Kinghorn Brushware

KINGHORN BRUSHWARE

KINGHORN BRUSHWARE

114 Years

and Still Sweeping for Kinghorn PRODUCTION: Manelesi Dumasi

With the South African manufacturing industry continuing to face significant challenges, Enterprise Africa talks to Kinghorn Brushware, one of the country’s oldest manufacturers, to understand how this old but still growing business is managing to thrive in tough times. “You now have to work better, be cleverer, and plan to get the margins in a different way,” says GM, Trevor Densham. www.enterprise-africa.net / 3

INDUSTRY FOCUS: MANUFACTURING

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Family-owned since its formation in 1905, South Africa’s Kinghorn Brushware is one of the country’s oldest manufacturing businesses. Early founder, John Kinghorn came out to the Cape from Scotland at the turn of the century. He had worked for his father-in-law’s brush-making business and, when he arrived in South Africa, he went about setting up his own company. After initial success, and rapid expansion, the factory struggled to run successfully and Kinghorn was forced to sell the business, becoming an employee in the process. In 1924, he tried again, opening a new business named JC Kinghorn. After three years, he was joined at the helm of the company

by Ernest Morgan, who later became his son-in-law. When John Kinghorn passed in 1935, the company was continued by Morgan and he oversaw a growth period that changed the business, catapulting it to the top of the country’s manufacturing industry.

By the mid 1950s, Morgan’s sons-inlaw were involved in the business and it has been under the same family leadership ever since.

Today, the fifth generation is involved, and the company is changing from simple brush manufacturer,

// LIKE ANY BUSINESS, THERE ARE CERTAIN DIFFICULTIES BUT YOU HAVE TO OVERCOME THEM IN A DIFFERENT WAY TO EVERYONE ELSE SO THAT YOU CAN ADVANCE THE POSITION OF THE COMPANY // 4 / www.enterprise-africa.net

becoming a vital supplier into South Africa’s retail and cleaning industry.

Kinghorn’s product portfolio includes brooms, brushes, mops, paint brushes, rollers, dusters, rakes and much more, all manufactured in-house at the company’s factory in Durban.

General Manager Trevor Densham tells Enterprise Africa that, after 114 years, there is still more to come from Kinghorn Brushware as focus shifts to the cleaning industry to bolster its already strong presence in retail and wholesale.

“We are looking to expand into the cleaning market. Our strength currently is in the retail and wholesale markets.

Our idea is to shift the business towards delivering a bigger and better basket, in support of the cleaning industry. We will continue to trade in wholesale and retail, but growth will come from the cleaning industry,” he says.

“It means us developing a different type of product mix as the cleaning industry requires a different type of product. To date, we’ve only had a small percentage of our product going into the cleaning market with the bulk going to retail. It’s all about gearing up and expanding our basket so that we can effectively service the professional contract cleaning industry.

“We do already supply some big national clients but we want to get into that market more aggressively and expand our customer base, so that is where our drive will be.”

Contract cleaning is big business in South Africa. There are more than 1700 contract cleaning companies across the country and around 400 are members of the national association, the National Contract Cleaners Association (NCCA), alongside Kinghorn. While 70% of the market is made up of small and micro enterprises, there is also a handful of major national players with more than 20,000 employees each. With improvements in technology and innovation, and with growing concerns over environmental issues, the industry is one of few that has been growing in South Africa.

// THE BUSINESS IS 114 YEARS OLD THIS YEAR AND IT’S BEEN A FAMILY BUSINESS FOR THAT WHOLE TIME. I DON’T THINK WE WOULD EVER MOVE AWAY FROM BEING A FAMILY BUSINESS // Currently, Kinghorn Brushware can be found in major retailers, wholesale chains, and independent chains across the entire country. Locally manufactured and known for quality, the reasons for Kinghorn’s successes are clear. But, even with the expansion and growth that has been achieved, it certainly hasn’t been plain sailing, and the new strategy to tackle the cleaning industry will soon become vital for Kinghorn’s ongoing development.

“The market is tough,” admits Densham. “In South Africa, we have had something like 1% growth, so it is very tight. As a company, we are showing growth so we must be doing something right. We are going out and finding growth down different avenues and that shows that it is there.

In the past two years, we have been really aggressive in the market and we have been aggressive with pricing and aggressive with sales. We are not getting our growth from an expanding market; we are getting growth from regaining market share and channelling our energies into new markets.”

If Kinghorn can get a grip on the cleaning industry nationally, demand for products could be expanded in a big way. Everything from brooms and mops for the office cleaner through to large, specially-designed road sweepers, brushware for industrial and mining applications – all ordered in bulk – is the type of business being targeted.

KINGHORN BRUSHWARE

SWEEPING ACROSS SOUTHERN AFRICA In order to ensure the pipeline for future work stays full, Kinghorn is actively looking for opportunities to expand its presence outside of South Africa into busy markets in neighbouring countries.

Highlighting the level of quality and durability as key selling points, Densham believes that there is without doubt big potential for growth in subSaharan Africa. Expansion strategies are already underway across two markets: Botswana and Malawi.

“Those are two markets we are targeting because we have the possibility of new clients there,” he explains. “We are busy with a new client in Malawi that supplies a major hardware group, and in Botswana there is a company that will be our agent and they play with all the major retailers and wholesalers in the country. Sub-Saharan Africa in general is our expansion target going forward.”

There are no plans in place to go into new markets and set up new offices or manufacturing facilities. Kinghorn prefers the idea of selling through agents, tapping into existing networks, creating an export operation from the HQ in KZN. “Agents have an existing client base and they are already distributors which means they already have infrastructure in place. It’s just a matter of us supplying the product and they can handle all the sales and distribution to bring the products to market as quick as possible,” details Densham.

Beyond Botswana and Malawi, there is further potential in markets including Zambia, Namibia, Mozambique and Angola. As a group, these economies represent a fantastic opportunity, growing collectively much faster than the South African economy, even if the business environment does not move as quickly.

“We will wait and see how we progress in Botswana and Malawi first.

Trading in sub-Saharan Africa is quite different to South Africa. Unfortunately,

NAC Paints is able to offer specialised coatings for custom projects. We have developed bespoke water-based coatings for Kinghorn and are proud to be associated with their brand.

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INDUSTRY FOCUS: MANUFACTURING

things move a little slower in subSaharan Africa compared to South Africa which, in African terms, is a major player.

We are not a first-world country but we trade a lot quicker than many of the other countries in the region.

“In sub-Saharan Africa, Botswana is one of the most financially stable markets.

We are busy supplying in Zimbabwe but through a third-party but we are very aware that the market there is unstable.

Botswana will be our test and we will expand from there,” says Densham.

BRUSHING UP ON SA SUCCESS In South Africa, Kinghorn is one of the industry leaders, but the company will not be resting on laurels. In order to keep growth momentum going, the business is planning to open up sales offices in the major metropolitan areas.

This would allow for fast, easy and efficient ordering and distribution.

“Our head office and manufacturing facility is based in KwaZulu-Natal and we supply into South Africa from here. We used to have a branch in Johannesburg but we closed that a few years ago. Our intention is to open up there again and we are putting sales people into that market right now.

We want to develop sales so that we can open there and following that we would look to open in the Free State and the Western Cape,” explains Densham.

He says that these satellite offices would carry stock and would be fully able to deal with orders and customer queries, encouraging manufacturing in Westmead, Durban to reach capacity.

Kinghorn Brushware is a proudly South African business and is the oldest name in South African brushware.

While the important focus on African expansion and movement into the contract cleaning sector continues, the company will also look to build an e-commerce offering so that products are available for everyone. We have set up our website to be able to function as a shop but it is not a focus right now.

Going forward, it is something we will look at, without doubt,” says Densham,

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who has been in industrial sales and FMCG for his entire career.

CLEARING COMPETITION Like any manufacturing business, one hurdle which must be overcome for Kinghorn is the ever-growing threat of competitors in the market, mainly coming from the East, challenging with basement pricing. Kinghorn’s products are high-quality, long lasting, specifically designed and as such, Densham is not concerned about cheap alternatives.

“There will always be cheap imports. You must be aware of them but you can’t be obsessed with them,” he says.

“The world is so small today; 20 years ago, you didn’t have exposure to products that weren’t made in your country. The world continues to get smaller and there remains a place for the cheap products, intermediate products and top-level products. You

have to go and find the business that you want and not worry about others who want to go cheaper.”

He also highlights the range of products that Kinghorn has developed over the years, claiming that the large batch manufacturers cannot bring such a portfolio.

“The cheaper guys often cannot bring a whole range. They will have one or two items and they flood the market without being able to offer a whole solution to the client. We don’t play in the street vendor market and you would be a lot more affected by cheap imports if you played in that market.”

In the final quarter of 2018, South Africa’s manufacturing sector recorded an increase in turnover of 7.1% compared to Q3. Total capital expenditure on property, plant and equipment increased by 6.7% according to Stats SA. These improvements came as welcome news across as industry

KINGHORN BRUSHWARE

which has faced so much despair over the past decade, seeing its GDP contribution decline from 20% 10 years ago to under 14% today. Pair this with an economy which declined by 3.2% in the first quarter of 2019, and you see a bleak picture. The result is buyers turning to manufacturers that come with a reputation for quality and longevity.

“There is a sentiment towards working with local products,” says Densham. “There’s definitely a sentiment towards working with smaller manufacturers rather than massive corporate-sized players, and we are hoping to capitalise on that.

“People like the fact we are a family business and we have been around for a long time. Kinghorn is the oldest manufacturer in South Africa from a brushware perspective.

“The business is 114 years old this year and it’s been a family business for that whole time. We still have the third, fourth and fifth generations working in the business. The third generation is finishing up retirement now, the fourth generation will retire in the near future, and the fifth generation is still very active within the business. It will continue in the family and one of our mottos is ‘big enough to deliver, small enough to care’ and that talks about us trading with family values. There is a definite trend in the market where customers are looking to deal with smaller companies in South Africa and we fall into that category.”

Despite the weak economic climate and the lack of market enlargement, Kinghorn continues to perform well and achieve growth. Prospects for the future are so encouraging that Densham is confident of increasing the number of jobs offered by the company.

“We are being forced to be more and more competitive and labour is a big contribution to the cost of product. Our factory is labour intensive across certain lines. We have invested in mechanisation and computerised equipment so the reality is that as we grow, there will be positions created but

also jobs lost to automation because it brings the cost down. For example, one new machine will produce what our existing machines produce at four times the speed. Instead of having three machines, we will only need one machine and one operator. It’s a fine balance and it is difficult so, going forward, we are looking at new ways to create jobs. There are certain lines that will always be labour intensive and we play strongly in those markets i.e. industrial applications. Those have to be made by hand as they are normally short runs and can’t be automated. If this type of business keeps growing as it has, we will certainly contribute jobs for the country. This is alongside the opening of new sales branches where we will need sales people, admin people and distribution people,” he says.

Modernisation of the company’s strategy and a rethink of process flow has also helped Kinghorn to prosper.

“Our growth has also come from streamlining processes in our factory and streamlining our raw material purchases,” says Densham. “You now have to work better, be cleverer, and plan to get the margins in a different way to compensate for the non-growth in the market. These are fundamental differences that you must understand

in order to compete as the cheaper alternatives will always be there.”

The most important thing in the FMCG industry is that you continue to drive high-quality output across the company, which in turn continues demand from the end user. For Densham, there is no question that Kinghorn Brushware will continue to deliver for and delight its customers.

The movement into new geographic markets and new industry sub-sectors will help the business to thrive and, as locally made products continue to realise an upswing in popularity, Kinghorn is perfectly positioned to boom.

The company is more than a century old, but it still feels like the start of a journey.

“We are in a great position and we are growing every month which is fantastic. Like any business, there are certain difficulties but you have to overcome them in a different way to everyone else so that you can advance the position of the company. We are growing in a market that is not growing, so we must be doing something right,” he concludes.

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