Inside the ANC’s PMB firm

2014-05-16 00:00

THE ANC’s investment company has scooped a jewel of the KZN economy with a R400 million turnover — and which holds a key to the country’s energy future.

This week, The Witness gained exclusive access to the vast Pfisterer factory in Willowton, Pietermaritzburg — a direct Eskom supplier — which emerged as the only manufacturer in Southern Africa of protective insulators for Eskom’s power grid.

On April 26, Weekend Witness exposed a secret R170 million deal in which the ANC’s investment arm, Chancellor House, had become a co-owner of Pfisterer South Africa, a power accessories maker with a R550 million contract with Eskom.

This was despite the fact that Chancellor House was forced to relinquish its stake in another Eskom supplier, Hitachi Power Africa, just a month before due to a “conflict of interests”, and a statement by the ANC’s treasurer general that Chancellor should not invest in companies that benefited from contracts with the state.

Opposition parties and the Institute for Accountability slammed the deal as “a blatant power grab”, while opposition companies complained Pfisterer might unfairly benefit from Chancellor’s political ties.

This week, the newspaper found thriving production on a series of new orders, in various factory units — and a new managing director, Kai Steinfeld, from the German mother company, who has invested his family’s future in the company’s success.

The company’s internal records show dramatically increasing annual revenues to R400 million since a turnover of around R60 million in 2003.

Crediting new technologies and efficiencies for the improvement, Steinfeld revealed a vision to double in turnover to over R700 million within five years — and suggested that employment could rise from its current level of 480 to over 600.

He said Eskom had a policy to try to source products, including insulators, from firms that employed South Africans. No other local company makes insulators — and Eskom contracts represent 50% of Pfisterer’s revenues.

Steinfeld said, “I want to build up this company — bring it to the next level. I want to globalise it and tap the world markets.”

Asked about The Witness’s disclosure that seven key staff members had suddenly left the company last month, Steinfeld said two “simply left for better paying jobs in Durban”, and that five maintenance artisans became largely redundant due to a new policy to replace, rather than refurbish, old machines.

“We offered a nice farewell package, which they accepted. Of course they were concerned — all the talk of new owners and what will happen — but nobody left because of turbulence or the sale.”

There was visible pride on the bustling floor of its “high-voltage” factory this week, following a new order to supply giant insulators to protect Eskom’s new range of super-powered 765 000-volt transmission lines — an initial order The Witness understands to be worth about R10 million.

In addition to other accessories, the company’s core products are the long serrated appendages — called “silicone insulators” — you see dangling from any power pylon.

They comprise a moulded insulator, a reinforced fibreglass rod and a forged steel attachment. The factory’s artisans and engineers not only make all of these components on site, but also design and build the tools that make them — even mixing their own silicone in a “secret recipe”.

Industry experts described the company’s ground-up manufacturing skills as “incredibly rare” in South Africa.

Speaking over the roar of high pressure moulding machines, the unit’s head, Chris Pillay, proudly showed off a new batch of two-metre grey insulators destined for the heavy, 400 000-volt transmission lines of Angola’s power grid.

Other insulators on massive racks were destined for Australia, the United States and other African countries, but most were ordered by Eskom.

“We are very proud of our products,” said Pillay.

Steinfeld, an electrical engineer from Berlin, and a motorcycle enthusiast — became the company’s stand-in boss in July last year, after its long-time MD, Rob Schorn, was allegedly forced to leave.

However, Steinfeld revealed that he had signed a five-year contract this month, and that his German family was permanently relocating to South Africa next month.

Joking that “in Pietermaritzburg, I’ve found that you don’t interview the top schools as a parent — they interview you!”, Steinfeld met with one leading school for the elder of his two young daughters on Wednesday night.

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