“Zico – large and in charge” is how investment entrepreneur Sandile Zungu, chairman of Zungu Investments Company (Zico), announced his entry into the outdoor media industry early this year when his company purchased a 53percent controlling interest in Outdoor Network, in a transaction worth R140-million.
Small in frame with a taste for Armani suits and luxurious sports cars, Zungu says outdoor’s phenomenal growth made it irresistible for him.
“The upswing in outdoor media is evident,” Zungu starts off, “and through Outdoor Network, we now believe we can add value to South Africa’s drive to communicate effectively to her people including the country’s hopes for a successful and colourful 2010 World Cup.”
Zico bought out Outdoor Network chairman and former SABC boss Zwelakhe Sisulu who had a 32 percent stake, among others.
The rest of the company remains in the hands of Sanlam which holds a 40 percent stake and management which owns the rest.
According to Nielsen Media research, outdoor media made an estimated R1.03-billion in advertising revenue last year, a 36 percent increase from 2005’s R788-million.
Originally from Umlazi township in Durban, KwaZulu-Natal, Zungu also owns 33 percent of Izimpondo Communications, publishers of Durban-based isiZulu weekly umAfrika.
And that purchase was not made for sentimental reasons.
“This has nothing to do with sentiments. It’s pure business sense,” he says, adding though that he believes print has in the past “shamefully neglected African languages.”
Although it’s been only 10 years since his cross over from engineering to business after attaining an MBA from the University of Cape Town, Zungu has earned a reputation in the industry as a dealmaker of note.
Not only does his company, Zico, have interests in several industries and sectors including healthcare, logistics, financial services, human capital, mining, cleaning and cash management, but as executive chairman of Africa Vanguard Resources (AVR), in 2003 he oversaw his biggest deal to date.
The transaction involved AVR and Harmony Gold whereby the former bought a 26 percent stake in the R1.3-billion Doornkop project in the Randfontein mining complex.
“Sometimes I hear people say I am greedy and that I play cards very close to my chest,” says Zungu, commenting on his reputation.
“Well, I really believe that competitive information is an asset in business, and when you have it, you have a duty to guard it jealously. I consider myself to be a streetwise person, a trait that I developed during my formative years growing up in the township.”
Zungu says he is “competitive and ambitious, and is always prepared to sweat for it, but enjoys a generally good relationship with most key empowerment stakeholders.”
“I strive to be ethically correct at all times and do not believe in taking short cuts.”
Nearly two years ago, Zungu’s Umthunzi Telecoms Consortium (Umthunzi) was dealt a blow when Transnet pulled out of the deal to sell to Umthunzi, a five percent stake in MTN.
When Transnet pulled out of the deal,the entrepreneur was livid and threatened to sue.
At the time, the 80-million MTN shares were reportedly trading at about R29 each, valuing the stake at R2.5-billion.
Commenting on why Transnet decided not to go ahead with the deal, company CEO Maria Ramos said the two parties could not come to an agreement.
Asked whether he had since taken any further legal action against Transnet, Zungu declines to comment.
Although bruised at the time, he appears to have bounced back, saying “I’m a very good loser who does not attach too much emotion to business deals, which is why I will never go to war over a lost million.
“I had a very modest upbringing, I would not want to say poor because that would be a bad tribute to my hard-working and loving parents. They had very little financial capacity and would never see us go to bed on empty stomachs. Most importantly, they always showed us unconditional love were able to instil in us good moral and ethical values.”
He admits though that there are some memories that he would rather forget about.
“My least proud moment was when an investment I had made in Roadcorp Limited went all up in smoke when the company was finally liquidated. It remains my worst investment decision to date.”
Zungu was also the chairman of South Africa’s arms manufacturing company Denel from May 2001. He resigned from the post in June 2005, a move he insists had nothing to do with the controversial arms deal, which broke prior to his appointment. When pressed for his views on the allegedly corrupt arms deal, he says, “Denel was not at the centre of the arms deal, I had absolutely nothing to do with the arms deal, and therefore my opinion on it would count for nothing.”
For now Zungu, who appears to have his fingers in many pies, says his main goal is to grow Zico. “I want to see Zungu Investments Company grow to become a success that it ought to be. At some stage I wish to take some time off to do my doctorate studies.”
Facts about Sandile Zungu
- He is married with four children
- He made the swap from engineering to finance because he was eager to broaden his understanding of commercial issues
- In June 2005, he resigned as chairman of the State’s arms manufacturer, Denel Pty (Ltd).
- While at Vukuzakhe High School in Umlazi, Durban, he received a scholarship from Shell to study at the prestigious Hilton College, also in KwaZulu-Natal.
- Zungu is currently reading William Taubman’s book about the Soviet-era leader, Nikita Khrushchev.
- One of his pet projects includes coaching high school and university students about leadership issues.