For over 55 years, Heidelberg based ProMinent GmbH has been a pioneer in developing and manufacturing components and systems for metering liquids and solutions for water treatment and water disinfection. Jock Bartolo, Managing Director South Africa and Regional Sales Director Eastern Europe / Middle East / Africa talks about chances and challenges in African markets.
blog:subsahara-afrika: Mr. Bartolo, the ProMinent Group has a worldwide net of 12 production sites and over 50 own subsidiaries, one of them in South Africa. How significant is Africa for the company?
Jock Bartolo: Africa is quite significant for the ProMinent Group because South Africa has an important strategic position for the company. Although as yet our sales in African countries are only approximately 2% of the company`s total turnover the continent has definitely growth potential for the future. Of course, the economic strength of most African markets cannot be compared to European countries, the buying power of developing countries is much lower than in the industrialized world but the yearly growth rate is higher than in Europe or America.
blog:subsahara-africa: So what is your company`s strategy for Africa? How does it differ from your firm`s approach to other World regions?
Bartolo: Our strategy is to steadily expand our market share and be present in more countries through our partners. There are some challenges for our business in Africa and one big challenge for our business in Africa compared to other regions is that there are less regulations and quality norms for water treatment in place in African countries, and therefore no necessity for industries to invest in specialized equipment sold by our company. Typically, developing countries generally do not yet have those regulations in place that are standard in more developed countries. An example outside Europe is Australia, where they have water treatment regulations, quality standards for drinking water etc. Therefore, market access for us is easier in Australia than in South Africa, a country with very similar climate conditions etc. but without such standards and regulations.
blog:subsahara-afrika: How long has the ProMinent Group been active in South Africa?
Bartolo: The company has been registered in South Africa since 2000. Before, ProMinent has been for many years represented through a local agent and distributor.
blog:subsahara-afrika: Which of your products are mainly sold to African customers?
Bartolo: Our range of products for African customers consists mainly of pumps motor and solenoid, disinfection equipment, sensors, measuring and controlling equipment but mainly we offer complete solutions. Our specialty is the electronic solenoid metering pump which was developed by ProMinent in 1968. Our “ProMinent Electronic” allows fewer chemicals to be used in numerous processes. For our customers, this means reduced costs, economical metering and environmental sustainability. Our product range for water disinfection are advanced ozone generation systems, and the ozone and chlorine dioxide systems are joined by Reverse osmosis and ultrafiltration and UV disinfection systems. Our measuring and control technology enables customers to measure and control the dosing of chemicals in a precise and accurate way. And our sensors complete the control circuit by being able to measure all common parameters. So our sensors are being used in a wide range of measuring applications.
blog:subsahara-afrika: What are your key markets?
Bartolo: A very important market for us are the Indian Ocean Islands, particularly Mauritius and Seychelles, both popular tourist destinations with numerous hotels and resorts. Here, we can, for instance, offer sophisticated water treatment systems for pools, drinking water and legionella prevention. For example, one of our most prominent customer in the region, a large luxury resort in Mauritius, uses our technology for its huge facility with more than 100 pools and ponds, including a versatile application of chlorine dioxide systems for disinfection of the inflowing main water supply and also for the elimination of biofilms and cleaning the pipe network. They also use our desalination plants to offer treated drinking water for the complete hotel. In the Indian Ocean Islands due to a certain lack of water we are very successful in installation and commissioning our own desalination plants. Another important region for our marketing is East Africa, particularly the leading and more developed countries like Kenya, Tanzania and Uganda, as well as Nigeria and Ghana as leading economies in West Africa. In all these countries, our key markets are portable water treatment and then also the food and beverage industries as one of the main pillars of local industry in these countries.
blog:subsahara-africa: How do you find your customers?
Bartolo: We operate through local agents and partners who are responsible for marketing our product range and establishing contacts to potential customers. To find a local agent we normally go through the local chamber of commerce. Local knowledge and know-how of local business culture is a very important factor for being successful in African markets. Our marketing regions are rather heterogenic, the cultures are different in all the various countries, therefore it is necessary to work with reliable local agents. But of course, regular visits by head office, which is for Africa the company branch in South Africa, is absolutely vital. So as Managing Director South Africa I usually visit our local agents and main customers minimum twice a year.
blog:subsahara-africa: What role do donor projects play for your business?
Bartolo: Most of the donor projects in the water sector are rather for large-scale and consist mainly of infrastructure work. Therefore, they are for our business not really significant.
blog:subsahara-africa: Doing business in Africa often means dealing with local public procurement agencies. What are your experiences?
Bartolo: Participation in public tenders is only permitted for locally registered companies, but we frequently participate through our agents. There are lots of public tenders in African countries and our agents do manage to get some orders, but in most countries public tenders are challenging: There is often no transparency of the process or a prolonged waiting period until the order is given.
blog:subsahara-africa: Who are your company`s toughest competitors in Africa, where do they come from?
Bartolo: In Africa, we find the same competitors like anywhere else: fellow market leaders from Europe, most notably Grundfos from Denmark and some other Danish specialists in water technology, Sera from Germany, and Seko S.P.A. from Italy. Apart from those well-known competitors, we have to deal like everyone going to Africa with rival companies from China.
blog:subsahara-africa: How do you deal with them?
Bartolo: Our general strategy towards competing companies is: offering top quality and top service to the customer and being reasonable in our pricing policy. In that way, we can well hold our ground in comparison to European or international competitors. But of course, with China it is first of all price competition which is very challenging. But then, the worldwide reputation of quality products “made in Germany” helps even with African customers who are more and more interested in high technology and excellent quality.
blog:subsahara-africa: How do you secure your payment demands?
Bartolo: For large projects we insist on payment secured by letter of credit. For smaller orders we either demand advance payment in total or 50% up front and the rest before delivery.
blog:subsahara-africa: What further advice can you give to those intending to do business in Africa for the first time?
Bartolo: Africa is definitely a growing market but still very challenging. In my experience, customers often are very demanding and expect a lot of support, particularly in regard to training the local workforce. Especially with modern technology, African workers have to learn the know-how and undergo a thorough training to be able to handle it properly. This has to be organized either directly from head office or through the local agent with support from head office. Another challenge is: securing payment on time and always being aware that there might be a financial problem on the customer’s side – do never expect money after delivery if it has not been secured beforehand! Keeping all those issues in mind, Africa is certainly a very interesting market with good growth potential, particularly for German companies with good quality products and modern technology – if they are prepared to do proper research and invest considerably before market entry.
blog:subsahara-africa: Which developments in recent years on the African continent have been positive or negative for your business?
Bartolo: There have been, in my experience, no negative developments as such but just the well known challenges: for example Nigeria getting in some political and financial problems because of falling oil revenues, the same with Angola. If you observe the political and economical development in major African countries then you find that Africa is like a pendulum: It swings high, then low and eventually high again …. Kenya is a good example with its regular ups and downs of the economy in tandem with elections and political upheaval every few years.
blog:subsahara-africa: Why is it, in your opinion, that German companies, especially SMEs, so often are rather reluctant in developing the African market?
Bartolo: In Africa there is no quick return of investments like in Europe, a lot of preparation, market research and organization is necessary to establish a business presence on the continent. My advice to entrepreneurs: Be prepared to invest, to give a lot of support to agents and partners, do business always the correct way, be transparent, patient and don’t run away in difficult times – remember: the pendulum will always swing back!
blog:subsahara-africa: Mr. Bartolo, thank you very much for the interview.
Joaquim (“Jock”) Bartolo has bachelor degrees in Electrical Engineering, Engineering Management & Finance from the University Witwatersrand, South Africa, and also several postgraduate certificates from South Africa, England and Singapore. After eight years as product manager at EACgraphics Heidelberg resp. Regional Sales Manager MEA (Middle East Africa) Region for parent company Heidelberg Druckmaschinen AG, Bartolo came to ProMinent Fluid control in 2005 as Business Development Director for Africa and from 2006 onwards as MD ProMinent South Africa & Africa. Since 2014 he holds the position of Regional Director Eastern & Southern Europe, Middle East and Africa, including MD ProMinent South Africa & Africa. Kontakt: E-Mail: email@example.com, Internet: www.prominent.com.
(Bildnachweis: ProMinent GmbH „Mauritius – Urlaubsparadies auf Erden“ – www.prominent.de/de/Praxisbeispiele/Mauritius-Urlaubsparadies-auf-Erden.html)