Dec 09, 2011
Distribution company has opportunistic growth strategyBack
© Reuse this
Hudaco Industries executive director Graham Dunford says the group is committed to making acquisitions to enable it to grow its business.
He adds, however, that the group’s acquisition strategy is opportunistic in nature, as suitable opportunities rarely present themselves.
“If we already represent a world brand, acquiring distribution rights for a competing brand is not feasible,” says Dunford.
Most major world manufacturers are invariably already represented locally and acquiring these distributors is usually only possible when the owners wish to disinvest.
“Investing in our own businesses is the least risky growth route and a high priority is placed on ensuring that every internal growth opportunity is exploited,” Dunford states.
Hudaco Industries has acquired seven companies in the past eight years, namely motion control automation product supplier Varispeed; industrial cable, plugs, sockets and connectors supplier Powermite; fitter and hose suppliers FHS Fitter & Hose Solutions; telecommunication specialist Global Communications; security distributor Pentagon; steel specialist Ambro; and Midrand Special Steels.
Meanwhile, Dunford says the Hudaco business model leans towards importing rather than manufacturing products locally.
“We cannot compete with countries such as India and China in terms of labour costs and efficiencies. Hudaco’s business model is to import and distribute quality branded products, which is its speciality, and it tends to steer away from manufacturing,” he notes.
The group carries 250 000 line items in stock, sources products from over 1 500 suppliers, supplies 20 000 customers in over 100 locations, mostly in sub- Saharan Africa, and has 17 companies under its umbrella.
The core demand for the product range is relatively stable and is influenced more by gross domestic product than by gross domestic fixed investment (GDFI).
Although some of its businesses benefit directly from GDFI spend, the impact on the total group is not significant.
“Half of Hudaco’s business is derived from the manufacturing and mining sectors, with the balance coming from the construction, automotive aftermarket and security industries,” says Dunford.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Corporate Profiles News
Aerosud’s flagship company Aerosud Aviation has come a long way since 2000, when the company’s diversification into commercial aviation as a manufacturer and supplier of parts and accessories to Boeing and Airbus started in earnest. The company succeeded in winning...
Aerosud programme aimed at empowering lower-paid employees To quality as a broad-based black economic empowered (BBBEE) company in terms of the BBBEE Amendment Act, 2013, Aerosud is placing the focus on putting suitable mechanisms in place to enable its lower-paid...
Aerosud, South Africa’s leading aeromechanical parts manufacturer, has restructured its operations as part of a strategy aimed at ensuring continued strong growth. The restructure, put into effect in June, is directed at strategically positioning and financially...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...
Next ArticleDivision achieves 50% growth in less than a decade