Thank you, Alan. You can go ahead.
Okay. Good morning, everybody. Can everybody hear me? I don't know. Maybe just the chaps in charge, if you can just confirm that you can hear me okay.
Yes, we can. Thank you.
Good morning, ladies and gentlemen, and a very warm welcome to all of you who are here today. As fate would have it, we had a check this morning to make sure everything was working. At about 8:15 A.M., everything was smooth. Of course, between 8:15 A.M. and 9:00 A.M., Murphy arrived, and we had the normal challenges that came with it. Our apologies for the slightly late start, but I'm sure that the proceeds of the day, and we've got a bit of time at the end, that we can still make sure we've got all of the requirements in and we meet everything that we intended to do during the course of today. A warm welcome to our investors, to our shareholders. We've got a little bit of press here, and our banking partners.
It really is a great pleasure to have you all at the Electrical Engineering Capital Markets Day. We've had a couple of Capital Markets Days over the last year. We normally have one per year, so we haven't had one for the electrical engineering businesses in their entirety. There's a lot of interest around it in the market, and I trust that we're going to have a good day today, and we welcome you to that. Just to start out, an apology from me for not being there in person. Unfortunately, we had a close family bereavement, a very sad bereavement on Friday. As some of you, or many of you may appreciate, that does cause quite a bit of complexity, and there's a lot of moving parts on my side. A great disappointment personally not to be there.
I've spent many years in the facilities you're about to see and have a great passion for cable and circuit breakers. I have no doubt that the management teams and the royalty teams will ensure that it's a productive day. I will be here throughout, but only virtually and not in person, and apologies for that. Before any further ado, I'd just like to hand over to the Managing Director of African Cables, Luis Corte, who will be giving us some health and safety information before we kick off. Luis, can I ask you to take us through that, please?
Thank you, Alan. Good morning again, ladies and gentlemen. Welcome to CBI African Cables in the warm Fahrenheit. A few things that we have to observe, please. We have, first of all, emergency events. In case of a very remote emergency event, if we're in this venue, we should go outside where all the banners are. While we are in the tour, your guide will lead you to the assembly points that are demarcated exactly there. It's in a very, very remote event. The gents and the ladies are just on the right, and obviously, you can see coffee and tea are served. When we go into the factory, we will appreciate very much if you restrain the use of cell phones or cameras, especially. There's a strict policy that the operators cannot be using cell phones while they are on their duties.
Therefore, as a respect to them, we should not be using our cell phones. In case of you having a need to answer the cell phone, please just tell your guide. We have specific places where I authorize. There are yellow squares on the floor that are specific places where you can answer the phone. Within the tour, we have a route that is demarcated in between yellow lines. Please maintain yourself within those two lines. If you have a question for your guide, please just only raise your hand. He will stop, or she will stop, and they will be able to explain any of your queries that may be. That's all, Alan. Thank you.
Thank you, Luis. Just onto the next slide from an agenda point of view, ladies and gents. What we're going to be doing, you're obviously all down in Reunert at African Cables, where I will give us a quick overview on Reunert and a couple of opening comments before handing over to the cable, the power cables team. You'll have a combination of both our Reunert site that you will see in person today, but also our Zambian site, Zamefa, who we will give you a video of, and you'll get a sense of what they also have up in Zambia. We'll then be traveling across to Isando, where we'll be taking you through our circuit breaker factory and our business and having something very similar to what you're going to have this morning, later on this afternoon.
If we could move just onto the next slide, I'd like to just quickly introduce the team that you're going to be seeing today. Everybody knows who I am. We have, from a Reunert point of view today, Mark Kathan, our Chief Financial Officer. I'm just going to ask each of the people, as I introduce you, just make yourself visible, either stand up or pop your hand up. Mark Kathan, the Group CFO, is with us, as is Mohini Moodley, the HR and Sustainability Director. Both of the Reunert other executive directors are in the room today. In the eventuality that we do lose connectivity in its entirety, Mark will then lead the rest of the engagements and take over from me in that regard.
In terms of the line leadership in our Electrical Engineering segment, which includes the power cables and the circuit breaker businesses, as well as our renewable energy businesses, Deon de Kock, who's a Segment CEO for Electrical Engineering and Renewable Energy. You've already met Luis Corte or seen Luis Corte, but Luis is the Managing Director at African Cables, our Reunert site. Welcome to him. Kangwa Bwalya, who's also with us, is our Managing Director of our Zambian facility called Zamefa. He's come down and joins us. We're very pleased to have you with us, Kangwa, and welcome. Charles, who I don't think is in the room, will then lead this afternoon's entirety when you get there. Charles Osborne is the Managing Director at our low voltage company in Isando. Just very quickly on Reunert, and I'm not going to spend too much time here.
There's a couple of other areas that I want to talk around, but I'd like to just add onto what I'll call it, let's call it a couple of Reunert housekeeping matters. I'm going to just give a quick overview on Reunert, then as we go in, Management will then lead the rest of the presentation. It'll be an entire management-led presentation for the rest. If there are any important questions that you have, please just pop up your hand, and you're welcome to ask it during the presentation itself. We have a relatively tight schedule, and we have about 45 minutes or so at the end of the day once we get to Ilanswantee, where we've got an entire Q&A session that we intend to have here. If possible, try and hold your questions to then so that we can get through that.
If there's an important question that you'd like to ask, just pop up your hand and do that. When we get to the Q&A at the end of the day, I will chair that Q&A. I'll take the questions, I'll direct it to the management member that's best positioned to answer that, and then management will respond to those questions. Next point, just around the factories, please. Luis is very polite, so I'm going to be a little bit harder in it. Please follow instructions. These are live facilities. They are fully operating at the moment. We have strict health and safety procedures. It's very important to us. The safety of our employees and our guests are particularly important to us. We have a suite of, I call it, procedures and rules and behaviors that are really important. Please follow the instructions that you're given.
I think it's out of respect for the management that we have today and the rest of our employees that we do follow those quite strictly, please. The next just point of order is please do not ask any price-sensitive or financial questions of the management teams. We've guided them that they must not answer any of those. It's not us being rude, but please, you know, you are all well-versed at what you can or cannot ask for. You've had plenty of engagements with myself and Mark, so you also know the manner in which we answer these. Please don't try and put the management under any pressure to answer any more complicated questions than what you would normally post. Like I said, they've been instructed not to do so. It's not them being rude. It's guidance from myself.
If management are unsure about a question, we've also asked them, just bring it back and we'll answer it in the group session. If there's anything that does come up that they're unsure about, again, it's not them. They've been guided. We'll bring it back and we'll make sure that that is answered, but done so if there's any uncertainty around it. That's just a little bit of housekeeping around that. From an objective of the day, there are sort of four objectives that I'd like you to leave today with. The first of these, you're going to meet firsthand highly capable management teams. I think you're going to get a very good sense of just how high quality these management teams are, how well they understand their business, how experienced they are, and how passionate they are about the businesses that they run.
I think you're going to see firsthand what one of the, you know, you can have all of the assets that you want, you can have the strategy that you want, but ultimately, it's the people that lead these organizations. I have absolutely no doubt, but would like you to get a sense of just how good these individuals are, just how capable they are. I trust that you'll leave today being very aware of just how good the people are that manage these businesses. The second objective that I would like you to leave with is to understand the businesses themselves and the facilities. These are all kind of capital intensive in terms of the assets that have been invested into. They've got great capabilities, great volume capabilities.
I'd really like you to get sort of under the hood and get a handle on just what is contained in these factories and how capable they are to operate in the markets that we do operate on. Thirdly, I'd like you to leave being clear on the clear strategies that these businesses have to be successful and sustainable, and importantly, to have a good handle on the fact that they are successfully executing those strategies and doing so in a very positive manner. Finally, it's just to be clear about the growth opportunities that these businesses and the markets within which they operate. The presentations have been set up effectively to try and take you through that and to give you a handle around that.
If you have any questions around that and you want to dig into that, that's what we'd like you to leave with, to be aware of the management and how good and capable they are, the businesses and the assets that we have here, the strategies that they're following and why they're being successful, and the growth opportunities that are available to these organizations and in the markets that they operate in. Hopefully, that's what you'll be able to leave at the end of the day in terms of that. We look forward to sharing that with you over the course of the day. Reunert itself, just at the end of last year, market cap around ZAR 15 billion, revenue, lots of 15s in that, around ZAR 15 billion, and an operating profit of around ZAR 1.5 billion. Those are the numbers at the end of last year.
Obviously, the market cap has come under a little bit of pressure during the course of this year, but the revenue and operating profits still hold true. Importantly, generating attributable earnings of around R1 billion and on a regular and almost steady state basis, generating free cash flows in excess of ZAR 1 billion per year. I don't want to spend too much time here other than just to express and to give an indication of the diversity of the business: 75,000 customers, 6,500 employees, a global operation with more than a third of our revenue now being generated outside of South Africa, and that being a really important part of where we're taking the organization itself. You can just go on to the next slide. The business itself is split across three segments, as you are all aware.
We have our defense businesses in applied electronics under Trevor Raman, our ICT businesses under Graeme Eddey, and where we are today with Deon, our power cables and circuit breaker businesses. Onto the next slide, and this will be my final slide before I hand over to our presenters for the day. Reunert's investment case has got three clear pillars and an underpin that we set out for our shareholders. The first of those is that we have high-quality assets that are distributed and exposed to slightly diversified segments, but really well positioned within those, in defense, in our applied electronics, in ICT, and where we are today in electrical engineering and what you're going to go through today. It really settles around why we believe those are strong and such a good pillar, is that they all have well-established and defendable positions.
The markets within which we operate are growing and have strong underpins to them. Whilst you're going to see a very big and impressive asset base, relatively speaking, they are relatively capital light in what we need to invest into those to keep those world-class assets, but to keep them in shape. There are relatively moderate capital investments that need to go into those to keep those capital requirements there. We have a long and proven track record of earnings growth. What you're going to see today in our electrical engineering business, if we just go through those, in our power cables business between Zamefa and African Cables, we have the largest power cable market in south of the equator. We are the largest operators into that, and we're going to show you most of that today.
In circuit breakers, we are comfortably the largest local and have the largest market share by quite some margin in that Southern African market space. You're going to see two very strong brands, two very strong operations, and in each of their own markets are leaders in those markets. In Reunert, we have three very clear strategies for growth. The first of those is into our renewable energy business, which continues to grow very positively. We have nearly now 100 MW under our own ownership, which is the core part of that strategy, and together with our trading business is well positioned to continue to participate along renewable energy growth in South Africa. Under digital integration, we have our ICT, and we continue to invest into that. Finally, our international activities that we've often which plays out very much in the cluster or the segment that you're in today.
In Zamefa, we have close to around about ZAR 2 billion worth of revenue that is outside of South Africa and continues to grow very strongly into Central Africa. In the circuit breakers, you're going to see later in that company, two-thirds of what they manufacture are exported and sold to international markets. Together with defense, we now have around about ZAR 5 billion worth of our revenue that comes from international operations, our existing and our core businesses. We have a very strong balance sheet. We are largely ungeared at the moment and remain ungeared. I mentioned a little bit earlier the strength of the cash flows that we generate on an ongoing basis. Broadly speaking, if you look over the period, we're able to convert EBITDA to free cash flow at around about 65%.
That enables us to invest into those strategic activities, into our core businesses to make sure that our assets are fully maintained and can grow organically. We can continue to pay healthy dividends to our shareholders to make sure that they have good value. All of those three pillars are underpinned by a very strong set of governance and risk management environments. We have a values-driven culture that exhibits and underpins our ethical stance and our ethical values that we sit into this organization. We continue to do all of this in a sustainable and long-term value creation for our shareholders. Ladies and gents, that's all for me from now. Thank you for joining us today. Sit back and enjoy the presentations with our management from both the cable businesses this morning and our circuit breakers this afternoon.
I will be, like I say, here throughout and look forward to engaging with you on the Q&A later in the day. Thank you very much, and over to the first presenter.
Good morning, everyone. I've got the honor to give you an overview of the electrical engineering segment before we go into the BU presentations. Electrical engineering is the segment in Reunert that produces power cables and circuit breakers. We employ about 2,500 people in our facilities for power cable manufacturing and circuit breakers. For power cables, we've got this facility here today in Vereeniging, which we will visit. We also have a manufacturing facility in Zambia, which is called Zamefa. For circuit breakers, this afternoon, we'll visit the facility in Isando, and we also have a factory in Lesotho. In addition to that, CBI Low Voltage also has subsidiaries in the USA, Australia, and own employees which are co-located with our applied electronics colleagues in India and dealers and distributors in Europe. For the group, we represent about 52% of the revenue, and it's been consistent from 2023 to 2024.
On the operating profit front, we represent about 43% of the total operating profit for the group, and that is up from 38% in 2023. The electrical engineering segment is a significant contributor and remains to be a significant contributor, not only to the top line, but also to the operating profit. If we look at the three business units in electrical engineering, it's called CBI Electric, and then we've got African Cables, the facility here, which is managed by Luis Corte and his team. We've got Zamefa, managed by Kangwa Bwalya and his team, and then circuit breakers managed by Charles Osborne, which we'll visit this afternoon. African Cables is a leading supplier of energy infrastructure in Sub-Saharan Africa since 1935. It designs, manufactures, installs, and maintains electric power cables, and they employ just over 700 people.
I'm also proud to communicate to you that we are a level one BBBE contributor. You will see a lot of grey hair and wisdom here in the team, many Luis, but they have accumulated expertise of more than 237 years, as Alan said in his introduction. You'll see it throughout the organization. What they produce are low, medium, and high voltage power cables, as well as overhead conductors and specialized cables for the renewable energy market, the industrial market, and also the mining market. In addition to that, they also produce copper rod, the same as Zamefa, and copper rod is a raw material as an input to many electrical engineering applications. In Zamefa, Zamefa is the largest copper beneficiation facility in Zambia, and it's also listed on the Lusaka Securities Exchange. They are a vertically integrated organization, and they convert copper cathode into electrical components.
They have about 340 people and also extensive experience in the management team. They're exceeding 130 years of cumulative experience. Producing copper rod, as I said, that's a raw material as an input for various electrical applications, and then low voltage cable, as well as overhead conductor and general insulated wires and control cables. Lastly, circuit breakers in Isando, which you will visit this afternoon, is a leading South African manufacturer and supplier of electrical protection, control, and automation devices focused on the low voltage market. I neglected to say, but you can read it there. Zamefa was established in 1968, and CBI Low Voltage was established in 1949. They provide circuit protection, automation, and control systems. They employ 1,400 people and also got, like I said, 137 years of experience. The products that they produce: circuit breakers, traditional electromechanical components, and then smart energy solutions.
Some highlights of our performance over the past years, you will see there that we are very proud to communicate to you that we've managed to grow the business steadily with a CAGR of just over 11% over the past four years, bringing us to an annual revenue of about ZAR 7.7 billion per annum. The good thing there is that the teams managed to unlock a lot of value and deliver the operating leverage there with, you will see, the profit before interest and tax growing by a CAGR of 21%. One of the key strategic initiatives is internationalization and to grow our revenue base with the export business and international business while maintaining the base of the local business. That has grown significantly to about 38% where we were last year, and it was up 7 points from the 31% in the previous financial year.
We value our people, and we value a safe working environment, and we pride ourselves in the LTIFR track record. As you can see on the screen, for all three facilities over the three-year period, we had a very good track record, bar 2023 in low voltage, where we had three LTIs, four LTIs. I'm also happy to report to you that those LTIs did not have any loss of limbs or permanent disability. With that being said, a very experienced team delivering a strong, steady, and consistent financial performance. Happy to hand over to Luis Corte, who is the Managing Director of African Cables.
Thank you, Deon. Let's start a little bit with our root, where it started. African Cables was raised here in 1935. To give you an idea, the only company in Africa that had the same basket of products is in Egypt, and they were started in 1938. Locally, our biggest competitor, Aberdare Cables, was founded in 1946. We have a long track record of providing electrical cables into this market and the region. In 1979, we were the first ones in Sub-Saharan Africa to put the high voltage cable line. You will see a tower outside there, which followed realizing the need of the technical expertise to install the cables. We founded Power Installations. Power Installations does the design, provides the coaching to the municipalities, or Eskom, goes into the field, installs the cable, commissions it, tests it, and if necessary, we give the maintenance to the municipalities.
We have contracts in 14 municipalities around the country where we have crews that they have, if there's an electrical fault, we have to be within two hours to troubleshoot the fault. If the municipality requires, we will be doing the repair. In 2006, African Cables was joined into the Reunert Group, and it was the same year where it was launched an initiative to have one same phase for the electrical segment, and we call it CBI Electric. In 2014, we saw the need to grow our range of products. While we had the 132 kV capability, the size of the conductors were reduced to 1,000 square millimeters. Today, we have the capability to make this cable, which is 2,500 square millimeters. None of our competitors are able to make it here, not in Africa.
We do it in aluminum and in copper, depending on the needs of the customer. In 2016, we managed to have the BBBE grade level one, which requires for us to participate in all the state-owned enterprises and the municipalities, which we have maintained up to date. Continuing with our modernization, we changed our machine to do the aluminum sheath, which is a requirement in HV cable. We have installed new machinery that you will be able to see operating today. This is the startup. This is a picture from 1936, where the builds were already done there. In 1979, we were reaching the tower. The tower, first, the first tower that even in Africa was done for high voltage cable. This is today. More than 130,000 square meters, 72,000 on the roof, and 22 buildings. We are just on the left lower side, where we are here today.
We will challenge everyone that we have to do a tour in less than 40 minutes. Hopefully, we know that everybody is very fit here. This is a very small representation of what we have in the network. We are providing a product from the beginning to the end. The beginning, let's assume that where we have number one is Koeberg. Koeberg generates from nuclear power into electricity. They come out from the reactors with 400 kV, which we participated those days to install. Thereafter, go to transformers, and this is the cable that comes out from the transformers into the grid. The grid will go to the towers, right? We said 132 kV. Today, one of the most common topics in the market is the TDP, the Transmission Development Plan.
The transmission goes from the transformer up into the towers and goes to other substations where we reduce the voltage. The voltage is transformed from 765, 500, 400 kV into 33 kV. We go to distribution. Distribution is what we see on the streets, either aerial or underground with 33 kV, or it goes lower to 11 kV. This unit, where we are sitting here, we have a supply from Eskom of 22 kV, but other industries use 11 kV. When we go close to the house, that 11 kV goes to 230 volts, and that's what we receive either at home or at a shopping mall. Today, dramatically, the data centers. We will speak about the data centers a little bit here. Our range of products, you can see, and you have some time. There are some samples here of what we have.
Again, from the connectivity, from the generating power to the house. What we see on the left lower side is the ACSR. It's aluminum conductor, steel reinforced. That's typically what we see between towers, most likely on the sides of the highways. That's what the Transmission Development Plan will be based on. Very briefly, the generation power of South Africa, 80% is on the north with coal fire generating plants, and 80% of the consumption is also there. 20% is that comes to the south. Because of the aging of the generating units and the need to go to a low carbon energy supply, the new renewable energy is mostly done on the Western Cape, the Eastern Cape. Therefore, now we have the dilemma that there is a lot of power on the southeast, southwest, and it has to go to the north.
There are three corridors in the Eskom network. It is the central corridor, which is the existing one, where around the transmission lines, there are already so many facilities that it's difficult to grow. The most difficult thing to grow the transmission lines is the right of way, the servitude. I want to put a new line here, but then it happens to be that there's a farmer or there is, in some cases, informal settlement, and they say, "I'm sorry, I'm not going to sell my land. You need to find something else." That's a big dilemma. That's one. The first part of the Transmission Development Plan, 2025 to 2029, is to retrofit and make that corridor efficient. The second is to go on the south corridor and the northern corridor, where there are new things.
To give you an idea, out of the 14,000 km that are discussed in the Transmission Development Plan, 6,000 are done in the first five years, and 8,000 are done in the second year. The first 5,000 are using conductors, so transmission lines that they require for each phase, three or four conductors. We're talking about probably 12,000 km conductors that we require. The second part, which is the biggest, and they will use 765 kV mostly, requires six conductors per line. That way, we're talking about 26,000 km of conductor. We can tell you that we can supply that thing in the first phase, 100%. The second phase, we can be more than 70% in terms of conductor, right? Besides the distribution grid, we also have municipalities. The municipalities are dependent. I mean, the biggest revenue of the municipality is electricity and water. That's the part.
The infrastructure, unfortunately, is on decay. There is a lot of needs to have a retrofit, a maintenance, new lines in the municipalities, which is what we serve mostly. Rural electrification in South Africa, I mean, South Africa has 87% electrification rate compared to Sub-Saharan Africa, only 47%. While there is a high electrification, it's in the urban areas. We need to go to the rural areas, and that's something that we also provide products for. In the private sectors, we were mentioning the data centers today are the biggest consumers of electrical power, not just only in South Africa, it's around the world. To give you an idea, if you go to the R24, you will have on the right side, going to the airport, is Tobacco, Tobacco Data Center. You'll see a gray building that consumes far more power than Sandton City.
The reason that is all the servers generate a lot of heat, and the biggest consumption of that is cooling. Those data centers use exactly as I'm going out of Koeberg, 2,500 square meters, which we have supplied and installed. The markets we serve, I mentioned municipalities, SOEs are big customers of ours, but also there has been a transformation in South Africa. The public sector is developing less, and the private sector is taking more over. Many of the development of infrastructure now is done by the private sector. Distributors and contractors now play a big part of our portfolio. We spoke a little bit of TDP. We'll speak a little bit more. The regional sectors, I mean, we are supplying, we're the biggest supplier of copper rod, which is the main material, the main raw material for electrical powers.
Between Zamefa and ourselves, due to the demise of Palabora Mining Company, now we are the largest producer of copper rods in Sub-Saharan Africa. Our competitors mentioned Aberdare, Mtech, but we have the French, Nexans, the Italians, Prysmian, and obviously also our continent colleagues, Els ewedy from Egypt. This is a little bit of a distribution, and I want to see here. Today, we are 55% of the distributors. We supply them. The change of procurement in municipalities has been dramatic for us. Before, we used to have, the municipalities used to say tender for manufacturers. Today, the municipalities, they say, "Uh-oh, I want manufacturers, and I want other enterprises, most likely contractors, new distributors." Instead of being three manufacturers, we were the biggest, we have sometimes six or eight people that are competing for the same tender.
Therefore, those companies now go to us, depending on their size, or they go through a distributor, a large distributor, to buy the cable. The amount of cable is still flowing, however, the channel to the municipalities has changed. The industry, our biggest customers today are renewable energy. We participate in mostly, probably we're talking about 70% of the wind farms and solar farms. Those cables are provided here. The mines are a very, very important customer of ours. They are very demanding. The contracts with the mines say that when we have a period of two years' contract, we must maintain around 10% of possible stock to be used at site. When they tell you, "I need this cable," it's for this afternoon or for tomorrow. Obviously, the mines are such a critical industry that they cannot afford to have downtime.
Eskom and municipalities, we can see here it's 11%. Five years ago, we were around 17%. Ten years ago, it was 60% of our market. It has been a good effort, very successful, to change our model to go exclusively around five big customers to now have 20. We don't believe ourselves to be a product supplier. We are proud to say we give an additional value, added value, and a service to the customer. Why? Because we're able to design the system, we're able to produce the cable for the system, install, build the system, test it, and manage it for the customer. That's something that we are very well recognized. One of our biggest customers is the City of Cape Town in the area, City Power. Very well-run municipalities, Stellenbosch. In all those places, we participate. Also, we are participating in those municipalities that have some problems.
Like Steve Tshwete, they have a critical situation in terms of their maintenance, but with our assistance and support, they see an added value rather than just only going and buying a cable from here. We see always that the customer must see us not just only as a big player. They must see us as a partner. That's exactly what we put in our logo, Power by Innovation, Innovation by Partnerships. Our competitive advantage, we're fully integrated. To give you an idea, after PMC is not producing copper rod, the rod coming into South Africa was from Russia, the Middle East. We do use regional copper cathodes, and we transform it in Zambia, in Zimbabwe, and in South Africa.
When there were the big logistical challenges that it was taking many, I mean, many more weeks than usual, and there was a scarcity of copper, we were not having that thing because we had the copper mainly from DRC and Zambia, transformed it, and we continued our operations without depending on logistics in that regard. Something very important, I think Deon mentioned, you are very important for us, so we strive ourselves every day to give you consistent results, shareholders. This is a combination, the left with the right. Where we see challenges, we see opportunity as well. The first one is the municipalities. The municipalities that we know, the newspapers, they have a funding problem. It has been modified now, the Section 16, where private industry can propose to municipalities or any other state-owned entity a solution, what we call here unsolicited bid proposals.
Now we are able, if it is below R2 billion, to tell the municipality, instead of finding R200 million for this project from Treasury, we can combine with our associates, the banks here, and give you a solution that maybe now, if you engage with the bank, you have a facility that has to be vetted by the GTCO and have, instead of paying R200 million upfront, be an OpEx with interest and really have the project in R20 million in 10 years. That's something that we're working on. We have been working with some municipalities that are interested, but it's a difficult, it's a change of mind in type of how the municipalities operate. They always have, they always see themselves controlling, right, everything. We're saying here, we can help you with that thing, but the management has to move out of the traditional way.
The Eskom Transmission Development Plan (TDP), as we said, I mean, Eskom, having so long, if you have a budgetary response, we supply a tender, we have 180 days to wait for Eskom to say it's good, it's bad, we'll go ahead. They're trying to put private industry into that. That makes the dynamics a little bit different. Eskom is very supportive of localization, which means that they have to buy whatever is produced locally, like ourselves. The private sector will say, I want to be cost-efficient. There's no way that anybody in Africa can compete with the Chinese aluminum conductors. The Chinese, besides having policies that they cannot export aluminum rod, but the conductor, they are discounted the VAT. They give them automatically a 13% advantage versus what we have to import. Our aluminum comes from Malaysia, from Malta, Russia, not in this time. That's important.
The steel is made locally, and then we can use it there. The independent transmission projects, right, we know that there are seven projects identified. We have been working with the people involved in that. Presently, we are supplying cable conductors to the TDP plants. TDP did not start last year or two years ago. TDP is coming from 2010-2012. All those projects that have been on the table for X or Y reason have not been developed. They've been developed. I think we see far more energy in getting this thing implemented, and we are supplying the cable there. In one of those things, there is a special cable that will use the same towers, but instead of steel, has a stressed carbon fiber coated with aluminum, which makes it lighter. It uses a special alloy of aluminum that includes zirconium. The existing cable works at 120 degrees.
The cable that we call high-temperature, low-sag, will be working at 200 degrees, and it will provide 20% more capacity of transmission. That's an average depending on the sizes, because instead of steel, it has that thing. Now they can take out the old cable, put in the new one, which is lighter, so they don't have to change the towers, but they increase the transmission capacity. We're working on that thing. You'll see there that it's a work in progress, right? It's technology that has been implemented in Europe, the United States, and Asia, but it's new to Africa. The public-private partnerships are very, very interested in participating with them. I think one of the biggest items that the private industry sees is governance. We are well recognized to be a very ethical company. When people from outside come here and say, how are we going to operate?
How are you going to deal with the customer? They have confidence that we will do it exactly in ethical manners. This is the last slide. What differentiates us on the market? Why do people, when they say, I want CBI, I want African Cables, I want Zamefa, why? The first thing is that they can see a full supply of the electrical product from the generating unit to the house, to the data center, or to the shopping mall. They see in us a support, a technical support, where they can cross-check their own calculations or the consultant calculations for the municipality. We have a very good relation with the technical parts of the municipalities, Eskom, Transnet. We don't depend much on the logistical side outside of Africa. The main product, copper, is within our...
and also, we supply some of our competitors, right, copper rod, because they see us also as a reliable supply for them as well. Special skills, the management here, we're buying next year, and our incentive will be sticks, because now we have 215 years of combining between eight executives. We have 80 years in our engineering team. It has 80 years of specialized design experience. We participate internationally. Every year, our engineers go to France, Holland, Australia, and they are leading international groups of study in cable manufacturing. We are not consumers of technical knowledge. We are also participants of existing developments around the world. With that, thank you very much. I now leave to my colleague, Kangwa Bwalya.
Thank you. Good morning, everybody. Okay. The first slide, what I'm attempting to do here is to just give you some background about our company, where we're coming from. We are not as old as African Cables, because we were only established in 1968. In Zambian context, we're a fairly, fairly old company. The company was started by the Zambian government in partnership with some of its JV partners from the U.S. and Europe. The actual production only started in 1971, where we became the first manufacturer of cables in Zambia, primarily for the mining industry, but also the telecoms before the cell phone arrived. It operated as such as a government-owned, so to speak, because the government continued as a majority shareholder up until 1996.
When the company was privatized following a change of government in 1991, the government then went on a very strong drive to privatize industry, and our company was such. Where Phelps Dodge, where the minority partners became the majority shareholder. Another milestone was 2004. Again, because of that drive to privatize, a lot of industry was being listed on the Stock Exchange. We became one of those early ones to be listed on the Lusaka Securities Exchange in 2004. In the same year, we got certification for the ISO 14001, and what used to be then called the OHSAS 18001. I want to mention that we were the first company to get that certification in Zambia, what is now called the ISO 45001.
The company went to operate as such, under Phelps Dodge, changed to General Cable, which was also another American outfit, up until 2016, when General Cable exited its markets out of Africa and Asia Pacific, and then Zamefa was acquired, majority stake acquired by Reunert. It's continued like that. Obviously, one of the points I wanted to point out is about the resilience of our business and our company. We survived the privatization. During the privatization, a lot of companies in Zambia collapsed, the ones which were previously government-owned. The country opened up. Suddenly, where there was no competition, you had a bunch of other suppliers coming in, mostly through imports, but we were able to sustain our business. Fast forward in the 2000s, COVID came. Again, we were able to sustain our businesses. We were able to keep all our people and stakeholders.
Also, we had an issue of VAT refund in the Zambian government, where the VAT was not refunded to a lot of taxpayers, including ourselves. That had issues not only for us, but as a country, it still remains a very significant item on the calendar for Zambia. Next slide. In this one, I just want to highlight some of our successes. I think Deon, in his intro, spoke about us being the largest and oldest integrated cable provider in Zambia. We add the biggest value to Zambian copper. As we know, Zambia is a big copper producer, but a lot of that gets exported in the form of either cathode or anodes, and sometimes even concentrates, which are low value-add products from the process. We are proud to be the largest value-add to Zambian copper.
If you look at the map at the bottom there, we just want to highlight Zambia's location in the continent. I mean, we are surrounded by eight countries. I think in Africa, probably only the DRC beats us because they've got nine countries around them, but the margin is very small. That gives us a special place in the continent because out of all those eight, we export directly to seven of them. The only country we don't export directly to right now is Angola, and it's because of the logistics. I think the Zambia-Angola border is probably one of the remotest parts of Africa one can ever get to. There is the Lobito Corridor project, which is coming. We hope that will open up that place, and then we could be represented or export directly to all our eight neighbors.
Next, this just gives you an overview of our product portfolio. Again, we've got four buckets, most of them similar to African Cables, but obviously, we don't produce the big things that they produce. When we go to the market, we offer a full portfolio because whatever we cannot manufacture locally in Zambia, we do approach African Cables to manufacture for us. When we deliver to the customer, we offer the full package. Pretty much similar to what Luis had already explained. Our business model. What are the drivers of growth in our business? Today, we still see a lot of need for electrification in Zambia, and I would argue that excluding South Africa and Egypt, probably the rest of the continent sits in the same space. We are very much involved in the electrification in Zambia, but also in the region.
We also see recovery in the mining business, particularly in the DRC and Zambia itself, but also regionally. I mean, the other day we were joking, not too long ago, we never heard of copper in Botswana. Now Botswana is becoming a big player in that space. There's a lot of mining activity in the region, including non-traditional mining countries are now moving into that place, and we see a lot of opportunity in there. As DRC, South Africa is a... Whatever happens in this market affects all of us on the continent. We are hopeful that when the improvement, the GDFI happens here, there will be spillover effects into other countries, including ourselves. How do we save our markets? What's our route to the market? Most of our activities are largely direct.
If you talk about the Zambian utilities, these are typically through public tenders, but sometimes they also do very direct bidding, if you're familiar with the way government procures. Most of them are really public, so we just have to fight for that business. Because of our capabilities, our history, we've typically secured most of the business in that space. I've already talked about the mining, also direct, but also sometimes through contractors. The other customers whom we sell through distributors, because we're not a retail sort of house, so to speak, we sell in bulk to our distributors, who then cater for the smaller, smaller buyers. The big buyers, we typically deal with them directly. How do we create value as Zamefa? Again, this goes back to how we've managed to grow and leverage our brand.
If you went to Zambia and spoke about Metal Fabricators of Zambia, there are very few people who would connect. If you said Zamefa, everyone knows what Zamefa is and what it does. Actually, our legal name as a company is Metal Fabricators of Zambia, but very few people use that name because of the brand that we've built over the years. We differentiate ourselves. We are not like every other player in the market. Over the years, we've built ourselves a very good reputation for quality because we only use very high-grade materials from the mines in Zambia. We do not mix and blend things at our factory, and our customers are aware about that. When they buy Zamefa, they know they're buying quality. That gives us an opportunity to even differentiate ourselves both from a pricing perspective, but also from how we deliver the service. Growth trajectory.
We're seeing sectors. Construction is a growth area which we are serving currently. The mining, I already spoke about it. There are bigger projects that are opening up. In Zambia, our biggest project right now in the mining space is what is being developed by Barrick. Barrick, they own a copper mine in Zambia called Lumwana, and they've just committed $2 billion to develop what they're calling the Super Pit. Obviously, in Zambian context, $2 billion is fairly a big amount of money. There's a commitment to procure the best if it's available locally, and we fit in that space. We are hopeful we'll be able to participate in those projects. First Quantum, they just went through a significant project, which we're calling the S3. Again, that was a $1.2 billion contract.
We supplied all the cable that we could manufacture for that project, and the bigger things we're able to get from Africa. Competitors in the region, we see South Ocean. We've encountered them quite in a few markets where we operate. NewCant Cables is a Zambian company. El Sewedy, which Luis already alluded to, is a big player in the region. We've got other smaller local manufacturers in some of our chosen markets, particularly East Africa. Challenges and opportunities. One of the key challenges we face, I think as a country, Zambia, is around the security of energy supply. Prior to last year's drought, Zambia was roughly 85% dependent on hydropower plants. We've got the Kariba, which we share with Zimbabwe. We've got a number of power plants on the Kafue River, which is in-country.
Because of the changing weather patterns, that has shown some vulnerability in our power supply situation. Right now, there's a lot of activity in the solar space, but it will take time before we ramp up that. It's a real challenge. Last year's drought, up to today, the country is still feeling those effects. The currency. Our currency is called the Kwacha. In one month, it can be the best performing currency, but the following month, it can also be the worst currency. It's the volatility around that currency, and that makes planning sometimes more difficult. We can say that for a number of other developing countries' currencies, but ours is quite significant. Reliance on ZESCO. Yes, ZESCO is an important customer.
They've gone through a lot of changes, a lot of improvements, but still, we want to move some of that reliance by developing other markets like the mining space, which we already spoke about. Commodity prices, yeah, these are things we see. Copper, aluminum, they're always on the move. Of course, politics always plays a significant role in most economies, particularly so in our case, where there's still a number of political decisions that influence business. Zambia is due for elections next year, but we think whichever government emerges, we'll still remain supportive of the private sector. Growth opportunities, we already spoke about the mining. Domestic demand, we still have a good pipeline, both with the utilities, but also with the mining companies. Zamefa produces both copper and aluminum products. Sometimes, depending on the price differential between copper and aluminum, certain customers want to make the switch.
If copper becomes too expensive, they want to migrate to aluminum products. Now, because we've got the capability to do both, we can serve the customer depending on what choice they make. Recently, ZESCO, which is a utility company, made a very bold decision to migrate from copper to aluminum. For them, the main reason was around thefts and vandalism. I'm not sure how the situation is in this country, but in Zambia, it was becoming a problem of people stealing copper cables. They knew where those copper cables lay, because even for the drop wire, the duplex, which for a layperson who wouldn't know if that cable coming from the port to the house is copper, a luminum.
They can easily tell, so they would target those. Once they know it's aluminum, they will not touch it because the value differential or the incentive is not there. Potential for growth, we talked about the DRSC, but also domestically we see opportunities in Zambia itself. I think this is my last slide. Again, here we just try to summarize what differentiates us. Luis already alluded to some of these. We produce very high-quality oxygen-free copper, which we supply in the region, mostly to our fellow manufacturers because that becomes an input into their process. A well-respected brand, we are the supplier of choice in Zambia. People, when they go to a distributor, will first ask for our product, and if that particular distributor does not have any stock, then they ask for the alternative. Typically, we come first. I think with that, I will beg to move.
Thank you very much.
A very warm welcome to Zamefa. Zamefa PLC is a company with a very rich history and heritage who were founded way back in 1968 by the government of Zambia with its minority partners from the U.S. and Sweden. We make cables to world-class standards. Obviously, over the years, the company has gone through changes. Today, we are listed on the Lusaka Securities Exchange with more than 1,200 shareholders, and Reunert is the principal shareholder with a 75% stake in the company. Zamefa still remains true to its primary objective of supplying world-class cables to its customers wherever they will be in our chosen markets. Zamefa is unique because we pride ourselves as the top-quality producer. We use only pure cathode, LME-grade material as our primary input in our process. Not so many players have access to that material.
The primary reason why we are based here in Luanshya is because it gives us access to multiple mines which produce high-grade copper cathode. It makes the logistics easier, but also makes it logical because we have access to power supplies.
At Zamefa, we use 100% Zambian copper produced locally at the copper mines here in the Copper Belt. That copper is then converted into copper cathode, which we use here in our factory, A-grade copper. We then melt those copper cathodes in our furnace at 1,175 degrees Celsius, and there it gets poured and then processed into rod of various diameters. We do a 16-millimeter rod, 12.5-millimeter rod, and an 8-millimeter rod. That is packaged or we put it into our local wire and cable factory where we produce our local cables here in Zamefa.
The first process we do is what we call rod breaking or wire drawing. There we take the rod, which is approximately an 8-millimeter diameter, and we draw it down to a wire size that is suited to the conductor that we are going to manufacture. Those various wires are then taken to the next process, which is stranding, and there the wires are wound together. We apply insulation over it. Some of it is building wire, as we say, and that goes straight into packaging. Other ones, we take those cores and we then lay them together to form a two-core or a three-core, even a four-core cable. Every single cable drum is tested to see that it complies to the electrical properties and electrical requirements before it is then sealed, ready for supply to our customers.
We produce to multiple standards, including the British standards, the American standard, South African standards, and obviously our own local Zambian standard here. Various checks are done in our laboratory. We have one of the best-equipped laboratories here in Zambia, and in fact, we believe in Africa, where we check the quality of our copper. Domestically, we're a big player, the biggest player, but also we play big time in the region. For example, Zambia is surrounded by eight countries. We export directly to seven of those countries, but we also export further afield, particularly in East Africa, where we have a very good customer base. As a company, we are certified for 9001 for quality. This means that in everything we do, quality comes first. How we source, how we process, and how we serve our customers and other stakeholders, they are a priority to us.
We're also certified for 14001, which is for the environment. We take this responsibility very seriously. As you go around our facilities, you see some of our recycling efforts, which we do for the environment, but also to support our local communities. We are equally certified for 45001, which is for the occupational health of our people and their safety. Our people are well cared for, including an on-site clinic where we attend to our people and their immediate family members. As you know, Luanshya is a slightly isolated place, so we want to be self-contained as much as possible. The prospects for Zamefa in the future are very good. Take, for example, the electrification levels in this country, Zambia. It remains very low.
If you go outside the cities like Lusaka, Ndola, and Kitwe, just a few km outside, the levels are extremely low, and the government is embarking on an electrification program to bring up those levels. Those would require a lot of cables, and Zamefa would definitely play large in those spaces.
Thank you, everyone. Now we will proceed to the tour. If you don't mind, let me introduce the management team of CBI Electric African Cables. If we will go outside, they will have their badge, and if you don't mind just to see who is going to be the leader with. Outside, you will have the reflective vest and the ear plugs. The ear plugs are only necessary when we are inside of the buildings. Please, on the way back, you can leave the vest, but you can take the ear plugs that you most likely will have to use at low voltage. Thank you. We could go outside. I think we will have one hour, five minutes. That's what we will have around for doing some exercise after this session.