Wire supplier warns of ongoing industry challenges

9th September 2011 By: Nomvelo Buthelezi

The wire industry is still struggling to overcome the aftereffects of the recession and it will take some time before companies resume normal buying and stockholding patterns, says diversified wire supplier Nockers Engineering Products (NEP).
Owner Mike Hardisty says the reces- sionary business environment of the past few years has resulted in a dramatic decline in the stockholding of customers.

Instead of buying in large quantities, customers have resorted to buying smaller quantities of goods with a quicker delivery rate.

“The potential downside for the local manufacturer is that, if it cannot sup- ply its product soon enough, the order is likely to be placed with an overseas manu- facturer. Manufacturers, thus, require quick access to their raw materials,” says Hardisty.

He expects smaller companies to con- tinue buying smaller quantities of goods. “The days of having a warehouse full of stock are gone. The uncertainty in the financial markets has caused companies to become more cautious in the buying of their stock.”

Further, Hardisty expects the local wire industry to continue facing challenges in the coming months. He believes South Africa is deindustrialising and says many wire users in the manufacturing sector will most likely close down in the next few years, as imports of ready-made manufactured goods increase.

He tells Engineering News there has been a decrease in the number of larger manufacturing customers and an increase in smaller manufacturing customers, as a result of the rising trend to import fully manufactured products.

Meanwhile, Hardisty believes NEP’s ability to be flexible has enabled it to meet the challenges created by the recession. The company’s involvement in both the mining and the automotive sectors, and its diversification into other sectors, has enabled it to be more competitive. He points out that, when one sector struggles, the company is able to grow in other sectors.

NEP supplies wire to manufacturers of cables, braids, springs, heating elements and industrial components.