South African ICT training solutions provider Torque-IT will open two branches outside SA within four to six months.
The black-owned group has concluded a franchise agreement with Nigerian-based Rinkka Computer Consultants and will open a Lagos branch in early 2006, says Torque-IT's newly appointed CEO of Africa and marketing director, Gary Chalmers.
A similar deal with a Kenyan investor is in its final stages, says Chalmers, adding the company's strategy has been to concentrate on growth on the African continent.
The company bases its decision for signing a franchise agreement on the amount of revenue generated in a country, he says. "Once turnover in a country exceeds 2% to 3% of the group's total annual turnover, we make the decision to launch a franchise branch."
The company operates outside SA by either flying its staff and equipment to other countries, or by flying students from those countries to SA, Chalmers says. The group operates in 22 African countries, with Ethiopia, Nigeria and Botswana counted among the group's top clients. Africa accounts for between 10% and 15% of its total annual revenue, says Chalmers.
Partnering with local investors to set up branches in other countries is a good way of mitigating the unique risks associated with doing business in Africa, he says.
"Many companies, much bigger than us, have fallen flat trying to operate on this continent, so we have to be very cautious. Local partners cover the set-up costs and carry the financial risks, while we risk our reputation. We feel more secure entering a market if a local investor is confident enough to put up its own money."
Future markets have been identified for franchise development, and the challenge remains to identify the right local partners, he says.
Torque-IT also announced that Mthunzi Mdwaba has replaced Chalmers as the group CEO, and will retain the title of chairman until the appointment of a non-executive chairman.
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