Italian electronic components subsidiary Microelettrica Scientifica South Africa is producing components and electrical equipment with local content of between 50% and 90% based on non-negotiable economic drivers.

This approach has benefited parent company Microelettrica Scientifica, while supporting the development of sustainable local industrial suppliers.

Microelettrica Scientifica South Africa MD Senny van den Oever noted at the factory launch last month that the company had 60 local employees, broad-based black economic-empowerment Level 2 accreditation and achieved up to 90% localisation on component manufacturing. The company manufactures components for locomotives, including passenger and goods trains, as well as electrical equipment and components for the energy, mining and wider industrial sectors.

The company’s large number of local suppliers have been developed incrementally since 2002, when the company started doing business in South Africa.

“All the products we manufacture or assemble in our new factory [in Laser Park, Johannesburg] were previously imported. We have progressively localised products. Some are easier to localise than others, while some materials or components cannot effectively be localised,” he said.

Microelettrica developed the capabilities and skills of its local suppliers, and achieved short response times from these suppliers, owing to the support and focus on quality and sustainable economic principles.

“Further, we benefit from innovations and technical developments from Italy and the other subsidiaries, which also help to transfer technologies, as well as skills, to South Africa,” said Van den Oever, adding that the company was particularly proud this.

Microelettrica Scientifica South Africa was the biggest subsidiary outside Europe and it had been very successful, compared with the group’s other subsidiaries, added chairperson Lorenzo Stendardi.

“Management has consistently developed the business and has adapted it to market changes. The strategic plans for the next 12 years are in place, and we look forward to the next building,” he enthused at the launch.

Quality was the foundational principle for localisation and if the products or components were locally made, then there could be no compromise on quality or integrity, as the integrity of the brand and the components was at stake. Economic factors, including costs and response times for local clients, underpinned the localisation strategy, emphasised Van den Oever.

“We started off (in 2002) doing local assembly and testing. We imported kits from Italy to assemble and developed our employees and local skills. From there, we progressively looked to source materials from within South Africa, firstly those readily available and subsequently more complex components.”

The company worked with local component suppliers and tested what they had produced until Microelettrica was satisfied that the quality of the components were equivalent to those manufactured in Italy. Samples were sent to Italy for validation and, once the parent company had approved them, the local subsidiary could source the products from the local suppliers.

“We are passionate about localisation within the transformational framework of empowerment and industrialisation in South Africa. Without the simultaneous focus on both, our growth and sustainability would be jeopardised,” Van den Oever added.