In just under ten years, the family duo at Max Output Industries has established itself as one of the country’s preferred Tier Two automotive manufacturing suppliers, advancing its early R1.4m annual turnover to well over R70m per annum.
“While we may have started out in 2010 sourcing raw materials, components, equipment for the automotive industry, with a two-man team, we have managed to build our client relationships such that they started entrusting a now 150-strong workforce with the manufacturing and modification of products,” says co-owner Luke Kobane.
South Africa’s automotive sector contributes 7.5% of the country’s GDP, employing around 113,000 people, and the automotive component segment, which is the most labour-intensive, accounts for 72% of the value chain.
Kobane adds: “It is our vision to not only grow our multinational client base, but in so doing, to contribute to job creation in our operations, but also in so doing, to contribute to job creation, skills development and transfer in the sector.”
Max Output Industries boasts a client A-list which includes BMW, Ford and Toyota, and with an operation located in Waltloo, Pretoria West, there are employment opportunities for those living in and around this community.
“We understand that the upgrading of key elements in the automotive industry are as important as modernisation, if we aim to stay on par in terms of our global competitiveness. It required a bit of bullish behaviour on our part, to convince our clients to give us a bigger share of the pie, but consistent quality and standards definitely helped.”
Luke, like his partner in business, and his younger brother Rapula, share a professional history in finance, skills which stood them both in good stead to strategically grow their business, and to manage the scale-up of Max Output’s operations.
“After four years in business, we could see that there were still very high levels of import, and spotted the opportunity to respond to local demand with localisation of content, which still remains sub-optimal in the country.”
As the country aims to achieve its target of increasing local content from 40% to 60%, Max Output Industries is geared towards supporting and contributing to what is set to become an updated plan which will replace the Automotive Production & Development Programme, which expires in 2020.
It is estimated that the localization target of 60% represents around 50,000 new jobs in the sector, and presents greater opportunities for companies such as Max Output, which is yet an adolescent in the local automotive industry.
“The mortality rate for start-ups in South Africa is still very high, with most barely managing to pass the 12-month mark. Our business started in a downturn economy, the after-effects of a global financial meltdown which only affected the local economy much later. So we are very proud that we avoided the scourge of job losses, instead, expanding our operations, since then, to what it is today,” concludes Kobane.