Business

Daily Maverick interview: Christo Wiese

By Ryland Fisher 23 April 2013

In an interview last week at his modest office in Parow Industria, north of Cape Town, RYLAND FISHER spoke to Christo Wiese about, among other things, growing up in Upington, his success in Africa, his spat with SARS and getting caught at Heathrow taking millions of rands in a briefcase into London.

Christo Wiese has that rare leadership quality where he is able to make everyone around him feel special. He greets you like a long-lost friend, asks about your family (and appears to be genuinely interested in your answers) and downplays his achievements.

His achievements, of course, are huge, but he always gives the impression that he tries not to focus too much on himself, but rather on the people around him.

At the end of March 2013, Wiese was listed by Forbes as the third richest man in South Africa, and the sixth richest in Africa, with a worth of about $3.5bn.

He has made most of his money through his controlling stake in Pepkor Limited, which owns, among others, South Africa’s most successful retailer, Shoprite Checkers. (Shoprite was bought in 1979 for R1m and is now worth more than R100bn.)

Wiese believes his small town roots have served him well in business.

“When you grow up in a small town, you believe in giving people the benefit of the doubt. All people are good people until they prove themselves otherwise.

“My perception is that in the city it works the other way around. People are generally sceptical or mistrustful of other people.

“The other thing about growing up in small town is that you knew everybody and everybody knew you. You were very much part of the community. There were fairly clear community norms and, by-in-large, unless you were a maverick, you stuck to those norms.

“Our business grew from a nucleus of people who knew each other. They pooled their resources and got the company going. That was also because of coming from a small town.”

Wiese says that his business never discriminated on the basis of race, even when in was founded at the height of Apartheid in 1965.

“There used to be an Act that prescribed that in an office building you had to have separate toilets for white and non-white ladies. We just decided in those days ‘bullshit’, we will have toilet for ladies and toilets for men, and that’s it.

“We were breaking the law and that also came from, I believe, our small town background. You look at people differently. In our entire group today, we employ over 150,000 people who are very representative of the demographics of South Africa. We have people from different backgrounds, religious affiliations, race groups and countries, and they all work together to make the business work.”

About 10,000 of the group’s employees work outside South Africa, mainly on the continent, but also in Poland, Central Eastern Europe, Australia, Singapore and Malaysia. They have about 500 retail shops, called Pepco, in Poland and the Czech Republic.

Wiese believes that part of Pepkor’s success can be attributed to it identifying and fulfilling a need, especially in rural areas.

“The business really started in 1955, even though Pep Stores itself was founded in 1965, but in those days if you went to the country towns, it was the exception to see a non-white child who was not dressed in hand-me-downs or second hand clothes.

“Today you will find the opposite in these towns. Children are properly dressed and that is what Pep Stores brought to those communities.

“I often have to tell my own family and other people, those of us who grew in different circumstances, you don’t realise how important it is for the dignity of a human being to be properly dressed. It is not good to feel embarrassed because of the way you are dressed.

“We just take it for granted. I was joking at lunch time how I now find that I keep shirts for 10 or 15 years because I’m comfortable and I don’t need to show that I’m always wearing a brand new shirt.”

Wiese said that in the 1960s, families could dress a child “head to toe” for less than one rand at Pep Stores.

“It sounds impossible, but you could buy a pair of beach thongs, boxer shorts, underpants and a T-shirt, all for less than one rand.

“We made it possible for every family, every father or mother, to clothe their children properly. The success of the business comes from recognising a need and fulfilling people’s expectations. There are a thousand other reasons but that is, in my opinion, the most important.”

Wiese has had his fair share of controversy over the years, including a much-publicised spat with SARS over billions of rands in unpaid taxes and having a briefcase containing £700,000 confiscated at Heathrow Airport. Wiese believes he has dealt with both issues.

“Let’s deal with the briefcase situation first. It took me three years, but I got every penny back with interest because they were wrong. So that matter played out very well for me in the end.

“I didn’t make a big brouhaha about it, but while this was a big story at the time, when I got my money back, only one newspaper carried a small story. Even my own daughter, a year later, asked me if I got my money back.

“On the SARS thing, I made my statement. If SARS thinks I owe them money, they know where I am. I don’t fight my legal battles in the media. There are forums where we can address them and I never ran away from something. I have a simple saying: ‘If I stole from you, arrest me’ and ‘If I owe you money, sue me’. Everybody knows where I am.”

Wiese believes that the negative publicity around wrongly-labelled meat products will not impact on his business.

“We try to do quality control as best as we can. But what I read was quite silly actually. It said that they found pork in boerewors. Everybody knows that the best boerewors is a mixture of beef and pork.

“One has to accept that the way the supply line works in the world today it is very, very difficult. Of course everybody will now up their game, but we buy from reputable suppliers and we cannot go in their businesses to check that when they sawed the pork, they washed and cleaned the blades properly before sawing the beef. A lot of the contamination comes from that sort of thing.

“I think it is a storm in a tea cup but, as a business, we are responsive and we will make sure that there is little chance of something happening where products are being mislabelled.”

Both Wiese’s parents were entrepreneurs and he still cites them as his greatest inspiration.

“My father died when he was very young but my mother only died last year when she was 94 years old. She was a remarkable woman. I’ve had mentors in business, people from whom I have learnt a lot, but at the end of the day, my greatest inspiration came from my parents.”

Wiese is quite firm on the role that government and business can play to help promote a culture of entrepreneurship in South Africa.

“With regards to government, the answer is easy. They must just get out of the way, reduce the red tape and make it simple for people to start a business.

“If I look at all the bureaucratic red tape we have to go through, the resources that we have to apply to get things done, I shudder to think what the man in the street has to do when he wants to start a little business. Where does he begin? He has to fill in forms, get the permits, make sure that he complies with all the health and safety regulations. It is a nightmare.”

Wiese believes that business should continue doing what they are doing – training entrepreneurs.

“We have enormous training programmes within our companies. Here and there someone will use that training to start his own business.

“But business can perhaps do more of that. The most important thing we can do is to create role models to show people that ordinary people can start one little shop and grow it into 6,000 shops, like we have done. We were not rocket scientists, just a bunch of ordinary people from Upington.”

Wiese’s businesses have been very successful on the African continent. He believes there are things that they have done right and wrong.

“The major challenge is that there is still a huge lack of infrastructure in Africa. For instance, in South Africa, if you want to start a chain of stores, you can go to any town and there are buildings that you can rent, but that doesn’t apply to many African countries.

“The second problem is the unbelievable red tape. Whitey (Basson, CEO of Shoprite) tells me for them to send a consignment of goods from South Africa to Maputo they have to fill in 1,600 forms. It is just unbelievable, the bureaucratic red tape.

“This is why trade between African states is only 15% of Africa’s trade. We trade with the rest of the world but not with each other.”

Wiese believes that it has helped that they have approached the continent as “Afro-optimists” as opposed to “Afro-pessimists”.

“We went in expecting to do well. We have stimulated the economy, which is what traders always do. For example, when we went to Zambia, which was our first foray north of the Limpopo, there was nothing on the shops, literally nothing.

“I remember walking into a store and there were only 24 bars of soaps on the gondolas. Today, if you go to our stores in Zambia, it is like you are in Cape Town. You can buy anything.

“When we started, everything we sold in those stores had to be imported. There was nothing in those countries that you could buy for the supermarket. Today, 80% of the fresh produce we sell in Zambia comes from Zambian farmers, because we created a market for them. We helped them to produce and pack for a supermarket.

“We’ve never paid bribes. We are in 17 countries in Africa and we never paid a bribe. I don’t even think we were ever asked for one.”

Wiese believes that they could have moved faster and put more resources into Africa.

“We are doing that today. After 20 years our African business is still only 15% of our overall business. In the next 10 or 20 years we believe that it will be more than 50% of our businesses.”

He welcomes the opportunities afforded South Africa by its participations in BRICS (with Brazil, Russia, India and China).

“It’s fantastic for us to be a part of BRICS. There are a lot of sceptics who say we don’t really belong in that club because we are too small. But we do belong as a representative of the African continent which will be the world’s premier consumer market over the next 30 to 40 years.

“We can leverage off our participation in BRICS. It just put us a little bit with the big guys, that we don’t have to be intimidated by the US and the Euro zone. We shouldn’t be intimidated anyway.”

Wiese believes that the biggest challenge facing South Africa is a lack of enlightened leadership.

“We need enlightened leadership all the way, in our businesses, in our politics, in civil society. We need leadership who understand our own place in the world. We are unique in many respects and we must play to our unique strengths and opportunities.”

He responded diplomatically to a question about Patrice Motsepe giving away a large part of his fortune and whether he would be inspired to do the same.

“I know Patrice quite well. He is a wonderful man and I admire what he is done, but we all do things in our own way. I don’t criticise or prescribe to other people and I don’t want to be prescribed to. I don’t think that is what Patrice had in mind. We all do what we can. We all believe that we can do more, but we do as much as we can.”

Wiese believes that his first social responsibility is to grow a business, to create employment opportunities, to create opportunities for people to grow within that business”.

However, he also invests a lot in education “because we regard it as extremely important in the South African context”.

“We have adopted several schools were we spend a very, very large amount of money upgrading the teachers, etc., with huge success.

“At Shoprite we focus, among other things, on the fairly basic needs of people. We have several soup trucks that go out every day and thousands of people are given a warm cup of soup a day. I believe that is where you start.

“I have my own personal charities. I am a patron of the Red Cross Children hospital because that is something that serves the entire community and often the neediest in the community. I can tell you stories that will make you cry.”

Wiese owns a game farm in the Kalahari and the Lourensford wine estate.

“I love going to the game farm. I still hunt, but not a lot. I love taking people there, it is beautiful part of the word and it is where I grew up.”

He describes Lourensford as “a terrible business, a wine farm and a food farm. It’s not something where you make money. We have now opened it to the public, for people to enjoy it, because it is very beautiful.”

Asked whether, at 71, he has plans to retire, he responds firmly. “No, I don’t have plans to retire. I would not know what to do with myself.”

Over the next few years, his plan is to continue growing the business and hopefully involve his two daughters.

“My son is with me in the business and hopefully my daughters will join too. The one is a lawyer and the other has just graduated from the London School of Economics. I hope they will get involved in the business.

“I also want to enjoy South Africa. I love South Africa.”

Asked in which areas he saw the growth of the business, he said: “It is a bit of a cliché but the world has become a very small place. We will go wherever the opportunities are. I would not have believed you if you told me 30 years ago that we would be fairly big in Central Eastern Europe, Poland, Romania, those funny places.”

Wiese said that if he could live his life over again, there is nothing that he would do differently.

“I often look at people who emigrate and I can’t really work it out. You have only one life and surely you must live where you are happy. I cannot imagine being happy anywhere else in the world but in Cape Town, South Africa in general but Cape Town in particular. I consider myself a very blessed person, I’m very happy in my skin, very happy.” DM

Photo of Christo Wiese courtesy of M&G (David Harrison)

Gallery

Commission of Inquiry into SARS, Day Five

SARS was broken while fixing a problem that never existed. It cost R204-million

By Pauli Van Wyk

Microwave popcorn is nothing special. You can have the same effect with normal popcorn kernels and a brown paper bag.

0