Current Issue 52
By strengthening local relationships on the ground, H&R is growing and expanding its activities throughout sub-Saharan Africa to unlock new business opportunities and secure a long-term future
A Customer-Centric Approach to Manufacturing
Writer: Emily Jarvis
Project Manager: Nick Norris
Mirroring the wider Group’s ability to overcome country and regional challenges, H&R South Africa is continuing its cross-border expansion plans to spread the availability, market knowledge and reach of its products across the personal care, woodboard and construction, packaging, rubber and plastics, electrical and communication cable industries.
The continent’s economic development has been the catalyst for H&R South Africa’s growth in the past decade; leveraging the wider German roots of the H&R Group and its ‘doing things right first time’ ethos to manufacture the right products at the right quality in response to changing customer needs.
Formerly established in 2004 as a result of a strategic acquisition that marked a major milestone in H&R’s international business prospects, H&R South Africa has fostered organic Company growth by matching its own expertise with the best opportunities the continent has to offer.
Recognising that Africa presents its fair set of challenges, Regional General Manager, Clive Wood says that differentiation and being attentive towards the value-add are two ways in which the Company can become further ingrained in, and contribute to, the local economy.
“Investing in local people and strengthening our local partnerships by forming relationships on the ground are two key focus areas that have driven H&R South Africa to a new level in its development. We are firmly focused on ways to expand the business the H&R way, by complementing our internal continuous improvements with a broader range of products at the right price point and quality to match our full service offering,” he affirms.
H&R has been quick to respond to, and understand the needs of, its local customers and is applying this knowledge to explore new markets in sub-Saharan Africa. With its customer-centric approach to business representing just one of the Company’s unique selling points, supported by the commitment and technical capabilities of its staff, H&R has built a solid relationship with clients based on flexibility and reliability on the ground.
“We recognise that each African market needs to be evaluated on individual merit, and often requires a different approach to business. To remain competitive, it is imperative that we do things right first time and tailor our sales offering to allow us to forge long-term mutual relationships with our clients,” says H&R South Africa’s Sales and Marketing Manager, Rudi van Niekerk.
Wood recalls: “We began to diversify our business and explore these new growth opportunities around seven years ago, once we were confident that the time was right to grow our product range. Leveraging the continuing success of our South African operations, we were able to offer our huge amount of product and industry knowledge to new markets.
“In line with this, we also looked closely at our supply chain and started to bring some of the previously outsourced business components in house; taking more control of our solutions.”
One particular sector that the Company has focused on in recent years is the personal care market, with the pharma and cosmetics markets showing promising growth as one of the results of the rising middle-class.
“Reflecting the changing needs of the market, we make sure that our products always speak for themselves in terms of quality. This means our sales teams can focus on ways to add value to the customer experience,” van Niekerk adds.
The pharma and cosmetics market is just one of H&R’s core business operations in Africa, having already become a well-established leader in the tyre and rubber industry, supplying its sector-leading process oils technology globally.
In 2015, H&R completed the purchase of additional facilities and subsequent plant equipment in Mobeni, near to its current Island View facilities in Durban; which are advantageously located close to the Port of Durban.
“We are currently bringing this facility up to standard prior to opening in preparation for our expansion plans to increase production and export to other parts of Africa. Our drive for continuous improvement and to always have the right stock levels for our customers, will ensure that our growth remains sustainable,” says Wood.
Operating successfully in Africa’s commodity market, where volatility in the local currency is a daily challenge, requires a business such as H&R to be agile enough to handle these difficulties and look beyond them to see the value of operating on the continent.
“Export markets are a growing source of revenue for us,” continues van Niekerk. “In order to expand, we need to have people on the ground who understand these markets and who put in the time needed to establish our footprint and subsequent relationships as a reliable supplier to sub-Saharan Africa and beyond.”
Having already spent the past four years building mutual relationships on the continent outside South Africa, H&R is beginning to see the fruits of its labour; building its credibility as a supplier that is in Africa for the long-term. Supporting this, the Company has invested all the relevant quality management and health & safety, and complies to relevant industry standards and certifications for products required to align with the H&R Group standards.
Wood further details: “When deciding what countries to explore, we try to look for opportunities where we can buy into that country and its culture, and ways to source both local staff and raw materials. For example, we will be investing in an H&R training seminar targeting potential customers in Nigeria in the coming months to start a conversation here.”
Van Niekerk adds: “Ultimately, we don’t just want to enter Africa to sell products, we want our customers to understand we are here to help them to better understand the benefit and quality of our products.”
Feet on the ground
As a relatively small team currently comprised of 45, staff retention has been a crucial determiner of H&R’s future-proof attitude to business success. Wood highlights: “We have a big appreciation for our hard-working teams and have an inherently strong Company culture to be proud of. Working together is a critical part of our 24-seven factory operations, where we have to be efficient around-the-clock.”
To remain at the forefront of industry, H&R recognises the importance of developing skills throughout the value chain; from soft skills and leadership skills, to the innovative capabilities of its technical teams. Adding to the overall strength and longevity of the business, the Company has also, in recent years, brought in trainees from local universities and technical colleges; while a further secondment programme to international affiliate companies also offers a platform for skills sharing.
“We have plans to continue to be bold and expand our volumes in the region in a sustainable manner; keeping the business and our core values simple and focused on the customer, with no more than five key objectives at any one time,” highlights van Niekerk.
“Continuous improvement is a core part of our business strategy that adds value. We recognise the importance of investing in H&R’s internal structures such as keeping on top of the maintenance and repair of machinery and refresher training, which is designed to improve our cost-cutting abilities and have a positive effect on efficiencies throughout every facet of the business,” Wood confirms.
With 2019 marking the centenary of H&R Group’s existence in the manufacturing industry, having started operations in Hamburg in 1919, Wood likes to keep a forward-looking stance on the business.
He says: “In order to secure our long-term sustainability for the next 100 years, we need to start preparing today. I am looking forward to the next generation and knowing that we have done all we can to support the ongoing development of the business.”
Wood concludes: “Conversely, in the shorter term, we want to make our contribution - as an African Company - known to the local economy. This will of course be driven by the continent’s development, where we will play our role in investing in local people, strengthening partnerships and finding new local customers.”