BAFOTECH
BAFOTECH
To A Good
Year
PRODUCTION: Manelesi Dumasi
In a time when South Africa’s economic outlook is uncertain and negativity seems to be creeping into the thoughts around many businesses who operate in the challenging mining industry, leading engineering firm Bafotech is pleased to announce its position is one of strength. Marketing Director Chris Boone tells Enterprise Africa that the company is having a great 2017, coming off the back of a good 2016.
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INDUSTRY FOCUS: ENGINEERING
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Back in November 2015, Enterprise Africa spoke to Welkom-based Bafotech and found that the manufacturer and repairer of winch units for the mining industry was caught amongst a wave of negative feeling stemming from a weak economy. At the time, Marketing Director Chris Boone said that the industry was “very tough” and company sat in a “reasonable position”, hoping for commodity prices to pick up. Fastforward 20 months and the landscape is very different. The economy now sits in technical recession, worse than 2015; the mining industry is facing further
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retrenchments as mining houses look to cut costs, and a new mining charter is in the pipeline and causing a lot of uncertainty. But for Bafotech, work remains good. Despite the bleak economic outlook and the troubles faced by the mining industry, Bafotech’s work is not slowing and has picked up over the past financial year. “Financially, we had a relatively good year ending in February 2017. This financial year has started very well and I think we might even topple last year’s figures,” enthuses Boone. So what is different for
Bafotech? How do you go from ‘reasonable’ to a good year’ in just 20 months, all in an economy not conducive to growth? “We thought outside the box and instead of trying to cut costs, we’ve invested more money,” explains Boone. “We’ve grabbed the bull by the horns and it seems to be working. We do keep a very close eye on costs and we’ve purchased a couple of new machines that are helping to keep our manufacturing costs down so we’re well-priced for our market. “The new products that we’ve
BAFOTECH
added are also helping. These are mainly underground rolling stock. We’ve also secured a contract with an OEM for repairs of underground hoppers and, thanks to our location, that relationship is flourishing,” he adds. INNOVATION Ongoing R&D will be a theme for Bafotech in the future as Boone suggests that further expansion of the product range will contribute to the company’s growth. In association with clients, Bafotech is currently busy developing all-new
solutions that will assist in all-new ways. “We are looking at new sealing arrangements for the winches. We’re also looking at new improved signalling devices and remote controls. This surrounds safety around the scraper winch,” says Boone. “We try to be ahead of the industry. We’re looking at computerised, electronic monitoring systems on the winches, with the help of our partner. This will help trace when the unit is and isn’t working underground and that sort of information is useful for
mine managers.” And, where 2015 saw more repair work rather than new contracts being awarded, 2017 has seen the opposite, resulting in Bafotech setting out a vision for 50% growth in the next three years. “We’ve secured some nice contracts and we’re hopeful of achieving our goal,” says Boone. This positivity is breeding further confidence throughout the business, and Boone says that every time an opportunity arises, Bafotech will explore. “Our whole workforce feels
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INDUSTRY FOCUS: ENGINEERING
positive. Everyone knows that it’s tough, but you have to get out there and do it. Our people are happy, they enjoy working and they’re giving their all. We never know when an opportunity will come our way but when it does, it’s our policy to grab it with both hands.” SA TO S.AMERICA When an opportunity to sell Bafotech units in South America came up, the company certainly took its chance. Supplying the same global mining organisations that it serves in South Africa, Bafotech’s progress in South America started quickly. Being able to supply units of the highest quality but at a cheaper rate than was available locally, or from north America, Bafotech picked up business in
Peru, Bolivia and Brazil. “We have sold some products there but it has quietened down recently,” admits Boone. “We sent some units to Brazil and Columbia and we’re receiving a number of enquiries.” But the Marketing Director is clear that his focus for markets outside of SA lays in Chile and the Philippines – markets which will be attacked as soon as possible. “As soon as we have the South African market settled, I want to concentrate on Chile and the Philippines. There’s two major mines in each of these countries that use the same type of product that we sell,” he says. “We’ve developed well in South Africa. We’ve added new products lines and we’re doing well – we’re quite happy with the situation at the moment. We’ve
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been concentrating on the gold and platinum mines and that is looking like our efforts will now start to come to fruition. Next year, I will try and make arrangements to head out to Chile and then the Philippines.” The price of gold and platinum in international markets has been stable, and even improved, in recent months – good news for SA’s miners who produce some of largest volumes of gold and platinum from anywhere in the world. Some have credited President Trump for scaring investors away from the US dollar and into safe havens such as precious metals, but whatever the reason, stable prices are good for the mining industry. Plummeting commodity prices in 2015 saw an increasing trend of miners looking to mechanise larger parts of their operations to bring costs under control, but it’s easier said than done. For Bafotech, this trend was a cause for concern as the company’s products are largely developed for conventional mining operations. Recent stability in the market, along with further research of deep deposits, has resulted in many companies ruling out complete mechanisation for the time being. “Maybe in 50 years mechanisation will take over but right now, there’s still so many mines that use our products. It’s not going to affect us in the short-term,” says Boone. “There’s a number of new mines that want to go fully mechanised but when they research the reef, they see they can’t go fully mechanised as there’s too much rock to come out so they end up going conventional for mining and mechanised for cleaning and that suits us.” As Bafotech’s success has grown and its ambitions have been achieved, the company has also looked to benefit the communities in which it operates. This
BAFOTECH
FROM L TO R: PAT BOONE (MANAGING DIRECTOR), LESEDI RAKGOKONG (CHAIRMAN), CHRIS BOONE (SALES AND MARKETING DIRECTOR), DANIE JOUBERT (FINANCIAL DIRECTOR)
longstanding approach to effective business practice has seen Bafotech investing in smaller black-owned companies in engineering and related fields. “We’re actively involved with helping black entrepreneurs develop their companies,” says Boone. “We benefit hugely from these relationships and enjoy developing our communities. Right now, we’re working on projects to develop a catering business, a laundry business and an engineering company. It’s all part of our BEE initiatives and we’re very proud of what is happening at the moment.” CHARTING ITS OWN COURSE The proposition of a new mining charter - which will involve sweeping new rules on ownership, employment and redistribution of revenues - has caused concern in the industry, mainly for the Chamber of Mines which quickly moved to say it would launch a legal challenge to block the charter. Chamber President Mxolisi Mgojo said that the new charter contained a string of ‘red
flashing lights’ that would have ‘unintended consequences that go far beyond the mining sector’. Of course, Bafotech is monitoring the situation, and quickly after the new charter was released and shares in the big mining businesses dropped, it became clear that the future remains unclear. But Boone remains optimistic. “The mining charter is a problem for everyone and the mines are fighting it,” he admits. “Many of the other companies that we hear about who deal with mines are all saying that they’re not doing too well but we’re obviously doing something right. “Our units are still underground and still need to be used so even if the big names were to disinvest, there will be new investment and mining will continue. The mining charter will be a big blow for the economy but we’ll always have work and that’s the most important thing.” He concludes with a message to any company out there who is feeling overwhelmed by the current market plight: “If you can sort your costs out, you will make a profit.
There are many companies who have operated in this sector for many years, through all the ups and downs, and cost control is the key.” It looks like the future will be exciting for Bafotech. The small engineering company that started in a dining room with nothing but some borrowed furniture and a computer that had been won as a raffle prize is now realising its most prolific potential. And with further international expansion to come in the future, Bafotech is one SA that refuses to be dampened by the economic outlook.
BAFOTECH (+27) 057 396 2848 sales@bafotech.co.za www.bafotech.co.za
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AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
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Issue No.62
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G4S DEPOSITA:
When Cash
is King
ALSO IN THIS ISSUE:
Van Schaik Bookstore / Zoona / IPSS / Safire Insurance
A S F E AT U R E D I N
ENTERPRISE AFRICA
SEPTEMBER 2017