The merger between outsourcing company Tsebo Outsourcing Group and catering and hospitality services company Allterrain Services (ATS) is set to bolster the companies’ service offering to the mine site accommodation industry by combining their expertise and client base throughout Africa and abroad.

Following the merger, ATS is now part of the broader Tsebo Outsourcing Group.

Tsebo Outsourcing Group CEO Clive Smith tells Mining Weekly that the merger, officially announced on March 4, formed the first “truly Pan-African services group”, with a turnover of more than R6-billion, an employee complement of 26 000 and 7 000 active customer sites.

He says that, over the years, the company had found that customers want more than a single element for their outsourcing requirements – they want a single point of contact that is more strategic in its overall offering.

“The merger between Tsebo and ATS has resulted in the group expanding from having a presence in ten countries to having a presence in 22 countries, thereby boosting our capacity to service customers across the continent and in the Middle East,” notes Smith.

Tsebo’s medium-term growth strategy was to have 25% of its net asset value in international markets, with that target now being achieved. “In the long term, we aim to extend that figure to 40%,” he adds.

Besides scale, Smith says the group is unique in its ability to deliver global standards of quality in African conditions. “Our clients rely on us to mitigate their operational risk, manage costs, align them to strategy and boost productivity.”

ATS CEO Sanjay Narain says the merged entities have resulted in a one-stop shop for customers across Africa.

“Both entities will continue to service customers as they have done before, and the existing ATS management team remains intact. I look forward to Tsebo boosting the operational aspect of our business with the sharing of intellectual property, customer support, skills transfer and training, as well as the introduction of more advanced technical solutions.”

By providing the full range of tried and tested facilities services to meet customers’ noncore requirements, Tsebo will be able to drive continual improvement in product consistency and quality, with the potential for efficiency gains and scale benefits across the merged entity, says Smith.

“Tsebo has been successful in securing some of Africa’s multinational, blue-chip brands, from financial services to the resources sector, as part of its customer base. As expansion across the continent continues to present a myriad of opportunities for medium-sized and large organisations, the merged entities are well placed to grow with customers as their businesses extend across the continent,” says Smith.

Tsebo has more than 40 years’ experience in the industry, with integrated offerings to customers in facilities services, catering, cleaning, oil and gas life-support services, energy management, security, hygiene and outsourced procurement.

The group delivers these services through a range of respected brands, including Drake & Scull, Fedics, ATS, Servco, KaramFedics and TSAfrika, among others.

Narain notes that, as with Tsebo, ATS has honed its offering over the past 17 years to include integrated solutions in the catering, cleaning, oil and gas life-support services, facilities management and turnkey camp construction space across sub-Saharan Africa.

“I am confident that the merged entities will continue to expand in Africa and the Middle East to eventually become the number one operator in facilities services,” he states.

Twofold Strategy
Smith tells Mining Weekly that the newly merged group’s macrostrategy is twofold: from Tsebo’s initial single service of catering, it aims to extend its service offerings within the company while also extending its business into more countries in which these services were previously not offered.

Tsebo was previously represented in ten countries – South Africa, Namibia, Lesotho, Swaziland, Mozambique, Zambia, Botswana, Saudi Arabia, Bahrain and Mauritius – with smatterings of project work in other African countries, including the Democratic Republic of Congo (DRC), Malawi and Nigeria.

Meanwhile, ATS has operated in other African countries, including Sierra Leone, Mali, Uganda, Tanzania, Kenya, the DRC, Zambia, Mozambique and Burkina Faso.

“This equates to ATS servicing nine of the countries in which Tsebo was not represented, and Tsebo having serviced nine countries that ATS did not service,” Smith says, adding that the only two commonly represented countries were Mozambique and Zambia, with ATS having the lion’s share of business in Zambia, and Tsebo having the lion’s share of business in Mozambique.

Meanwhile, local content plays an important role for the group. “We strive for a long-term goal of 90% localisation, which can take many forms, including local manufacture of products, employing a local workforce, using local engineering expertise or uplifting local infrastructure such as schools,” he adds.

“We understand that a large driver of economic growth, particularly in the resources sector, is local community involvement, which in Africa is termed ‘local local’,” says Smith.

He tells Mining Weekly that more than 50% of Tsebo’s monthly turnover is allocated to employee salaries, adding that “people are core to our value system”.