ELSO HOLDINGS
feature
A clean
sweep With over 50 years experience producing eco-friendly cleaning goods in Namibia, Elso Holdings is ready to replicate that success all over Southern Africa.
By Ian Armitage
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Elso Holdings focus manufacturing
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onsumers in Namibia are dealing with declining disposable income and inflationary pressures are rising. It naturally has an effect on industry. In the case of cleaning products manufacturer Elso it has slightly delayed expansion plans. It hasn’t derailed them by any means, but being a sensible businessman, CEO Rene Rusch has decided to bide his time. “We are looking to expand certainly,” he says. “We’ve secured our position as a leading manufacturer of cleaning goods in Namibia and so we’ve decided to take our success abroad.” Over the coming decade, Rusch says, Elso plans to be present in all eight countries in Southern Africa. “We’ll start more aggressively next year. Because of the economic slowdown we have opted to hold off. We’ll take it slowly, but we still want to aim for Zambia next year. “We have to produce bigger quantities to get the economies of scale so we will certainly be expanding.” He says at the moment, consumers are buying down – opting for cheaper options. Cheap is seldom best, however. “They will buy it once, but if it is no good, they are
willing to pay R1 or R2 more. That’s what we’re really seeing now. “With inflation rising, everything is more expensive. If you went with R100 to buy groceries today you only get one bag full. In the past you could buy more. Electricity, petrol expenses and overall cost of living increased dramatically due to the world economic situation but wages don’t reflect that. Severe pressure for the consumer and the manufacturer makes it difficult and this where I think the problem is.” Windhoek-based Elso is a market leader, producing several different sorts of cleaning products. “We are the premier provider of ecologically sound, bio degradable products in Namibia,” says Rusch, who along with his wife acquired the company that has been in business for over 50 years in 1998. “We manufacture cleaning liquid detergents and soap powders, paper products and cleaning equipment, which we supply primarily to wholesalers and retail, guesthouses/lodges and other businesses,” he explains. The idea of producing natural products has been with Elso Holdings since its very beginning. At the time of its founding in 1956, the elephant population in Etosha
We are the premier provider of ecologically sound, bio degradable products in Namibia
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NAMPAK TISSUE Nampak Tissue is proud to be associated with Elso Holdings since its inception. Elso Holdings structured and professional approach to its product and markets mirrors that of Nampak Tissue. Nampak Tissue along with Elso Holdings will continue to supply high quality cost effective disposable healthcare products to the Namibian market and its Southern African contact points.
National Park was out of control and posed a threat to the park itself. After a cull to solve this problem, the elephant meat was tinned by the local meat factory, while the fat was bought up by a Mr Elmar, who then used it to produce bars of blue soap, which he stamped with the emblem of an elephant. Some 42 years later, Elephant Soap Company became ELSO Holdings and it still uses the image of an elephant as its logo. “We took over the company in 1998 and since the main focus for investment has been in new machinery,” Rusch says. ”This is something that is taking place on a continuing basis. When we acquired the business, everything was made by hand. However since then the company has experienced rapid growth – far beyond even our expectations. Consequently, we have brought in new machinery that has allowed us to both speed up production and increase volumes, allowing us to cater for bigger markets. Additionally, these machines allow us to introduce different product sizes into our ranges.” Responsiveness to customer demand is particularly important with regard to the retail sector, he adds. “If you cannot produce the quality and 4
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quantity for these organisations at the speed they demand, they are simply not interested in doing business with you. It is however a valid point to produce quality products and packaging for the retail. “With retail forming a major part of our customer base, it has been imperative for us to purchase these machines. Of course we are then able to apply these benefits to our other customers too.” Over the past decade or so, Elso has invested R5 million in new machinery and Rusch says it intends to invest a further R6 million in the coming five years. Elso’s client base is very diverse, covering virtually all industry sectors. “In terms of retail, we sell to all the chains in the country, including Pick n Pay, OK, Woermann & Brock , Spar Group , Massmart, Metro Group and Shoprite. Along with hotels, lodges and guesthouses, these two sectors are our target markets of revenue and so our major sales focus. However, we also supply to other businesses like factories, restaurants, government institutions and so on. It is quite a mix.” Elso has very strong roots in Namibia and in eco-friendly ethics of which it is very proud. It is these factors that Mr
Elso Holdings focus manufacturing
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Rusch believes sets the company apart from many of its competitors in the region. “The most important thing for us is that we are a Namibian company. Also, we are very concentrated on biodegradability in our products, which preserves our heritage as a business and helps to conserve our local natural environment. “Our company motto is ‘for a better life’, which we have incorporated into our logo. By this we mean that through our products and our manner of business, we want to provide a better life for the future of the people of Namibia and of Africa.” This commitment to localism does come at a price, and there are a number of challenges to overcome. “Probably the biggest problem we face is the lack of skilled labour in the local workforce,” says Rusch. “We have decided to take a proactive approach to this and solve the issue ourselves through training.” Although he is keen to expand into new countries, Elso will not be losing its Namibian roots and heritage. “Windhoek will remain the manufacturing base, with goods being exported to the various countries. All goods will, of course, still be guaranteed biodegradable and non-toxic.” Being heritage focused is not a policy that always works in business, yet it is the key to Elso’s success. Localism and environmentalism are things that we think of as new, yet they have been at the centre of this company for half a century. Far from being stuck in the past, the management are using the history of the business as a stepping-stone for further success. “If you’re passionate about what you do and passionate that you want to achieve something then you will be successful; working extra time, going that extra mile. If you don’t love it you won’t succeed,” Rusch concludes. To learn more visit www.elso.com.na.
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11 Bell Street Southern Industrial Area P.O. Box 1931 Windhoek Namibia Tel: +264 61 382250 Fax: +264 61 382256/8
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