Big plans for Jasco

By Iain Scott, ITWeb group consulting editor

Johannesburg, 30 Aug 2005

Jasco Electronics` empowerment shareholder, Community Investment Holdings (CIH), clearly has big plans for its investment.

Incoming CEO Joe Madungandaba, who is a co-founder of CIH, says technology is important to CIH and Jasco is well positioned to take advantage of increased government spending in this area.

The group, which has an "A" rating from empowerment rating company Empowerdex, is also positioning itself to be a preferred black economic empowerment (BEE) partner.

Madungandaba points out that Jasco has synergies with other companies in the CIH portfolio, including cable manufacturers and other companies that operate in power and telecoms sectors.

Madungandaba is replacing Stuart Robertson, who steps down as CEO this week to take up a post at CIH, where he is to consult to the group on driving the future direction of its investments and extracting synergies between CIH and Jasco.

Asked yesterday whether the group was moving to consolidate its ICT interests under the Jasco banner, Robertson replied: "Possibly, but it`s still very early days."

Chief operating officer Martin Lotz added: "It would be wrong to say that we haven`t looked at it or that we haven`t investigated it, but as Stuart says, it`s very early days."

Critical mass

Robertson says CIH does see Jasco as an investment vehicle. "They invested not to have a small-cap company in their portfolio, but to use as a vehicle going forward. There is a lot of synergy in that portfolio, and the idea is to gain critical mass in the ICT space."

Madungandaba says Jasco`s strategy, after having been turned around from a loss-maker into a profitable company over the past few years, is to grow both organically and through acquisitions.

The appointment of Lotz as chief operating officer was to allow the company to take advantage of all such opportunities and also to allow the company to be a vehicle for BEE partnerships.

The idea is for Lotz to take care of Jasco`s day-to-day operations, while Madungandaba steers the company`s strategy and monitors BEE opportunities.

"That is a full-time job in itself," Madungandaba says. "I am inundated with opportunities," he adds, noting that he receives proposals daily.

Lotz says the vision is for 50% of revenue to come from telecoms, and for manufacturing and security to account for 25% each.

The idea, he says, is to have a diversified revenue stream so that if one area falters, it does not have too serious an impact overall.

Jasco is expected to release its results for the six months to August in late October or early November.