Allied Tube Fittings and Valves director Charles Gracie tells Engineering News that the company expects the deal contracts to be complete soon, which will see 30% of the company acquired by black economic-empowerment partner Oziward Phiri.
Phiri, who is the owner of a separate export business, will also take a position as director of corporate and export marketing at the company. “Phiri has already started working with the company and is already an integral part of our setup here. We are only awaiting the signatures on the final contracts which we expect will be signed within the next few weeks,” explains Gracie.
The reshuffling of ownership at the company will also see current head of marketing Simone Douglas become a director in the company.
Gracie explains that the move toward empowerment was driven by the company’s desire to conform to the various industry charters and scorecards which stipulate the use of a certain amount of black economically-empowered partners.
“As we are suppliers to industry it is necessary for us to conform as closely as possible with the industry standards, in all regards, in order to make our company as attractive to do business with as possible,” explains Gracie.
The move follows a slow- down over the past few years at Allied Tube Fittings and Valves. Gracie reports that the company has experienced a negative trend in sales due to a number of reasons which the company has now taken moves to rectify.
“There is a lot more competition in the market and, despite the fact that much of this com- petition is from companies which are importing inferior quality products from the Far East, we have still seen an impact on our business,” explains Gracie.
In addition, Gracie reports that the company, which supplies Parker Hannifin originals, has also been affected by piracy whereby the pirates replace the body of the valves with inferior-quality bodies and attach Parker Hannifin flanges and nuts thereby making the product look like the original but with half of the quality.
“Piracy is a huge problem as it costs the company not only the lost sales but also in reputation when these valves malfunction. The fact that these pirated valves are offered at a cheaper price than the originals has also ensured that the uptake by industry has been very high,” explains Gracie.
Gracie explains that while Parker Hannifin is trying to combat the use of pirated valves, Allied Tube Fittings and Valves is also attempting to educate customers as to these pirate pro-ducts and show them the differ- ence in quality between the pirated items and the orginals.
“Often customers only learn that they have been duped when they come to us and ask us to repair the valves under our guarantees. Obviously the fake parts don’t carry our customer satisfaction warranty and those companies often lose out on what can amount to thousands of rands,” says Gracie. Gracie says that owing to the presence of the pirated products, the company has requested a letter, or certificate, from Parker Hannifin confirming that they are accredited agents of the products.
“This is a necessity, as pirate products are so pervasive that we don’t want our good name as accredited dealers possibly being jeapordised by the mistaken belief that we might deal in these products,” explains Gracie.
Besides implementing BEE and educating the customer base about piracy, the company also hopes to turn the slowdown in business around through a strong focus on marketing and customer service. It was with this policy in mind that the company appointed Douglas as the director of local marketing. Phiri will become the director in charge of international marketing and development. Gracie explains that the past few months have already begun to show an upturn in business and he believes that this might be due to the fact that more technical tenders are being forwarded.
“The past few years has seen a lot of basic development which really does not impact on our sector of the valve industry. The past few months, however, have seen many more enquires and we believe that this is a good sign for the development of the industry,” says Gracie.
Gracie adds that the confidence and optimism surrounding the industry at the moment has led to an environment which is conducive to the measures which the company has put in place to combat the general lethargy surrounding sales over the past few years.
“Things are looking positive at the moment and we are certain that the sentiments surrounding the industry, the new developments and our new focus will lead to Allied Tube Fittings and Valves going from strength to strength,” concludes Gracie.