¬†With demand for water-related equipment in Africa growing fast, East Africa‚Äôs premier specialist and supplier, Davis and Shirtliff is poised for further expansion. Africa is the place to be, CEO Alec Davis tells Ben Walker, but against a seismic trade shift to the Far East warns that for European manufacturers, time is running out.
Hot climate and failing infrastructure make water a major issue in Africa, a shortage worsened by yet another; water-borne disease brought on by lack of clean water and effective sanitation, and impacting on health care costs, pollution and environmental degradation.
Cost effective water treatment equipment availability is essential, and East Africa‚Äôs most committed participant in a vital industry is Kenya-based Davis & Shirtliff, for sixty five years the region‚Äôs leading water supply equipment specialist.
‚ÄúWe operate in eight countries and been in this industry far longer than anyone else. We have the experience and vast range products. When it comes to pumps we say we know more than anybody else,‚ÄĚ says CEO Alec Davis.
Davis & Shirtliff distribute high quality equipment from manufacturers in Europe, the Far East and Australia across five principal product sectors – pumps, water treatment swimming pools, generators and solar – as well as manufacturing and assembling water related products.
The Nairobi-headquartered company and its twenty five branches sells in eight markets, with major subsidiaries in Uganda, Tanzania and Zambia, smaller ones in Ruanda and Ethiopia and sales platforms in Burundi, Somalia, Southern Sudan and the Republic of Congo.
‚ÄúThere‚Äôs a boom in Africa at the moment, the market is growing strongly, and there‚Äôs a multiplier in demand for infrastructure-type products such as ours. If the GDP goes up ten per cent you find the demand for our products might go up twenty five per cent because there isn‚Äôt the scale of supply there is in the developed world. It‚Äôs a huge potential market.‚ÄĚ
Last year the Davis and Shirtliff business grew by around 40%, ‚Äúa quite exceptional year and we grew right across the board. We aim to grow our footprint, which we define as the combination of outlets and the number of products we are selling across the segments we operate in – and our focus is to increase both outlets and products.‚ÄĚ
While pump sales ‚Äď the longest-established sector ‚Äď continue to grow, the biggest growth is in the high potential emerging niches ‚Äď solar energy, water treatment, and generators/power products. ‚ÄúWater pumps will always be important, but we are really focussing on these emerging segments, which are very much up and coming areas.‚ÄĚ
Davis and Shirtliff has the most comprehensive water-related product range in East Africa, including over 300 different pump models available from stock in all sizes for borehole, booster, irrigation, drainage, sewage, hot water, chemical dosage, domestic and hand powered applications. A wide range of special duty pumps for industrial, agricultural and commercial uses is also available.
Supporting it is a comprehensive service from a team of engineers, master technicians and workshop. The service function extends across field service and service contracts, and includes¬†inspection of existing equipment and recommendations for improvements to facilitate testing, and identification of potential problems. Davis points to product literature, including a hard copy manual which has become the standard reference in the region, as another example of competitive advantage.
‚ÄúIt‚Äôs not just about excellent after sales, it‚Äôs also about being a good supplier, having a regular supply, being able to get the product to the customer, using our scale to give him a good price, and ‚Äď very important – being reliable. That is something which is taken for granted in Europe but not in Africa. There are so many brief case businessmen here but professionalism is lacking.‚ÄĚ
The supply chain is a major focus, an area in which Davis and Shirtliff has invested heavily. Distribution is centralised from large warehousing in Nairobi with products transported by a fleet of company-owned vehicles. ‚ÄúThis makes us pretty unique and we have achieved real success. It means we can get all these many products from distant places like China, Britain, Denmark, Germany and France, and deliver them to very obscure towns around the region. The range of products and the scope of what we can provide is a key focus for us. There‚Äôs no other player in sub-Saharan Africa ‚Äď even South Africa – that has our business model or depth of product portfolio.‚ÄĚ
The supply chain is also an area of biggest challenge. ‚ÄúFactors such as suppliers who can deliver reliably, shipping, clearing consignments through the congested port of Mombasa, and then delivering to the many remote places we supply, are daily challenges. ‚ÄėHe who can deliver the product wins.‚Äô The supply chain is important in any business, but the complexities and hurdles we face here are much greater than in the developed world.‚ÄĚ
In overcoming them, Davis pays tribute to his 400 workforce. ‚ÄúWe are an indigenous African company, and this is very important to us. We have a highly committed workforce and enlightened employment policies, focussing very much on developing local talent. We develop our own talent, with a training scheme that focuses on top level graduates.
‚ÄúYes it is difficult to recruit trained people, but the Kenyans generally are very capable, hard working, and have a very good attitude both to work and education.¬† They realise education is the way to success, and push themselves to achieve the highest levels. And they all want to get on.‚ÄĚ
After sixty five years prominence in the regional marketplace, where does Davis see his company placed in five years?
‚ÄúWith a much wider footprint certainly.¬† All our business segments are growing and we are looking very much at increasing our local assembly of higher tec products such as water treatment plants, reverse osmosis plants, solar hot water heaters and so on. We are also looking to increase our skill base so that we can own and understand these technologies rather than importing them.
‚ÄúIn Africa we need to develop indigenous technologies and expertise. This way we can provide a better service and save cost, and our engineering division will certainly grow.‚ÄĚ
While continuing to work closely with established branded suppliers, the company is now introducing its own branded products across all its segments. ‚ÄúMost of the products we are introducing from the Far East now go under our own Dayliff brand, and we see considerable potential here. We have more competitive sourcing and can leverage off the profile, recognition and brand that we‚Äôve established in the markets in which we operate.‚ÄĚ
The other area of focus is trading. ‚ÄúAfrica‚Äôs links are accelerating towards the Far East; China, India, Taiwan, and very much moving away from traditional European suppliers. European suppliers are fine for very high tec products where there is no direct equivalent, good companies which will retain strong links here ‚Äď and we deal with a couple, Grundfos of Denmark, a fantastic company, and Pedroloo of Italy being examples.
‚ÄúBut for what we are selling – which is basically medium tec products – the European cost base is so huge and the pricing gap now so wide, they just can‚Äôt compete.
‚ÄúAfrica is happening now. And I believe there‚Äôs a fundamental seismic shift going on in the way business is carried out here. Volumes are now building quite rapidly because of the population and increasing prosperity, and so demand is growing.
‚ÄúAfricans generally are far more price sensitive, and demand is shifting to East. Existing trading patterns are changing, and this is something we‚Äôve accepted. The market is not prepared to pay European prices any more. European suppliers are struggling and this is going to become a trend. Unless European manufacturing can become competitive they do not have a great future in Africa.‚ÄĚ
¬†Written by Ben Walker
Category: Business Profiles