South Africa’s stainless steel hollowware (pots and pans) and flatware sectors (cutlery, trays and serving dishes) have felt the effects of an influx of Chinese imports over the last ten years which has all but smothered local production. The good news is a fundamental shift is taking place that has seen the launch of an exciting, newly refurbished plant CTI Systems in Stanger, KwaZulu-Natal.
They have already produced more than 2 500 sets of stainless steel pots with a view to ramping up production by May 2018, when a range of imported, world-class machines arrive in South Africa to beef up the local facility. It’s hoped that this will see the reintroduction of proudly South African stainless steel pots, pans and cutlery in kitchens across the country.
Spearheading this initiative is Graham Morgan who originally founded his company (Le Morgan) in 1998. “My wife and I started the business from home, selling imported waterless cookware. The reason I imported stock was that at the time, one of the few local manufacturers wouldn’t supply anyone else. We also tried buying from another local manufacture in Middelburg but sadly the quality was simply not up to standard.”
Le Morgan initially imported a single container in 1999 but eight months later it had already ordered a second container and after that began to sell more and more waterless cookware. At the heart of Le Morgan’s business was a direct marketing approach that subsequently saw its sales force increase from the initial six people to the current 600. It also went from ordering one to two containers a year to two containers a month of stainless steel cookware and other stainless steel items.
Eventually, Le Morgan reached the point where it was selling between 2 000 to 3 000 sets of stainless steel pots a month to the local market. Graham explains; “I took the decision to launch our own manufacturing facility last year because we were in a financial situation where we could start manufacturing our own cookware.”
He therefore approached a couple of local manufacturers including NMC in Stanger near Durban, which at that stage only had limited capacity and would therefore not be able to produce the required 2 000 sets a month. The owner of NMC unfortunately passed away at the beginning of 2017 and following negotiations with his family, Graham subsequently purchased the operation in its entirety.
“Ultimately, owning a manufacturing facility protects our business for the future as we don’t know where the Rand is going. In addition, besides creating jobs and expanding our own market, we’re also looking after the country because I’ve always had a strong belief that if you’re selling a product to the local market, it should be made in South Africa,” he states.
To ensure its independence from Le Morgan, the factory was structured as a separate company with a different name CTI Systems. This gives it the ability to supply other companies and distributors in a completely autonomous manner. CTI also has its own MD Anton Faurie who runs the factory on a full-time basis ensuring production is ongoing and ironing out any issues.
Looking back at the process of getting the factory up and running, Graham says one of the biggest challenges (besides the age of the equipment) was moving premises. “We knew upfront that we would have to move at the end of February 2017. We therefore found an empty warehouse 200 metres down the road”. Fortunately, despite the factory drawing 600 Amps of power – which is no small amount in a place like in Stanger.
Once the machinery and tooling were moved into the factory we started with the commissioning process and discovered that machine after machine required serious attention. The issue was that many had previously been repaired with a “piece of wire and pair of pliers” as Graham puts it! “Over the past couple of months, we’ve spent an absolute fortune on stripping, repairing and in certain instances, we have rebuilt and recommissioned polishing machines from as far back as the 1970s. Now even though they don’t look like it, they operate like brand new machines!” The factory currently has 100% of machines running and has already delivered its first 1 000, 6-piece pot sets and is busy making the next 3 000 sets of stainless steel waterless pots.
Its success to date is due in large part to the fact that it took on six of the original NMC staff initially who helped with getting the machines up and running by July 2016. It was then able to hire the balance of the staff at much improved salaries and CTI currently has 51 staff of skilled operators and polishers with decades of experience.
Looking to 2018, one of the most exciting developments will be the arrival of more than R20-million of machinery from world-renowned, equipment manufacturer Sillem in Italy. CTI has ordered three brand new polishing machines and a new 16 meter washing tunnel that treats, washes and polishes stainless steel to perfection.
The new machines will arrive at Durban Harbour in six containers in March 2018. This will be a welcome addition, as at present, the factory’s main challenge is that it is only able to produce limited quantities, whereas once the machines are up and running it will be able to produce 1 000 sets of pots a day. Key CTI staff will visit the Sillem facility for training in February next year, so that they are fully up to speed on how best to operate the new machines once they arrive.
Going back to his trip to Italy, one of the most interesting visits Graham undertook was to world-renowned stainless steel producer Meyer. There he saw the almost fully automated nature of their facility that utilises robots in its manufacturing process.
“What I realised, is that if they can manufacture and competitively export cookware despite Italy’s sky-high taxes and steep minimum wage, then surely a South African producer like as ourselves should have no problem producing highly competitive products for the export market given that our labour is nowhere near as expensive and we can produce the same world-class quality.” The idea is to therefore focus on the export market from April next year once the factory has its new Sillem machines up and running.
Sassda Market Intelligence Specialist Lesley Squires adds; “Sassda’s Africa focus for next year will be Tanzania, Kenya, Mozambique and Zambia, with a possibility of Madagascar being included if it obtains WTO funding, and there’s no doubt that markets like that are ripe for the picking from a hollowware perspective. So as Graham says, if stainless steel hollowware can be made cost-effectively in Italy, there is no reason why our producers shouldn’t be looking to African markets where there is a demand for premium products made available through a direct sales route.”
Graham is, however, cognizant of the fact that there is a need to design different kinds of cookware featuring innovative designs if CTI is to gain real traction in the export market. This will require having new, different kinds of tooling in place to differentiate itself in the local and global market. It has therefore been fortunate enough to take on the services of an expert local tool maker who has already made a substantial contribution to the success of this proudly South African business!