Automotive OEM supplier Supreme Spring is readying itself for an increase in activity, investing in equipment and people at its manufacturing plants in Nigel, Johannesburg, Gauteng.
GEARING UP FOR GROWTH
“The industry is in an extremely exciting phase at the moment.
“If you compare South Africa to competitors like India and Thailand, we are a fairly small market, producing around 600,000 vehicles a year, but there is a great opportunity to grow, especially in the areas of passenger vehicles with German OEMs and light commercial vehicles, or “pickups” as we call them.
“In the next four to five years, driven mostly by international exports into the likes of Europe and Asia, the volume will grow to between 800,000 and 900,000 vehicles a year, which is hugely significant.”
South Africa’s automotive industry is poised to accelerate.
The above words of Christo Hechter, Commercial Director at Supreme Spring, reflect a wave of optimism that is reverberating through the country’s automotive supply chain, a direction of travel that is being firmly supported by the national government.
Indeed, the Automotive Production and Development Programme (APDP) is providing incentives for investment into SA automotive players, especially exporters.
“This looks ahead to 2035 and plans to increase local content within the country’s automotive sector to 60 percent, up from the 38 to 40 percent it is sitting at currently,” Hechter adds.
“Localisation becomes a big focus, and it provides a brilliant opportunity for smaller players than us – these companies we call enterprise development suppliers – and they will be providing tens of thousands of jobs through the South African Automotive Masterplan (SAAM 2035) vision.”
Supreme Spring is one of the larger suppliers to South Africa’s automotive industry.
With three plants closely located in Nigel, a small gold mining town in southern Gauteng, the company produces high quality coil springs and torsion bars (Plant 1), leaf springs (Plant 2) and stabiliser bars (Plant 3) for a range of customers, including OEMs Ford, Toyota, Isuzu and Nissan.
For Hechter, it is this variety of specialisms that helps to stand the company apart, not just among SA suppliers but those it is competing with on the international stage.
“We have unique technologies and processes within our manufacturing plants, which combine to make Supreme Spring something of a one-stop shop,” he explains. “There are a lot of European competitors who predominantly focus on one technology – for example coil springs, stabiliser bars or leaf springs – whereas we can produce all of these.
“For example, for Toyota we have gone into additional products outside of the core range because the technology required is very similar to what we use for our stabiliser bars, and this can be integrated with our torsion bar technology. They have asked us to develop more products, recognising that we can serve them as a one-stop shop.”
Further, Supreme Spring’s relationship with the likes of Ford, Isuzu, Toyota and Nissan begins at the product development stage. It works with Ford engineers in Australia, as well as specialists from Japan for the other three major OEM customers.
And such work, according to Hechter, is due to ramp up by the end of 2020.
Anticipating a new wave of activity as new product lifecycles come around, the Commercial Director has set his sights on gearing up Supreme Spring’s capacities and capabilities over the course of next year to meet this demand.
“This has already started,” he says. “We have invested significantly in recent times, most notably in a reinvestment into our leaf spring production facility by upgrading a second production line which doubles our capacity in this area.
“Equipment generally has been the main focus of our investments. In order to be ready for growth, we are ensuring that we update and upgrade our existing machinery so we can continue to be globally competitive with companies in Asia and Europe.”
This has involved embracing ideas from staff, ideas which have in some cases enabled output to be increased by as much as 50 percent across coil spring, stabiliser bar, leaf spring and torsion bar lines.
As Supreme Spring readies itself for a busy period ahead, Hechter also points to the increasingly crucial role that the company’s own supply chain will play.
The firm is a proud champion of black economic empowerment, recognised as a BBBEE Level 1 organisation thanks in no small part to its effective implementation of a preferential procurement policy.
This requires Supreme Spring to source locally as much as possible, not only with larger companies (such as steel producers), but also smaller firms, which are classified as microenterprises (up to R10 million turnover) and small enterprises (up to R50 million turnover).
“What we are doing is helping these companies to develop from scratch,” says Hechter. “This is quite a sizeable priority for us in our sourcing decisions – we are giving ourselves a target of three new enterprises a year.
“There are many ways we can help these companies, one being through an incubation centre that a couple of firms have got involved with. For 2020, we want to formalise this incubation centre setup, which will give them a platform to build up their business and receive help in areas such as financial management and procurement.”
Currently, around nine to 10 percent of all Supreme Spring procurement spend is through small and microenterprises, a proportion that Hechter wants to grow, the Commercial Director recognising the value of building up local expertise to SA’s wider automotive supply chain industry.
Direct employment is another way in which the company is contributing to its surrounding community.
“We believe in putting back into our communities, and employment is the biggest way we can make a difference,” Hechter continues. “We have a whole compliment of interns and trainees across the spectrum of what we do, people who make up around eight to 10 percent of our staff intake.
“A lot of people will hold qualifications but may not have the job opportunities to make the most of them, so we are participating in what is called the YES (Youth Employment Scheme) programme. Here we take youngsters without real work experience and get them into the production scene at Supreme Spring, and once they develop themselves through our systems, they could be offered a permanent position with us.
“By qualifying people and putting them into the industry, be it at our company or elsewhere, we are helping to develop a wider skills base in South Africa.”
This will be crucial as the sector moves forwards, especially with the rise of new technologies and processes which are revolutionising the automotive manufacturing industry.
For Hechter, embracing such innovation will play a key part in the development of Supreme Spring, the Commercial Director explaining that technological advancement will be the defining trend of 2020, enabling the production of new, enhanced products.
“Light commercial vehicles are becoming lighter, as has been the case with passenger vehicles in recent times, and that means we must come up with innovative ways to support these objectives towards a reduced carbon footprint,” he says.
“For example, on our side, stabiliser bars are moving from solid steel to tubular products in order to lose weight, and other component manufacturers are also having to achieve efficiencies in this way.”
The overriding objective for Supreme Spring, however, is ensuring it is ready to meet the expected growth in business from OEMs in 2021 and 2022.
Hechter concludes: “We must compete globally, not just locally, and in order to do this we must achieve higher volumes within our existing framework, and this requires investment. Next year will be a year of consolidation, making sure we are ready for the growth in activity that we anticipate from OEM manufacturers.”