Retractaline

R E T R A C TA L I N E

RETRACTALINE

Hanging High

atop SA’s Manufacturing Industry PRODUCTION: Karl Pietersen

Durban-based Retractaline is underway with an aggressive expansion programme that will see the iconic South African laundry and homeware brand strengthen its industry-leading position. After moving into a new facility at Dube TradePort, the company is now looking to expand its product range and restart its export operation, while always manufacturing to the highest international standards.

//

Last month, Enterprise Africa delivered the story of Dube TradePort and its remarkable journey from greenfield development project to one of South Africa’s key trade gateways.

The area is now home to a number of very exciting companies from agriculture, logistics, technology, hospitality, manufacturing and more.

It is a region that drives the wider local economy and brings prosperity to KZN. One company that realised the potential of the Dube Special Economic Zone, and moved in to take advantage, is Retractaline – South Africa’s iconic laundry care product manufacturer.

Founded in 1985 as a one-manband, it took Retractaline a decade

2 / www.enterprise-africa.net

to hit the fast lane. In 1995, when current Owner and Managing Director Chris Frost purchased the company, Retractaline transformed from a garage operation to become one of the country’s leading manufacturing organisations, supplying products to customers across southern Africa.

24 years ago, Retractaline was operating out of a 180 m2 space in New Germany, on Durban’s outskirts.

When Frost took the business, manufacturing was split between SA and China. He went about establishing relationships with new customers and Retractaline began to grow, carving out an industry-leading position in its niche market. But, then came the 2008 global financial crisis and business

became challenging for everyone, in all parts of the world. Retractaline halted its export programme and Frost analysed operations realising that manufacturing in China was not as cost-effective as it had previously been. In 2014 he decided to move all manufacturing back to South Africa and quickly began the search for a new location. After initial frustration, Frost discovered the opportunity at Dube TradePort, north of Durban, and set about building a dedicated 4400 m2 facility from which Retractaline could grow.

“I was semi-retired but when the expansion project began, I started working full-time again, travelling around the world sourcing new

INDUSTRY FOCUS: MANUFACTURING

machinery, overseeing the construction of the new factory, planning new product development and remaining very hands on with the business,” he tells Enterprise Africa.

The expansion project was challenging but enjoyable and you get a lot of personal pleasure seeing a vision become a reality.”

BRINGING BUSINESS BACK Many products stocked by South Africa’s retailers are imported. Locally manufactured goods that meet international quality standards are now uncommon. But, for Chris Frost, this is not right.

“I have no doubt that part of the solution to some of South Africa’s socio-economic problems will come through the stimulation of manufacturing. It’s a long-term job creator and skills enhancer,” he says.

One of the main drivers behind his decision to invest into a new facility was so that local retailers could source quality, locally manufactured goods for their local customers.

“The move was linked to the whole growth strategy through which we aim to go on an import replacement drive by expanding our product range to be able to offer the stores products that they are currently importing from countries in the Far East,” he states. “We are also looking to grow our export business. Part of that is to reverse integrate our manufacturing processes and bring everything in-house. To achieve that, we needed a new factory facility. We looked all over the market and Dube was attractive because of its Special Economic Zone status which comes with certain tax benefits for manufacturing entities. We acquired the land and commissioned a custom designed facility for our requirements.

The build took around one year and was split into two phases. Phase one began in 2015 and included the first two buildings, and phase two was started in 2017 with the two more buildings completed.

“It’s been relatively smooth with only the regular teething problems that come with new processes. Everything

is working as planned and we now have the ability to be internationally competitive against the East, and to improve production output with a wider product range.”

Funding for the new factory came from international venture capitalists and resulted in Frost sharing a stake in the business. “I owned 100% of the business prior to the expansion and I managed to get a venture capital company to invest into the business in return for shareholding and provision of credit facilities in terms of development financing for the buildings and plant and machinery.”

He highlights the investment as a shining example of how foreign funders are still keen on SA as a manufacturing investment destination when a sound business plan is presented.

“A lot of SA manufacturing work has been replaced by Chinese imports. If you look at any retail store in SA, a great percentage of what is on the shelves is currently imported from the likes of China and Europe. This means there is a lot of opportunity for South Africans if they can invest in plant, equipment and technology to become internationally competitive. The bottom line is if you can improve on imported standards and offer competitive prices, the stores will buy from you because you’re local, there are shorter lead times, they don’t have to order such volume, they don’t have to order as regularly, and you can offer in store merchandising services.”

NEW PRODUCTS, NEW CHANNELS Retractaline’s focussed approach to business development and quality has seen it rise to claim enviable market share across the categories in which it operates but Frost is keen to continue growing and is looking at new products and new routes to market to keep the company developing.

“We dominate the South African market with around 80% share,” he states. “We split our range into five categories: retractable clotheslines, rotary clotheslines, wall-mounted

4 / www.enterprise-africa.net

RETRACTALINE

// THE BOTTOM LINE IS IF YOU CAN IMPROVE ON IMPORTED STANDARDS

BY OFFERING COMPETITIVE PRICING, THE STORES WILL BUY FROM YOU BECAUSE YOU’RE LOCAL // folding clotheslines, folding airers, and ironing boards and accessories.

We don’t dominate with 80% market share in each of those categories, but we are growing rapidly. In retractable clotheslines and rotary clotheslines, we probably have more than 80% market share but in ironing boards, where a lot is still imported, we probably have 5-10% share. Our goal is to dominate the retail market and be the brand of choice across all categories.”

Currently, Retractaline products are found in some of the country’s major retail stores including Builders Warehouse, Brights Hardware, Bu Co, Game, Makro, Mica Hardware, Takealot, Russells, Pick n Pay, Burmeisters and more.

In the future, Frost expects online retailers to play an increasingly important role in the distribution of Retractaline products.

“There is a lot of growth in ecommerce, not just in South Africa,” he says. “Amazon is a disruptor to the traditional brick and mortar retailers and that is no different here. We are seeing big growth in ecommerce whereas traditional retail has slowed significantly. There are some new entrants in the traditional retail market with various players opening up stores, so the future is not just about the big chain stores.”

On the product side, Frost explains that the company will

stick to its laundry theme when introducing new homeware ideas.

“We have started with self-assembly wardrobes, we are making shoe racks, and there is a lot of product development ongoing. We launched the self-assembly wardrobes last year and they have been phenomenally successful, growing to become roughly our third biggest selling item across the range in a short space of time.

“In our market, not every home comes fitted with cupboards. With our product, you can walk into your local store and pick up a self-assembly wardrobe with steel tube and plastic components for not a lot of money – it meets a niche. We also expect our shoe racks to be pretty popular too.

We have grown from one product to now having more than 60.”

RETURNING TO EXPORT As manufacturing in South Africa, and product development at Retractaline, continues to pick up, the company will look to restart its export business. The first targets will be established markets through established online channels.

“We exported into Europe via Ireland for ten years but that ended with the 2008 financial crash. We’ve been growing so rapidly locally that the international focus tapered but in 2019 we will be expanding that and we have set up stores with Amazon UK, USA and Australia so we will go direct through the online route,” says Frost.

Next, Retractaline will aim for continental growth by teaming further with its existing customers that have a strong African presence. For example, the many brands owned by Walmart (including Massmart, Builders

SPECIALISTS IN INDUSTRIAL FASTENERS AND TOOLS We are your specialist supply partners, complemented by a professional team  More than a 100 years combined industry experience  Local & International network of suppliers to source difficult to obtain fasteners  Service delivery that meets our customer’s needs  Sales people that care for their customer’s businesses COMMITMENT • RESPECT • INTEGRITY • CARING

www.boltlink.co.za • 031 579 3144 sales@boltlink.co.za

www.enterprise-africa.net / 5

INDUSTRY FOCUS: MANUFACTURING

Warehouse, Game etc) are present across Southern Africa and act as the perfect distribution channel for Retractaline.

“We will deliver to a distribution centre in South Africa and they will deliver to their store network around Africa at their risk. For an independent business, there is a lot of risk in Africa and it’s easier for the big retailers to manage,” admits Frost.

The challenge here is delivering the

6 / www.enterprise-africa.net

high-quality standards that international retailers expect, consistently.

“It can be challenging” says Frost “but I’ve been doing this for 27 years and you eventually get used to it. Everyone wants everything on their terms. They all want stock to be held so they can order at short notice and have products delivered quickly. They all want overstocks to be returnable and they want

rebates and advertising spend – it is a challenging environment, but the challenges are vastly outweighed by the positives. The payment record is impeccable as you’re dealing with blue-chip companies, and their reach is unrivalled.

“If you understand what they’re looking for - quality products at internationally competitive pricing with instant stock availability – and you can deliver that effectively then you will be able to grow significantly.”

But how can Retractaline deliver quality and innovation unfailingly?

According to Frost, all success comes from not needing to outsource, and that is because of the company’s fantastic staff base.

“We have around 100 people and as the employee base grows, it does come with certain challenges, but any manufacturing business has those issues to deal with and we are fortunate with the calibre of staff we pull from our community. All are educated but also quick to learn our culture is one where people are certainly keen to learn and grow.

RETRACTALINE

// IF YOU UNDERSTAND WHAT THEY’RE LOOKING FOR - QUALITY PRODUCTS AT INTERNATIONALLY COMPETITIVE PRICING WITH INSTANT STOCK AVAILABILITY – AND YOU CAN DELIVER THAT EFFECTIVELY THEN YOU WILL BE ABLE TO GROW SIGNIFICANTLY // “We have some technical and specialised processes from steel tube making, machining, CNC programming etc, and everyone has been trained in-house – we don’t bring in outside expertise. We have high staff loyalty and there are still a number of people with the company that have been here since day one. Many have had 15-year or 10-year service behind them. We always look out for people that fit our culture and have a strong team and work ethic.”

With this strong team, a widelyrespected brand, a quality product offering, and a new internationally competitive factory, surely there is not much that can stop Retractaline’s expansion?

“South African manufacturing has been decimated over the past 20 years in many sectors,” explains Frost. “I still like to see our customers and try and convince them to switch from imports to us, and that keeps me very busy.”

But it seems as though manufacturing could be showing some green shoots. In January, the Absa Purchasing Managers’ Index - a report from the Bureau for Economic Research at Stellenbosch University – showed that respondents expect business conditions to improve over the next six months. The index rose from 49.5 in November 2018 to 50.7 points in December 2018 – it’s highest since July 2018 – signalling growth in the

sector. The report indicated that sales orders are outstripping inventories but highlighted the fact that a sustained recovery in demand is required before a meaningful recovery in manufacturing output, investment and employment can take place.

Frost agrees, saying: “There is a lot of positive talk and when I decided to do the expansion, sentiment was probably at its most negative. People told me I was crazy. But I thought that the right time to invest was when everyone was running. Since then, especially under current leadership, there has been a lot more positive talk about job creation in manufacturing. At this stage, it’s still a lot of talk and not much is transpiring into actual projects, but the sentiment is right and we should see talk become action.”

WWW.RETRACTALINE.COM

www.enterprise-africa.net / 7

Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher.

Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved.

No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Š CMB Media Group Ltd 2019

AS FEAT UR ED IN

ENTERPRISE AFRICA

FEBR UAR Y 2019