Dr Christo Wiese – at the top of the food (and retail) chain

r Christo Wiese is one of the wealthiest men in South Africa. He is the chairperson of Pepkor Limited, Shoprite Holdings Ltd, Tulca (Pty) Limited (trading as Mango), Invicta Holdings Limited; and he is the former chairperson of the Industrial Development Corporation of South Africa Ltd. It does not stop there, though.

Wiese is also a director of PSG Group Ltd, Luna Group Ltd and the Primedia Group. He is a past director of KWV, Sasol, Santam, the South African Reserve Bank, BoE, Mettle Ltd and Malbak.

He served on the Stellenbosch Council for many years, is the owner of the renowned Lanzerac Manor and winery in Stellenbosch and the Lourensford Estate in Somerset West.

Last and by no means least, Wiese owns a private game reserve in the Kalahari.

When one looks at this list of impressive credentials, it can be rather intimidating anticipating how a face-to-face interview may turn out with someone with so much clout. Couple this with the fact I could not find a single interview archived on the Internet that could give me some insight into the man himself.

There were thousands of articles, but they were all about financial figures, annual reports, corporate statements and share price speculations – nothing about the man behind the titles.

As the editor of Leadership for a number of years now, I have been very privileged to interview some incredible people. More often than not, though, many of the subjects are so enamoured with their own self-worth that one feels that after talking about their accolades and accomplishments for an hour, they would turn to say, “Well, let me stop talking about myself, why don’t you talk about me for awhile!”

Then there are the rare few such as Richard Branson, Mark Shuttleworth, Archbishop Emeritus Desmond Tutu or Raymond Ackerman who turn the stereotype on its head. Leaders who are still humble, engaging and make one feel at ease immediately.

Dr Christo Wiese is one of these people. After spending an hour in his company talking about a host of subjects off my questions list, it felt as if I were simply chatting with Christo, a devoted family man, born in Upington, who attended Paarl Boys’ High and is a passionate Matie University old boy. A chief executive officer whose personal assistant Sandra has been with him for an incredible 31 years. A man with a love for the bush, good wine and the Fifa Soccer World Cup.

After my recent interview with Whitey Basson, it is easy to see why these two men would work so well together; and why Dr Wiese’s favourite quote is one he remembers took centre stage on the desk of former United States president, Ronald Reagan: “There is no limit to what a man can achieve, provided he doesn’t care who gets the credit.”

These are the questions I asked him for Leadership.

How difficult a nut has it been for Shoprite to crack the African expansion?

From my perspective, the greatest difficulty was getting people to make that paradigm shift in their thinking. South Africa had been so isolated from the rest of Africa that it was very difficult for people to concede of exploiting business opportunities there. We needed to get everyone in the company, from board level down, to be reading from the same page and to be ready to change the stereotype approach to Africa.

I always tell the story that when we went up there, the first time I went with Whitey to Zambia, you could not buy anything in the shops; there was nothing.

In the early 1990s, clothing was sold on the pavement by hawkers, so one of my colleagues from Pep Stores said: “You know, we can’t come and open shops here because look at how people buy their clothes.”

I reminded him of the story of two shoe salesmen who went to a poor country and the one sent back a telegram, saying: “There’s no market here because nobody here wears shoes”, and the other one sent a telegram back: “I’m elated because what a market – because nobody has shoes.”

It is merely the way you look at things. Some people seem to think it is a walk in the park to simply go and open businesses in Africa, that it is that easy and it will simply flow.

They look at Whitey and they think, “Well, he can do it, so I can do it.”

And, of course, people can, but people must not think it is a walk in the park; it has its own challenges.

Dr Wiese, you have been described as a serious risk taker and you have made some very clever investments across so many different market segments. Do you have one particular set of criteria that you go through, irrelevant of the sector? Or how do you measure their worth?

First of all, how people describe other people – one cannot assume responsibility for it.

I simply do not know how one makes a go of it if you are an entrepreneur, if you are not prepared to take risk.

How does one define serious risk-taking? There are many recorded instances of people who had built huge empires and then in order to increase the empire, they would bet everything. That is the nature of the beast in some cases in South Africa, and they are well recorded.

Some of my investments across different sectors are really very small in relation to what my core businesses are. And I got into those businesses for a variety of reasons.

Some have been where there were young people starting out and they needed a perceived stronger shareholder, or where I thought I could make a little contribution; some where I liked the people, or where there was just an opportunistic geleentheid (opportunity).

At the end of the day, my main businesses are Shoprite, Pepkor and Invicta.

Many financial services are now being offered in retail groups overseas. Do you see all your companies at some stage falling under one banner again, where you would be offering all sorts of services?

There are no definite plans. In businesses such as these, and with different management structures driving them, there are always things happening. Trends change and new opportunities open, but there are certainly no plans of putting everything under, as you call it, “one banner”. But that may well happen at some stage in the future.

They used to all be under one banner and then the market suddenly decided it did not like conglomerates and there was pressure for me to unbundle and say, “Do your food retail in one and do your clothing retail in another.”

It has worked to an extent, but perhaps not for the reasons that those people were pushing for initially.

Recently, there were Hallmark representatives (Wal-Mart) in the country and there was talk of your speaking about the potential of their buying Shoprite, which you said, on record, was untrue. You were quoted as saying that these guys did not see the potential in Africa, or there was much scepticism about Africa. Do you think that because they have stood back, it has enabled you to get more of a stronghold in Africa? Do you foresee them eventually coming in?

My first response to that is that I want to make clear I never said that Hallmark said it does not like Africa. What I did say – and this is purely a personal opinion, and I may be a hundred percent off the mark – is if you consider the sheer size of Hallmark, then the South African market cannot look incredibly exciting to you. It is simply too small.

If you take Shoprite, for example, its turnover this year will be in the order of US$10 billion. Hallmark’s is approximately US$350bn.

So unless one sees South Africa as a gateway to Africa, where there are another 850 million people living to the north of us – on a continent that is awakening from a slumber – then it is not really a hugely exciting prospect from that perspective. It is different when you look at it from a South African perspective.

So it is my personal view and I have nothing on which to base it.

The second thing is that retail is probably one of the most competitive businesses you can find because any man with an idea and who has access to a couple of rand can start a retail operation.

The Pep Group is a case in point. It was founded in one little shop in a dusty little town in the Northern Cape.

It is a hugely competitive business and, in fact, I always maintain it is not the competition from another big player that one needs to watch, it is from a small player - nimble, ambitious and driven.

Can you imagine: when Pep was founded in 1965, the South African retail scene was dominated by OK Bazaars and Pep was a single room, a little shop in Upington. It is amazing when you go forward 35 years and Pep took over OK Bazaars.

So the threat, if there is a threat, comes more from the up-and-coming guy.

Since the global recession, public opinion has been rather negative toward executives with excessive pay packets, and I know that your friend and colleague Whitey Basson was also targeted on the bonus package he received sometime ago. What is your opinion on the companies such as SAA and Eskom whose senior management was running the company into the ground and then getting these excessive pay cheques?

That is simply completely unacceptable. If you subscribe to the so-called “capitalist model”, then yes, performance should be rewarded. But to reward non-performance simply boggles the mind.

Now, it is not as simplistic as that because even in the private sector, you may sometimes find there are contracts one has to honour. But in cases where people are being suspended on full pay is simply wrong.

The other aspect is about the entire issue of the differential – the discrepancy between the remuneration of people at the top of the totem pole and ‘the rest’.

I have given it much thought, and it is a multifaceted problem that the world has been struggling with since the beginning of time or since people had an understanding of compensation. So it is a very difficult one to answer.

I have always said to fellow board members on a few occasions that we have had a bit of a furore about it, like the one you have referred to. “Have I a reputation for overpaying for things?” and the answer has always been: “No, no, you definitely don’t have that reputation.”

They were very quick to point out that I am seen as this hard-nosed, bargain-hunting kind of person.

Now, tell me, if that is so, why do you think I will pay Whitey Basson more than he is worth? Why would I do it if my very nature is to try and always do the best deal possible? Why would I do that?

There must be a reason for it: that he is worth it, or that there is no one as good whom I can get for less.

If you bring me a thousand Whitey Bassons, I will pay them more because look at the value they have created for their shareholders, or that Whitey had created for his shareholders.

The net purchase price of Shoprite when Pep Stores bought it was R1 million – that was in 1979. Its market cap last week touched R50bn. Now, how do you not compensate the guy who had taken it from there to here?

That is something I often have to say to people: “For Pete’s sake, man, just look at things in perspective. Just look at it in perspective and then suddenly, the picture looks different.”

Do you think Raymond Ackerman’s recent retirement will leave a slight void in the business world?

A personality and business leader such as Raymond Ackerman always leaves a void, but against that, I often tell my colleagues that the moment any one of us thinks he or she is indispensable, simply come in my car and we can go across the road where there is a cemetery. Every single person there was indispensable and yet, the world carries on.

That is the basic lesson, but people of Raymond’s calibre? Undoubtedly, yes.

Regarding the 2010 Fifa Soccer World Cup, do you think the knock-on effect for the country is going to be considerable, or do you think it is going to fizzle out somewhat?

No, I think most of us simply have no idea how tremendously positive the consequences will be. The way it was handled, the way people had responded, the sort of gees (spirit) that we demonstrated to the world, but more importantly, to ourselves. People stopped whining and moaning about everything and realised what a great country we live in. What a wonderful opportunity.

And what to me, particularly, is more important, is that I sense this is happening in respect of the whole of Africa, south of the Sahara. People are suddenly saying, “But hey, you know, this really is a great place.”

As an Afro-optimist, I see it everywhere, I see the changes in Africa happening. It is astounding.

There is a bit of a sadness, too, because I think in the next 10 or 15 years, the old Africa will have died. The sense of adventure that you get in a four-wheel-drive vehicle driving all the way to Cairo – now I think you can drive a Porsche from Cape Town to Luanda.

You have almost answered the question already, but I was going to ask: Do you still have a positive attitude about our country and continent? I presume that is the case?

Ever increasingly. Everything I see makes me feel more confident.

I have never been able to understand what the gain is in being anything but positive. I simply do not get it.

I know people have different personalities, different psyches and they look at life differently, but I simply cannot get it when people are continually negative and focus on the things that are wrong and completely ignore the things that are right.

Here in Cape Town, at one of the big games my kids attended, two hours before the game was due to start, a thousand security personnel grounded tools and within half an hour there were a thousand policemen. I do not know of too many cities in the world where that could happen.

What would Christo Wiese’s advice be to tomorrow’s leaders, and how would you describe your own personal style of leadership?

It is ultimately a complete acceptance of the value of a team effort as opposed to an individual. That, to me, is the essence of what people would define as leaders.

Very few decisions in business or politics are decisions that the decision-makers reach alone. Ninety-nine percent of them are made with general consensus, with perhaps one or two needing someone to step in and make the call.

If one aspires to be a leader, then it is in that instance that one should step up and, with the best light at your disposal, make the call.

These businesses of ours have a great sense of that on which Bill Venter once wrote a thesis; he called it “familiness”.

Familiness is something different from a family business; it is when we are all in this together and we are going to sink or swim together. It is this kind of approach that enables people to have a greater affinity and regard for each other perhaps than in a normal, cold corporate environment.

It seems to be something that you have definitely entrenched across your companies, a motto of sorts.

It is. It is very much part and parcel of the culture here. This company grew from that single little store in Upington.

The founder Renier van Rooyen adopted the business policy, that no one in those days could become an employee at managerial level – a store manager – unless he was a shareholder; and no one could become a shareholder unless he worked for the company. It is a simple little formula.

He spun gold out of straw because he took ordinary people and was able to get them to do the extraordinary.

We are in it together and we care for each other; it is about more than merely making money.

And it is bigger than the individual?

It is much bigger than the individual.

One of the things that has given me great pleasure in my business career is that I know a business such as Pep has made a huge difference to the lives of millions of people.

First of all, it created employment and development opportunities for many people. Today, we employ 140 000 people.

The second thing is that when I grew up – now that was a long time ago, when you guys were not around – in country towns, if you saw a child from a previously disadvantaged group dressed in new clothes, that was an exception. You can go through the country today and if you now see a child in rags, that is the exception.

Pep has made a huge contribution to that. We have made it possible for poor people to be able to buy something new.

So it also gives you pleasure from a social upliftment point of view?

Absolutely. We have letters in our archives, in which people wrote what an incredible difference it has made to their lives to be able to buy themselves a new shirt, etc.

In 1966, you could dress a young child at Pep for less than a rand. So it gives me much pleasure.

What can we expect to see regarding investment in the industry, or outside industry? What is next on the agenda for Pepkor and Shoprite?

It is very difficult to say. There are always many opportunities on the table that we are looking at.

Last year, Pep started growing very strongly in Poland and we are looking at more expansion into eastern Europe.

Pep has developed into a very large player in the mobile telephone business and we are the largest seller of airtime and of handsets. I cannot give you all the statistics, but it has become a very, very substantial business and has broadened our customer base because people, who normally would not have gone to Pep for their clothing, would now go because they get such wonderful deals.

And then in your personal capacity – what is on the agenda?

No, nothing really at the moment.

But if I had any sense, I would be thinking of retiring.

I do what I enjoy and I do not know what I would do with myself if I do not come to the office every day. I am here every day and most evenings until seven or later.

You and Basson are obviously quite close, and have been for years. Why do you think it works so well?

We come from very similar backgrounds. We both come from bloedsap families, Afrikaans families.

We became friends at Stellenbosch University. I am a few years older than he is and was his senior at university.

The bond that had developed between us is almost one of brothers. I never had a brother and it is that kind of bond which is complete and of complete trust and support.

We share many similar interests; have the same sort of sense of humour and are both passionate about hunting and spending time in the veld. We try go to my farm in the Kalahari as often as possible and have common friends.

In fact, his eldest son and my son are best of friends and also have very similar personalities.

What would the ‘legacy’ of Christo Wiese be if you were to pass it on to the next generation of business people?

I am often asked to go and address young business people and entrepreneurs, and I always say to them that the main lesson in life is that one must realise as soon as you can that you – and you alone – determine your own horizon.

We all grow up with a kind of a preconception. You come from the wrong side of the track so you therefore think you can only get that far, but not really further. You are Jewish; or you are an Afrikaans boer from the platteland; or black – and therefore you allow other people to tell you subtly, to condition you, so that you must know your place.

I have a wonderful friend in England who once quoted something to me, a prayer. It was quite an indictment on English society at the time when he grew up, and he is a man in his 80s. The prayer at their table was, “Lord, bless the squire and his relations and let all others know their stations.”

Do not allow anyone to tell you that you cannot achieve what you set your mind to.

Do not believe in the concept of a blueprint – there is no blueprint. One may look at a guy who has really built a huge business and you say, “But that guy must have had a wonderful bladdie blueprint or plan.” Rubbish. It is all about opportunities.

Shoprite is a case in point. Shoprite was bought by Pep Stores in 1979. Today, Shoprite is two and a half times the size of Pep Stores. Well, probably three times the size. The child has far outgrown the parent.

So I can quote you a million examples that building a business is not according to a blueprint. No matter what they may teach you in business school. ▲

Robbie Stammers

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