Leadership talks to Khalid Abdulla, the CEO of SA’s number-one black empowerment company

he word “Sekunjalo” is a Nguni word meaning “Now is the time”; and it certainly seems that under the stewardship of chief executive officer Khalid Abdulla, Sekunjalo Investments Limited has weathered the stormy seas and is about to ride a wave of success heading into 2011 and beyond.

In April this year, Sekunjalo won the prestigious Financial Mail/Empowerdex Top Companies Awards for 2010.

In 2006, the Financial Mail/Empowerdex Awards have authoritatively ranked Sekunjalo as the Top Empowerment Company, and in 2004 and 2005 as one of the Top Empowerment Companies (second and seventh respectively) out of the top 200 companies listed on the JSE.

Sekunjalo has also won the award in its sector in 2004, 2005, 2006 and now 2010.

While the award considers empowerment factors (such as black ownership, black management, employment equity) when deciding its scores for companies, additional factors such as employment equity, skills development, preferentially procurement, enterprise development and social economic development are also taken into account.

Sekunjalo won the overall award, was ranked first in the Financial Sector, and is considered the number one on black ownership.

The company scored highly in Enterprise Development, Employment Equity and Socio Economic Development. This is certainly nothing to sneeze at, considering many factors that have counted against it. When Sekunjalo’s main investment generator, LeisureNet, was put into liquidation in October 2000, few analysts expected the black-owned industrial group to survive. With an 18% stake in the health and fitness company worth R180 million, a huge investment for the empowerment company before the crisis, Cape-based Sekunjalo’s share price fell sharply.

The company’s shareholders – some of them the original funders of the company – were devastated, and financial analysts began saying it was only a matter of time before the entire ship went down. But the analysts were wrong: Sekunjalo controlled and managed all its businesses in the information technology (IT), healthcare, biotech and fishing industries, and has now branched out into other exciting avenues.

Leadership sat down with Abdulla to get insights into the journey thus far.

Abdulla was appointed CEO of the group in November last year and has been with the group for more than 10 years, having started as CEO of a healthcare subsidiary and also successfully serving as CEO of the IT and capital businesses before being appointed group chief financial officer in 2007.

“We are very proud of the achievements the group has achieved to date, and the award signifies that progress,” says Abdulla. “We have come a long way in our 13-year history and learnt from our mistakes. We knuckled down and it’s been a hard grind, but we believe we have paid our school fees.”

It certainly seems that Sekunjalo has learnt from the school of hard knocks and the fact that it is one of only five remaining black economic empowerment (BEE) companies out of 40 listed on the JSE a decade ago, says it all.

Sekunjalo was formed in the Western Cape in 1997. At the time, the National Party retained control of the province and former activists saw the political control, for which they had struggled, continuing to elude them. The mood was low, and empowerment deals that were starting to take place in Johannesburg were not happening in Cape Town.

It was at this time that Sekunjalo executive chairperson Iqbal Survé and his colleagues saw that action was required to kick-start economic empowerment in the region. Sekunjalo was formed from a capital base of R250 000 invested by a consortium of former political activists, professionals, informal savings groups and black business people.

The rest is history, as they say. Most companies would frankly battle to survive a loss of R180m now, never mind 10 years ago, but Sekunjalo is looking as strong as ever, even after the global annus horribilis of 2009.

It had already started a restructure of the group before the recession began, so Sekunjalo was better prepared than most.

Although the last results from the end of 2009 showed a share price drop, Abdulla sidesteps that issue with confidence: “We always knew that last year was going to be a tough year, not only for ourselves but for the entire international business world. External factors such as international pricing changed, the rand-to-dollar exchange rate was under pressure and the demand for South African products was also under pressure.

“With our restructure, we have taken approximately R30m worth of costs out of our system, which will only benefit us in 2011 and 2012.”

On top of this, Sekunjalo has done noteworthy deals in the last year with Saab and BT Telecoms. With regard to the Saab deal and an increasingly unstable world, defence systems are big business and Africa offers growth opportunities.

The empowerment company will be tasked with “increasing linkages” in South Africa and Africa and it will be hoping that the deal will boost investment in its shares.

Sekunjalo has acquired a 5% economic stake in Saab SA, with 25% voting rights. It can increase its economic interest to a maximum of 25%, depending on the performance of Saab SA over the next five years.

After the Swedish Department of Defence, the South African government is Saab’s biggest customer. This may be one of the reasons Saab is bringing Sekunjalo on board for what Abdulla calls a “nominal” sum.

As with Sekunjalo’s investment in telecoms company BT last year, financial details of the deal were not disclosed.

One of Sekunjalo’s biggest pieces of its pie comes from Premier Fishing. It is no secret that this was one of the largest areas to be hit in the recession on a global level, but Premier Fishing seems to have its house in order on the home front. Premier Fishing is the largest South Coast lobster fishery in the country.

“It’s our people that make our company, and it was very important for us to limited casualties as far as possible on that front,” says Abdulla.

It was paramount to him to ensure that Premier Fishing’s workforce was looked after, as they were the ones who have supported the company through trying times over the last few years and it was important for him that they benefited in the security of jobs going forward.

“We went into our fishing business to rather see where they were wasting money with regard to procurement and costs and take those out rather than cutting out our people,” he adds.

“Without people, you cannot make the profits; and without profits, you cannot keep the people. So we managed to find a good balance in that way. It’s not an easy task, and sometimes people criticise you for putting people first, but we have gone beyond that.”

As Sekunjalo started in Cape Town, and as a Capetonian himself, Abdulla has a strong emphasis on building and maintaining growth in the Western Cape. The company began an abalone farm a decade ago in Gansbaai, which is now reaping the rewards on an international level. Sekunjalo has very recently bought another six hectares to expand that project.

On the entertainment front, Sekunjalo has a phenomenal brand in the Cape, namely the Cape Town International Jazz Festival, which even though it happens only over one weekend a year, contributes close to R800m to the Western Cape gross domestic product.

“Although we are obviously a listed national company with both international and national interests, our hearts are still found here under the mountain, so it is important for us to help grow and expand Cape-based projects where we can,” says Abdulla.

Another feather the company hopes to add to its Cape-based cap is a commercial sound broadcasting licence for a Western Cape radio station. “The radio station is an exciting venture for us, as it also enables us to give back to the Cape community,” he says excitedly. “We have created a Cape-based consortium with a very reputable organisation which has the expertise to make this happen.

“At Sekunjalo, we only feel comfortable going into partnerships with someone you trust and whose integrity is unquestioned. The station will be called Magic FM and, with its ‘classic hits’ format, we believe it will fill a much needed gap in the Western Cape market,” he adds.

The radio station licence application is now far down the line with the Independent Communications Authority of South Africa and hopefully will result in on-air success in the months to come. Sekunjalo is looking at expanding and acquiring more business partners and acquisitions that will benefit growth into the rest of Africa, something it has its eye on in a big way.

Cape roots

Abdulla’s passion for the Cape is understandable. He tells Leadership he is part of a third-generation Indian family and was conceived in Cape Town, but when his mother was three months pregnant, they had to visit her ill mother in India. In those days, one had to travel by ship and it took them over a month to reach their destination. He was therefore born in India, but the family moved back to Cape Town before he was two years of age.

He grew up in Harfield Village, which was one of the only multiracial areas in the country in those days, similar to District Six. His father ran a successful shop in the area and soon owned a few properties there as well. There is no doubt this is where a sense of entrepreneurship rubbed off on Abdulla from his father.

“My father created a movie house in one part of our house. He built a wall between our bedroom and one of the café’s, so he could house a projector in the room and show it through the café. We would have 50 people sitting there and my siblings and I would help change the reels with him.”

This part of their happy life sadly all came to an abrupt end when the Group Areas Act squeezed the family out.

“It was a rough time for us, as you were either given peanuts for your properties or kicked out. We loved it there, but we had no choice and moved to Rylands, Athlone, where I completed my last two years of schooling at Livingstone High School,” he says, reminiscing.

Abdulla’s eyes light up when he talks about his passion for sport. He was an incredibly gifted sportsman and played provincial volleyball, athletics and soccer. In soccer, he actually ended up playing at a professional level, but in those days it cost one money, instead of making money.

“I think I was born 20 years too early,” he says bemused.

Sport was still amateur in those days, and his father urged him to get into his studies.

It was at this time that Abdulla started becoming more politically active. Boycotts were a dime a dozen and he was getting locked up and getting hidings from the police. “You learn things from your courage in those times that you can never learn from books,” he says earnestly.

However, he realised that without the proper education, his future would certainly never reach the dizzy heights he had set for himself.

With the colour bar set so high in those days, it proved impossible for Abdulla to get the experience he required in the accounting workplace. He was studying through Unisa and eventually began doing work in a small account firm for free and working weekends at a hardware store to support himself. However, he soon proved very efficient in numbers and books and finally got his break at a larger firm in Cape Town called BDO Spencer Steward, after completion of his BCompt (Hons) CTA.

Following this, Abdulla began his own consulting practice and later merged with BDO and became the managing director of BDO Consulting Cape (Pty) Limited.

In 1999 he joined the Sekunjalo Group and headed up Sekunjalo Medical Services. He became a director of the holding company and was instrumental in all the investments within this group.

The apple of his eye is his family, who are obviously his rock and greatest pleasure. Abdulla is married to Fatima, who is a medical doctor, and they have three children: a 15-year-old daughter Shaazia, a 10-year-old son Idrees and a 7-year-old daughter, Amaara.

“My family are my stabilising factor in life and my absolute joy,” Abdulla says with a smile. “If it wasn’t for my wife, I would not be where I am today.” With years of incredibly long hours (which had to include an MBA at the University of Cape Town a number of years ago on top of his position at Sekunjalo), one can see why he is so grateful.

Abdulla is finally getting an opportunity to spend more time with his family and loving every minute of it. “My kids bring a lot of logic to my mind even though they may not know it. I ask them questions and their simple answers make such a difference and make me see things in a different light,” he says candidly.

“Just knowing they are around and spending time with them fills me with joy.”

It seems the soccer bug has also bitten his son, who is now playing regional soccer. “He is showing some great signs and I am very proud of him, but will not be pushing him in any direction if he does not want to go there,” says Abdulla.

He now gets his soccer kicks from coaching junior soccer every Saturday to give something back into the sport he so loves.

On leadership

Abdulla took over the reigns of Sekunjalo from the founder and chairperson of Sekunjalo, Dr Iqbal Survé.

“It has, and still is an honour and a privilege to work with such a leader,” says Abdulla. “He is a very well-respected person locally
and abroad.”

On Abdulla’s own leadership style, he believes a good leader is someone who can inspire people and transform them from being junior and middle managers to senior executives in a business. “Through our own disadvantaged backgrounds, we know it is difficult to rise through the ranks without people believing in you and guiding you along the way. It is all about broadening their skills base and increasing their confidence,” he says.

Abdulla further believes that a true leader has to have the ability to listen to those around him. “The old days of command-and-control are gone,” he wisely points out. “There is a softer side to leadership now, where one must understand the perspectives and input of others. Of course, information and knowledge are key ingredients, but one must also make sure that everyone feels respected – and the results will come from there.”

With Sekunjalo’s debts-to-equity ratio down to single figures, and a total of over a billion rands worth of assets under the company’s control, it is indeed as if respect is something Abdulla and Sekunjalo have earned. As the meaning of its name stipulates, it certainly seems that the time is now. ▲

Robbie Stammers