The Kunene Brothers are branching out into military hardware. Jim Caredig reports
Black business is poised to penetrate the military bastion of the old South Africa. The Mail & Guardian has learnt that Kunene Finance Company (KFC) is to buy a 10 percent stake next week in Grinaker Electronics Limited (GEL).
KFC is a wholly owned subsidiary of Kunene Brothers Holdings (KBH), more usually known for bottling and distributing cold drinks.
While they also have spaza shops and hamburger franchises, the brothers have been rapidly broadening their investment base, this month taking on a 30 percent stake in nationwide cleaning company Supercare, with the option to expand later to 51 percent. Supercare is valued at R20-million. GEL’s asset value is some R70-million.
Although the move to military electronics seems a big change in direction, one of the five brothers, Zoli Kunene, has represented France Telecom in South Africa for some time and has widespread connections in the telecommunications field.
The addition of a black partner will vastly improve GEL’s and Northern Telecommunications’ (Nortel) joint submission for a slice of the R6,6-billion cake on offer from Telkom.
GEL products include silvered, radar-reflective balloons to deceive, harass and confuse air defence systems and long-range, anti-radar drones rocket- launched from trucks or ships, to track targets and dive on to them to detonate a 20-kilogram warhead. GEL calls its products “defence” yet many are essential to efficient attack.
There are a multitude of laser and radar warning devices, guidance systems and measuring equipment to determine the velocity of bullets and bigger
Some systems also have important peaceful uses, such as microwave television communications and antennae for rural telephones; portable X-Ray machines; voice-mail systems and call analysers; and flight computers.
It is the peaceful variants of GEL’s technology that will prove most useful in the Telkom bid, as local content and the extent to which local contractors and labour would be used during the project will be taken into account. GEL has already worked with Vodao, M-Tel, Dimension Data, Plessey Tellumat and Alcatel to provide telecommunications for the 1994 general election, but now they are rivals.
The Kunenes will set up a subsidiary to handle the Grinaker stake, which is 80 percent-owned by KFC and 20 percent-owned by its bankers, First Corp Merchant Bank. Their joint venture will continue to acquire segments of Grinaker Electronics until the 30 percent stake opportunity has been taken in full.
Grinaker Electronics is 90,2 percent-owned by Grintek Limited, which comes under Grinaker Holdings, in turn owned by Anglovaal Industries.
Last year GEL increased its earnings by 33 percent to R10,6-million. It is unlisted and describes itself as engaged in the design, manufacture, distribution and logistic support of electronic products and systems in the fields of radio, voice and data communications, electronic defence and security, satellite communication, industrial and mining instrumentation and control, radio trunking, fleet management, surveillance systems, and air traffic control.
GEL contains Grinel, Grinel Natal, Grinaker Electronics Manufacturing Services, GEMS Surface Mount Technology (50 percent); Avitronics, Delgi Electronics; Grinaker Electronics Systems, Grinaker System Technologies; and Fleetcall (33 percent).
GEL makes real-life war games, with one product allowing a geographical display of the electronic order of battle, digitally recording intercepted messages and jamming up to 10 prioritised target frequencies.
It seems a far cry from the milk and liquor deals done so many years before by Zoli, Keith, Zanosi, Dudu and Menzi Kunene. While their qualifications range from medicine to the law, arguably their greatest asset is recently employed new “brother” Graham Royston. His wide experience with Price Waterhouse, Barlow Rand, the UAL Merchant Bank, Hill Samuel & Co and Ernst & Young, shows through in the shape of the Grinaker deal, the Supercare share and the likely strategy of the Kunenes.