Fabrinox, a sheet metal manufacturing company, was founded 20 years ago in the Western Cape of South Africa, and has since grown to see an annual turnover of between R50m-R60m (US$4.84m-$5.81m). [hidepost=9][/hidepost]
The company’s founder and CEO, André Visser, has successfully taken Fabrinox’s business to a number of African countries. In light of being a finalist for the 2013 Sanlam/Business Partners Entrepreneur of the Year award, Visser told How we made it in Africa about the entrepreneurial decisions behind Fabrinox’s business, and shared his advice to South African companies looking to expand into the rest of Africa.
What inspired you to start Fabrinox?
Fabrinox was established in 1993 when Johan Beyers, owner of Filmatic Packaging Systems, challenged me to do so. I was working as a junior mechanical engineer in Filmatic’s design department at the time. The initial idea was to provide custom-made sheet metal products and components to Filmatic only, as they struggled to find a reliable supplier at the time.
We started off with five employees working in a 20x20m² space in the Filmatic factory, and have since expanded to 7,000 m², two sites and a staff complement of 148 people. We supply sheet metal components and sub-assemblies to more than 300 clients in industries such as the food, agriculture and mining sectors. We do under-licence manufacturing, import replacement manufacturing or batch manufacturing to a client’s specifications. Fabrinox also manufactures and delivers complete projects, and has recently also branched out to do installations for clients worldwide – from China to Poland and the Netherlands – even when we did not manufacture the installed products ourselves.
What has been the best decision you have made to grow your company?
To have followed the advice of my business mentor Johan Beyers to not restrict Fabrinox and its people to one geographical area, product or service, but to take a global view in running the business. For instance, it means that we think globally in terms of our supply chain, and are most willing to service clients beyond the boundaries of the Western Cape province in which we are located, and South Africa for that matter.
Fabrinox’s work extends beyond South Africa into other African countries. Describe the potential the African market holds for your business.
The fact that Africa has more than 650m cellphone users is just one indication of the potential that the continent and its people hold for most businesses. By collaborating with and servicing South African and other multinational companies, Fabrinox already provides products and services in Namibia, Senegal, Mozambique and Tanzania. Increasing one’s footprint into Africa is all about timing. It works well for us to combine forces with the right partners who already have sound working relationships in different countries.
Drawing from your experience, can you provide five tips for South African companies looking to expand into the rest of the continent?
1. Small to medium-sized enterprises should not try to expand on their own, but rather partner with others.
2. Africa needs turnkey solutions, so it’s better to provide a complete product or service – from manufacturing to installation, for instance.
3. It’s extremely expensive to do business in Africa, for instance in terms of transport, freight costs and accommodation.
4. Africa isn’t a quick solution, and one should be patient to really make profit.
5. Make sure that you add real value that can, for instance, create real new job opportunities.