ABSA Corporate and Singaporean consortium Prime Africa Investment (PAIL) will invest R200m over two years into newly formed security company Secureco, to use a technology focus to tap into SA's competitive market.
Secureco CEO Angus Partridge said: "We believe the security market worldwide is going to be driven by technology."
The group was aiming to be a fully integrated provider of security services and equipment, in contrast to the fragmented nature of the market.
He said this integration, as well as its philosophy of integrity should place Secureco in a position to benefit from the changing market in SA. "We think the government may, in the medium term, look to privatise certain functions of the police force," he said.
The PAIL consortium - a R600m joint venture between Southern African Investments (SAIL) and Cisco, the national auxiliary police force in Singapore - was set up by the investment arm of the Singaporean government, Temasek Holdings. With total net assets worth over $42bn, the listed companies under the Temasek group account for about 27% of Singapore's total market capitalisation.
Cisco is considered one of the world leaders in the security market, with 27 years experience and a number of partnerships throughout Asia. Over the last five years it has reduced its people-delivered services to 50% from 70%.
SAIL chairman and a director of PAIL, Chandra Das, said technology would be used as the main driving force of Secureco's future development.
Director for business development at Cisco, Ranger Wong Kim Wah, said expensive guard systems would be replaced with sophisticated monitoring and alert systems. "This will offer a reliable and more effective alternative which will enhance the management of manpower resources," said Wah.
Services offered will include guarding, cash-in-transit, monitoring and armed response. The turnover of Secureco is estimated at R400m within five years, with growth to come partly from organic expansion of the existing businesses in KwaZulu-Natal, Gauteng and the Western Cape and partly from further acquisitions.
ABSA said the institution had invested in Secureco because it believed the company had the ability to deliver superior returns with security becoming more IT-driven than people-driven.
Partridge said the value of having the investment backing of players such as ABSA, SAIL, Cisco and Temasek was to add to the company's credibility and experience.
Source: Business Day - 15 March 2000
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