GOING GLOBAL Business News, page 24
Automotive supply deal offers tremendous opportunity, says Microfinish boss Brian Naidoo
THE LONG-TERM supplier deal between a Durban-based automotive component manufacturer, Microfinish, and one of Europe’s largest automotive component manufacturers has put South Africa’s automotive industry on a global pedestal.
Microfinish signed a multimillion-rand deal with the Motor Service Deutschland and BF Germany last month to supply automotive valve guide and valve seats inserts parts.
“The supply agreement means tremendous opportunity for Microfinish and beside signing with these two organisations it means we now can supply sister organisations throughout the world,” said the company’s owner and managing director Brian Naidoo.
He said this deal gave the automotive industry assurance of doing business with the European markets.
“It also shows that South African manufacturing companies have the ability to comply with the delivery and quality standards,” said Naidoo.
Although 75 percent of the Microfinish components are exported, the new supply deal with the German-based group will make them the manufacturer’s biggest customers.
Microfinish was the only black-owned company in the automotive industry which can produce its raw material in its foundry with “virgin” scrap metal.
“We have an in-house metallurgist that controls the metallurgy of raw material, we cast high chrome and cast iron in various forms,” said Naidoo.
“For the local industry, this means that South Africa has what it takes to be part of the global market, because we already produce high-quality products from our backyards,” added Naidoo.
The Pinetown-based firm employs 200 people with a capacity to produce 500 000 units a month. It makes 7 900 different sizes of valves.
The new deal will see Microfinish increasing this number to between 750 000 to a million units a month.
At present Microfinish supplies components to the automotive marine, aerospace and heavy-duty vehicle industries in Europe and the US.
Naidoo said the open-ended agreement between the firm and the German companies meant that once Microfinish stopped supplying quality products, the agreement would become null and void.
“So we need to keep up the standard and maintain the quality and delivery schedule.”
Since taking over the company five years ago, Naidoo said more than R60 million investments had been made in improving and upgrading the plant.
Naidoo was concerned about the strike action which nearly brought the industry to its knees earlier this year. However, he said the strike’s impact on Microfinish was minimal as the company did not source anything from external suppliers. “We have control over our raw material and we also carry a minimum two-months stock at any given time.”
Currently, Naidoo was involved in possible deals with India, China and Taiwan which will give the group a lever to tap into other markets.
Locally, Microfinish supplies parts to AutoZone, Alert and CAC components.
Brian Naidoo, the chief executive of automotive component manufacturer Microfinish, says the supply agreement offers a tremendous opportunity.