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Building German brands in Africa

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Not only is South Africa the largest capital equipment market on the continent, it is also regarded as the ‘bridge to Africa’ for many international companies looking to establish a footprint on the continent.

That’s according to Eric Schultz, Finance and Operations Director for Smith Power Equipment, who said many German original equipment manufacturers (OEMs) seeking to establish themselves in this market have over the years turned to them as a distribution partner.

He singled out their partnership with the KION Group as a key success story. As part of its one-stop shop approach, Smith Power signed a distributorship agreement with the KION Group for the distribution of the Baoli range of materials handling equipment.

Through the agreement, Smith Power added the Baoli range of diesel, electric and LPG forklifts, as well as stackers and pallet trucks to its stable. KION Baoli is a brand of forklift trucks that was founded in China in 2003 and acquired in 2009 by Germany’s KION Group, the European market leader and the world’s second largest manufacturer of warehouse technology.

In 2017, the KION Group went on to establish Baoli EMEA, a new organisation which replaced and expanded the previous Baoli structure in Europe, the Middle East and Africa, currently covering 26 countries, but with the aim of covering 86 markets in the region in just a few years.

Schultz said that in South Africa, the brand had benefitted from Smith Power’s knowledge of the market, as well as the extended branch and dealer network.

“We have proven to be a builder of German brands in South Africa. OEMs come to us and we help them build and establish their brands within the relevant markets,” he said.

“We have a 30-year track-record of establishing leading brands in the country. Some that come to mind include the likes of Toro, Kubota, Linhai and Club Car and Polaris, to mention a few. These are not necessarily German brands but they are leaders in their respective markets. In our stable we have three market leaders and one second-placed brand in the market.”

The partnership with Baoli started in 2018. The brand recorded the biggest growth in 2020. Despite the market challenges posed by the outbreak of COVID-19 and the subsequent lockdowns, it has doubled its market share in a space of a year.

Schultz attributed this success to a number of factors, mainly the favourable price points, great sales and aftersales support as well as the proven quality of the product.

“The Baoli product is competitively priced in the market. The cost of ownership is also another competitive edge, buoyed by the quality and reliability of the product,” he said.

The one-year/ 1,000-hours warranty, complemented by Smith Power’s strong support structures was another factor, he said.

The Baoli brand has enjoyed extensive reach into the market through a 35-dealer network offered by Smith Power. The partnership between the OEM and the dealer has also been key to the success of the brand, Schultz said.

“We have a strong relationship with the OEM. They are working closely with us to grow market share. We get round-the-clock flexibility in shipment of parts.”

Schultz believes there are cultural similarities between the KION Group and Smith Power, with the companies sharing the same business ethics, passion for product, customer engagement and the desire to grow their respective businesses.

Schultz believes that it’s no longer just about parts availability and fulfilling maintenance obligations. Customisation is one of the top trends in today’s equipment business.

Customisation means understanding what the end user’s needs are and being able to modify the product or solution to meet the particular requirements. “Baoli is always willing to work with us around customer specific builds,” he said.

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