ROLFE L A B O R ATO R I E S
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ROLFE LABORATORIES
Rolfe Labs Expecting
Beautiful Growth
With Prominent Principles PRODUCTION: Manelesi Dumasi
Chances are that some of the cosmetic, beauty and household products in your cupboards are manufactured by Rolfe Laboratories in the Eastern Cape. This history of this South African contract packer goes back a long way, but has always been entrenched in Middelburg. The Rolfe family is looking to continue producing high-quality products for its big-name customers while always protecting local jobs and upskilling local people. CEO, Brad Rolfe tells us more‌ www.enterprise-africa.net / 3
INDUSTRY FOCUS: MANUFACTURING
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South Africa’s manufacturing sector, one often identified as holding major opportunities for growth and job creation, has not been utilised to its full potential. Famous for food, automotive, pharmaceuticals, chemicals, and metals and minerals, South Africa’s manufactured goods, especially in export markets, are known for quality and reliability. But as imported goods become cheaper than ever, South African consumers and businesses have started to move away from locally produced goods in favour of inexpensive alternatives from other sources. Then there’s technology, which has also had an impact on how the country manufactures. Jobs are being lost to machines and robots, but this is not something new. Enterprise Africa speaks to one of the country’s most prominent manufacturing specialists - Rolfe Laboratories, a Middelburg-based producer of branded and mass-market home and personal care products – about the industry and how the company is managing to thrive in an ever-changing environment. “We currently have around 650 people employed, down from around 1000 in peak time four years ago,” explains CEO, Brad Rolfe. “We have dropped the numbers in the plant as we were producing Sanex and the volumes were massive, running with more than one shift, but we no longer have that brand. Ideally, our efforts are focussed around running a single shift from Monday to Friday and if needed we can run an extended or additional shift to meet the needs of the month.” Sanex, a skincare product range owned by Colgate Palmolive, moved its production to Europe to take advantage of economies of scale through a centralised manufacturing process. Rolfe was happy that the business was not lost to a competing
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// IN TOTAL, WE HAVE 21 DIFFERENT PRINCIPALS ON OUR BOOKS RIGHT NOW, AND THAT IS VERY HEALTHY // contract packer in South Africa and says that some of the business was quickly replaced. “Tiger Brands is still an ongoing principle and one of our bigger clients. We still do business for Unilever. We still for work for SC Johnson – we’ve been working for them for a number of years. We are working for Avroy Shlain, which is now owned by Tupperware Brand Corporation, they are a big principal. In total, we have 21 different principles on our books right now, and that is very healthy.” MIDDELBURG… THE MIDDLE OF NOWHERE? Located in the Eastern Cape, in the Chris Hani District Municipality’s Upper Karoo, Rolfe Laboratories home in Middelburg is remote. It is almost seven hours drive to Jo’burg and more than 750 km from Cape Town. Nestled neatly between Port Elizabeth and Bloemfontein, Middelburg is a small town that has the cosmetic manufacturing industry at its heart. The business was founded as a small pharmacy shop more than 100 years ago. It grew to become a chemist, serving the local region, before gaining investment from local farming businesses and bringing in a larger product range, and then manufacturing its own ranges. In the ensuing years, the company looked for growth opportunities and Brad’s father, Phillip found it. The company owned the rights to the Playboy trademark in South Africa but had never used it. He quickly realised this potential, bought the company and launched the Playboy range of
cosmetics. Playboy deodorant became the number one male deodorant in the country and catapulted Rolfe Laboratories into an industry leading position. The Playboy brand was sold and new brands launched as the company became a contract packaging specialist, servicing international brands from the same base in Middelburg. The company makes it clear that it is at home in Middelburg and has no intention of leaving. It has become home to a strong and skilled workforce and the business is entrenched in the local community. Today, Rolfe Laboratories is one of the largest employers in the region and supports the lives of many families. “We are entrenched in Middelburg,” says Brad Rolfe. “It’s in a difficult location because of it’s in the middle of nowhere. The services that we have in the nearby area are very limited so any skills that we have in the plant are there because we have put them there. Generally speaking, we love the town, we love the area, we love the people – they are good, honest people and there’s a massive pool of labour available for us to tap into and we continue to support. “We’ve got a situation now where we are employing three generations from the same family,” he adds. “It is not uncommon for us to employ brothers and sisters and mothers and
// WE LOVE THE TOWN, WE LOVE THE AREA, WE LOVE THE PEOPLE – THEY ARE GOOD, HONEST PEOPLE // fathers from the same family. The town doesn’t offer opportunities for many people to move away from Middelburg, it’s a relatively poor area and people grow up here with this work being all
ROLFE LABORATORIES
they know. When they already have family working here, it gives them a step up into the business.” The company is very keen on job creation and Brad Rolfe wants to stir economic growth in the region - he wants Middelburg to share in the success of the business. This is why he will not automate the factory like many other cosmetic manufacturers. “It’s a manual manufacturing plant and is not fully automated,” he says. “It’s semi-automated in certain areas and when the equipment gets old we need to replace it and we try and replace with similar equipment because the last thing we want is to replace jobs with machines – that wouldn’t go down well with our labour force. “We are continually improving and when we outgrow certain parts of
our facility, we install new machinery to increase our capacity. We have just installed another powder line to increase our output. On fragrances and perfumes, we have just installed more capacity but we’re always taking into account that we have access to a lot of labour, especially on the packing side.” GROWING, OR NOT? After losing Colgate Palmolive as a customer, Rolfe had no trouble replacing that business and is now booming with its 21 principals. In particular, local brands from Avroy Shlain and Signature Cosmetics have kept Rolfe’s facilities busy. “We’ve got to a situation where the challenge is not getting business into the manufacturing facility. It’s operational things that become a
challenge such as supply chain. To be honest, we are happy with our size and we’re not looking to get too much bigger right now,” says Rolfe. “Our biggest growth right now is coming from two principals: Avroy Shlain and Signature Cosmetics. The growth that we are seeing there is unprecedented and both are making huge investments which we are benefitting from. One has a large store network across South Africa and is planning further growth in the future. The product range is toiletries and cosmetics and they are showing excellent growth. “When we lose a principal and have spare capacity, we go out and look to replace that with a similar product from a new principal.” The company’s growth in the past two years has been modest, and work
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INDUSTRY FOCUS: MANUFACTURING
patterns and throughput is now very regular and reliable. Rolfe Laboratories calls on its vast experience to offer unique insights into the consumer space, helping its clients to delight their own customers. “The industry is not in the best place and everyone is battling for volume and for margin protection. “We have built line extensions on existing brands, we haven’t acquired any new brands but we have recently released a bigger brand which we purchased from Boots Healthcare - Mylol Mosquito Repellent. Subsequently, we sold that brand to part of the Cavi Group.” Asked what separates Rolfe Laboratories from its competitors, both local and international, the Director is clear is his reply – financial stability, strong relationships with clients and suppliers and, of course, its workforce. “We have a slightly different model as we have been around for a long time and a lot of our equipment and our buildings are all owned – we
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// OUR ORDER BOOK IS NICE AND FULL AND WE’RE ALWAYS RUNNING OUR CONTINUOUS IMPROVEMENT PROGRAMME ACROSS ALL PARTS OF OUR BUSINESS // don’t owe any money,” he says. “We’re at a different level to others and we’re happy with the size of the business. The volume that we’re doing will grow with our existing customer base and I don’t believe that would be successful if we went out looking for more substantial contracts, at least not in the near future.” 2018 FUTURE STRATEGY The future looks extremely bright for Rolfe Laboratories. With its brands and principals promising ongoing growth, and with a growing middle-class becoming more influenced than ever by innovative cosmetic advertising campaigns (especially men), now is a good time to have an established and reputable operation. Rolfe sees opportunities on
the continent for future expansion and he is buoyed by the positivity surrounding the appointment of a new President. “Not only locally but internationally there has been a lot more interest in looking to South Africa for opportunities. Ramaphosa has reshuffled the government and there is a good team involved. I’m very positive about the future for this country,” he says. “At this stage, we do supply some of the SADC countries including Mozambique, Namibia, Botswana and Zimbabwe but we do see a huge opportunity further north. We are in discussions with certain key players but we’re not doing volumes into North Africa. It is very exciting for us as the Rand has strengthened in
ROLFE LABORATORIES
recent times and since Zuma left office it has strengthened further. Africa is always an opportunity for us but it’s not our focus; we look at local supply first.” Of course, economic development, government policy and living standards will impact on demand for Rolfe Laboratories’ clients, and this could filter through to the Middelburg business. But the fourth quarter in 2017 saw the country finish strongly, growing by 3.1% according to Stats SA. Brad Rolfe is understandably confident, stating that South Africa is perfectly
positioned to become a global exporter to rival those that have built their mega-economies on export. “Our order book is nice and full and we’re always running our continuous improvement programme across all parts of our business,” he says. “Our hope is that what you see in five years’ time will not be the same as you see today. We want to be improving our systems, facilities and capabilities every year and that is our commitment to the industry. We need it in South Africa; there’s so many opportunities to manufacture here for export markets. There’s no reason why
South Africa cannot become a serious contender with China and India as a manufacturing destination of choice.” So, Rolfe is in Middelburg for the long-term. And despite the location of this somewhat remote operation, things continue to go from strength to strength. This is ethical South Africa at its best – an example to follow for those looking to create jobs and empower communities.
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April 2018
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EXCLUSIVE INTERVIEW WITH OASIS WATER MANAGING DIRECTOR, MYNHARDT OOSTHUIZEN
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ALSO IN THIS ISSUE:
Rolfe Laboratories / Wonga SA / NFB Financial Services / RussellStone Group
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ENTERPRISE AFRICA
APR IL 2018