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LOCAL MANUFACTURING
Duratherm Geysers hots up
Geyser manufacturer and solar panel supplier, Duratherm
Geysers, has been around for 20 years, thanks to two
entrepreneurs who innovated in the geyser space.
By Tristan Wiggill
The company was previously known as WE Geysers,
which ceased operations on 31 December 2016.
Duratherm Geysers acquired that company’s assets,
factories, and capabilities, in a process led by
current managing director, Thembinkosi Nzimande.
“Geysers are generic commodities,” he says. “Everyone
makes the same thing. But WE Geysers was unique;
its geysers had a different lining and did not need
a sacrificial anode. They also outlasted the others,”
Nzimande explains.
He says the company had also been innovative with its
hybrid solar panels.
CHARTERED COURSE
Last year, the company focused on a continuity and
transformation solution for the two founders and
chartered a future course for the company.
Nzimande, who has a background in the construction
and engineering fields, has started and run various
electrical, mechanical, and civil engineering companies
in the sector.
He is the former president of the South African
Federation of Civil Engineering and is now the
chairperson of the Solar Water Heating Manufacturing
Cluster of South Africa.
“We met with Absa to fund the acquisition transaction;
it turned out that Absa was also on a journey of
transforming its supply chain and was interested in not
only funding black companies, but also in buying from
them,” he says.
Absa is one of the biggest purchasers of geysers in the
country. “They gave the company a five-year offtake
agreement to supply a percentage of their geysers. We
are still supported by Absa very much — they believe in
the product.”
Through Absa’s Enterprise and Supplier Development
Programme, Nzimande became the 51% owner of the
January 2018 Volume 23 I Number 11
business, making Duratherm the only mainstream,
South African, black-owned, and black-operated geyser
manufacturer in the country.
This fact created a unique cocktail in the company:
it is a mid-tier manufacturer with unique innovation
and technology in its products, and it performed a
groundbreaking transformation transaction in the industry.
The company has been embraced by the insurance
industry because of this journey of transformation,
operational investments in its factory, outsourcing of
warranty operations, and new management. “We have
had a lot of success in growing the product through the
support of Absa,” he adds. “But, getting finance is not
easy; you still have to jump through all of the hoops to
get better rates.”
He describes local manufacturing as an ‘absolute
challenge’. “The first point is that most customers have
the intent to be committed to local manufacturing, but
procurement realities on pricing still drive purchase
decisions. There is a lot of imported products and
foreign-owned companies that still dominate the market.”
Part of the problem is a lack of enforcement of the
country’s rules. There is a requirement, set by the
Department of Trade and Industry (dti), that solar geysers
comprise 70% local content, but both clients and
purchasers of geysers do not enforce the designation.
“We need to enforce our own policies as a country.
We are becoming an import warehousing/distribution
country; there is more warehousing going up than
factories being built.”
COMPETITIVENESS
“Local manufacturers have to become extremely efficient
and competitive in their operations, as being locally or
black owned does not necessarily secure business in
this environment; you have to go toe-to-toe with the
established players in your product offering. We have to
buy well and manufacture in an efficient factory. I buy
local steel and locally made components.”
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