Establishing a strong local manufacturing base in South Africa has been integral to Zest WEG’s success over the past decade, building the economy and providing an important springboard into Africa.
This process has aligned closely with the strategic approach of Brazil-based parent organisation WEG, which prioritises its member companies’ capability, efficiency and innovation on a local level, according to Juliano Vargas, CEO of Zest WEG.
“This has required considerable investment in our local production capacity and skills base,” says Vargas. “The outcome to date has been very successful, with Zest WEG developing its local structure and supply chain , while working to world class standards and supported by WEG innovation.”
As an example, he notes that Zest WEG today achieves almost 90% local content capability for its transformers and more than 70% local content capability for other products such as E-houses and panels. These products form part of the company’s wide range of solutions, including electric motors, drives, switchgear, energy generation, electrical infrastructure, and generator sets, with different levels of localisation.
This locally developed supply chain delivers various benefits to customers, says Vargas. These include short lead times, as there is little reliance on Europe, China or the US for parts and components.
“The impacts to our market are considerable, and we have more predictability and control of our supply chain,” he says. The company has embraced South Africa’s commitment to transformation, achieving Level 1 B-BBEE status and investing heavily in training and enterprise development.
It helped that WEG is a member of the BRICS Business Council (representing Brazil), so it has over the years been able to engage with South African authorities about local content requirements and industry development opportunities.
“Our business – both in Brazil and South Africa – has put our weight behind economic empowerment and transformation, focusing heavily on local suppliers and local skills,” he says.
Zest WEG’s investment in human capital exceeds the portion of payroll demanded by B-BBEE in local training. Among other initiatives is a bursary programme, and it will shortly employ its third electrical engineer from this scheme.
Vargas highlights the powerful launchpad that this groundwork has created for growing the company’s footprint in Africa, where it also applies its local development philosophy by partnering with in-country Value Added Resellers (VARs).