Rising from the dusty town of Upington, Dr Christo Wiese has made billions and lost a few. REImag sits down with the controversial, deal-making business legend.
It’s a crisp Tuesday morning in Parow Industria when we sit down with billionaire businessman Dr Christo Wiese at Pepkor’s head office. The rest of the country is waiting for the 2017 Steinhoff International results the group promised to publish that day, as we get to know the man whose public persona has been overshadowed by the scandal. We talked of trusting the right people, building businesses in South Africa and a little bit about the future for the 77-year-old man who’s made (and lost) billions.
REImag has one thing in common with Wiese (it’s not our bank balance) – it’s the belief in the transformative power a title deed brings to a person’s life. And that’s why Wiese is talking to us – he’d recently been to Vukuzenzele in Cape Town to hand over title deeds to a further 66 residents, mostly women for the Free Market Foundation initiative Khaya Lam.
Dr Wiese has already sponsored over 300 full titles and says, ‘I don’t know of a more worthwhile project (than Khaya Lam) in South Africa today. What could be more important than this?’
Khaya Lam gives title deeds to legitimate incumbents who can’t afford the process themselves. The cost of titling a modest house with an average value of R100 000 is advertised at about R6 500. The current Khaya Lam cost is R2 350 (which includes the cost of all the administration, fundraising and titling costs), according to the initiative. Generous donors, like Christo Wiese, and Johann Rupert (featured in a previous REImag edition) also offer Khaya Lam valuable publicity when they’re seen handing over title deeds to beneficiaries.
‘Those of us who are positive and optimistic about SA and its future are always on the lookout for silver bullets and sometimes find some that appear so obvious. A project which gives title deeds to between 7 and 11 million ‘owners’ of properties, must be such a silver bullet, says Wiese.
‘It appears so simple that by the stroke of a pen you can give those people title because they are perceived as owners by the community. They have every ownership right except the document. It can be the most transformative economic initiative in South Africa,’ says Wiese.
From rags to riches
‘When I grew up as a child in the platteland – to see to a child of colour in anything but hand-me-downs was an exception. Then PEP Stores appeared, and today to see a child in tatters is the exception. Because PEP Stores made it possible for parents on a tight budget to dress their kids. We take for granted that we grew up with new shoes and a clean shirt. You have no idea what it does to a person’s sense of self and dignity to dress neatly. It’s amazing.’
Despite recent economic challenges, the core businesses of Wiese’s brag book are holding up valiantly. And he believes the economy is five years away from a complete transformation.
‘I tend to focus on the positive, on the opportunities, rather than the headwinds. We’re all aware of the challenges, my argument to people thinking of emigrating is: Where are you going where you don’t have these issues. Look at all the angst in Europe, for example. Where do you go where you are problem-free?
‘When I look at South Africa, the way General Smuts articulated South Africa resonates deeply with me. He said South Africa is this peculiar country where things are never as good as they should be, but never as bad as they could be.’
According to Wiese, South Africa is chock and block with advantages.
‘We have natural resources, wonderful climate, we’re not at war with anybody and looking particularly through the eyes of a retailer – we have a young population. Our age demographic is very favourable for economic growth. But, then, we need to employ the right policies. And those are pretty obvious and in fact, the way forward had been spelt out in the National Development Plan. If we just follow those guidelines, this country will be transformed.’
“Nobody has a blueprint. Business is ultimately opportunistic. You’re in the arena, an opportunity comes by and you try and exploit it.” – Dr. Christo Wiese to REItv.
On How He Became one of SA’s Most Successful Entrepreneurs:
Wiese received his BA and LLB degrees from Stellenbosch University and practised at the Cape Bar before he became a director at Pepkor, the discount clothing chain his family helped found. In 1979 Pepkor bought eight supermarkets in Cape Town for R1 million, called Shoprite. Wiese then helped Shoprite acquire distributor Senta and in 1997 acquired the struggling OK Bazaars from SA Breweries for the now famous amount of R1 (it had cost SAB an estimated R1-billion in capital injection).
Today, Pepkor operates around 2266 retail stores in Southern Africa, with a turnover of R64.2 billion for the year ending September 2018. Shoprite has 2738 outlets in 15 countries across Africa and the Indian Oceans islands and sold R75.8 billion’s worth of merchandise in 2018.
When called a Master Dealmaker, Wiese waves his hand dismissively and says he prefers to call it ‘building businesses’. But it’s probably more accurate to call it ‘building empires.’
On what shaped him as a businessman, the first trait he mentions is his risk appetite, saying that it’s something of a personality trait of his. ‘Secondly, I come from a part of the world, the Kalahari, where when I was a child, it was still a pioneering country. And their people just had to go out and make things work, it’s not an easy part of the world to make a living, it’s a harsh place.
According to Wiese, growing up in a business household was also a major influence in his business career: ‘My parents were small businesspeople, so I was aware that business gives opportunities, that there are risks, but above all you have to work very hard, and that you have to be passionate about what you are doing.’
My mother always articulated it this way, she’d say ‘Those people are people with rigting, with a sense of direction. I just knew I had to have goals and apply myself.’
Risk and Riches
Taking risks has always been part of his DNA, according to the book Christo Wiese – Risk And Riches by TJ Strydom. Putting half of his visible wealth into a single share at age 75 is just the latest example of his risk-taking.
Strydom wrote in the book:
‘His business philosophy, developed decades earlier with [his cousin] Renier van Rooyen at Pep Stores, can be summed up in five principles: faith, positive thinking, hard work, enthusiasm and compassion. When he wants to invest in a business, he looks for a company focused on the cash consumer and with a strong management team. Management needs to have ‘skin in the game’, he says, and the business has to display a nearly unlimited growth potential. It needs to generate strong cash flows.
It’s been a turbulent two years for the risk-taking businessman. His latest risk didn’t pay off, but according to him, it won’t be his last business deal.
‘I’m going to keep doing what I’ve been doing. The greatest joy for me is that I’ve been building businesses and if it wasn’t for a fraudster, we could’ve employed over 350 000 people.’ Today Shoprite employs 145 000 people and Pepkor close to 50 000.