SA component group aims to expand African battery distribution footprint

5th April 2013

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Vehicle component manufacturer Metair has the ambition to expand its battery distribution footprint in Africa significantly and will try to advance this dream in 2013, says MD Theo Loock.

He says Metair is currently servicing the African countries of Angola, Namibia, Lesotho and Swaziland with its Exide brand, Malawi with the Raylite brand, and Algeria, Egypt and Morocco with its Romanian Rombat battery.

Loock says Metair “wants to push” its Exide brand into Africa, particularly Eastern African countries such as Uganda, Kenya, Zambia, Zimbabwe, Tanzania, Egypt, Rwanda, Burundi and the Democratic Republic of Congo. More Francophone countries, such as Chad, Niger, Mali and Mauritania, as well as Nigeria, can potentially be added as Rombat customers.

Expanding Metair’s battery business is part of the company’s strategy to expand its battery business up from the current 38% of overall business, to 50%.

Metair’s new 3 × 50% strategy also wants to ensure that 50% of revenue comes from supply- ing parts to vehicle manufacturers, or original- equipment manufacturers (OEMs), with the other 50% of business residing in the after, non- auto and export markets.

The current split saw 58% of revenue come from the OEM market and 42% from the after, nonauto and export markets.

Loock says many of Metair’s competitors are exiting the OEM business, but notes that the company will remain active here as it believes supplying vehicle manufacturers provides it with access to the parts aftermarket and a continuous flow of new vehicle technology.

Metair supplies all seven OEMs in South Africa, such as Toyota, in Durban, and Ford, in Pretoria.

Loock is also positive about business oppor- tunities in Europe, with the Rombat acqui- sition, now one year in the Metair stable, play- ing a significant role in boosting Metair’s oper- ating profit for the financial year ended Decem- ber 31 to R669-million, up from the previous year’s R576-million. Revenue increased to R5.27-billion in 2012, up from the R4.29-billion recorded in 2011.

“Our new business really contributed to this result,” says Metair FD Brian Jacobs.

Consolidated results showed Rombat record- ing a turnover of R713-million and profit after tax of R45.5-million in 2012. While revenue was not up on 2011, profit was higher than the R34.2-million recorded in the previous year.

Loock says the installation of a start-stop battery manufacturing facility has been completed at Rombat, but emphasises that it will take around three years for this project to come to fruition.

The first start-stop batteries off the line were currently being tested. Loock expected sales of around 150 000 units in 2015, growing that into 2016 and 2017 as the company expands into more of Europe.

Looking ahead, Loock says it “will be challenging” for Metair to continue the growth spurt seen in recent years, backed strongly by rising vehicle sales in the local and global markets.

Maintaining the company’s positive position will require “continued demand for local vehicle production and aftermarket products”.

Loock adds that a prerequisite for success in 2013 will be “a stable and nondisruptive labour environment, combined with reasonable currency stability”.

The automotive manufacturing industry this year has to negotiate a new labour deal, following the end of a multiyear agreement.

Loock estimates that the 2012 Marikana labour conflict cost Metair, which also supplies the mining industry, around R30-million to R40-million in sales to the mining sector, with a spillover strike at a vehicle manufacturer costing the group another R150-million in revenue.

Edited by Creamer Media Reporter

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