech IST   Powertech IST contributes to socio-economic development in the following ways:
  • Bursaries are supplied to under-privileged engineering students allowing them to complete their studies. During the period under review, R280 000 was spent on this initiative.
  • Grocery supplies are donated to Silverton Orphanage (2011: R35 280), and children are taken on outings such as team building events.

Powertech is also participating with Altron, Altech, Bytes and Vodacom in the development of the Centre for Specialised Services in Hillbrow (Johannesburg) – a centre that will provide medical care to, among others, pregnant women and children infected with HIV/Aids and tuberculosis. Powertech will provide cabling, sockets, generators and other electrical products.

Aims
In general, Powertech aims to continue with the initiatives presently running. Powertech Electrical Accessories plans to increase its funding to organisations with more than 75% black beneficiaries.


Environment

Powertech, as an industrial manufacturing group of companies, has the largest impact on the environment out of all the Altron group companies.


Sub-issues:
  • Management and policy
  • Energy use and reducing Powertech's carbon footprint
  • Responsible use of water
  • Usage of materials and handling waste
  • Reducing pollution and harmful emissions
  • Compliance with new legislation


Management and policy

During 2009, Altron instated a group-wide policy for safety, health and the environment. Many of the aspects of this policy relate directly to Powertech's operations. Aberdare Cables, Powertech Batteries and Powertech Transformers have their own set of policies, procedures and controls in order to manage their impact on the environment. At these companies, environmental performance is included as a key performance indicator linked to management bonuses. Powertech Calidus and Crabtree Electrical Accessories SA have separate Safety Health, Environmental and Quality (SHEQ) policies. Aberdare Cables in particular has been driving environmental responsibility strongly at its factories for the past two years - major reductions in environmental impacts have been achieved.

As a business, Powertech has always taken responsibility for the effects of its operations and has obtained a number of internationally recognised certifications, as follows:

Environment-related Certifications
  ISO 14001 OHSAS 18001 and other ISO 9001 Other
Aberdare Cables
  • Standford Road (Port Elizabeth)
  • Pietermaritzburg
  • Gauteng operation
  • All Certified
  • BASEC certified
 
  • All South African sites
  • Portugal and Spain are IQNET ISO 9001:2000
  • Spain is AENOR ISO 9001:2000
 
Powertech Transformers
  • All Certified
  • All Certified
  • All Certified
 
Powertech Batteries
  • Factories Certified (except Elandsfontein)
  • Factories Certified (except Elandsfontein)
  • Factories Certified (except Elandsfontein)
  • TS 16949:2009
  • VDA6
Powertech Industrial
  • Crabtree Electrical Accessories SA - Aiming for 2012
  • Powertech Calidus – implemented but not certified
  • Strike Technologies - Aiming for 2012
  • Crabtree Electrical Accessories SA - Aiming for 2012
  • Powertech Calidus – implemented but not certified
  • Strike Technologies - Aiming for 2012
  • Crabtree Electrical Accessories SA
  • Powertech Calidus
  • Strike Technologies
 
Powertech IST
  • Certified
  • Certified
  • Certified
 
Powertech TIS
  • Aiming for 2012
  • Implemented but not certified – aiming for 2012
  • Certified
 


Carbon footprint

As an industrial manufacturing business, the group's carbon footprint is significant; Powertech contributes over 70% of the Altron group's total carbon emissions. Electricity use constitutes 97% of total Powertech carbon emissions.

carbon

Management process
Measurement of the carbon footprint is overseen at the Altron group level (see the Altron Group report).

As electricity consumption is the group's primary carbon emitter, Powertech companies aim to minimise electricity use wherever possible. For more information on this, see the following section on 'Improving energy efficiency'.

Performance
During the period under review, the scope of measurement was expanded to include more operations, including those offshore and the accuracy of the emissions measurement processes was improved. Powertech's total carbon footprint was calculated at 178 170 metric tonnes carbon dioxide equivalent (tCO2 e).

After electricity use, business transport use is the next biggest carbon emitter, although only contributing just over 1% of the total carbon footprint (2 311 t CO2 e). For more detail on Powertech's carbon footprint see Appendix 6.

Aims
Powertech is now sufficiently confident in its measurements and has set carbon reduction targets for the next three years, as follows:

Carbon emissions reduction targets for 2015
Element  Total Average reduction target over three years
2011
2012
2012
2013
2014
2015
Electricity Usage in KWh of all facilities / buildings owned and leased by company.  Franchises are excluded. 2.44%  0.81%  0.81%  0.81% 
Business Road Travel in LITRES of all business road travel for fleet vehicles, rental vehicles and employee owned vehicles 0.86%  0.29%  0.29%  0.29% 
Business Road Travel in KMS - Where employee travel allowances were included  (2009/2010) these were converted at 14000 km per employee 1.80%  0.60%  0.60%  0.60% 
Paper Consumption – KGS 2.93%  0.98%  0.98%  0.98% 
International Air Travel - MILES 1.56%  0.52%  0.52%  0.52% 
Domestic Air Travel - MILES 1.33%  0.44%  0.44%  0.44% 
Fuel Use - DIESEL  - LITRES 0.67%  0.22%  0.22%  0.22% 
Fuel Use - BUTANE – KGS 4.67%  1.56%  1.56%  1.56% 
Fuel Use - LPG – KGS 1.33%  0.44%  0.44%  0.44% 


Improving energy efficiency

In addition to Powertech's contribution to carbon emissions, as an industrial user of electricity its is well aware of the need to reduce electricity consumption in order to lighten the load on South Africa's over-burdened electricity supplies. This will not only benefit the economy by reducing the incidences of load-shedding power cuts, but also reduce operational costs and therefore improve the group's bottom line earnings - while minimising environmental damage associated with fossil-fuel based energy use.

In addition, Powertech has a role to play in the National Energy Efficiency Strategy which has set a target to reduce South Africa's electricity consumption by 12% by 2015.

Management process
At the group level, an education initiative called Powersave@Altron is in operation, providing employees and operations with information on how to be more energy efficient. In addition, the Envirowatch campaign aims to achieve reductions in energy consumption across the group. Aside from addressing 'low-hanging fruit' across all its businesses, Powertech's most energy intensive companies run their own in-house programmes to manage power use. The groupaims to improve the efficiency of buildings, equipment and operations, and it develops products and services to help customers improve their own energy efficiency.

Performance
Powertech consumed a total of 168 052 MWh (mega watt hours) of electricity this year. As discussed in the section on the group's carbon footprint, the increase from 2010 is as a result of expanding the scope of measurement to include offshore operations, expansions as well as improving the accuracy of the measurement process.

Initiatives
As discussed above, Powertech focuses on three areas for energy efficiency: buildings, operations and products.

Building efficiency
Powertech is an energy intensive business and its buildings (and the activities that occur within them) are part of this. The group retrofits older buildings with energy efficient and alternate energy options where possible and new buildings are designed to make minimal use of energy. For example, Powertech Calidus and Powertech Batteries are in the process of replacing traditional electrically powered water geysers with solar models, and the new Powertech Batteries building uses green design to maximise the use of natural light, with motion sensors connected to all lights and air-conditioning units.

Operational efficiency
All electrical equipment is maintained regularly in order to ensure energy wastage is minimised by functioning optimally. Old equipment is replaced with new, more energy efficient models. For example, in the period under review diesel motors at Distribution Transformers Booysens and Aberdare Cables were replaced with electrical models. The use of high consumption equipment is limited, allowing operations to reduce demand for controlled periods.

Power factor meters are now used at Aberdare Cables to ensure that power signals are in phase. This results in a significant saving for such an energy-intensive company.

IT systems are another major area where efficiencies can be found, and Powertech IST has just completed virtualization of its servers, and is investigating the remote switching of computer monitors.

Products and services
As a power electronics and telecommunications company, the group can facilitate energy efficiency throughout South Africa through its products and services. In this spirit, Powertech IST Otokon has developed a system for collecting and analysing consumption data e.g. energy or water consumption. The ecWIN system collects raw meter data, performs metering calculations and verification routines, and stores the data in a centralized database, where it can be accessed on demand. This system is deployed at most energy-intensive industries in the industrial, mining and utility sectors in South Africa and is now also being deployed throughout the Altron group.

Powertech IST Otokon has partnered with Eskom on its transmission meeting schemes, and has completed numerous Demand Side Management (DSM) projects which allow the energy provider to influence the electricity usage patterns of electricity consumers in the drive towards energy efficiency.

Powertech IST now supplies the first self-recharging hydrogen fuel cell. It engages automatically whenever external power fails, and when power is available it automatically generates its own hydrogen from water. Powertech is investigating ways to reduce thermal losses in transformers and cables they manufacture.

Rentech specialises in renewable energy systems, specifically solar photovoltaic systems. Powertech IST Industrial Division provides turnkey engineering solutions in the area of environmental pollution control such as off:gas filtration, fuel:gas cleaning and industrial water purification for large mining and power utility industries.

Aims
As shown in the above table, Powertech aims to reduce energy consumption by 2.44% by 2015.

Powertech System Integrators is investigating various co-generation and renewable energy product and service solutions to provide to customers. In addition, Distribution Transformers Booysens have an energy survey planned for their Cape Town premises for the next reporting period, with the aim of identifying areas for achieving efficiencies.

Responsible use of water

At a time of dramatic climate change, a water scarce country like South Africa needs to look to solutions for conserving its freshwater supplies. If we continue to maintain the status quo in terms of this issue, experts say it is likely that we will run out of freshwater supplies by 2030.

Management process
Powertech companies encourage the responsible use of water by employees through educating and raising awareness of water issues on an ongoing basis. Signage is placed in applicable areas and various initiatives are being implemented including retro-fitting buildings for water efficiency.

Water management representatives conduct monthly inspections in order to identify problem areas, or to address water efficiency issues raised by employees. In Powertech's more industrial and water intensive companies, such as Aberdare Cables, additional issues such as water pollution are continually monitored. When pollutants are identified, management actions are in place to mitigate the effects of these on the environment. In some of Aberdare Cables' operations, waste water treatment facilities have been installed to facilitate the reuse of water in the operations.

Performance and initiatives
Powertech consumed a total of 98 560 816 m3 of water during the 2011 financial year. During this time, Powertech Transformers replaced a water-cooled motor system with a closed-loop system, saving 500 000 kilolitres of water. Solenoid valves were installed to manage water flow more efficiently.

Aberdare Cables has converted water-intensive manufacturing processes to closed-loop systems. Cooling procedures are now done in a closed trough to prevent evaporation and re-use water by filtering and pumping it through a cooling system. Shut-off valves are used to prevent overflow and subsequent wastage of water. In addition, a robust maintenance programme is in place to ensure that all equipment is functioning optimally at all times.

Aims
The Altron group, including Powertech, will be identifying water saving / reduction targets in 2011/2012 for all their material operations. Powertech Batteries plans to save up to 4% of water through the capital expenditure that will be allocated to water saving programmes aimed at recycling where possible.

Reducing pollution and harmful emissions

The South African Constitution prescribes the right to an environment that is protected from pollution and ecological degradation. As the major manufacturing group of Altron, Powertech needs to manage the environmental and social impacts caused by hazardous waste, air and water pollution and emissions from its operations.

Management process
In addition to educating staff on pollution prevention, Powertech has the necessary protection measures in place and continually monitors the high-risk areas of its business. The group uses a number of prevention measures on equipment. If instances of pollution occur, these are cleaned up immediately by specialist companies, who ensure that the clean-up procedures and rehabilitation processes meet legal requirements.

Polychlorinated biphenyls (PCBs) and heavy metals such as lead pose a significant risk to the environment and these are monitored closely at a number of group companies where they are used. Powertech Batteries carefully recycles all batteries to prevent lead pollution. Where asbestos is present at certain sites (e.g. Aberdare Cables) monitoring programmes are in place, and where fluorescent bulbs (which contain mercury) are used, these are disposed of responsibly using a specified tube crusher and removed as hazardous waste.

Performance
All Powertech companies comply with legal limits for pollutants and emissions. Aberdare Cables has in the past had minor air pollution issues, but is now compliant with South African and United Nations legislation. The company is currently drawing up a new, comprehensive emissions and pollution policy in line with international best business practice, which will go beyond compliance with the National Environmental Management Act: Air Quality Act - No 39 of 2004.

During the period under review, Powertech Transformers experienced a minor oil spill on its premises which was successfully remediated. Metal contamination beneath a Willard Batteries premises was discovered and this too has been rectified. No other significant incidents of water, air or soil pollution occurred.

Initiatives
To monitor groundwater quality, Distribution Transformers Booysens has drilled wells at strategic positions all over the factory and these are monitored for PCBs on a regular basis. The company's site is now PCB free. A heavy metal groundwater plume which was discovered beneath the site is being monitored continually, and action plans are in place should the metal concentrations exceed acceptable limits.

Aberdare Cables began an initiative to obtain the ISO 14001:2004 certification for its factories in 2006. At present, two of the Aberdare Cables sites are certified and the rest should be successfully completed by mid-2011. This process has set the baseline for an effective waste stream management and pollution prevention programme.

To reduce the effects of their spraying operation, Crabtree Electrical Accessories SA is upgrading its plant and continuously makes improvements to ventilation and extraction in line with OHSAS requirements. There have been no further issues with lead seepage since 2008. Crabtree Electrical Accessories SA conducts drain sampling on a regular basis in order to immediately identify and control any future seepage into the storm-water system.

During December 2010, Powertech Transformers removed asbestos from a process autoclave in Pretoria. The asbestos was carefully disposed of as hazardous waste

Aims
Aberdare Cables will be investigating the possibility of separating lubricant oil (for correct disposal) and water (for reuse) before disposal as well as the potential to reuse cross-linked polyethylene (XLPE). Distribution Transformers (Booysens) will be replacing all asbestos roofing, gutters and downpipes. In addition, the company will be implementing ISO 14001 and working towards certification

Crabtree Electrical Accessories SA aims to reduce airborne pollution and air quality by improving the extraction and encapsulation of the blending process. To reduce atmospheric sulphuric acid emissions at its factories in Port Elizabeth, Powertech Batteries is planning to upgrade the scrubber systems. The company is concentrating on eliminating lead vapour from conventional grid castings. A total of R2 million has been committed to these initiatives for implementation in the next financial year.

Usage of materials and handling of waste

National Environmental Management Act: Waste Act – No 59 of 2008 (the Waste Management Act) requires that waste is managed responsibly and calls for greater private sector participation. This Act promotes cleaner production, waste minimisation, reuse, recycling and waste treatment - waste disposal is seen as a last resort in the management of waste.

Management process
Waste management policies are specific to each company and govern recycling processes for all recyclable materials consumed through Powertech's operations – manufacturing and other. Powertech aims to measure and monitor all waste in order to analyse throughput and identify where waste can be reduced. Waste management processes are well established, and hazardous waste disposal meets the Department of Water Affairs and Forestry (DWAF) minimum requirements. All waste is separated and where hazardous waste is generated this is kept onsite for a maximum of 90 days before being disposed of responsibly.

Some Powertech companies have third party waste removal contracts, and these are audited regularly to ensure compliance with legislation.

Performance
During the period under review, Powertech measured the quantity of waste it generated for the first time. Out of a total waste amount of approximately 6 243 tonnes, 3 593 tonnes was sent to municipal landfill (almost 58%). Just over 12 tonnes (0.2%) was incinerated and the rest was recycled.

Initiatives
Aberdare Cables now has a waste management standard which was formally implemented in October 2010. Aberdare reclaims and recycles all copper and PVC and is presently investigating the possibilities for reusing wooden cable drums. Most products manufactured by Aberdare Cables are fully recyclable, with the exception of silicon rubber and XLPE.

Aims
Powertech is constantly looking for ways to find efficiencies in its materials and waste streams. A number of group companies have specific goals for the coming year:
  • Aberdare
    • Reduce general waste by 5%;
    • Introduce recycling programs for GOC and GBU site by June 2011; and
    • Investigate rubber recycling.
  • Crabtree Electrical Accessories SA
    • Identify income opportunities in waste management and use income to finance sustainability initiatives.
  • Powertech Calidus
    • Implement waste separation at the source of generation;
    • Identify the alternatives to recycling waste;
    • Identify economic opportunities in the waste stream;
    • Sale of materials considered waste by us to other companies - market feasibility studies will be done on micro companies which can assist in this regard; and
    • Develop an EMS that includes an environmental management plan.
  • System Integrators
    • Reduce consumption of paper by 3%.
  • Willard Batteries
    • Replace all wooden pallets with plastic ones, which have an estimated lifespan of between nine and ten years after which they can be converted back into plastic pellets for creating new products.

Responsible management of the product lifecycle

The Waste Management Act provides for extended producer responsibility, which means that companies could become responsible for how consumers dispose of their products.

Management process
Powertech is aware of the potential impacts of its products and is trying to determine which points in this cycle pose the most risk to the environment and society. In addition, many group companies are undertaking application of the 'cradle to grave' principle and fostering a culture of waste minimisation and recycling at all levels.

Performance and initiatives
Powertech's battery manufacturers continue to reclaim and recycle batteries to ensure that these do not end up in landfills or other more ecologically sensitive areas. Lead-acid batteries are fully recycled in a multi-phase process that produces lead, plastic and chemical materials that are reused.

ST: Business conduct in foreign operations

The Altron group is a signatory to the United Nations Global Compact which upholds the rights of people and communities affected by business operations. Powertech is aware of the perceived and potential risks at all its operations and aims to ensure that fraud, corruption and human rights violations do not occur.




Sub-issues:
  • Impact of operations
  • Human rights and fair labour practices

The Altron group is a signatory to the United Nations Global Compact which upholds the rights of people and communities affected by business operations. Powertech is aware of the perceived and potential risks at all our operations and we aim to ensure that fraud, corruption and human rights violations do not occur.

Impact of operations

Powertech does not employ expatriates in its international operations. All employees are local and required materials are procured locally, where available. The impact of Powertech's operations are therefore positive in terms of providing employment and stimulating the economy. The group believes that its products provide benefit to local communities by providing much needed communications and power infrastructure.


Human rights and fair labour practices

Powertech ensures that human rights practices are upheld in all its foreign operations. Currently Powertech is in the process of establishing what the human rights practices of its relevant suppliers and distributors in some of these countries are. Where problem areas are identified, these will be appropriately addressed.

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