Chalumbira is banking on the Musina Internodal Terminal to boost rail and cross-border trade
Isaac Chalumbira straightens the name badge of one of his employees as we sit down for breakfast at the Reef Hotel in Marshalltown. He is CEO of Lionshare Venture Holdings, an investment company that has helped shape the Joburg CBD through its property development.
Since 2003, the group has built more than 1,000 apartments in the city and has now moved into the transport sector.
Looking around, Chalumbira says the hotel is the sum total of the work he and his family have put in. The business employs about 400 people. He is still excited and passionate about the CBD and the possibilities for a city he has lived in for more than 20 years, but he is worried the CBD is becoming something of a dormitory district rather than a place where people can work, play and live.
"People follow economics, so, yes, if you keep moving businesses out of town and it takes me an hour to get to Waterfall [City in Midrand], what am I going to do? I am going to go to Waterfall, and then we are replicating the infrastructure we are sitting with [in the CBD]."
He says there are policy issues that are still holding back development in the CBD — he recently had to sell of a student village in Doornfontein because he was unable to expand the number of housing units due to parking ratio requirements. So he is taking a wait-and-see attitude to how the city will change, taking a cautiously optimistic approach.
He owns a number of petrol stations, which he is using to fund his other interests, but this is not his only focus. In August, he launched a transportation hub, the Musina Intermodal Terminal (MIT), on the border between SA and Zimbabwe near Beitbridge. It aims to facilitate the movement of cargo, especially mineral exports, from Zimbabwe, Zambia and the Democratic Republic of Congo, to the Port of Durban for onward shipment to markets across the world.
It has taken Chalumbira about seven years to get MIT to where it is now, largely through trying out different partnerships. The terminal — which was commissioned by Trade and Industry Minister Rob Davies in July — is meant to help the transfer of cargo from road to rail, thereby reducing the cost of cross-border trade.
Lionshare is investing R110m to upgrade the existing infrastructure in phase one which should be completed in the next 18 months. Phase two will focus on facilities to handle coal shipments. While some of the infrastructure needed is already in place, the company will need a further R200m to build bigger facilities to accommodate consignments of coking coal destined for the export market.
Chalumbira noticed the potential for cross-border trade from his site in Braamfontein, from where buses travel to and from Zimbabwe. He wondered why so many people were traveling so far for goods. He initially wanted to build a mall, but the 2008 financial crisis hit, and so he moved onto creating a logistics hub.
SA, he says, needs to look at opportunities that sit across the border rather than just overseas. "SA has the industrial infrastructure to service more than 110-million people north of the Limpopo." He has high hopes for MIT, which can also be harnessed to move goods produced in SA into the rest of the continent by moving cargo from road to rail.
A SADC protocol that facilitates intra-country trade is in place and Chalumbira says it just needs to be implemented: "We are just an enabler, a catalyst."
He points to the amount of oranges and other citrus fruits produced along the Limpopo river, the majority of which is exported. If an investment was made to add value to the raw product, to produce orange concentrate and other products, and then sell it to markets on the continent, this would likely spawn a profitable business.
Presently some R100bn worth of goods pass through Beitbridge a year and he says there is room for this to increase — with investment.
Shoprite-Checkers, Spar and Pick n Pay are all in Zambia and use trucks to transport north-bound products. Chalumbira says if they could get their products onto rail it would reduce costs by 30% for the journey within SA to the border post. But SA has to be more willing to invest in the rest of continent — and other African countries need to be more receptive towards investments by removing business and bureaucratic hurdles.
Formerly an employee of Coca-Cola and Procter & Gamble, he says he learnt the best way to enter a new sector was through partnerships. While studying psychology and sociology at UCT, he was encouraged by a mentor to apply for a couple of post-graduate development programmes rather than become an entrepreneur from the start. At the time he was buying and selling cars and working part-time to fund his education.
He got into the Procter & Gamble graduate programme and stayed with the group for three years, moving on to different units every six months or so. After leaving Procter & Gamble he joined Coca-Cola in SA with his final achievement at the group being setting up a Coca-Cola plant in Angola in 2001.
"After Angola I could not come back because I tasted running a business on my own — with Coca-Cola resources — but on the ground, it was me."