In conversation with
Mr Anthony Leeming
Group Chief Executive Officer | Sun International
FDI Spotlight: What is the DNA and the African footprint of Sun International?
Anthony Leeming: Our core business is in South Africa. We have exited the investments that we used to have in Zambia, Botswana, Lesotho and Namibia in order to focus on our South African operations.
We are still in Nigeria and Swaziland, but we are looking to exit these businesses. There are a few challenges that we are facing in Nigeria: when we first entered that market, it was very promising with high occupancies and rates and other growth opportunities. However, recently rates and occupancies have dropped, and the Nigerian economy has come under significant pressure with the drop in the oil price. It has become increasingly difficult to do business and we are often faced with demands for taxes which we challenge and invariably win. Other South African corporates have also battled to establish themselves in Nigeria and have faced similar challenges to us.
The bottom line is that doing business in Africa has its challenges, especially when it comes to appropriate regulation and governance. South Africa’s corporate sector has world-class regulation, security and compliance with business ethics. However, regulations on the rest of the continent are not always clear and defined, particularly when it comes to gaming and tax legislation. It is often difficult to gain access to the right people and to get the necessary approvals and permits required to do business.
What are some of the latest developments of Sun International, specifically with regards to international partners?
Anthony Leeming: We have recently increased our interest in our Chilean subsidiary through acquiring Entretenimientos Del Sur Limitada’s (EDS’s) shareholding in Sun Dreams.
Sun Dreams has operations across Chile, Panama, Peru and Colombia, and is ranked as the largest casino operator in Latin America. The 13 properties host 6,996 slot machines, 313 table games and 533 rooms. We secured the deal in conjunction with casino group Nueva Inversiones Pacifico Sur Limitada, or Pacifico, and it raises Sun International’s stake in Sun Dreams from 54.9 percent to 64.9 percent. This deal reinforces our intention to grow our gaming and hospitality business in Latin America, and the acquisition strengthens the partnership between Pacifico and Sun International in Sun Dreams.
In South Africa, our primary business is casinos and hotels. Our resort and hotel properties include Sun City (where the Palace of the Lost City is located), the Maslow Hotel, the Table Bay Hotel, and the Wild Coast Sun. Our casinos are frequented mostly by local South Africans while the guests at our properties such as Table Bay and the Palace are primarily international tourists. International tourists generally do not visit South Africa to gamble.
We have recently completed a large casino near Pretoria and will shortly complete an 8,500-seat arena and a hotel with 250 rooms at the casino. There are not many great hotels in the area, so the development should do well.
We have recently invested significantly in our flagship property Sun City, which has since shown good growth in revenue.
In your opinion, should South Africa’s private sector play a more active and aggressive role in pushing for investment into the country?
Anthony Leeming: The private sector needs to – and does – play a major part in investing and encouraging investment in South Africa. That said, it is critical that government provides more policy certainty to ensure the private sector has the confidence to invest for the longer term. With current policy uncertainty, making the decision to invest is challenging.
As CEO, what is the legacy you want to leave here once your tenure is over?
Anthony Leeming: We have made significant investments over the past few years and we are strongly focused on bedding these down and growing the business.
In South Africa, there are no more casino licences available, and we are therefore limited to growing our existing casino revenue. While we are focusing on leveraging and growing our business in South Africa, our primary area of focus is in LATAM Airlines.
I am also optimistic about the growth prospects of our online sports betting business. The Sun International brand is strong, and we can use it to grow our online presence, both locally and internationally.