New Remgro chief excited about technology

2012-06-24 16:20

Stellenbosch – The word nanotechnology – changing the properties of matter at nano level – rolls smoothly off 45-year-old Jannie Durand’s tongue.

The new chief executive of the conservative Stellenbosch investment holding company Remgro chats about what he calls his “entrepreneurial side” – his passion for creating new companies.

This is easier in the technology sector because there are more new discoveries in it than in other sectors, nanotechnology being one.

Technology does not scare him; it excites him.

Technology has become a bigger portion of Remgro’s portfolio since its 2009 merger with unlisted investment company VenFin, where he was the chief executive, investing in technology companies.

It grew in size as a result of the merger with VenFin and therefore now receives more attention, he responds to nagging questions from investors about the importance of the technology sector for Remgro.

One example is the technology infrastructure company Dark Fibre, which he says is very successful.

He laughs when asked if investors understand this investment. All that Dark Fibre does, he says, is to lay pipes in the ground and supply bandwidth.

It's like laying a railway track, or a pipe. Many technological things are actually very simple.

The ground floor of Remgro’s new office building in Stellenbosch is a small incubator for technology company Invenfin, which provides seed capital for companies.

It’s one of his “babies” and there have been some interesting investments.

It's very small but, when something works, it works. The success rate is around one in 10.

He does not know what difference it will make to Remgro over the long term. He hopes to see one or two of the projects able to work for Remgro.

But technology is still small within the company.

Remgro’s total net asset value (the total value of its underlying investments and cash) is more than R75bn. Interests labelled technology run to R2.5bn, thus around 3%.

Durand – who has been with Remgro for 17 years – recently took over as chief executive under difficult circumstances when Thys Visser (58), his predecessor, was killed in a motor accident.

Those were the last circumstances in which one would wish to take over, he said. Over the past two years, in particular, the two men he had worked closely together; Visser’s death was a huge loss and an emotional struggle.

Durand said the transition went smoothly owing to the systems and structures that Visser had set up and the “good people” he had appointed.

The biggest change was that Durand now had to be appointed Remgro’s representative director at those companies in which he had an interest.

He now serves on three boards in Durban, four in Johannesburg, one in London and one in China, and has spent almost the entire past month travelling.

Over the coming financial year he will focus on getting to know the businesses better.

Durand was in his late 20s when he started working for Remgro. For five years he was personal assistant to Johann Rupert, the non-executive chairperson and the billionaire businessman whose family controls Remgro.

Durand describes Rupert as his mentor.

It's not difficult to understand why Durand is the natural choice for one of the country’s top companies.

At school and university he was a high achiever and a good sportsman.

This father of four is described by people who know him as a down-to-earth person who does not allow the money to affect him, being the son of a theologian.

He was born in Port Elizabeth in 1966, where his father was a missionary at the time. The family moved to Stellenbosch when he was six and his father accepted a position in the theology department of the UWC.

He attended school at the Paul Roos Gymnasium and studied first at Stellenbosch University and then at Oxford.

In 2000 the old Rembrandt Group split into Remgro and VenFin and at the age of 33 Durand became the first chief financial officer of VenFin.

In 2006 he took over from Dillie Malherbe – whom he also describes as a mentor – as chief executive.

After the merger with VenFin he was appointed head of investments at Remgro where he was able to realise another of his passions: making investments and analysing companies.

Durand says Remgro’s investment strategy won't change now that the company has a new chief executive. “We are comfortable with what we have, because it has worked for us.”

The strategy is, in his words, that Remgro wants to invest in companies that can withstand recessions, deliver good growth and have good management with good cash flow, good dividends, pricing power and good brand names.

If you have good brand names you can get through these times, he says.

That’s one side of Remgro.

“The other is that I have an entrepreneurial side and like to start companies,” he says with a  gleam in his eye.

Durand reels off names of companies that they started from scratch or in which they were involved at the outset: Vodacom, Tracker, and Dark Fibre.

He says in each case great shareholder value was created.

“I think it's important to have a combination of them, because the new companies you start give you the stronger growth, while the others hopefully offer you consistent and sustainable growth.”

He believes they are content with the solid industrial portfolio the group now has (including giants such as Mediclinic, Unilever, Distell, Rainbow Chicken, Tsb Sugar and Grindrod).

“But that dos not mean that we won't expand further or make more acquisitions. It all depends on where the opportunities lie. ”

Durand hopes that 10 years into the future Remgro will still demonstrate consistent growth.

The company is often criticised for investing too much into listed companies. But it only does so when it can get hold of a large strategic stake its shareholders would otherwise be unable to access, such as in the case of Grindrod, says Durand.

He declares that Remgro has stated quite clearly that it wants to invest in unlisted companies. “We want to make investments that our shareholders cannot make directly.”

There are many in the unlisted market but to get something that makes sense, meets Remgro’s criteria and is sufficiently large is not so easy.

In order to get something big enough to move the speedometer at Remgro’s level R2bn to R3bn needs to be invested, and it's difficult to find such opportunities.

He says that many of Remgro’s underlying companies fortunately have expansion opportunities.

 - Sake24

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