Zest Weg Group Intensifies Plans To Penetrate African Markets

The WEG Group, holding company of Zest WEG Group, the acknowledged leader in the supply of electric motors, variable speeds drives, transformers and switchgear in Africa, has intensified its plans to realise prospects for growth both in South Africa and the greater continent.

Harry Schmelzer Jr, president and CEO of the WEG Group, says he expects these prospects to continue to grow above the world average and, in order to build a solid foundation on the continent, WEG will continue to invest heavily in expanding its business in Africa.

“The Zest WEG group, our base in South Africa, will spearhead our advances into new markets and increase our presence in the countries of sub-Saharan Africa,” he adds. “We already have meaningful participation in all business lines, particularly electric motors, where we are leaders in the South African market. Our customer portfolio is made up of the largest companies in Africa’s mining, oil and gas and energy sectors.”

Louis Meiring, Zest WEG Group CEO, comments that WEG is well on its way to achieving the objectives set down in its 2020 strategic plan, which 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.

“At least until 2020, the major focus for the all companies in the Zest WEG Group will be on realising growth opportunities in Africa,” Meiring says. “As we embark on this new chapter, our service to our South African customer base will in no way be compromised, as we’re adjusting our business to enhance existing skills and bringing additional personnel on board. This is not just lip service — our Africa team has more than doubled in the past year. At the same time, we’ve geared this team to be able to communicate appropriately in terms of the profile of Africa, by incorporating sales personnel who speak English, French and Portuguese.”

To support the Africa growth initiative, the Zest WEG Group’s executive team has been restructured and includes the appointment of an additional board member to fulfil the newly-created role of group automation and systems director. This board member, currently being relocated to the South African operation from WEG in Brazil, will focus on driving the Group’s automation and systems business, which encompasses Shaw Controls, EnI Electrical and the genset division. Each Zest WEG Group company will retain its existing managing directors and the executive team will drive an array of initiatives designed to assertively penetrate other African markets.

The challenging Rand/Dollar exchange rate has prompted the Zest WEG Group to seek ways to reduce costs without compromising its support to customers. One such development has been the introduction of a complete warehouse management system at the Group’s head office in Linbro Business Park that is having a major impact on the Group’s logistics and stock control, in support of both South African customers and those further afield.

Another important shift in focus for the Zest WEG Group is a gearing up of all its manufacturing operations to align with international production standards and move into a position where it is able to supply world markets with its products.

“We will no longer be a manufacturing operation dedicated only to the supply of products into Africa,” says Meiring. “This will require a lot of investment into operational improvements and at present, the spotlight is on our recently acquired transformer factory, formerly Hawker Siddeley Africa. WEG Transformers Africa is already one of the largest manufacturers of mini substations, unit substations and distribution transformers in South Africa, with the capability to design and manufacture the complete range presently in use in the country’s industrial sector. During 2014 we’ll be investing about R20-million to upgrade the transformer factory and, in 2015, we plan to spend a further R30-million to continuously improve the facilities. The latter investment will probably include the construction of a completely new factory adjacent to the existing one, to equip the operation with international supply capabilities.

“The buying power of a Group as robust as WEG has brought about a potentially huge impact on our input costs into our manufacturing capabilities and will help us tremendously to accelerate the growth of our transformer business.”

The investment plan is not isolated to the transformer factory and Meiring says Zest WEG Group company, Shaw Controls, one of South Africa’s foremost suppliers within the electrical trade, is also being geared for international supply. An investment profile is being prepared, focusing on innovation, international best practice and the latest technologies and part of this plan is to prepare Shaw Controls to enter additional market sectors. The company has performed exceptionally well in the mining industry and its business model will now be adjusted to focus on new sectors, including oil and gas, pulp and paper, and sugar.

Meiring says ENI Electrical, that provides a full service electrical and instrumentation offering across the board, is already well on its way in terms of the Africa strategy, deriving about 85% of its present business currently from countries outside of South Africa. Zest Energy, the Group’s renewable business, has just completed its first renewable energy co-generation plant in the paper and pulp industry and is now focusing heavily on the next installation.

“We believe this excellent reference project will bring forth some good opportunities in other parts of Africa, where there are huge energy shortages,” he comments. “The company is also busy manufacturing its first African built mobile substation and this technology has immense potential in the region.”

Corporate Social Investment (CSI) has been an important focus of the Zest WEG Group and much success has been achieved in this arena. Sustainability guides the Group’s CSI decisions and to this end, key investment areas have been identified for the medium term. Meiring says Group CSI involvement is underpinned by the activities of an internal committee tasked with investigating and proposing future interaction with large end users, in order to align Zest WEG Group’s business with initiatives that really make a significant difference.

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