The Lion Match Company’s extra-long match epitomises its growth push

2nd March 2018

By: Shirley le Guern

Creamer Media Correspondent

     

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The Lion Match Company, which is making inroads into the local fast-moving consumer goods space, has begun 2018 with the roll-out of a new extra-long safety match.

This, according to executive chairperson Gora Abdoola, forms part of a strategy of innovation, acquisition and investment that is expected to see the group reach its R5-billion turnover target within five years.

The new match is double the length of a conventional safety match and ideal for those wishing to access hard-to-reach areas such as gas burners or to light multiple candles without singeing their fingers.

Although not a world first, it is the first product of its kind in South Africa. Abdoola says the longer match presents an opportunity for Lion Match to produce a product suited to the upper end of the market Living Standards Measure (LSM) 8 to 10. The existing Lion Safety Match is sold primarily to the lower LSMs (1 to 5).

A R2-million investment using in-house engineering at its Rosslyn match factory resulted in a semiautomated line that will allow the company to test the market. Further investment to completely automate the production process depends on customer uptake of this new product, Group CEO, Basie van Wyk adds.

Matches make up just under 40% of the diversified Lion Match group’s turnover. The company currently produces seven-million boxes of matches daily, five days a week. The existing automated process delivers around 30-million matchsticks each day.

Abdoola admits that The Lion Match Company is also working closely with a research university on a far-longer-term project into the development of a synthetic alternative to wood in the manufacturing of match splints.

“Given the high price of timber and the expected shortage of timber for match splints, it is not sustainable to continue to make matches using timber, so we needed to find an alternative. “We started an initiative working with the university to try to come up with one – an extruded product that is environmentally friendly. But that process takes time. Nevertheless, we hope that, in the next three to five years, we will not need timber to make matches,” Abdoola says.

Timber to make matches is currently sourced from its own timber operation in Ermelo and others in the forestry industry
Initially, offcuts of wood that were not suitable for match manufacture were sold to saw mills. However, an opportunity to set up its own saw milling operation in Ermelo 18 months ago has now proved a runaway success.

According to Van Wyk, the operation was profitable from day one.

“As a result, we’ve optimised and automated. A lot of this plant was also built in-house. Now we are reaching critical mass and we can’t supply enough timber in-house, so we need to start buying in timber to run this sawmill. “This speaks to the success and diversity of the group. I can go from visiting a sawmill in Ermelo to talking to female consumers about feminine care products,” he points out.

He says further investment in increasing capacity at the Ermelo sawmill is imminent.

Lion Quality Shoe Polish, which is the third-largest shoe polish brand in South Africa, is also produced from the Rosslyn Match factory. The manufacturing process was also engineered in-house.

In addition to local manufacturing equipment, the group also recently imported new equipment from Europe to manufacture panty liners at the group’s top performer, personal care products manufacturer NSP Unsgaard, in Cape Town. This followed the installation of a R20-million automated line to manufacture wet wipes in 2016.

A R100-million investment programme that is expected to include additional equipment to make diapers and sanitary pads is planned for the near future.

NSP Unsgaard produces well-known brands such as Cherubs, shaving brands Lion Duel and Loving Touch, as well as Comfitex feminine care products, and is growing at an annualised rate of 22%, with turnover having increased from R40-million to R240-million in just five years.

Abdoola says that the value of the Lion Match brand has gone way beyond lighting fires. Thanks to strong relationships with retailers and its established supply chain, it has diversified extensively over the past ten years through the creation of new products and acquiring large manufacturing operations countrywide.

“If you look at our base – matches – you find them in every retailer, right from spaza shops to hypermarkets. This pipeline provides a sound foundation for the introduction of other products. The more products you get into the retail spaces, the more efficient you become.

“That’s why The Lion Match Company is in a unique position.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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