Japanese multinational sets up shop in Joburg

Construction of pneumatic control systems specialist SMC Pneumatics South Africa’s new 4 000 m2 head office in Midrand, Johannesburg, was completed last month, construction having started in February.

Company GM Adrian Buddingh tells Engineering News that the Japanese multinational made an operating capital investment in excess of R100-million to establish the branch.

He adds that SMC Pneumatics South Africa is expecting stock worth R22-million to be delivered this month, before the company’s new facility starts trading next month.

In addition to the stock, the company is also expecting the delivery of a significant portion of the manufacturing and assembly equipment this month, which will enable SMC Pneumatics South Africa to produce valve terminals and air service units.

The branch expects to receive the balance of the equipment, imported from Japan, by December or January, Buddingh notes. The value of equipment being imported from Japan totals about R16-million.

The company will also establish pneumatic training programmes, which will be held at the new facility and are likely to launch in the first quarter of next year.

Meanwhile, Buddingh further highlights that the company is currently in negotiations with a number of companies to establish a network of authorised distributors.

The company is also looking to expand its presence in South Africa by establishing branches in other provinces. “Our focus is to get our Johannesburg operation completely up and running and we will most likely open branches in Durban, KwaZulu-Natal, and in Cape Town, in the Western Cape, in the first quarter of next year,” he says, adding that the company might also open a branch in Port Elizabeth.

He notes that Durban would be a logical expansion destination for the company, owing to the city’s proximity to Japanese car manufacturer Toyota’s manufacturing facility in Prospecton, about 20 km south of the city.

Buddingh explains that Toyota has been a long-standing customer of SMC Pneumatics, which supplies the automotive giant with a range of products used in vehicle manufacturing, including valve terminals, air service units, and tubes and fittings.

Global Expansion
Buddingh says SMC Pneumatics currently boasts a global market share of 32%, but he points out that the company has not been able to emulate this success in South Africa.

“SMC Pneumatics wants to increase its global market share significantly, and the only way we can achieve this is by investing in emerging markets such as South Africa.”

Entry into the country will give the company direct access to markets across sub-Saharan Africa – a key target market for SMC Pneumatics – he adds.

Buddingh highlights that the company’s five-year strategy is to become the market leader in South Africa and to progressively increase its market share in sub-Saharan Africa.