As on-going tough economic times bite, Business Connexion (BCX) looks likely to be less aggressive with its pan-African growth strategy. By Gugu Lourie
Even after it was acquired by Telkom last year, BCX continued to pursue its forceful acquisition strategy.
But, now with the market downturn affecting most of its clients such as mining houses, BCX could put brakes on its growth strategy ambitions.
Global miners are seeing profits diminish amid slowing economic growth in China, the largest commodities buyer.
With other exogenous factors such as rand weakness, the downturn was likely to affect technology firms, including BCX, which provides software solutions to the mining industry and other related sectors.
This will result in cost increases for equipment, putting pressure on revenues.
Understandably, BCX CEO, Isaac Mophatlane, sounded cautious when speaking about the company’s expansion drive via acquisitions.
“We will still continue with our expansion, but definitely is not going to be aggressive expansion plan,” he explained.
“Certainly, the expansion drive has been halted by tough economic times, but should a great opportunity present itself we will certainly look at getting involved.”
It’s a given that tough economic conditions always present an opportunity for any industry consolidation as smaller players struggle to survive on their own and are better of being part of a bigger group with enough resources to weather such storms.
Mophatlane said: “One must not ignore that. We have to manage our cost structure in such a way that in each of our business unit or country that we operate in we are relevant and when there is an uptake, we can take advantage of those opportunities.”
BCX, a leading IT service provider in South Africa, provides strong presence in East Africa and has an established presence in West Africa, which it continues to grow through aggressive acquisitions.
As part of this strategy to grow on the back of IoT, last month BCX made moves into the retail petroleum industry through an acquisition of Joint Venture Pump Services Proprietary Limited (JVPS).
BCX sees growth opportunities in the IOT space via JVPS
JVPS is an industry leader in product supply and support to the petroleum industry in Southern Africa, and the acquisition allows BCX to provide a unique market offering through a single entity for fuel retail services.
JVPS’s comprehensive portfolio includes fuel dispensing equipment, a range of forecourt automation equipment including automated tank gauging and forecourt controllers as well as an environmental management solution for the forecourt.
These elements will allow BCX to provide technology capable of enabling IoT in the petroleum industry.
“That business (JVPS) has done fantastically well post acquisition. Its integrated well with UCS Solutions. We are certainly seeing opportunities outside South Africa already in some of the similar petroleum, fuel companies. It’s been a great acquisition,” said Mophatlane, adding that the technology firm was beginning to reap the benefits of this acquisition.
“We would be looking to similar type of businesses, which will position us as a leading enabler of IoT. Look, opportunities are also hard to come by and we are not going to buy for the sake of buying. We will be looking at businesses that can add value and quality management and a great profit history is essential in determining our further acquisition strategy.”
