Following Germiston-based investment company iSipho Capital Holdings’ acquisition of 90% of Boksburg-based hydraulic and pneumatic manufacturer Anderson & Kerr Engineering in 2017, the hydraulic manufacturer will actively focus on client and market expansion to increase turnover, market footprint and profit, says Anderson & Kerr executive chairperson and iSipho Capital CEO Sipho Mdanda.
He explains to Mining Weekly that iSipho Capital Holdings acquired Anderson & Kerr because iSipho Capital’s main focus is acquiring manufacturing and engineering companies and transforming them through direct operational involvement in day-to-day activities, and it was looking for a supplier for Smith Capital Equipment, now one of Anderson & Kerr’s sister companies, that could manufacture and supply it with cylinders.
Anderson & Kerr will use client retention, client extension and new client acquisition to increase sales and turnover, Mdanda explains.
In terms of client retention, Anderson & Kerr aims to improve client service and the quality of goods produced, as well as product and delivery timelines. This will be possible through the injection of capital expenditure worth about R100-million over the next year, with the company also having approached the Industrial Development Corporation and the Department of Trade and Industry for expansion funding.
Client extension follows from client retention. “Once clients see how Anderson & Kerr has improved its services, they will have reason to conduct further business with us,” Mdanda maintains.
Client acquisition will be bolstered through other companies in which iSipho Capital holds shares, such as Durban-based engineering firm Kholeka Engineering and drilling machine products manufacturers Smith Capital Equipment; this will create further opportunities for Anderson & Kerr, as it will supply cylinders to these companies and, subsequently, expand its client base.
Moreover, iSipho Capital is a Level 3 broad-based black economic- empowerment (BBBEE) company, as it is 65% black women-owned, subsequently making Anderson & Kerr a Level 4 BBBEE company. This enables Anderson & Kerr to tender for projects, such as those of State-owned entities, for which it previously did not qualify. Anderson & Kerr has tendered for projects and is currently awaiting the outcome of these tenders.
Mdanda tells Mining Weekly that Anderson & Kerr believes that the increase in the number of hydraulic and pneumatic cylinders it has had to repair since the beginning of the year is indicative of increased activity at mines.
Original-equipment manufacturers (OEMs) have also noted a slight uptick in the sale of new hydraulic and pneumatic machinery for the same reason, he adds.
Mdanda believes that this will benefit Anderson & Kerr in the future, as these cylinders will eventually have to be repaired or undergo maintenance.
As part of its market expansion strategy, Anderson & Kerr aims to service more mines in Africa, as there is currently more mining activity in Africa than in South Africa.
Anderson & Kerr has a strategic relationship with Komatsu Mining in Germany, whereby it manufactures and repairs their cylinders in South Africa and then exports these to countries where Komatsu Mining directs it for delivery. Anderson & Kerr also repairs cylinders for Komatsu South Africa in line with the Komatsu Mining specifications and standards. The company is positioning itself to take advantage of the drive by the South African government for localisation by positioning itself as the preferred partner to OEM’s who want to increase local content of products.
Anderson & Kerr created a projects division in January to work on larger projects outside the confines of its 10 000 m2 factory in Boksburg. The division will enable the company to send a team to complete a project at a client site which, in turn, will improve turnover and profit without having to invest in new capacity improvements.
Moreover, Anderson & Kerr will consider the construction of a sponge blasting facility to clean cylinders before they are painted. Currently, a third party provides sand blasting services for the company’s cylinders.
“We have sufficient work that necessitates investment in our own sand blasting facility, so it makes sense,” Mdanda reiterates, adding that this will also be more cost effective.
The company is also considering a two-shift system for employees. It has hired ten new employees, including a learnership programme, on the factory floor, four of whom are women, but they also have to work on weekends to complete orders, Mdanda explains.
Anderson & Kerr has also employed the services of labour and productivity specialists Productivity SA, a public entity, to implement lean manufacturing strategies in the business. “We have invested nearly R1-million over three years and have embarked on a continuous improvement and best practices journey and thus taking our company onto a new path. We want to be a world-class manufacturer,” Mdanda concludes.