In conversation with… David van den Berg

April 21st, 2017, Published in Articles: EE Publishers, Articles: Energize, Articles: Vector

 

Vector caught up with David van den Berg, CEO of specialised direct importer and wholesale  industrial electrical product distributor ElectroMechanica, to talk about his 33 years in business and the future of his company.

Van den Berg says his company started out in a small office in Ophirton, Johannesburg, back in 1984, on a site that was previously a shebeen. Within just a year, the company moved into new premises four times the original size, only to have to find even bigger warehousing again two years later.

Today, the switchgear and automation distributor estimates a turnover of R700-million for 2017/18, and employs a staff contingent of 200 people based in four cities.

He says the milestones on the journey pivoted on product acquisitions and supplier agency recruitment, but he singles out the milestone of the opening of ElectroMechanica’s four current branches. The first branch in Durban, he says, was successful almost immediately, while the Cape Town branch took three months to achieve five times the turnover produced from distributors in the Cape Town area.

Product ranges, line items

Van den Berg says the initial product range was Finder relays from Italy. The range was new to the market at the time, but it was soon accepted and standardised upon by most wholesalers in the country.

Another break-through was the acquisition of the complete and very popular Hager range of miniature circuit breakers (MCBs), moulded case circuit breakers (MCCBs) and air circuit breakers (ACBs).

It was tough to break into the market with the Lovato range of contactors, motor controls and switchgear, especially with large players in the switchgear camp. Van den Berg says says the range was incomplete at first, and even Lovato, Italy, had its doubts when the company took the range on. Today, he describes the range as “one of the most complete in the market”.

It was by coincidence that Van den Berg contacted Delta Electronics with a distribution proposition for its electronic automation range just two days after a strategy meeting on that company’s African footprint. The result, he says, is a range with a sales growth of between 30 and 40% per annum.

While the company is known today for its support as a distributor, Van den Berg admits that he was hesitant at first to enter the automation sector. He says he even avoided the PLC market because of the after-sales support these products require, until he realised the opportunities in terms of auxiliaries such as contactors, relays and timers.

He says the product line items today total 18 000, and are turned over three to four times a year on average, despite some products that can be shelf-bound for years. These are kept on the books to maintain the completeness of some ranges. The company carries around R300-million worth of stock at present.

When asked about the best-performing line brands in the stable, Van den Berg singles out Hager and Lovato, as well as Delta and French switch line Socomec. He says the company recently introduced power products, the most successful of which being in energy metering for large projects. These products, like all the company’s lines, are dispatched via a new distribution centre at its head office in Wynberg.

Branches and distribution

Van den Berg says ElectroMechanica does not distribute via franchises, opting instead to open branches countrywide. He says plans are underway to open further branches, in addition to those at Durban and Cape Town, the first of which being the recent opening of the East Rand branch. All branches, he says, are run independently as business units, complete with their own stockholding and controls, and with their own customer bases.

The company also has a manufacturing arm for its in-house range of electronic monitoring equipment such as plug-in devices and timers. A drive to complement its range with locally-manufactured product has seen ElectroMechanica venture into plastic trunking manufacture for its team of panel builders.

Challenges

A hurdle facing the local market at present is the shortage of skills in South Africa. ElectroMechanica responds to this by way of personnel training, both in-house and abroad.

Van den Berg says Hager and Socomec have deployed three paid staff members to the company’s premises to attend to sales and service. Another vendor has also requested him to employ a person dedicated to its product.

Van den Berg takes the ElectoMechanica catalogue seriously. The 2017 edition was almost two years in the making and contains an additional 40 pages of products. He regards it as a critical tool to bring exposure to the company, and to serve as a tool of reference to the industry.

Succession

Speaking on the future of ElectroMechanica, Van den Berg says there comes a time in any business’ lifetime when the “old man” must move over to make way for young blood. Where the older generation stays on, businesses tend to plateau and eventually to “start going downwards”.

“I’ve always said I never want to be that person, but at the moment I am turning into that person. I’m still hanging on.”

The fact is that ElectroMechanica has employed a number of young people in recent years. Van den Berg’s son, Richard, a minor shareholder, joined the company as a warehouse packer some ten years ago. He migrated through the ranks and is currently involved in implementing a new accounting software system.

“He’s definitely the one who’s going to be taking over from me. My plan is to move out slowly, to be in the background for when I am needed.”

The future

In terms of growth prospects, Van den Berg says the company is focused on systems and solutions. The 2017 catalogue introduces a range of sensors to complement its automation products, variable-speed drives (VSDs), programmable logic controllers (PLCs), and the Panasonic range of sensors, proximity and solar electric switches.

When asked about the secret of the longevity of his company, Van den Berg stresses “service, service, service”. The secret of the success behind ElectroMechanica, he says, is to provide the best possible service at all times.

“We know that we are not the cheapest”, he says. “We cannot compete with some foreign Oriental product which enters the country at very low prices. But we offer a level of service that very few people can achieve, and that’s been our success”.

 

 

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