Energy management and automation multinational Schneider Electric is planning to partner with more South African manufacturers as part of a strategy geared towards accelerating the expansion of its domestic market presence, while increasing local content.
Global CFO Hilary Maxson told Engineering News during a recent visit to South Africa that the group would pursue licence agreements with local companies, which would produce Schneider Electric-certified products using specialised components, but with the goal of progressively localising the solution over time.
“We have a model whereby we are able to operate in an ecosystem of partners and which allows those local partners to build ecosystems around themselves to progressively increase localisation.
“This, we believe, makes us one of the most local of global companies and also ensures we are closer to customers and more competitive in terms of pricing,” Maxson explained.
Her visit coincided with Schneider Electric’s appointment of Eya Bantu as its local engineering and customisation licensed partner for the PIX Easy range medium voltage switchgear.
Under the arrangement, Eya Bantu is certified to design, manufacture, assemble, test, and sell the range, which is used by electrical utilities and the renewable-energy sector, as well as in buildings, and various process industries.
The black-empowered company has added a second assembly plant in the Eastern Cape as a result of the licence agreement and has also employed 15 more people as a result of the associated investment.
Such arrangements, which involve intensive collaboration, technology transfer and skills development, position the licensee to progressively raise local content to levels well above 50%.
Cluster president for Anglophone Africa Devan Pillay said that the group was actively looking for additional partners in South Africa, where it already has its own assembly facilities.
Pillay says partnerships currently comprise about one-third of its local manufacturing and assembly, but that Schneider Electric’s intention is to focus more intensively on rolling out its licence-agreement strategy.
“This trend towards more partnerships will continue and we think the strategy also speaks to government’s drive towards enterprise development, job creation and local value addition.
“The partners have skin in the game and are willing to invest, while we offer step-by-step support and high-quality products that are widely accepted across various markets,” Pillay elaborated.
Maxson adds that the partnerships also help accelerate market penetration for Schneider Electric’s portfolio of products, which are relevant to key growth sectors in South Africa and Africa, such as natural resources, electricity and process industries.
“The world is really doubling down on trends such as electrification, digitisation and sustainability. And these are really the same trends that I think we see as opportunities in Africa.”
She sees particular opportunity in using digitalisation to drive energy efficiency across industries, which in the South African context would also help ease load-shedding pressures in the short term.
“We are really trying to shift the energy security conversation from the current focus on supply to taking greater control of demand.
“Energy efficiency, and using what we have better, we think should be an enormous part of the solution, and it’s also something that corporate and consumers can take into their own hands, rather than relying on big utility or private power projects.
“That’s the secret sauce and Schneider has a suite of products and solutions that can really help customers manage their demand far better,” Maxson enthuses.