From entrepreneurial beginnings on a farm in Limpopo in the 1970s, JoJo tanks has grown into an iconic South African brand that not only lives its own sustainability journey but is growing beyond water storage into a range of water solutions to help both commercial and residential users secure an increasingly scarce resource.
For the last 10 years, RMB Ventures has walked this journey alongside JoJo as one of three private equity investors, marrying their expertise in capital structuring with the entrepreneurial spirit at JoJo to grow the business, provide strategic direction and become a company that ‘walks the talk’ when it comes to innovation and sustainability.
From water storage to water solutions
JoJo has always had innovation at its heart, beginning by pioneering the technique of using rotational moulding to manufacture large tanks which were originally sold to the agricultural community for irrigation and fertiliser storage.
Between 2005 and 2012, JoJo became the leading water tank supplier in South Africa and an iconic and highly recognisable brand, with eight factories in South Africa and one in Zimbabwe. Market share peaked in 2015 and 2016 at 60%, with JoJo selling an average of 1,200 tanks a day, and when other brands entered the South African market, the plan was to expand further into Africa.
“Up until 2018 we viewed ourselves as a specialist tank manufacturer and our growth plan included expansion into Africa, but this proved to be more challenging than we expected. We also tried to acquire a major competing brand in the Western Cape, but this was blocked by the Competition Commission. This forced us to rethink our strategy and we began the journey to redefine ourselves as a specialist water solutions business,” says Grant Neser, Managing Director of JoJo.
A gap in the market
When JoJo’s growth trajectory shifted, the company spotted a gap in the market for smaller scale water solutions for consumers, households and commercial, industrial and agricultural markets. Going beyond supplying tanks, JoJo has become a leading provider of DIY water solutions through a variety of building merchants and co-ops. Systems include booster pumps, water filtration systems, in-house designed rainwater harvesting accessories including screens to filter out the debris from gutters, and a first flush diverter.
“We are in the process of bringing other products to the market to round out this offering and help us further grow our market share. We are also constantly refining our range of slimline tanks to create more aesthetically pleasing buffer water storage solutions, especially for the urban consumer and homeowner market. Activating this urban buffer water storage market with all its peripherals, in the face of ever-increasing water delivery challenges in SA cities and towns, is a key focus of the business, and builds on JoJo’s historically well established “rural” water storage orientation” says Neser.
JoJo is also growing its service offering of installed solutions. They acquired wastewater and sanitation specialists Calcamite in 2019 to enable them to offer wastewater treatment solutions for households and settlements of up to 500 people. JoJo also now offers completely off-grid solutions for households of up to 10 people, complete with a three-stage biological reactor that recycles water for irrigation and non-potable purposes. Future plans include expanding solutions into full treatment to enable households to recycle water for both potable and non-potable applications.
Walking the talk
Sustainability and security of water supply is not only what JoJo sells, but what they live as part of their company ethos. The state-of-the-art manufacturing facility in Klerksoord features their own in-house developed, highly fuel-efficient ovens as well as three 20,000 litre rainwater harvesting and storage tanks, which take the facility completely off the grid when it comes to water consumption.
“We are proud of the technology we have developed on the back of international best practices. We have taken elements that work well for commercial manufacturers and improved on them for our own purposes, and the efficiencies and fuel economy we have achieved off the back of this has been exceptional,” says Neser.
A decade in the making
JoJo’s relationship with RMB Ventures over the past 10 years has been intrinsic to the journey of the business. Rather than taking over, they have acted as constructive shareholders and interactive members of the board, providing a strategic framework for growth and the impetus needed to help the management team evolve sustainably alongside the business.
Dwight Snyman, senior principal in the RMB Ventures private equity practice, explains: “Our philosophy is always that private equity transaction styles should focus on putting in place the right, appropriately aligned strategic framework to set a business up for longer term success - and that this framework will yield greater returns over time than the short term pursuit of “fast profits”. Our capital is patient but demanding. Research and development, innovation and sustainability are at the heart of JoJo’s story and their facility at Klerksoord is testament to how the right partnerships can grow and support fully sustainable business practices.”
“One thing RMB Ventures does well is make good choices with regard to the allocation of capital. They are also hands on with capital structuring and have many years of experience in a variety of markets, so they have a broad frame of reference against which to test management’s plans on acquisitions and growth. The executive team, shareholders and management are aligned on the direction of the business, which minimises conflict. We look forward to continuing our partnership and enjoying mutual success and growth as we continue to launch new products and services in the future,” Neser concludes.