Fuchs Lubricant

FUCHS LUBRICANTS FEATURE

BY BEN WALKER.
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Fittingly for South Africa’s leading independent sector trader in products reducing friction between moving surfaces, Fuchs Lubricants has a big reputation for delivering operational efficiency across the mining and manufacturing sectors and among Major League auto clients such as Mercedes-Benz and Volkswagen.
“Customer focus backed by strong technical expertise and a very wide range of OEM-accepted and approved products, gives our customers a fantastic peace of mind,” says John Anderson, Fuchs SA’s Automotive OEM Manager.
A subsidiary of the Manheim, Germany, based parent, Fuchs SA is the ninth biggest of the company’s thirty four global production plants, and the largest non-fuel lubricant supplier in South Africa with around 8% of market share.
Sector competition is fierce. “The fuel majors produce lubricants as a by-product of their fuel-blending plants, and this makes them aggressive in trying to get market share, especially here in South Africa,” says Anderson.
“Across border the situation is less competitive with many of the majors moving out of Botswana, Namibia, Zimbabwe, Zambia, and operating through agents. But while we too deal through agents in those countries, we are showing a lot of growth.”
Pitched against giants like Shell, BP and Engen/Petronas, specialisation and customer-orientation are   defining features of the Fuchs business. “We are a dedicated lubricants-only organisation and if we get lubricants wrong we get everything wrong. We’ve nothing to fall back on.
“The fuel major competitors ahead of us sometimes make decisions that from a lubricants perspective don’t seem to make sense. But since they have massive fuel interests they don’t appear to suffer too much as a result. But we have to make the right decisions – and with our customers very much in mind to ensure they continue to buy the very best lubricants.”
With around a thousand formulations – and between three and five pack sizes per formulation – Anderson says Fuchs range is “massively bigger and wider than our competitors, which allows us to fill more needs for any individual customer.”
The major players supply their own base oils, whereas Fuchs as a lubricants focussed organisation has to buy its raw materials in the same space. “Not being backwards integrated we are at the mercy of the markets, yet we have few if any stock-outs compared with our competitors,” says Anderson.
“I think we are a lot more customer-focussed than our bigger competitors. We place a very strong emphasis on face-to-face selling and to support this we have a substantial sales force empowered to make decisions on their own and do the right thing by the customer.”
Backing them is a strong, experienced and highly qualified technical team.  “This means the customer stays happy from a technical as well as lead time and delivery perspective. And this is where we really stand head and shoulders above the competitors ahead of us.”
Unsurprisingly, customer retention is high with attrition miniscule, a Fuchs SA characteristic replicated among its 100-plus staff where the average length of service in the sales and technical teams is eighteen years.  “The fuel and lubricant sector tends to have a lot of personnel movement whereas we have a lot of expertise in-house and tend to keep it.  And this leads back to client retention, with the customer used to seeing the same dependable faces again and again. At the same time we take in a lot of new blood, young people who we train and mentor – another key advantage for us.”
Fuchs SA is also a career magnet for senior personnel among the big players. Anderson, fifteen years in the industry, arrived 18 months ago from Shell, and finds the customer focus enjoyable. “Being able to make a decision autonomously for the good of the customer and have it backed internally is a huge plus. Our decision making criteria is simple: ‘Was it good for customer? If it was then it was the right decision.’
“Now that is really nice when compared with the very rigid corporate frameworks of the big names, and speaking personally it’s been quite liberating coming to an organisation such as Fuchs where I have been given a lot of autonomy – and with this of course a lot of responsibility.”
Anderson’s biggest customers are Volkswagen, Mercedes-Benz and John Deere, and Fuchs SA has returned ten per cent plus year on year growth over the last decade. “We see this continuing in South Africa with double digit volume and revenue growth. This will be backed heavily by the global focus put on us through the OEM business, with the South African organisation part of the team that’s on this journey of getting closer to OEMs. Fuchs puts up shop wherever the OEMs go.
To facilitate its growing customer base, last year Fuchs doubled its Johannesburg manufacturing, bottling and warehousing facilities, with new state of the art bottling lines ranging from one litre packs to drums and 1,000 litre flow bins. ”Growing into our new capacity has enabled us to take on recent parcels of business.”
The most recent was from Volkswagen following an unexpected and dramatic challenge to Fuchs resourcefulness’ and customer-focussed reputation.
“Five times in 2011 the VW business had been stocked out by their supplier, and on the afternoon of December 21st they called me and asked if I could help. They wanted two products each in its own bottle and I didn’t even have the product or the bottle size they wanted. I had a half litre and they wanted a one litre.
“The South African Christmas shutdown is like the European shutdown, nobody open for business and it was a nightmare. But two days later we managed to deliver a huge percentage of that sizeable order – making a blend, procuring new bottles, bottling and labelling all in 48 hours. Now that blows the competitors out of the water, and in the six months since winning that business we haven’t had a single stock-out.”
Service reliability is an absolute key, says John Anderson.” You want thirty tons this month? Then you’ll get thirty tons this month by hook or by crook. You have to deliver on a promise.”

Tags: Africa, Ben Walker, Fuchs Lubricant, June Issue

Category: Business Profiles