The global valve market appears to be experiencing steady growth, largely because developing nations are either beginning to address or making good progress with their infrastructure, urbanisation, manufacturing and environmental goals. Africa is a big part of this development wave. In light of the encouraging signs that cross-trade is preferred over international trade, from the perspective of Invincible Valves, stalwart South African supplier of local and imported valves for the mining, petrochemical, power generation, water, sewage and general industries, an all-Africa diversification strategy is timeous.
Larger, more developed nations provide obvious investment opportunities. Yet, while they are not excluded from Invincible Valves’ plans, investigations have shown that it’s the smaller African nations that surprise the most in terms of valve-product needs.
‘We have been pleasantly surprised by the potential of nations like Burkina Faso, Côte D’Ivoire, the DRC, Sierra Leone and Zimbabwe,’ says MD Pam du Plessis. ‘While we see the entire African market as incredibly viable and agree with many that it is the “next big thing”, a few of the larger countries have not flourished as well as expected, for a number of reasons.’
South Africa is one such example, particularly from a mining perspective, which is the organisation’s primary market. Industrial action, job losses and a low contribution to GDP are among the issues, further exacerbated by the introduction of controversial amendments to the country’s Mining Charter that are currently being legally challenged by the Chamber of Mines. The country’s struggling economy and uncertainty caused by ructions in the ruling party has also caused junk status downgrades in its global credit ratings.
In diversifying into Africa, Du Plessis says the company has had to be mindful not only of currency fluctuations but also of wide-ranging cultural differences, and the red tape related to the import regulations of different regions.
These are, however, issues that drive the manner in which Invincible Valves conducts its business on the continent.
‘We have found that by appointing locals within the nominated country of distribution, we’re able to eliminate a number of the challenges we would potentially face if we were to set up our own operations,’ says Du Plessis. ‘It also means we can continue our legacy of trading responsibly.’
For Invincible Valves, responsible trading means taking the South African ‘local is lekker’ concept (a slogan that portrays the preference of local over international) into the African market by tapping into local distribution channels and appointing indigenous agencies and distributors. It’s a proven formula for the organisation, and while stringent agency appointment criteria are in place, they serve purely to benefit all involved.
‘For instance, we require our agents to be trained on our valve range and the application thereof,’ says Du Plessis. ‘We monitor and assist with stock holdings, costing and selling prices, which in turn creates consistency and access to product in the market throughout Africa.’
The training provided also encompasses marketing skills that enable agencies to promote the Invincible Valves product range. ‘Part of our commitment includes the provision of marketing material and advertising support across a wide range of African publications.’ It helps too that the parent company is visible at a large number of relevant continental trade shows.
The initial selection of an agent is based on an important response to one of the company’s most vital foundation stones – namely, whether the agent has a similar value system to that of Invincible Valves.
‘We are very involved with our agents,’ says Du Plessis. ‘We like to be part of their growth processes and spend a considerable amount of time understanding their markets and customers. We are mindful too of the cultural differences and work specifically to ensure long-lasting and mutually beneficial relationships are formed.
‘We view our agents as extensions of our sales force, allowing them to earn commissions, in some cases. For others, it’s about adding to their supply chains to create added value for their customers.’
Customer service has been identified as a crucial component of success for all. Quality products, services and technical expertise are provided from Invincible Valves support structures, which exist in key areas of the continent. ‘This also means agents need retain only a nominal amount of stock on their shelves, as it can be replenished speedily,’ according to Du Plessis.
The mining sector is the main beneficiary of the organisation’s supply. ‘We are able to service this sector with valves for most applications – from everyday mining to slime dams, water reservoirs, wash plants and so on.’ Slurry valves and the introduction of Invincible Valves’ own range, Inval, are most in demand, especially given that the organisation has managed to factor currency fluctuation rates within its own pricing structure by securing contract pricing from its global and local investors, thereby allowing it to absorb a percentage of the margin rates.
In so doing, Invincible Valves is now, ironically, competing with its own key suppliers on their own products. ‘It’s a dog-eat-dog environment, requiring creative solutions that do not impact on our standards of quality of product and service,’ she says.
‘In recent times, we have also found a large number of mining corporations preferring to procure from one reliable supplier, even if such is out of the scope of the agent’s normal supply. This is why we encourage agents to develop the one-stop-shop approach that we have built our reputation on.’
African customers, according to Du Plessis, are also keen to embrace the latest technology, and they aren’t opposed to new concepts.
‘In the valve industry specifically, there are few changes in terms of valve selection or operation, so it is seldom that there is a request for anything less than we are able to supply. We do, however, offer custom products when required.’ Such may come from West Africa, where Invincible Valves is experiencing significant interest in its products. ‘This gold mining hub is producing far more than any other region in Africa currently because of the discovery of new mineral veins coupled with large investments in new mines. Our interest in the region is driven by the needs of these operations.’
The decision not to make acquisitions but invest in local businesses is, according to Du Plessis, the safest way to trade in Africa, given the differing regulatory frameworks. Yet more so, it is a socially responsible one.
‘By not sending our own people into targeted areas and electing rather to educate and uplift local traders, we contribute to job creation and, in turn, those businesses can add to their own local economies,’ she says.
Such a social-responsibility attitude is also rolled out from the South African Invincible Valves factory, which hosts annual HIV/Aids and TB awareness days. Further, at its accredited ABET (adult basic education training) centre, it has provided a library stocked with reading material that caters for all levels of reading ability.
From a technical perspective, the training centre runs SAVAMA (South African Valve and Actuator Manufacturers Association) training courses, which incorporate an introduction to valves, working with valves and control valves. A basic business skills course is also available and offered to students from local technical high schools as well as staff. The company also assists disadvantaged schools and local education facilities with upgrades to classrooms and material required, and offers bursaries.
‘In this way we ensure we contribute to the development of skills in our and other industries. Though ours is a tricky business, it can be incredibly successful and rewarding, provided your growth strategies do not compromise your business ethics. For Invincible Valves, this translates into maintaining integrity through innovation, honesty, meeting quality expectations, and in having respect for our agents and customers.’
