REBA CHEMICALS
REBA CHEMICALS
All The Properties Of An
Industry Leader PRODUCTION: Karl Pietersen
Freddy Motau of Reba Chemicals tells Enterprise Africa that the company is investing into new plant and equipment to drive an export push. He wants the company to become recognised as one of the top industrial and speciality chemicals suppliers in Africa and these investments are the next step in the journey of this well-established South African business.
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INDUSTRY FOCUS: CHEMICALS
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Celebrating 35 years of successful operations, Johannesburg-based Reba Chemicals has eyes on future expansion and is investing in a new production plant to develop its export offering. For the past three decades, Reba Chemicals has been one of the country’s go-to suppliers of industrial and speciality chemicals, but in order to catapult the company to the top echelons of the industry, Managing Director Freddy Motau has identified local manufacturing for export as an opportunity. “Currently we’re working on a project to expand the product range we started with, which is inorganic metal salts like zinc nitrate, zinc phosphate, nickel carbonate, nickel acetate, nickel chloride and nickel sulphate,” he says. “We have contracted an engineering company
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and they are busy planning a new plant for us. “We’ve completed research around these products and found that they often go to India. There’s also a local market but we hope to export and that is a real driver behind our expansion.” Since his introduction to the company more than 10 years ago, Motau has been keen on local manufacture and wants to increase SA production for Reba in a big way. “The reason behind that is we want to create employment in the country and we want to save our customers money on shipping costs which are going up all the time,” he says. “We also want to give them the opportunity to carry less stock. They won’t need to carry 12 months stock as they know that Reba Chemicals is just around the corner and can produce certain products in two or
three days.” Local manufacturing will also help the company achieve another target of further entering the export market in Africa. However, only certain products will be considered for continental markets. “If we expand into Africa, the chemicals we will sell will be for water treatment because there isn’t a big market for automotive chemicals or other ranges that we produce. “We undertake a lot of research, especially around automotive products, and if we find that a product is not being made locally we will investigate that market. We like to enter niche markets and make things that are not being made by anyone else locally,” says Motau. DOUBLE TURNOVER Reba Chemicals holds the vision of becoming ‘the largest manufacturer,
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INDUSTRY FOCUS: CHEMICALS
supplier and distributor of industrial and speciality chemicals in Africa’. With construction of a new manufacturing plant, exploration of new markets, and constant innovation in the product range, Motau remains patiently committed to this vision. “Right now, our long-term project is to double our turnover,” he says. “I’m targeting the end of 2018 to achieve this. There’s a number of processes to finalise before we can talk about reaching this goal. There’s a number of purchases to make, we have to arrange finance, and it’s going to take a lot of time.” Asked if the company would be celebrating 35 years of success as it continues on its impressive journey, Motau says ‘not yet’. He is keen to point out that there is more work to be done. “We are still a growing business. We are still hiring people and adding
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more products so our celebrations will come at a later stage, possibly after 40 years when we are settled and the company is where we want it to be,” he says. STEEPED IN HISTORY Despite the fact that Reba Chemicals is still a growing business, it has a long and noteworthy history and is regarded as an industry leader. “The company was founded in 1982 by Ronald Whitehorn,” explains Motau. “The name Reba is an acronym for the names of the original management; Ronald, Edna, Brian and Adele. From 1982 until 1985, the company was only selling commodity chemicals like charcoal. From 1985 until 2005, the company’s four core products were developed locally - nickel nitrate, nickel phosphate, manganese
phosphate and cobalt nitrate. The company was created to manufacture chemicals which were imported. “I joined Reba in 2005 and purchased the company in 2008. I brought expertise in water treatment, metal treatment and industrial chemicals. I wanted to add products for these areas to balance the company as we only had very few products for only a few customers.” Following the 2008 global financial crisis and subsequent recessionary period, Motau (a former-chemist, laboratory analyst and technical product manager) decided that the company required diversification in its product range to mitigate against any slowdown in sales. He oversaw the installation and improvement of in-house production technology, with the
REBA CHEMICALS
assistance of MCEP South Africa – the government’s Manufacturing Competitiveness Enhancement Programme, and now leads a SASDC and ISO certified organisation that is a Level 1 BEE Contributor. “In terms of volumes, acids are our biggest products,” he says. “Things like sulphuric acid, hydrochloric acid and caustic soda lye are commodities that everybody uses and are therefore our biggest sellers. With products like this, we would only look at those which will sell more than five tons per month. We don’t like to sit with too much stock or open drums. When we started we had around 200 products but as time went by we realised that wasn’t efficient. Today, we have around 50 products and if a particular line doesn’t move, we can move quickly to cut it out of the range – we are not tied back by corporate structure.” Because of its reputation for excellence, Reba Chemicals has developed an impressive client base, with some of the biggest businesses in the country utilising its products. “Our biggest customers include Rand Water and Eskom. A lot of the time, our end users do not buy directly from us. Most of our products goes through agents. This is especially true with the mines and automotive businesses,” says Motau. VOLATILE ECONOMY One of the main challenges that stands in the way of Freddy Motau and Reba Chemicals is South Africa’s unpredictable economic climate. Sometimes more volatile than the chemicals that the company manufactures, the economy is a cause of concern for the Managing Director. However, the company’s focus on spreading risk and diversifying product range means that much of the negativity has
been avoided, for the time being at least. “The economy is struggling and it does cause problems,” admits Motau. “However, we are surviving. We have been successful in creating export opportunities so when our market is slow, Zimbabwe, Namibia, Botswana, Swaziland, Lesotho and others continue to buy. We have learned from the past that we need to spread our risk and have outside markets.” Another tool used by the company to mitigate against a negative trading environment is ensuring top quality is nonnegotiable. This is done by employing well-trained, highly skilled people that are identified by management as value-adding for the business. “We deal with CHIETA (Chemical Industry Education and Training Authority) and they will bring student to be trained here and subsidise that training. We take around 10 students for practical and theoretical training each year and as soon as a vacancy arises, we will look to those students to fill the role,” Motau explains. “We prefer
this method as the students know us and we know them and we can ensure a good fit for both parties. We think this is the right thing to do and we know that even if people do not end up employed here, they will have developed a good skillset for work elsewhere in the industry.” Thanks to its workforce and leadership, Reba Chemicals is extremely well-positioned for the future. Operating in an industry that has been described as a ‘hidden opportunity’ and a ‘market with growth potential’, the future for Reba looks bright. “We’re not in a bad position,” Motau says. “I’m not nervous, we’re confident in everything that we do. We’re financially stable and excited about the future.”
REBA CHEMICALS +27 11 976 4938 www.rebachemicals.co.za
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Issue No.61
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JEGIE PADMANATHAN:
People Are The Power
of Bidvest Prestige ALSO IN THIS ISSUE:
CCI South Africa / Thebe Tourism Group / RPP Developments / ALG Estates
A S F E AT U R E D I N
ENTERPRISE AFRICA
AUGUST 2017