WIRQUIN SA
WIRQUIN SA
Ever-Growing Wirquin Continues on Expansion Journey PRODUCTION: Manelesi Dumasi
Wirquin SA distributes and manufactures plumbing and sanitary products that save water and space, and allow consumers to enjoy their kitchens and bathrooms. In South Africa, the company is a market leader in terms of brand recognition, and so CCO talks to Enterprise Africa about how the company will be expanding over the next two years. 2 / www.enterprise-africa.net
INDUSTRY FOCUS: MANUFACTURING
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With economic conditions remaining somewhat in the toilet in South Africa, very few businesses are finding a strategy that is allowing them to achieve meaningful growth. Although a 3.1% uptick in GDP was registered by Stats SA for the second quarter, this followed a 3.2% slump in 2019’s first three months. The environment remains unpredictable and, as soon as some positivity is injected, it can just as quickly be flushed away. This is similar in global markets where companies are now having to work harder than ever to achieve margins. Plumbing and sanitary equipment specialist, Wirquin Manufacturing SA, provides the perfect case study of a business that is realising growth, but is being held back from achieving its full potential by stagnant economies, globally and locally. Featured in Enterprise Africa in 2017, Wirquin SA – the regional arm of the French multinational – was growing nicely, introducing innovative new products that were helping plumbers to achieve maximum efficiency in bathrooms and kitchens. Today, Chief Commercial Officer, Adler Teubes tells Enterprise Africa that the company’s
// WE CONTINUE TO PLUG AWAY, LITTLE BY LITTLE, ALWAYS WORKING ON SERVICE, QUALITY AND INNOVATION, WHILE TRYING TO OFFER OUR CUSTOMERS AND THEIR CUSTOMERS THE BEST VALUE FOR MONEY,” // 4 / www.enterprise-africa.net
growth is ongoing and will soon hit top gear as a facility expansion is signed off. “We’ve been talking to the board for three years but I think we will get the go ahead next year. As far as we are concerned in South Africa, it’s underway – we are just waiting for the final board approval,” he says. He describes the current situation in the warehouse as one where the company is ‘bursting at the seams’, housing many products to meet insatiable demand. The manufacturing facility is also in need of additional space to install new machines and improve output. “We are looking at taking our space up to 8000-9000m2. It’s a big expansion; the need for extra space comes from increased demand. We are part of an international organisation and we work on economies of scale so certain items become cheaper to import rather than going through the capital expenditure required to produce new moulds etc. As we have been increasing our volumes in the local market, we have also increased our production requirements as we now do the volumes that warrant a capex spend on tooling - it is cheaper to manufacture locally. We have also seen natural growth with other products.” For manufacturers in South Africa, the current economic climate has been prohibitive. Few are willing to invest until long-term government policy is detailed and any investment can be made securely. From the Wirquin HQ in France, where the investment decision is ultimately made, a close eye has been watching over the South African economy. “The entire economy, not just in South Africa but around the world, is taking a dive and that effects the big European companies. Cash-flow, growth and profitability for all European manufacturers are under immense pressure and everyone is turning a dime six times before they spend it - that is the reality of the market. “We have set up everything locally and as soon as we get the go
// WE BELIEVE IN WHAT WE’RE DOING, WE BELIEVE IN OUR PRODUCT, AND WE BELIEVE WE WILL GROW // ahead, we can press the button and start building. The build will take around nine months, and then we will be able to move into the premises. We would plan to get into the new premises in the first quarter of 2021,” explains Teubes. With more space, Wirquin will be more efficient and will be able to automate. Specialist new machines will be sourced from Spain and Italy, demonstrating the company’s desire for excellence. “Since 2017, we have put four new machines into the factory and we are quickly running out of space. We need blow moulding and compression moulding machines to continue our growth,” says Adler.
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ALWAYS INNOVATING One of the strengths of Wirquin, and something which has separated the company from its competition globally for many years, is the fact that it offers such a comprehensive product range, manufactured to the highest of quality standards. The company is also an innovator, regularly introducing new products to solve problems and advance layouts of plumbing and sanitary equipment. “Every year, we bring out at least 10 new products within the group internationally. There are three specific products that we will be concentrating on for the new year in the South African market,” details Teubes. These new products will be for the shower industry, one where
Wirquin has enjoyed much success, and Teubes is excited. “One is a ready to install shower tray – that is nothing new in Europe but it’s new for South Africa – a composite material that is just dropped straight into the shower. This is a massive product in mainland Europe. We want to bring it to South Africa to revolutionise the shower tray industry. “A lot of our new products have nanotechnology and that is for space saving, taking up very little space under your basin or bath, or within the slab for a shower. With this new technology, we are able to assist a lot of the developers in constructing multi-storey buildings with showers where they do not negate the integrity of the slab because they do not need to dig deep into the slab
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to install the traps. We believe these products will be real winners because of the nanotechnology,” he says. Currently, Wirquin boasts the lowest profile shower waste on the market and a Neo waste trap which offers the assurance of no leaks. The range also includes a toilet seat fixing which comes with lifetime warranty and promises to completely stop any seat movement. It is the company’s ability to solve problems that allows it to keep growing. MARKET STRENGTH Despite economic downturn, and capacity problems, Wirquin remains a growing business. The brand is strong and relationships with wholesalers are well-serviced. The company has also managed to develop robust export
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INDUSTRY FOCUS: MANUFACTURING
// EVERY YEAR, WE BRING OUT AT LEAST 10 NEW PRODUCTS WITHIN THE GROUP INTERNATIONALLY // channels and Teubes has no intention of stemming the flow anytime soon. “We have been fortunate in the past three years and we are growing. Our factory is expanding and we are happy with our performance, even with our high expectations. The general market and economy is bad, the building industry is terrible, and overall people are saying that if you are growing on your previous year then you are doing well.
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“Export is growing, but not in a major way. Our biggest growth is coming from our complete range. We are stealing a little bit of market share in everybody’s market. There are certain areas where we are not so happy - the DIY segment, for example – but overall we are still managing to grow. We continue to plug away, little by little, always working on service, quality and innovation, while trying to offer our customers and their customers the best value for money,” he says. Going forward, Wirquin will utilise its local manufacturing facility to offer affordable export for markets to the north and across the Southern Atlantic. “I look at southern Africa as part of our local market. Export for me is central Africa and above. We have a few customers in northern Africa and Europe that we supply from South Africa because
of our cost of production. That is a market we want to grow but again, we need the capacity before we enter those markets. There is massive potential in Brazil – we have all the contacts, but we are unable to approach because we would need more machinery,” says Teubes. Of course, Wirquin will also focus on strengthening relations with its existing clients where it has created lasting partnerships over its 15 years in South Africa. This is paramount for Teubes who is keen on making the most out of the market while the company waits for the green light on expansion. “I wish we could attack new markets and new customer groups but with our production and warehousing constraints we are in a Catch 22 situation. If we get new customers, we won’t be able to deliver service and we’ll lose them. We are trying to focus
WIRQUIN SA
on our existing customer base and start utilising that market more,” he says. And the reason these customers keep coming back? It’s all to do with quality. Wirquin designs its products to be time, money and space saving, high performing, hygienic and reliable. This aids the company’s growth significantly. “Quality plays a massive role, and with us producing more parts locally – importing from our sister companies less – our costs are lower and that helps our pricing structures to be more competitive too. Combine that with overall customer service, these are the things that are assisting us with our growth,” explains Teubes. POSITIVE FLOW With many home builders, developers, and construction firms reporting extreme pressure in the market, it’s important for businesses to remain upbeat. The vast swathes of negativity coming through the media are enough to make anyone feel challenged, but Teubes isn’t buying into a short-term vision for South Africa. “You have to be positive. If you allow the world to get you down, you will never ever succeed. “We try and instil into the team to not look at the market conditions,” he continues. “We believe in what we’re doing, we believe in our product, and we believe we will grow. I believe the South African market is going to turn; unfortunately, we are at the end of the building cycle. If we are lucky and nothing happens in the next three months with the
// SINCE 2017, WE HAVE PUT FOUR NEW MACHINES INTO THE FACTORY AND WE ARE QUICKLY RUNNING OUT OF SPACE //
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government, I’m expecting major investments in the building industry in the first quarter of 2020 and we will start seeing some of that spin off at the end of 2020, and that means 2021 should show strong growth.” Even in a market that has been very weak for Wirquin, the expectation - and hope – is that the upswing is coming. “The DIY market will recover but people don’t have disposable income to spend. If there are major investments and the entire economy starts turning, I think 2021 and 2022 should show improvements in that sector,” says Teubes. Wirquin is not a company about to be swallowed up by a changing marketplace and an unpredictable economy. This is a business that has seen it all before. When Wirquin’s local facilities are expanded, expect this
industry leader to boom. “There is not another local manufacturer that competes on quality,” says Teubes. “We do have strong European opposition that are in South Africa. All of their products are imported directly from Europe. They are strong here but we have the advantage of manufacturing locally and that is why we are trying to drive volumes here, relying on imports less. The exchange rate has a big impact on the economy and local manufacturing helps us. Other local manufacturers are not investing like we are,” he concludes.
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