Master Currency founder Zitulele “KK” Combi has built an impressive business empire over four decades without fanfare. Lindo Xulu and Phakamisa Ndzamela chart his rise from humble beginnings.
Businessman Zitulele "KK" Combi hit on his big idea for a start-up while on holiday in London in 1995. He noticed that visitors could get foreign exchange at outlets other than banks and wondered if the concept could work in SA.
A combination of chutzpah and the right contacts helped - he got assistance from former cabinet minister Piet Koornhof - and Combi soon became the first black businessman to obtain a foreign exchange dealer's licence, with which he started Master Currency. This was the business that catapulted him to national prominence after several local successes in Cape Town.
Combi's first business venture was a café in Gugulethu in the 1980s. He has since accumulated numerous directorships and stakes in a variety of businesses.
He is worth hundreds of millions, yet prefers to maintain a low profile.
As chairman of Thembeka Capital, an empowerment partner to PSG, one of SA's top-four investment firms, Combi sits on the boards of Pioneer Foods, PSG Group and Curro Holdings. In 2009 he sat on the board of the JSE Ltd before Thembeka Capital and PSG sold their stakes in the holding company that operates the local exchange.
Thembeka's net asset value (NAV) is about R1,6bn, putting it in the same league as Mvelaphanda Group, now called New Bond Capital, which was founded by Tokyo Sexwale and whose NAV stood at R1,6bn in September 2012. Investment firm Brimstone, with an NAV of just under R2,8bn, is another peer. Mvelaphanda and Brimstone are well known, but Thembeka does not get as much attention as Combi shies away from the limelight. (See story on page 38.)
But that's perhaps in keeping with his name Zitulele, which loosely translates from the Nguni languages as the "one who is quiet".
Since starting out as a salesman for Old Mutual, he has grown in stature and now comfortably rubs shoulders with the business elite in Stellenbosch and the powerbrokers at Luthuli House and the Union Buildings.
When Combi was looking into the foreign exchange business, he was neighbours with former SA president FW de Klerk and Koornhof, who was also once ambassador to the US.
"Between the two I figured Piet was the best bet, because I often used to bump into him at the local coffee shop, reading the Sunday Times," he says.
"So one day I went up to him and told him about an idea I had about starting a forex business and asked if he could arrange a meeting with Chris Stals, the then Reserve Bank governor, to discuss the matter. He asked me to give him about two weeks to set it up."
It was a stroke of genius and epitomised Combi's low-key, yet persuasive approach to making contacts and setting up deals.
"Ever since my first business deal, I realised that going straight to the top helps. Had I gone to Pretoria to ask for a meeting with the governor, I would've quietly been asked to leave or would have had to suffer the indignity of going through all sorts of security measures only to be told that I couldn't have an audience with the man. So I figured with the help of a former minister it would fast-track the process."
Koornhof did arrange the meeting, paving the way for the setting up of Master Currency.
There was one condition though: he had to partner with Rennies Bank, which provided the back-office support and helped him with the technical details.
"It was the best deal for me because in that business one has to have a lot of offshore relationships. You must remember those were the days before the euro and one had to be able to source the British pound, Italian lira and the German mark very quickly, and the Rennies guys were experts at doing just that."
After establishing Master Currency branches nationally, he sold the business to Bidvest for an undisclosed amount in 1998. At the time the business was reported to be valued at R100m.
Combi says: "I sold out because I started getting bored. Under Bidvest it's a business that has gone on to prosper, particularly after the World Cup."
Combi's business prowess has won him the admiration of PSG Group founder and chairman Jannie Mouton and his son, Piet, the CEO of the company. Piet Mouton says: "From Stellenbosch one gets a particular view of how the world works, but through KK we get insight into how the other side of the country generally thinks.
"This is a man who through hard work has managed to build himself up. He's not in a Zuma camp or an Mbeki camp, he just makes sure that he knows who the key people are and simply does business in an honest way."
Jannie Mouton describes Combi as hardworking and intelligent and a "bridge to government and other key stakeholders". After all, this is the man who was key in negotiating a settlement between Pioneer Foods, in which PSG has a stake, and the competition commission. The case had threatened the very existence of the food company.
Combi's claim to fame comes from the fact that he was making multimillion-rand deals long before black economic empowerment (BEE) became law, catapulting the politically connected into the business world. But his journey had humble beginnings.
The nickname "KK" was given to him while he was part of the school debating team, in deference to former Zambian president Kenneth Kaunda, and for his autocratic manner.
He was born in Retreat, Cape Town, near Tokai, but the family was forcibly moved to Gugulethu township when he was six, an event that left an emotional scar. "My family, like many others at the time, was a victim of forced removals. It was one of the most traumatic events of my life, and today still leaves me feeling angry, particularly because of the level of brutality that was involved," says an emotional Combi while clearing his throat.
"People would just come, stop in front of your house with a truck and tell you to take your things and move. They didn't seem to care that this was home. They just threw your possessions into the back of a truck and all you and your family could do was simply sit back and watch it happen.
"We were stripped of everything and my family went from having built up an asset with a stable home to being thrown into poverty in Gugulethu, in a four-walled shack. I often tell my business colleagues that part of the problems we have in SA is a result of forced removals. It destroyed lives and an entire generation. The people I grew up with continue to live a very hard life, a life very different to mine."
Instead of wallowing in despair, this tragic episode fuelled a young man's desire to change his circumstances. At the age of 23 he become an insurance salesman for Old Mutual.
"It was the only job where I could literally write my own salary. And the first people I targeted were teachers, nurses and policemen. At that stage it made sense because they were the only pool of black people who had stable employment," says Combi with passion.
After 18 months he had saved up enough capital to open a self-service café in Gugulethu. But the business came to an abrupt end due to political unrest. As protesters targeted delivery vehicles in townships, the cost of supplies rose and in some cases distribution simply ground to a halt.
"I was dependent on the suppliers and when they stopped their distribution in 1985, I had to find another business," recalls Combi.
His entrepreneurial zeal was not dampened and in 1989 he opened the first service station in Gugulethu. He later sold that to one of the major oil companies.
His interest in property development also started then.
"Buying land, let alone getting land rezoned back then, was a problem. The government didn't allow black people to own land so we were left with the option of having to settle on a 99-year lease. But in 1994 that quickly changed and I began looking for opportunities to buy up as much land as possible," he says.
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When you call the Cape Town offices of Master Currency the response is prompt and the voice at the other end is friendly and professional. It is on the basis of this thoroughness and attention to detail that Zitulele "KK" Combi founded Master Currency, a local chain of foreign exchange bureaus.
Combi is a man of firsts. He was the first person in South Africa to be granted a foreign exchange licence; the first black South African to win the local Ernst & Young World Entrepreneur award in 2000; the first South African to be crowned World Entrepreneur for Managing Change in 2001 in Monte Carlo; and the first black South African appointed as a judge for the World Entrepreneur Competition in 2002. He holds directorships at nine associate companies and organisations.
Combi had his first taste of the corporate world at Old Mutual where he worked as a financial consultant. During his brief tenure there he was the salesman of the year, leaving the insurance conglomerate a year later to pursue a diploma in public relations.
This knowledge empowered him to spot an enticing investment opportunity in Gugulethu. There were no convenience stores, so he opened a self-service café in the township. For two years the business was a success until the outbreak of riots in 1985. Delivery trucks could not access his café because of the violence and he could not replenish his stock. He sold the business and turned his attention to other pursuits.
In 1989 he developed the first service station in Gugulethu. Next he bought a chunk of land with a view to developing a shopping complex, but the idea was aborted when his neighbour refused to co-operate. Combi rezoned the plot and sold it for almost nine times the original purchase price.
Subsequently he identified the Nyanga Station on the Cape Flats as a potential development site. With 30 000 people accessing the facility daily, he reckoned it would make for an ideal investment option. In 1994 Combi was granted permission to develop what is now the Nyanga Junction Shopping Complex. He was later to sell it to Southern Life for R45 million.
Encouraged by this success in property development, he spread wings to the Eastern Cape, developing a R20 million One-Stop Engen Ultra City in King Williams Town in 1995.
With the advent of democracy, exciting opportunities were beckoning. That same year Combi travelled to the UK in search of ideas. While visiting a London foreign exchange bureau, it occurred to him that hordes of tourists would be flocking to see the miracle nation. They would all need the services of a foreign exchange bureau. For the next couple of days he stood by the doorway of a London exchange bureau to observe proceedings. It wasn't long before the bureau manager spotted him and called him in.
The manager wanted news on South Africa's smooth transition to democracy and Combi offered to give it to him in exchange for an insight into the world of foreign exchange transactions. "It wasn't easy to comprehend initially," he admits. However, a week later he got the hang of the business. Upon his return, and with help from former National Party Minister Piet Koornhof, he secured a meeting with the South African Reserve Bank. The Reserve Bank duly granted him a foreign exchange licence in 1995 and Master Currency was born. The Reserve Bank prudently suggested a joint venture with Rennies Travel, to facilitate smooth transfer of skills.
Since then Master Currency has been a key player in the foreign exchange market, positioning its outlets within easy access of its customers. The visibly branded outlets at the entrance to the V&A Waterfront in Cape Town are a case in point. The company differentiates itself on flexibility, its strategy to offer faster, hassle-free, round-the-clock service.
The company now employs 250 people at 20 branches in Cape Town, Johannesburg, Pretoria and Durban. With a gross annual turnover of R2 billion, it is ranked third in the industry and commands 12% market share. "Look out for opportunities, they are always there waiting to be discovered," says Combi.
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