EET Group - August 2019

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EET GROUP



EET GROUP

The EET Group Is

Strong to the Core PRODUCTION: Benjamin Southwold

Designed to offer the full package for heavy infrastructure in the mining industry, the EET group of companies cover fabrication, magnets, hoisting and much more. CEO Trevor Watson outlines what he feels the future will hold for EET, with the group navigating tricky waters in recent years to emerge ready to profit from the opportunities of a new President, and with new markets to conquer. www.enterprise-africa.net / 3


INDUSTRY FOCUS: MINING

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While intricate, the composition of the EET Group has been carefully thought through to ensure that every aspect of the wider industry is considered. The three EET divisions - Fabrication, Magnets and Sleeves - are grouped into EET SA (Pty) Ltd, and joined by Rotomech, Consultation, Wessel’s and Watson Steel and Hoisting and Handling Controls. Diverse in their services and expertise, all the separate companies fall within the larger EET Group, by virtue of their common shareholding and management control, and benefit from the renown and resources EET possess within the sector. “The group has been structured to facilitate vertical integration in terms of supply chain management,” EET explains, “and to create economies of scale. This structure provides integrated group resources such as banking/finance, human resource management, insurance and distribution and marketing.”

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MAGNETIC APPEAL EET has been serving the mining, steel and material handling industry in South Africa with its permanent and electromagnetic solutions for the best part of half a century. Extensive experience in the engineering and manufacture of magnet systems has enabled EET to provide clients with high-performance, reliable and costeffective systems, and paved the way for a recent relocation to new larger premises in Heriotdale, Germiston. The new facilities have allowed EET’s design, fabrication and manufacturing activities to be housed under one roof, together with improved access and increased floor space. The EET Fabrications Division, meanwhile, has been involved in heavy fabrication since the 1980s, with products ranging from mine winders, bearing pedestals, bedplates, brake anchor brackets to another full range of heavy duty electro magnets. It too benefits from ample facilities, including some 8000 m2 of

// RAMAPHOSA IS BUSINESS FRIENDLY AND HE HAS A VERY STRONG MINING BACKGROUND // factory space in total and a wealth of equipment: boiler maker stations, heavy welding stations, drilling machines and lathes are all to be found under its expansive roof. There has been extensive streamlining expansion for the EET Group in recent times, and while this has all been hugely beneficial to the overall operations, CEO Trevor Watson explains that it has also been necessitated by factors beyond EET’s control. “The current political situation has been hugely significant,” he explains of the rationale behind the group’s recent moves, with tragedies and controversies in the country reverberating into the market.


EET GROUP

“We have had to consolidate massively because of the conflict caused by the Marikana massacre,” he offers by way of example, “and the subsequent decline in mining activity that followed. “I would estimate that it brought about somewhere in the region of a 30% drop in the amount of business activity in the years after that event in 2012. It has affected both facets of the EET business - the hoisting equipment and the electromagnets. Both were negatively impacted by the massacre, and all the subsequent political events have contributed to a notable diminishing in the business we receive.” This of course tested EET’s resilience, but the group’s response was exemplary. “To be able to function with lower revenue we have had to consolidate our operations, by changing our premises and reducing our staff count,” Watson says of EET’s reactions in the wake of the challenges. “We then switched over to a slightly different form of hoisting, starting out in marine work, and we have moved into repairs on electromagnets for the steel industry.” EET’s own astute judgements have been greatly added by the renewed confidence and subsequent opportunities with the changing Presidency. “It will definitely have a positive effect on business,” Watson says of Cyril Ramaphosa’s accession. “I have actually met the new President myself, and he is very much more in tune with the broader demographics of the country. He is

// OUR LARGER MACHINES FOR MINING PRODUCTS ARE BUSIER NOW THAN THEY HAVE BEEN FOR A DECADE //

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INDUSTRY FOCUS: MINING

far more approachable by all forms of business and community in South Africa. He is business-friendly, and he has a very strong mining background. “This is obviously hugely important for us; we have already seen a 10-15% improvement in business confidence, and particular in mining, where our tendering has increased massively. Our larger machines for mining products are busier now than they have been for a decade. WIDER AFRICA “I think he is also very active in the African Union, and determined to make the trade between South Africa and our neighbouring states much more streamlined,” continues Watson on how EET can profit from Ramaphosa’s own verve for commerce. “Not engrossed only in South Africa, rather he is concerned with participating in the whole continent,

and we can feel this already in what we do. “Obviously with our immediate neighbours, like Mozambique, Zimbabwe and up to Zambia, as well as Namibia, we have been doing business ad hoc without formal agreements, as they are traditionally serviced through South African consulting companies and then the product is exported. “I think those dynamics will change, and will become more favourable going forward, and will then evolve into business further up into Africa, and certainly the rest of sub-Saharan Africa.” While all expansion is fraught with potential pitfalls, Watson feels that these are now greatly diminished, to the extent that this is the right time to strike. “Getting paid, first of all, is often rather problematic,” he qualifies. “Zimbabwe going back to its

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// I THINK THE DYNAMICS WILL BECOME MORE FAVOURABLE GOING FORWARD, AND EVOLVE INTO BUSINESS FURTHER UP INTO AFRICA // own currency is an example of an unknown, as we simply don’t know what to expect; as a result this is a bit of a risk factor. The logistics of trading with Africa are problematic, too. Because it has historically been so corrupt, particularly with control of the border posts, this is something which must be seen to. “I truly believe that this current


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government has the appetite to resolve these issues, however,” he goes on, “and make these links much more straightforward to create and maintain.” While the three core EET divisions of the group have gained many of the headlines in months gone by, the group’s overall strength comes as a result of the intricate workings of all of its composite parts. Take Rotomech, for example; operating from the groupowned factories in Sebenza, Edenvale, since its establishment in the early

// OUR VERTICAL INTEGRATION HAS ALWAYS BEEN ONE OF EET’S REAL STRONG POINTS //

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1990s it has swelled into a cost-effective company with resources capable of extruding aluminium and copper, and insulating them through one of a multitude of covering materials. Hoisting and Handling Controls (HHC) follows a similar story, now the sole distributor in Southern Africa for the full range of Sicmemotori AC and DC electric motors, one of the top European players in the field of modern industrial drive motorisation. As Trevor Watson concludes, together with EET’s effective response to adversity and the changed political nature in the country, it is its unique model which will carry it forth to even greater things. “Our vertical integration has always been one of EET’s real strong points,” he sets out. “This control of our supply chain is crucial, and due to it we are able to

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complete a lot of our primary tasks as in-house operations. We have a design department, and we cut our own steel, for example, so within the EET group we are pretty much self-sufficient when it comes to many of our inputs. “This puts us in a very strong position for the South African market moving forward,” he concludes. “When you are undertaking big projects it also means that the risk levels are greatly reduced. It is a great strength of ours, and alongside our compliance with the South African legislation it has put us in a really strong, stable situation in which to trade and progress into our next phase.”

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Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Rd, Norwich NR1 1RB T. +44 (0) 1603 855 161 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

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ENTERPRISE AFRICA

AUG UST 2019


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