SA Tourism, Kagiso enter into deal for exhibitions
SA TOURISM and empowerment firm Kagiso Exhibitions, a subsidiary of JSE Securities Exchange SA-listed Kagiso Media, have struck a profit sharing deal to help fund overseas tourism exhibitions at minimum cost to the taxpayer.
Kagiso Exhibitions piped two other short-listed companies Rai Exhibitions and Surekey for the three-year contract based on its bid that reduces financial risk to SA Tourism.
The profit sharing model, which excludes an up-front management fee, frees up R15m that SA Tourism would have used to fund oversees exhibitions this year for other international campaigns in SA's core US, UK and Africa markets.
The deal sets the trend for future tourism contracts, and paves the way for other government-funded organisations to reduce public spending.
SA Tourism CEO Cheryl Carolus announced yesterday that the partnership would put SA on the global map as a world class travel destination, while "playing smart financially".
"There were a number of key imperatives that set Kagiso apart from its competitors including a one-stop innovative exhibitions package that minimises the financial risk to SA Tourism on exhibition logistics," she said.
"This way we can draw tourists to SA by utilising the least amount of funds."
Kagiso will begin by preparing for the World Travel Market, one of biggest travel trade shows, being held in London in November. Next on the agenda is the Internasionale Trade Burse in Germany.
The real challenge, though, will be to grow SA's premier travel trade show, Indaba, into one of the top three exhibitions of its kind worldwide.
Kagiso Media CEO Roger Jardine said yesterday he expected turning over more than R10m profit a year through selling floor space at exhibitions.
He said it was a realistic expectation considering one stand is sold at between 200 and $350 a square metre, with the total size of an exhibition venue ranging from 10000 and 40000 square metres.
"Kagiso's bid places emphasis on responding to the trend of reduced public spend ."
The company would use its competitive intellectual capital and experience and an expanding international footprint to showcase "SA's unique tapestry of cultural depth, colour and texture", Jardine said.
"Kagiso will implement a spectrum of plans to take exhibitions to a new league by leveraging resources from within the group to create a one-stop exhibition management service," the Kagiso Media CEO said.
Jun 13 2003 06:10:22:000AM Sharda Naidoo Business Day 1st Edition
Friday
13 June 2003
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