Bata South Africa / Enterprise Africa

BATA SOUTH AFRICA

BATA SOUTH AFRICA

Bata Steps Out of Lockdown with Strength and Quality PRODUCTION: Karl Pietersen

When Bata veteran Michael Wyatt took the reins of Bata South Africa at the end of 2019, things were looking good for the company. But a global pandemic, economic meltdown, and regional unrest have forced Bata to refocus. Fortunately, a careful but ambitious plan has left the business ready for the next step in its growth strategy.

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INDUSTRY FOCUS: MANUFACTURING

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The famous Bata Toughees have been a mainstay for South Africa’s school children for generations. Smart, hard wearing, reliable and made for quality, Bata school shoes come out of KwaZuluNatal, South African-made from heel to toe. The same goes for Bata Industrials – trusted by hard workers across different industry sectors, these shoes are safe, attractive and affordable. Made in South Africa, using premium materials including South African leather, the industrials range makes up part of a powerhouse portfolio that is busy searching out opportunities for growth.

Originally founded in 1894 in the Czech Republic, Bata arrived in South Africa in 1947 and the sturdy brand was immediately popular in an economy based on mining, heavy industry and agriculture. Today, at group level, Bata is the world’s leading shoemaker by volume, and in South Africa the company enjoys strong market share, with 500 people delivering years of industry experience.

MD Michael Wyatt tells Enterprise Africa that, after a need for refocussing during the pandemic, Bata now has Africa at its feet.

“When the pandemic came, unlike a lot of businesses that were involved in things like fashion products or those with seasonal patterns and trends, we went back to basics,” he begins. “We are a school shoe manufacturer and we make industrial and safety products, and then we have a few fashion brands.

We focussed on our core competencies and, after the pandemic, we plan to further strengthen our manufacturing or expand it to really look at those lines which saw us through the pandemic.

“We applied for a permit as an essential service provider and were allowed to restart manufacturing.

We provided PPE/safety footwear and this was a key in leveraging strategic

sales opportunity during the pandemic.

We opened our factories with strict Covid protocols and that was key to our success in 2020 compared to our competitors, leaving us in a strong position for 2021. Even with the hardest challenges there are opportunities.”

ONWARDS AND UPWARDS Wyatt sees the opportunities for Bata in export markets. Africa has long been a key element in the company’s strategy, and strong relationships are already in place across strategic territories.

Traditionally reliant on imports from the East, Africa’s footwear industry has a lot to offer but has been priced out of the market.

By teaming with local suppliers and marketing ranges in an effective manner, Bata has created an exciting portfolio for retailers to take to market.

// EVEN WITH THE HARDEST CHALLENGES THERE ARE OPPORTUNITIES //

MICHAEL WYATT

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BATA SOUTH AFRICA

// WHAT WE’RE DOING AT BATA IN SOUTH AFRICA IS TO BUILD FOOTWEAR COLLECTIONS USING LOCAL AFRICAN SUPPLIERS // “One of the most interesting areas in our business recently has been our export division,” confirms Wyatt. “A lot of African countries have suffered under years of various anti-dumping duties or prohibitive importation around certain products, so what we’re doing at Bata in South Africa is to build footwear collections using local African suppliers.

We then showcase those collections to the rest of the Bata group. We have branches in Zimbabwe, Kenya, Uganda, Zambia etc and we have become a hub for sub-Saharan Africa. We put

the collections together, and our retail sister companies from Africa come and view in the showrooms and put in their orders. We then facilitate the whole process from South Africa for export across the SADC region. That is a key project and something that we will focus on more going forward.

It all plays back into the idea of being self sufficient in sub-Saharan Africa and South Africa, relying a lot less on imports from China and others.”

Bata is capable of supplying a large chunk of the market, and its footprint in terms of impacting people is significant within the South African manufacturing industry. The company sells around 4.5 million pairs of shoes each year and Wyatt wants this to grow.

“We want to rebuild the business back to pre-pandemic levels. When the vaccination programme has run through South Africa, we will start to open up and get back to where we were before, and this is largely the target for most businesses locally. We also want to expand into fashion area of the market. Up until now, we’ve

focussed on the core aspects in the business and we want to grow the Bata brand. E-commerce and is going to be important going forward. We also want to drive a continued expansion into Africa, working alongside our sister companies in Africa and other new markets where Bata doesn’t have a presence,” he says.

FEET ON THE GROUND Before the pandemic hit, forcing businesses to close and many retail operations to come to a grinding halt, Bata’s output was climbing.

Strong relationships with the country’s merchants - including Pepkor (Ackermans & Pep), Massmart (Builders), Mr Price Group, The Foschini Group (Jet), Agrinet, Matus, SPAR and more – Bata was rolling out an expansion programme with market leadership in mind.

“South Africa had a record year in 2019 and equally strong start to 2020 before hard Covid-19 lockdown in March. We developed a strategic Covid mitigation plan early to strength

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INDUSTRY FOCUS: MANUFACTURING

test Bata South Africa resilience to the pandemic long-term to ensure we could see the company through both 2020 and begin to regrow in 2021 which proved successful in H1. We focused primarily on simplifying operations, focusing on our core production competencies and collections whilst mitigating and reducing any cash or stock risk - basically sticking to basics due to ongoing market uncertainties.”

Wyatt had only recently returned to South Africa before the pandemic impact became clear. A South African who had previously emigrated to Australia and then New Zealand before working for Bata in Eastern Europe, Wyatt wanted to get back to SA, knowing the market was immeasurable.

“I moved to Europe to manage Bata’s business in the Czech Republic, Slovakia and Poland. The European market is very dense and very populated whereas, as a manufacturing business in South Africa, it can be like the Wild West, and there is a lot of opportunity. There are 60 million

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// THE EUROPEAN MARKET IS VERY DENSE AND VERY POPULATED WHEREAS, AS A MANUFACTURING BUSINESS IN SOUTH AFRICA, IT CAN BE LIKE THE WILD WEST, AND THERE IS A LOT OF OPPORTUNITY // people, and then we have sub-Saharan Africa with our export partners.”

Wyatt has a personal ambition to develop the manufacturing industry in the country, which was hammered by the pandemic, falling by 2.1% year-on-year in February 2021. In fact, manufacturing as a whole has declined almost every month in the past 24.

“South Africa has a number of challenges and one of the main problems is unemployment, and I wanted to bring skills back to the country. My intention was to come back and strengthen our standing as a local manufacturer in the country. I returned at the end of 2019 just before the Covid

pandemic began going worldwide.

A lot of businesses import, and that is fine, but our drive has been to be a 100% locally made manufacturer in South Africa, for export into sub-Saharan Africa.

“We have a complicated political landscape and with that comes a lot of emigration to Europe or Australia and New Zealand and that results in a loss of skills, so for people who can come back, who can support the country, and through their efforts grow the economy and create jobs – it’s very important,” he says.

During the early stages of the pandemic, many jobs were shed in manufacturing, while companies were closed. For Bata, the idea of redundancies

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was unacceptable, and the company kept every single member of staff on payroll.

“That was a strategy from our side and relates back to unemployment in South Africa. Unemployment is above 30%, and can be as much as 70% in the youth so we try and come up with as many creative ways as possible to avoid laying people off.”

Employee loyalty is something that few companies can genuinely boast, but when it is achieved, product quality is improved and industry knowledge drives a healthy business. Wyatt - who has been in the industry for 20 years,

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across multiple Bata sites in different markets and various roles – truly appreciates the unique knowledge held within the South African workforce and utilises this longevity as a strategic asset.

“There are not too many companies where the average employee has 20-30 years of knowledge with the group,” he smiles. “Additionally, Bata is extremely resilient, after trading for 127 years there are not too many situations that the company does not have learnings and solutions on. Our customers and suppliers find security in this longstanding history, so Bata is a

trusted brand globally. Logically, we also realise that nothing is certain forever so we cannot be in any way complacent.

There is always a drive to improve, make progress, and move forward to find solutions. Overcoming the recent Covid-19 pandemic and Riot’s in South Africa are examples.”

LACING FOR GROWTH In Bata’s key product lines of school shoes and industrial wear, the focus continues. In these markets, Bata has a dominant position and it is not about to take a step back. In other sectors,

BATA SOUTH AFRICA

// AFTER TRADING FOR 127 YEARS THERE ARE NOT TO MANY SITUATIONS THAT THE COMPANY DOES NOT HAVE LEARNINGS AND SOLUTIONS ON //

including fashion-based lines, there is no doubt that a quality focussed, local manufacturer could make a big impact – especially one with retail relationships in place all over the country.

Wyatt is clear that developing the sector, creating jobs, and highlighting locally produced goods over cheap imports is the way forward for Bata, and for manufacturing.

“Look at the challenges with international shipping, container costs, ability to get bookings, various different lockdowns around the world, availability of finished goods or raw materials – it’s wreaked havoc on those who are solely importers. Our ability to turn on and turn off production, or adjust production accordingly is a fantastic positive that not a lot of businesses have and has allowed us to mitigate and find our way through this pandemic.

“Previously in our industry there was a heavy reliance on China for imported finished goods. The last two to three years have taught us that having our own manufacturing, and being able to control product in house, is key

to overcoming global challenges. In the next three years, we will continue to focus on South Africa and Africa.

Re-starting and growing local industry is the only solution to South Africa’s youth/job challenges. This is the primary reason I decided to return from Europe in 2019 and bring learnt skillset back to South Africa.”

Like Bata’s Toughees, its famously strong work boots, and all of the brands within its portfolio, this is a business built to last. The decades behind it provide the perfect base for the opportunities ahead. This is a South African manufacturer, using local materials and local suppliers, working in African markets to play its part in the Bata vision of shoeing the world.

“There are expansion plans in place for the post-covid market. Firstly, it’s about recovery to pre-pandemic levels, then it’s about expansion in the to the rest of Africa,” Wyatt concludes.

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September 2021

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