Defy

COMPANY PROFILE

2014

Defy

Appliances

‘You can rely on Defy’

company profile

‘You can rely on Defy’ Editorial: Christian Jordan Production: Ajuanne Payne

Defy Appliances has been leading the way in Southern Africa’s domestic appliances sector for many years. CEO, Hakan Kozan gives IndustrySA an insight into what keeps this pioneering organisation at the forefront of the industry…

Manufacturing is one of the country’s most important sectors and a significant driver of economic development. The sector has received huge support from the government and from the private sector and as a result has helped with the creation of jobs and the building of South Africa’s reputation in international markets.

While there are many sub-sectors of the manufacturing industry, each has a stand-out company; one which leads the way in terms of innovation, entrepreneurialism and business excellence. In the case of the domestic appliances sector, that company is Defy Appliances; an organisation that has been setting the standards for over 100 years.

As Southern Africa’s largest manufacturer and distributor of major domestic appliances, Defy certainly

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knows its market. Supplying everything from stoves and ovens to refrigerators and air conditioners, Defy’s name is universally respected and its brand is extremely strong.

Sticking to its philosophy and slogan, ‘You can rely on Defy’, the business has gained a robust customer base and because of its on-going focus on quality, growth is inevitably on the cards.

Having already expanded its footprint into neighbouring countries, Defy is looking at increasing its market share in the SADC region and also further afield in Africa as CEO, Hakan Kozan explains: “There is a continued drive to expand into SADC countries. Defy already has branches in Namibia, Botswana and Swaziland.

There are also distributors in Zambia, Zimbabwe, Mozambique, Angola and Malawi. Further opportunities are being pursued in DRC, Malawi and Tanzania.

Defy Appliances

“Now that Defy is part of a global group, exciting opportunities exist to export worldwide to satisfy the group’s global customers.”

That global group is the Arcelik Group, a Turkish household appliance business, active in over 100 countries with approximately 21,500 employees.

Defy was acquired by the Arcelik Group in 2011 and since then there has been much investment in SA, allowing Defy to modernise and expand.

“Since the takeover, Defy has been able to provide a product offering that competes with the best in the world. Aside from the huge investment to modernise our factories to international standards, additional product categories like air conditioning and Small Domestic Appliances (SDA) have been added to the range,” explains Kozan.

International standards are something to which Defy

is no stranger. The company has been ISO certified for many years and quality remains a focus area when it comes to continual improvement.

“Quality and continual product improvements have been a key focus area in all Defy manufacturing plants. Future quality certificates planned are ISO 18000 – Health and Safety and ISO 50000 – Energy management system,” says Kozan.

OUTSTANDING PRODUCTS So what is it that makes Defy such a popular brand?

What has driven its expansion in sub-Saharan Africa?

Obviously it is partly down to the outstanding products and service offered.

Defy’s current product portfolio includes refrigerators, freezers, ovens, hobs, stoves, cooker continues on page 48...

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Construction Automotive Industry

REHAU EMBARKS ON LONG TERM GASKET SUPPLY CONTRACT Leading polymer specialist REHAU has embarked on a long term contract, awarded in the latter half of 2013, to supply Defy Appliances with refrigerator gaskets.

The gaskets will be produced at REHAU’s newly commissioned production facility in Ezakheni Industrial, Ladysmith, in close proximity to Defy’s refrigerator and chest freezer factory in Ezakheni.

Nico Bläser, REHAU’s Sales & Marketing Manager for Southern Africa, says REHAU has a well-established relationship with Defy Appliances, based on the longstanding supply of refrigerator gaskets and rigid profiles from its plant in Fort Jackson, East London. Defy Appliances was acquired by the Arçelik Group in Turkey in 2011, one of the biggest appliance companies in the world and also a long term customer of the global REHAU organisation, supplied from its plant in Osmaneli, Turkey.

“When Arçelik took over Defy Appliances we went into discussions with its local management to supply the company’s entire gasket demand for its South African operations,” Bläser says. “We’re delighted to have secured this extensive contract and we believe the order came our way based on successful relationships proven over many years — locally with Defy Appliances and internationally with its parent company, Arçelik.”

“The recent commissioning of our new production plant in Ezakheni Industrial has ideally positioned us to execute this contract and to optimise logistics costs, not only for Defy Appliances, but also for our other customers.”

In addition to the manufacture of gaskets for refrigerators and chest freezers, the new REHAU plant produces specialised profiles made to customer specifications in soft and rigid PVC, as well as co-extrusions that incorporate two different compounds. Included in the production line-up are profiles for the manufacture of cold rooms and for supermarket refrigeration display units, as well as customised products for copper electrolytic refining.

Materials used in residential refrigerator and freezer gaskets require distinct qualities to withstand the

demands of these applications. REHAU meets these demands with its own uniquely formulated PVC grades that incorporate low migration plasticisers. Gasket features include lead-free and cadmium-free colours and stabilising systems, colours matched to any solid-colour sample, special biocide materials to inhibit fungal and bacterial growth and particular formulas for excellent low-temperature flexibility.

Bläser comments that the commissioning of the new plant is the latest in a series of investments made

by REHAU into South African industry. “A few years ago we built a state-of-the-art production facility for automotive components in Port Elizabeth and right now we’re investing in expansions to an existing plant in Fort Jackson on the back of an additional automotive contract awarded by Mercedes Benz. These significant investments demonstrate REHAU’s commitment to the future of South Africa.”

“Our extensive range of products and services is unique worldwide,” Bläser concludes. “Many of our polymerbased products are world leaders in the construction, automotive and industrial sectors. We specialise in providing custom solutions to technically difficult problems and are able to support contemporary needs for engineering prototypes, testing and production. The international experience available to our South African production facilities enables us to offer customers world class quality products.”

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EXPERT DEVELOPMENTS FOR THE APPLIANCE INDUSTRY MATERIAL + TECHNOLOGICAL SKILL = BESPOKE SOLUTIONS REHAU’s extensive range of products and services is unique in the world. It generates valuable knowledge transfer across various industries and a systematic quality advantage.

Many of REHAU’s polymer-based products in the area of construction, automotive and industry are today’s world leaders.

REHAU offers innovative products for various industries, such as the domestic appliance sector. We supply tailormade solutions together with flexible logistics to strengthen our customer’s competitive ability.

Contact REHAU on (011) 201 1300 to discuss your requirements.

REHAU Polymer (Pty) Ltd - P O Box 924 - Edenvale -1610 - Pellmeadow Office Park - Building B - 60 Civin Drive - Bedfordview - 2007 Tel: 011 201 1300 - Fax 011 201 1350 www.rehau.co.za MAR 14 PAGE 5

company profile

...continued from page 45 hoods, washers, dryers, dishwashers, microwaves, air conditioners and more, and with the addition of the SDA range and other projects, it looks set to add to its already sizeable customer base.

“Defy has an extensive customer base which includes chain stores, independent traders, buying groups, contract business as well as exports customers. New sales channels will be added through the introduction

“Further opportunities are being pursued in DRC, Malawi and Tanzania” of SDA and air conditioning,” explains Kozan.

“We are continuously monitoring the market activity and identifying any potential product opportunities.

At this point in time, there are a number of planned projects within the major domestic appliances category which are priority and receiving the most focus. As mentioned, SDA have been added to the range and will

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be distributed by the end of the second quarter 2014.”

But even though products are vital to the business, anyone who operates in manufacturing will know that a comprehensive after sales service can be equally as important. Fortunately, Defy offers one of the best in the country, reinforcing its position as a market leader.

“Whilst there will always be aggressive competition in the market, it is our opinion that Defy’s extensive product range together with the exceptional backup service in almost every region throughout the country is what has made us the market leader in major domestic appliances in South Africa,” says Kozan.

He adds: “With Arceliks investment and expertise, we intend to extend that lead even further in South Africa as well as dramatically increase exports into subSaharan Africa and the rest of the world.

“With such a strong household name in South Africa and neighbouring countries, Defy believes it will greatly benefit by offering the consumer additional products in the kitchen, especially with the very good national support structure.”

FACTORY UPGRADES Defy is headquartered in Jacobs, Durban and controls

Defy Appliances operations in three major factories. The facility in Ezakheni (Ladysmith) manufactures electric chest freezers and electric refrigerators; the facility in East London manufactures electric refrigerators and the facility in Jacobs manufactures free-standing stoves, built-in ovens, hobs and tumble dryers.

Recently, the factories have received investments which have bolstered their ‘green’ credentials as Kozan explains: “There has already been significant investment in all Defy factories in respect of design, technology, energy and environmentally friendly chemicals and gases.

“A massive R200 million upgrade at the Ladysmith (eZakheni) Factory was completed in 2013 which included brand new chest freezer and refrigeration lines. The plant is now one of the most modern refrigeration facilities in the world, with harmful gases and chemicals being eliminated, ensuring compliance with the Kyoto protocols and future South African legislation.

“More than a R100 million is currently being spent on investments in the East London refrigeration plant.

A brand new side-by-side line as well as upgrades to existing lines is in the process of being completed. All

products within the Jacobs plant have been updated and improved to world class standards.

“Investment in each plant is geared to achieve future sales growth objectives,” he says.

But even with this investment into green processes, how friendly can home appliances really be when it comes to the environment? After all, lots of energy is used to make them and run them, isn’t it? Well, Defy has made its stance on eco-friendly processes clear.

“The Arcelik Group, and hence Defy, are committed to ‘environmentally friendliness’ – all products are designed with this principle in mind. Energy is also a key design consideration. The new generation of Defy products are up to 44% more energy efficient than the previous generation of products,” says Kozan.

“Arcelik’s motto is ‘Respects the globe, respected globally’. In all aspects of our business, everything is done with this motto in mind.”

STRENGTH IN TOUGH TIMES One of the toughest tests for businesses in recent times was the global economic slowdown that struck in 2008. Companies around the world felt the pinch when spending dried up and South Africa was no different.

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company profile

We have heard of many difficulties that have presented themselves as a result of the recession but Defy managed to navigate all of this relatively unscathed. The growing demand for electrical goods and developments in infrastructure helped this and allowed the company to continue to grow, even during tough times.

“The major appliances market in the Southern African Customs Union (SACU) has historically enjoyed strong growth primarily due to the growing South African middle class and the investments in infrastructure since the change in government regime,” Kozan explains.

“However, the appliances market was hit both in terms of volumes and value during the South African economic recession, as consumers became stretched both in terms of credit and disposable income. In 2010, the market recovered significantly as the economy turned around helped by infrastructure development programmes, the FIFA World Cup and reduced interest and inflation rates.”

Infrastructure development and the attraction of world renowned events such as the World Cup are partly down

to the government and Kozan says that Defy, and the industry more widely, enjoys helpful support from Pretoria.

“Defy engages with the DTI on a regular basis and are currently exploring opportunities. The government is very keen to encourage further development and employment in the manufacturing industry. Defy is enjoying the benefit of government manufacturing grants related to our large investment spend.

“Despite the global economic slowdown, Defy continued to grow in market share as well as profitability due to its strong brand and unrivalled countrywide service back-up,” he says.

So, with its sights firmly set on growth whilst focussing heavily on efficiency and eco-friendly practice, it seems that Defy is set to further extend its leading position in its chosen market place. With factory upgrades and new product lines imminent, why would you look anywhere else? The company’s slogan, ‘You can rely on Defy’ defiantly rings true, all over Southern Africa.

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Defy Appliances: The facts • Founded - 1905 • Head office location – Jacobs, Durban • Number of employees – 2700 • Annual turnover - (2012) in excess of R3.5 billion • CEO – Hakan Kozan • Ownership – owned by Arcelik Group since 2011 • Quality – all factories are ISO 9001-2009 certified

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Bakers Making Strides Bakers SA Ltd a Level 2 BBBEE compliant organisation holding a 150% preferential procurement status which includes 25% as a value added supplier, is once again proving to be at the forefront of cutting edge technology. Bakers has created a strategic partnership with Vodacom, and use their high capacity microwave infrastructure for voice and data communications which provides rapid internet connectivity and ADSL failovers to provide redundancy. Bakers also utilizes a host of software products for the smooth operation of the business which includes warehouse & transport management systems providing online visibility to clients. Focusing on improving core functions of operations, the Accellos 3PL warehouse management system has been successfully implemented, and has become a viable asset over the past 3 years. This software aids with the management of inventory from production, first choice sales, returns and exports.

Our current objectives include infrastructure development and expansion of our sites & depots. In 2013, a facility was established in Namibia, enabling the organisation to be more accessible across the

border. Future plans will see the opening of facilities in Botswana and Zambia as well. Local expansion projects are also under way with the extension of the head office based in Pietermaritzburg and the development of a flagship depot in Philippi, Cape Town. This state of the art facility will be officially opened in May this year, and will become the benchmark for the entire Bakers network. Last year also saw a remarkable increase in fleet of 81 mechanical units, bringing the fleet total to over 1000 vehicles.

Other key components for 2014 objectives include: • special attention to the quality of human capital development • more frequent health & safety awareness campaigns • implementation of the new marketing infrastructure • making our world class operation a reality at all facets of the organisation

At Bakers each and every employees focuses on providing the best service to our clients at all times, we are performance driven logistics.

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www.defy.co.za (011) 621-0200

(0)1603 618 000 info@industrysa.com East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street.

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