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Leveraging on almost two decades of experience in South Africa, and a presence in a further six African countries, networked key and equipment management solutions company Traka Africa announces an acceleration in their growth strategy. It plans to open new operations or expand more widely in five Southern African countries, as well as into East Africa.
Traka is the global leader in its market, having a presence in 40 countries through a combination of its own subsidiaries and local partners. Key and equipment management is a highly niche market that Traka Africa’s general manager Craig Williams estimates as a global R5-billion to R7.5-billion market. The African segment is approximately R350-million (though the largest chunk would be in South Africa). Capping a period of strong, 25% a year growth in the South African market over the past five years, Williams says Traka is expanding, having recently also launched a new automotive business unit in South Africa, Traka Automotive, focused on car dealerships in South Africa.
Traka Africa provides asset management solutions using radio frequency identification (RFID) technology particularly to the mining and petrochemical, banking and now automotive industries, and globally is a market leader in the management and security of keys and mobile equipment such as laptops and barcode scanners.
Nicolai van Zyl, business development manager for Traka Africa, adds: “Traka already operates in several countries outside of South Africa such as Rwanda, Kenya, Namibia, South Africa, Swaziland, Botswana and recently Mauritius.”
He explains that Traka has built considerable expertise in supplying to the mining industry and in more recent years the banking and telecommunications industries and it is therefore a logical step to use this experience to grow its business in other African countries strong in those sectors. “We have identified various opportunities to launch into Africa, and will now be targeting countries with stable mining economies, such as Zambia, Zimbabwe, Namibia, Mauritius and Botswana.
“We have also gained, in a relatively short time, a lot of influence and expertise in the vital banking and telecommunications sectors, which are major contributors in the economic growth of Africa at the moment, especially the rapidly growing sector of East Africa where there already existed fast fibre networks.”
The selection of individual countries has depended on a matrix of characteristics: tax, economics, logistics and business potential in each sector. “This reduced the options to just a handful of countries,” says Van Zyl. The equally exciting economies in North Africa are for the moment being neglected in the first wave of expansion as “too ambitious”, and to enable the company to focus on those it is more operationally ready for.
Traka’s experience in South Africa will stand it in good stead, explains Williams, “We have found that many of our prospects and customers prefer to deal with companies based on the continent. Our advantage lies in being African and our ability to support partners and customers with a specialist team based in the region, with the full support of our global team headquartered in the UK.”
Van Zyl has been active in the past few years building such relationships in the targeted countries. Actual financial investment into the wider African market will initially be of a limited nature. Traka’s philosophy is to identify network partners which are prepared to invest in Traka’s technology, and for Traka to reciprocally invest in them through an accreditation and upskilling partnership. This process enables its network to grow over time into Traka Platinum status partners. Once their level of expertise and customer service reaches the highest international standards, that company might become a wholly-owned subsidiary, at which [point Traka’s financial investment might become substantial.
Williams explains that Africa expansion will take time, a factor which reflects the business model itself: “It can take as long as nine months to secure a single deal in our business, but when a client signs up it is typically with a company owning over 100 branches, and may be a multi-million contract. Upskilling and relationship building is key, and builds up over years.”
“We have a quite ambitious target of 15% growth per annum over the next five years and will be investing in growing our staff numbers and wider African footprint to achieve these ambitions,” says Williams.