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Africa Outlook

PFK
Electronics

PFK ELECTRONICS

Elementary my dear Watson



The acquisition of Pi Shurlok has enabled Durban based PFK Electronics to diversify says MD Gary Stanton who talks to Africa Outlook.

Writer Ian Armitage
Project manager Eleanor Watson

This is a pivotal moment in the history of Durban-based PFK Electronics. The firm is a renowned designer and manufacturer of aftermarket electronic vehicle systems, telematics systems, and alcohol interlock devices, and in November it completed the acquisition of automotive electronic components manufacturer Pi Shurlok. It was a watershed moment and will enable the company to diversify and expand. That was the point, says managing director Gary Stanton.

"It is a bid to diversify our core business to include the manufacture of vehicle components for local and international original equipment manufacturers (OEMs)," he explains. More than that, it increased production capacity – significant growth within PFK Electronics over the last five years meant it lacked production capacity.

"The last 18 months have been very interesting," says Stanton. "We've had some fantastic organic growth in the business both through existing customers and products but also with the introduction of new products that we've designed ourselves. On top of that, in the last six months, we have acquired Pi Shurlok which adds capacity from a production point of view and turnover diversification as well. It means we are now firmly entrenched in the aftermarket and the OEM market.

"Our organic growth has been very aggressive. PFK Electronics has been growing as a company by about 30 percent each year for the past six years. Pi Shurlok hasn't, but we plan on turning the OEM segment of our business around. With immediate effect the OEM segment of our business is renamed PFK Shurlok. This rebranding provides a strong linkage between the two formerly separate companies."

According to Stanton, the plan is to grow the OEM business and the acquisition is a "good opportunity" for PFK Electronics to diversify into the OEM arena of contract manufacturing – also known as build-to-print – instrument clusters and plastic injection moulding.

"We have amalgamated the businesses together and our production facility is now where the Pi Shurlok facility was so our production facility has moved and merged into one and that has doubled our capacity. That was very important."

PFK Shurlok has established a reputation as an ISO/TS-16949, Ford Q1 and VDA-6 OEM certified first-tier supplier, which, says Stanton, "Are very prestigious ratings that now allow us to supply more products to the OEM market."

Before the acquisition, PFK Electronics' fully-automated surface-mount device placement capacity was 70,000 components an hour; it has increased to over 150,000 since the acquisition, he says.

"What the acquisition does is bring in production technology that we didn't have access to, as well as broaden our range by giving us access to PFK Shurlok's combination meter instrument cluster, and exhaust emission-control technology, and it broadens the customer base.

"The acquisition represents a huge growth opportunity. With combined business, I'd like to think in five years time that we're going to be in a position where we've doubled our turnover. It is going to be a big effort but everyone is all focused on it."

Stanton explains the new combined staff complement is 550, with office and manufacturing facility floor space of over 10,000 m2. PFK Electronics has acquired production and test equipment, including in-circuit testers and selective soldering, and the acquisition has made it one of the biggest electronic product manufacturers in South Africa.

His focus is on PFK's traditional business too. Stanton says plans are in place to grow its alcohol breathalyser immobiliser systems and the telematics and fleet management products under the Autowatch brand. "I believe our aftermarket products will in future also become an OEM installation. Under Autowatch we have our Autowatch Tracking, so we're talking to a lot of insurance companies at the moment where we're introducing different tracking devices to them in addition to our very successful stolen vehicle recovery products. We have launched The Autowatch Profiler system. It is an insurance telematics driver behaviour and profiling system; insurers are very interested by it.

"We also see growth in our Alcolock range. We are a designer and producer of alcohol breathalyser based immobilisers and we have the Ignition Interlock which uses breathalyzer technology which is integrated into a vehicle immobilisation system so, effectively, if you blow into it and you're over the limit, it keeps a record of that, immobilises your vehicle and stops you from driving. Our focus at the moment has been overseas on that. We've already sold over 20,000 systems into Europe and sales into the US are looking very promising. Ultimately our aim is to increase the number of Ignition Interlocks supplied to the local automotive sector to reduce the amount of alcohol-related road deaths and public transport accidents.

"The other area under the Autowatch brand is our traditional vehicle security alarms and immobilisers which we sell to over 500 fitment centres in South Africa. We've got about 60-70 percent of the local market share and we have had so for quite a long time. We believe there are some fantastic opportunities into the rest of Africa and our growth strategy will focus on this in the next three years."

PFK was established in 1985. It has experienced significant annual growth in recent years, and key to this success is innovation, quality, flexibility in design and manufacture and keeping engineering at the core of the business.
"One of our catchphrases is 'transforming challenges into opportunities' and we just love to do that. I think it's really the people passion in the business that does it. We have focused a hell of a lot on recruiting the right type of person, the right type of personality. We do a lot of profile testing before we select people and we need them to fit into the culture and the ethos of the company here. We want people who view a challenge as an opportunity rather than getting bogged down by it. We've also got great innovation throughout the business and take pride in providing great customer service, our product quality is good and it's a one stop shop – we design, we manufacture and we distribute, which makes us very competitive from a cost point of view."

Expect to see a lot more of PFK Electronics in 2013 and 2014.

To learn more visit www.pfk.co.za.