2020 In Review – Luvhone Engineering

Handover of the Registration Licence by South African Council of Space Affairs at the Ministry of Trade and Industry Offices,  Left Leago Takalani, Luvhone CEO and Ms Nomfaneko Majaja, Chief Director Department of Trade and Industry on behalf of SACSA

Luvhone Engineering and Consulting Partners (Pty) Limited is a South African company, based in Johannesburg. The company trades under the brands One aerospace, One Telecoms and One satcomms. The business was established in 2015 by a South African woman engineer.  The company also trades with countries across the globe in the Atlantic, Asia, and Europe regions.  We continually look for trade and technology partners across the globe that share in our company values and the premise of shared prosperity for the advancement of society. The company provides niche and high technology solutions within the industry segments of Aerospace, Air Traffic Management, Terrestrial and Satellite Communications, Information and Communication Technologies.

In line with Space in Africa’s 2020 in Review series, we had a chat with Takalani Leago, the Founder and CEO of Luvhone Engineering and Consulting partners on what the Aerospace company has been up to in 2020 and what to look forward to in 2021.

What are the milestones achieved by Luvhone in 2020?

First and foremost,  staying in business has been a key milestone in 2020.  As we know this year was like no other with the advent of the COVID-19 pandemic.  Managing the business through the COVID-19 wave crest has been a learning and also a true test of business continuity and operational processes.  As we saw many businesses folding and falling short of staying afloat during the pandemic, staying in business for a NewSpace such as Luvhone has been formidable. 

Luvhone as a NewSpace company also turned five (5) years in operation on 6 October 2020.  In 2015, the existence of the company was an idea on paper and today we have an organisation that has products,  customers, investors and a team that is passionate about making a difference in a high-tech, niche and male-dominated space industry. 

On the business portfolio of products, we expanded our distribution network to a national footprint –  providing services and products across eight (8) provinces in South Africa.  This network has enabled us to service customers with satellite components such as antenna hardware,  system engineering services and also the expansion of our Radio Frequency (RF) test and measurement services portfolio.

In this year,  we also have expanded our technology partner network and we were successful in completing the Cisco Partner certification this year.  This is in line with bringing the best of network and cybersecurity management within our products portfolio amidst the growth of global cyber vulnerabilities on technology systems. 

In terms of infrastructure investments, we also recognize that the future of our business depends on technology Research and Development (R&D).  Luvhone invested in a new engineering laboratory facility to drive research initiatives and innovation in data analytics, software applications, aerospace systems security management capability as well as small satellites RF systems.  As part of infrastructure investments made, we also have relocated our operations to new office premises.  This will enable us to be closer to our customers, stimulate employee collaboration as well as drive growth plans we have for the next 5 , years. 

On the regulatory side of things, we were also successful in attaining our license to operate in the areas of handling space objects through the registration with the South African Council for Space Affairs. This is in line with the United Nations treaty on Convention for Registration. This is an exciting development for us and will help us to drive new global opportunities, engagement with private and public role players in forging new space technological advancements. This is particularly in consideration of the pan African vision for the delivery of African solutions for Africa and maximising the African Intercontinental Free Trade Agreement. This is an exciting era that will help African NewSpace and industry to be globally competitive in the areas of Space Technology, Satellite communications and Telecommunications.

What projects did you execute this year?

Albeit this year started with the advent of global disaster management, we were in a fortunate position to have embarked on a few projects in the year 2020, while some are ongoing and will be completed early 2021.  Our tactical approach this year was to divert focus on areas that were least hit by the COVID-19 pandemic. For example in the environment of our aerospace business, which includes air traffic management and airport infrastructure, the industry experienced clawback in expenditure due to the travel restrictions and customers postponing planned projects whilst managing the pandemic.

Our projects focus this year was therefore on our mainstream satellite components products, telecoms and professional services. To this effect, we expanded our distribution network footprint in South Africa, in order to reach customers outside of the main business hubs in Johannesburg.  We also implemented projects in RF safety as well as test and measurements portfolios.  We continued to retain the clientele we have in the telecoms business related to software and ICT infrastructure. The project’s implementation was not without challenges as we had to manage supply chain constraints and movement restrictions. This has had a significant effect on our ability to pursue project pipelines that we had anticipated for the year. 

In this case, we focused the time that was available to harness the internal processes such as our Quality Management Systems and internal business processes.  This was also in consideration of the business model changes we expected from the internal office relocation project and the establishment of the engineering lab needed for helping us bring the innovation plans to life.   The office project builds and moves during COVID-19 was challenging, with multiple contractors working on-site and safety procedures that had to be monitored for compliance.   We are now settled and look forward to starting the new year in a new environment, and also finding partners we can work within the year.

At an organisational level,  we also rolled out new company values that will take the business to its next 5 years of growth.  This was very important to me as the CEO, in order to ensure that we have the charter for the right set of values that will promote the right conduct and mindset within the business. This is essential in order to leapfrog to exponential growth towards a 10-year milestone ahead.  This is part of the change management initiative we are implementing as we change gears from a  NewSpace start-up to grow to a mid-cap organisation. 

How are these projects selected, and what is the process for selection?

Luvhone, as a NewSpace that aims to be the preferred pan African engineering technology partner of choice, inventor of solutions within aerospace, telecoms and Satcom that can be exploited for commercial use globally and shared for the prosperity of Africa and humanity.   Therefore, a long term outlook and sustainable approach are very critical in our project vetting process, including a thorough analysis of projects with the right fit and within the business strategy, values,  investment viability spectrum,  competencies and resources needed. 

To this end,  our project selection processes are based on a clear articulation of the problem to be solved, review of how we can derive solutions using capability within the areas of our space systems,  air traffic management, software applications and information communications systems. As an organisation, we also take careful consideration of the values represented by the conduct of the partners or clients we work with, in order to ensure alignment with our purpose and vision of what we stand for.   This helps us to ensure that we work with credible above-board partners, that share the same values of ethical conduct and integrity.

How are they being funded and how much funding is going into these?

The projects are funded from cash generated from operations as well as debt financing.  Although this is the case, the lifeline of the business is its ability to manage cash flow and also an investment in R&D. We are working on an investment drive program to raise capital for research and development, as the future of this company depends on our ability to secure this funding. Research and Development is the bloodline of any high-tech company and Luvhone is in need of this investment. We are hoping to secure this funding in the course of 2021.

How has the pandemic affected productivity?

As a company having essential services status, we had to keep our business doors open as critical infrastructure was needed for connectivity and service delivery to our customers. This meant that in order to minimize the risks of infections – we had to limit the number of people coming into physical contact with customers at facilities such as warehouses and dispatch.  This created pressure on the team to quickly take advantage of the job rotation practices we had been applying in the past. This helped us to ensure business continuity and also limit absenteeism in the workforce. As part of our daily business operational procedures, the medical health surveillance program was a critical part of our business risk management and early reporting of any health condition that may risk the wellness of team members and customers became a norm in the business.  From a productivity perspective, we saw great improvement and efficiency as we had to quickly adapt to do more with less and work smarter.

Left: Thakhani (Dispatch Controller), Leago (CEO), Thuli (Sales Consultant), Lynn (Metallurgical Engineer)

 

Was your workforce affected by the pandemic?

Luvhone takes the wellness, health, and safety of its employees as a matter of first priority. Eight (8) months into the pandemic after the first case of COVID-19,  that hit the grounds of South Africa in March –   we can safely say the business transition was successfully implemented.  Fortunately, to date, we did not have any COVID-19 cases of infection within our workforce based on our current surveillance processes. 

Did you switch from physical to remote work?

Yes, in particular, the sales force team had to move from on-premise contact centre to a remote contact centre. This was done within a matter of days.  We had to adapt our processes to work within a remote setup, and still ensure delivery of a service experience that was ubiquitous.  The other corporate services areas of the business had to some extent already been geared up to work from home. 

Not all areas of the business could be moved to remote working.  There were areas where the nature of work necessitated physical on-site presence in order to service some of our customer requirements. To ensure we created a safe working space; most of the employees were working from home and were using company approved tools to engage with the rest of the organisation. The customer-facing employees were required to work on a rotational basis to minimise possible contact.

From observing what had already transpired in China and Italy during the early parts of the year, we anticipated that the pandemic would eventually affect South Africa.  In this case, we quickly adapted our systems and empowered our employees on the changes necessary due to the pandemic.  All the necessary support both from tools of the trade to employee team coaching was done to ensure that everyone was at least aware of what is expected during the transition.  By the time the lockdown was instituted, we already had all our permits in place as well as health procedures simulation and practise completed.

All employees were further equipped with all the Personal Protective Equipment (PPE) needed to ensure their safety, in line with the WHO and South African Department of Health recommendations. Daily pre-screening of employees and customers and record-keeping was always monitored daily to ensure adherence.

Did you achieve all you set out to do this year?

We have achieved some of the milestones as other projects did not come through this year. We, however, continue to work hard in closing the gaps in areas that were especially affected, due to the lock-down regulations. Our financial year-end is  March 2021 and through our customers,  hard work and commitment of our employees we believe we would be in a position to recover in  2021 from the pandemic setback. 

Will the pandemic shape business operations henceforth?

We have always set ourselves up as an organisation that is lean and flexible. This model has not only helped us survive the impact of the pandemic on the business and the countrywide economic challenges, but it allowed the organisation to respond to disruptions quicker and change management to implemented speedily. The pandemic has also helped us optimise our daily operations which we will be adopting even beyond the pandemic and ensure we are prepared for any disruptions like this in the future.

This pandemic has also highlighted a great need for technological development of solutions needed to address the desperate need for access to the internet, health, education, and other basic services that led to the deterioration of services during the pandemic.  The gaps in infrastructure development and cost of services have exposed the tectonic plates of inequality, as the most vulnerable group of population in society were the most negatively affected during the pandemic.

In accordance with the 2030 Sustainable Development Goals SDG9, technology is vital in building resilient infrastructure, promoting inclusive and sustainable industrialisation that will foster innovation.   As a technology company, we have taken it upon ourselves to help our country in rebuilding the economy in developing some of these solutions by looking at how Space  Technology and satellite services can be used to drive these solutions at affordable costs and better access for the majority of the population. This will require collaboration between private, public, and international institutions. Effectively, as an organisation, we had to revisit our strategic objectives to incorporate some of the opportunities that have emerged at the backdrop of the pandemic.

What can you say about Luvhone’s global presence this year, despite the pandemic?

Today we trade with industry partners across the Asia Pacific, Europe amongst others.  In our pursuit of growth and global competitiveness, we are always engaging with our existing international partner with the view of expanding our working partnership into other areas of the business.  Due to the pandemic, this year we focused more on maintaining the existing partnership as it was critical towards ensuring retention of customers and risk mitigation of current supply channels. Having achieved some stability on this end, we are now looking forward to exploring new ventures and building plans for new opportunities.

For NewSpace companies to be effective in bridging the gaps of unemployment and economic recovery, it is important for start-ups to join forces with large-caps. This is essential for cultivating the start-up’s exponential growth towards building a critical mass of mid-cap organisations. In my view,  mid-caps are predominantly more able to sustain the economic shocks of disruptions compared to a start-up in its early stages.  To this effect, we have partnered with a number of stock exchange-listed large caps. This has enabled us to have the global muscle when we need it,  and access to markets in a way we would not have reached if we went on our NewSpace start-up journey alone. 

We are very grateful to our customers, employees, shareholders and investors, especially Multichoice –  for having worked with us during the challenging period and being solution-oriented.  We are also fortunate to have had our industry partners such as a subsidiary of CommScope Inc,  Norton Rose Fulbright Inc amongst others – that have been with us for many years since the very early stages of our start-up journey to date.  Thanks to the corporate citizenry of these large caps and our stakeholders; the Republic of South Africa Ministry of Science & Innovation, Trade and Industry and South African Space Agency that we are able to confidently chart the journey ahead.  

Would you say that Luvhone expanded its turf this year?

Yes, I would say so.  Whilst the senior management of the organisation pulled all the stops to ensure the business does not succumb to the business repercussions of the COVID-19 pandemic, the most significant impact that Luvhone can make in society is through scaling from a start-up to a mid-cap.  Our planning horizon is over five (5) years, as this gives us time to adapt and flex our muscles towards beneficiation opportunities that exist in the market.  We, therefore, will be working towards this goal of scaling to a mid-cap in the next 5 years.  As we head into the business athletics lap that will take us to the next decade of existence,  we have set ourselves ambitious targets of ensuring that we meet all the targets we had set for ourselves before the pandemic.

Have you started exporting outside South Africa?

We have not started exporting outside of South Africa yet, we are however working on business development initiatives for the export market, whilst we continue to entrench our presence in the local market. 

How did you fare in One Aerospace, One Telecoms and One Satcom business lines this year?

Despite the supply chain constraints due to the pandemic,  One Satcom managed to service customers nationally. We also managed to increase our customer base through marketing campaigns and a product offering that is based on quality as a value proposition. Pertaining the One telecoms business line, we typically would have completed several RF measurements and other professional services by this time. However, due to the pandemic, some of these service commitments have been moved over into 2021. For the One aerospace business line, no projects were viable for implementation in this year due to the impact that COVID-19 has had on the aviation industry. However, we are actively engaged with local and international partners on the possibility of new opportunities ahead of the industry recovery – given the aviation pivoting prospects that may open on the backdrop of the pandemic.   

What are the plans for 2021? What are the new milestones you are set to achieve in the coming year, and what are the new projects you will be pursuing?

The first quarter of 2021, will be very important for the organisation as our financial year-end is in March. We will drive the completion of current projects that are in Work in Progress status as well as finalise our annual plans. In terms of new opportunities, we will be aggressively pursuing projects in the public sector as in the initial 5 years of the start-up, we focussed on private industry. This was due to public sector instability in the last few years and unpredictable payment terms that would have been too risky for our business in the initial stages.  Our key focus will be to drive software-centric projects, in light of movement restrictions as well pursue the R&D investment drive that we are embarking on.

Fundamental to our business is to also drive one of our key objectives, which is to ensure a sustainable and profitable business.   As such and in meeting the purpose of our existence, we must ensure high efficiency and cost containment especially in anticipation of the uncertainties that are still ahead. Pursuing new opportunities in the most cost-effective manner will mean that we can expand the business and create much-needed employment for young people and women in particular.  The late Kofi Anan, once said: “When women thrive, all of the social benefits and succeeding generations are given a better start in life.” If there is anything we should be able to achieve in our journey as Luvhone, this is it. 

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