WEG Group Strategic Plan Poised To Achieve Significant Growth In Africa

The significant growth experienced by the Zest WEG Group’s holding company, leading Brazilian motor and controls manufacturer WEG, promises to continue, following the 2011 introduction of a strategic plan to accelerate its ever expanding global network of businesses and manufacturing plants. The strategic plan is expected to ensure that the WEG Group increases its sales by at least 17% year on year until 2020, when it aims to arrive at a turnover of US$10-billion.

Harry Schmelzer, executive president and CEO of WEG, was in South Africa recently to participate in the 2013 BRICS (Brazil, Russia, India, China and South Africa) Summit. With the possible exception of Russia, BRICS members are all developing or newly industrialised countries, who are distinguished by their large, fast-growing economies and significant influence on regional and global affairs.

“In the same year that our Group strategy was launched, in the wake of the economic crisis, WEG achieved 19% growth — and again in 2012,” Schmelzer continues. “We’re confident that this vigorous growth will continue year on year, deriving from investments and our entry into new markets. We’re focused on introducing more products into these markets to increase the reach of our portfolio and on expanding the number of electrical and automation systems on offer.

“Before WEG acquired a majority stake in Zest in 2010, the company was already considered an important element of our Group and its successes, having represented WEG electric products in southern Africa since the 1980s. This acquisition was therefore pivotal for us, because it has brought WEG much closer to the African business world. Our next step is to grow vigorously in the African market.

“Our business strategy in South Africa aligns with the Group’s strategic plan, with emphasis on exploring sectors of market in which we are not currently active. Customers in various sectors are helping us to identify potential opportunities and these are currently being assessed from a perspective of introducing new products and making acquisitions. For example, we’re about to acquire a transformer manufacturing facility in South Africa that will place us in a space that customers have requested.”

Schmelzer adds that in line with its global strategy of localisation, WEG is broadening its investment into the group’s local infrastructure. Localisation is also in line with the Zest WEG Group’s BBBEE and localisation strategy that seeks to boost job creation and add value to local communities. Wherever possible, the Zest WEG Group works with its customers and various players in industry to modify group products to suit the African market.

“As an internationally respected supplier of first-class products to the industrial electrical energy sector, WEG will continue to make investments in order to secure business and market share and achieve growth in mature markets, while keeping a close watch on emerging markets, where there is always opportunity to develop.”

Louis Meiring, CEO of the Zest WEG Group, comments that a unique feature of the group’s African market is that smaller transformers are required than in other countries.

“The acquisition of this well established transformer company will consequently strengthen our position on the continent and allow us to meet the specific needs of this market,” he says. “This acquisition strategy is being underpinned by the transfer of state-of-the-art WEG technology and any new companies added to the group will be aligned with the WEG product range.

“The Zest WEG Group has a reputation for knowing how to respond to market needs in a flexible and adaptable manner, which is particularly necessary when we’re called upon to support certain African companies whose planning is not always strategically undertaken.”

BRICS business council
Schmelzer not only participated in the 2013 BRICS Summit, but also represents Brazil in the BRICS business council that was launched at the Summit to bring together business associations from each of the BRICS countries and manage engagement between the business communities on an ongoing basis. The other Brazilian representative companies were Vale, Banco de Brazil, Gerdau and Marco Polo.

He says WEG was selected as a national business representative owing to its strong international presence, which is felt in operations across all BRICS countries.

“Being a part of the new business council will have major advantages, not only for WEG as a global player, but also for the Zest WEG Group, that will find itself elevated into a position of higher visibility within government circles,” Schmelzer concludes. “It will also facilitate close ties with the business representatives of other countries.”

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