Zensar inks BEE deal
News | 12 Sep 2013
Zensar Technologies aims to increase its investment in SA and Africa, and sees the country becoming an off-shoring hub for ICT services in Africa. This, says Ganesh Natarajan, vice-chairman and CEO, is among the reasons the Indian company has entered into an empowerment deal that will see the Kapela Group gain 25% of the local entity. He notes the South African unit is growing at a faster rate than the rest of the company's operations, which are gaining at about 20% a year. Natarajan says the venture will help Zensar move into the public sector. It has previously focused on the private sector in areas such as banking, insurance, manufacturing and mining. Zensar operates in the US, Europe, Africa, Middle East, Singapore and Australia, and has delivery centres in India (Pune, Hyderabad and Bangalore), China, Japan, UK, Amsterdam and the US. It has also established a local development centre, which the company sees as becoming a hub to service Africa.
"We see this country as a potential centre for research, education and software development, and plan to invest significantly in developing global delivery capabilities here. This will be an important hub of development activities for all our new markets in the coming years," says Natarajan. Although Natarajan will not disclose the value of the deal, he says the price was based on an independent valuation of the local unit. Globally, Zensar expects to turn over around $500 million in the current financial year, of which more than R300 million should come from SA, he says. Israel Skosana, chairman of the Kapela Group, says the black-owned company aims to get involved with Zensar to aid its growth plans. He says Kapela and Zensar will work together on public and private sector projects. "The whole issue is about relationships."
Skills development The deal should also boost the company's empowerment rating, which is currently at level four, to between three and two, says Harish Lala, regional head for Africa and the Middle East. The partners include The Tomorrow Trust, which will receive investment from Zensar to aid it in its education mandate. Lala says the transaction is the last step in its transformation process, which started several years ago. He notes the company was initially focused on skills development and trains about 30 young people a quarter. Locally, where the company has had a presence since 2001, it has 700 staff. It mainly operates in the application space, but also manages infrastructure, such as servers and moving data centres to the cloud. Kim Normand-Feinberg, CEO and founder of The Tomorrow Trust, says the organisation will also benefit from the deal, as Zensar will provide it with corporate social investment, which will allow the trust to be sustainable.
The Tomorrow Trust supports orphans and vulnerable children by providing education such as ensuring they are PC literate, says Normand-Feinberg. She adds that, as part of the empowerment deal, Zensar will help train the children, and there will be opportunities in its training programme for the trust's beneficiaries. Skosana says this will help alleviate some of the challenges the sector faces in finding suitably skilled people, and will also help government's plan to trim unemployment. Of the 250 people it has trained through the graduate training programme and learnership model, it has hired 99 staff, with a total of 140 of the graduates finding positions through Zensar, says Natarajan.