German drive engineering group looks to expand activities in South Africa

German drive engineering group SEW Eurodrive is planning to expand its assembly capacity in South Africa. The company operates 15 manufacturing plants in Germany, France, Brazil, the US and China, which ship components to assembly plants in 75 countries, including South Africa. “We invest in all the countries in which we operate,” assures group managing partner Jürgen Blickle. “We’ll always be here in South Africa!

“We hope to have a new assembly facility in South Africa in the near future and expand our production here,” he says. “The proposed new facility would be on a greenfield site in Gauteng. It would be double the size of our current facility, or 10 000 m2. The existing assembly facility would be sold. The new facility would also double our production capacity. It would create some new jobs, but it is likely to be a more automated plant.

“We also want to expand our service business in South Africa, including – at our customers’ request – servicing brands other than our own,” he added. “We do this in other countries already. In many cases, we can offer complete replacement units as, in many applications, units from different manufacturers have the same dimensions. Our long-term strategy for South Africa is to improve our performance and to be part of the country’s economic growth.”

Worldwide, the group’s policy is to own all the properties on which it operates, never leasing or renting. In South Africa, it has its head office and assembly facility in south-west Johannesburg, and branch offices in Nelspruit, Durban, Port Elizabeth and Cape Town. Currently, it employs 208 people in South Africa – 60% of them in Johannesburg – and some 16 500 worldwide.

In South Africa, the company’s main customer sectors are automotive, food and beverage, materials handling (including port equipment and airport equipment) and overhead cranes, mining – especially coal mining – and conveying. “The bulk of our business in South Africa comes from mining, despite the slump in the sector. The automotive sector is also very important.”

The assembly plant in South Africa supplies markets across Southern Africa up to, and including, the Democratic Republic of Congo. The group has a branch in Tanzania and a service centre in Cameroon. It recently opened an assembly plant and service facility in Morocco. In some African countries, like Egypt and Tunisia, where SEW Eurodrive is not directly present, it works though local partners, who act as agents for sales and servicing.

The group is continually developing new products, with a particular focus on the automotive industry. “We’re getting more into systems,” he reports. “These include systems for self-guided vehicles. We’re also looking at what, in Europe, is called ‘Factory 4.0’. As a result of these trends, we’re going into software. This is a new field for us. Our plan is to make the hardware and write the associated software as well. We have already started writing software.” The company also intends to produce software for factory automation. The production of software will be concentrated in Germany. New technologies, systems and procedures, including software, are developed and tested in the group’s showcase factory – or ‘factory of the future’ – in Germany.

Globally, SEW Eurodrive’s main markets are Germany and China, with about a 25% share each. “We measure our success in a country through our market share in that country – we try for 50%. We’ve been in South Africa for a long time and South Africa is successful!” The company is on track to reach its goal this year of revenues exceeding €2.7-billion. “We are still doing well, especially in Europe and the US,” observes Blickle. “The only rough spots are in Eastern Europe, because the sanctions on Russia are affecting the business there.”