One of the biggest problems South Africa currently faces is a lack of power, or more specifically, electricity. Recent years have shown, more clearly than ever, that power utility, Eskom has the power to make or break us as a country.
The shortage is there for all to see — every South African is affected by the yearly hikes in Eskom’s tariffs, and resisting this seems pointless.
South Africa is in desperate need of a solution to its power crisis. We sat down with Neil Kayton, CEO of Powertech — a company which specializes in manufacturing and delivering services, products, expertise and solutions to our power and electrical sectors to find out more about the industry and what it is like heading up an organisation like Powertech.
Kayton was employed by Powertech in 2004 as the CFO and remained in the position until mid-2012 when he took over the role as CEO.
As a CEO who overseas numerous other operations within the Powertech group, Kayton says it’s sometimes hard to get away and have family time. However, he does try to get away in December with his wife and twin daughters who are both nearing the end of their university days.
The beach is always their favourite place to holiday but he adds, “I don’t like the cold water, it needs to be somewhere where the water is warm,” which makes Durban—Kayton’s former hometown—the perfect destination.
He adds that because they all play golf it is also “nice to just get away from the stresses and strains back home to just hit a few golf balls.”
The way business works in today’s environment doesn’t really allow for family and work to be separated.
Kayton agrees with this sentiment and adds: “Yes, it is difficult to separate the two. Globalization has meant that you on call 24/7. When we go to sleep, America or China are waking up. When a client calls, no matter the time, you have to sort out the problem. The client’s perception of the problem may be very big and even if you can hear that this is not the case, you cannot tell them you will sort it out tomorrow or next week.”
Competition is rife throughout all sectors of business these days. There “is no time to relax” because if you do, you could lose a client. Kayton refers to the recession and says, “things are much better now (compared to 2008) but no longer can one just sit back and expect business flow.”
Another challenge facing local manufacturers of power and electrical supplies is international brands. The recession hit the world hard a few years back, and America and Europe were badly affected. Africa is the untapped market at the moment and according to Kayton, “it is a growing market” so when things are tough in other parts of the world, companies need to look to where they can grow their business, which means they come to South Africa, or Africa.
Kayton explains, “These companies produce the same as what we do, which causes competition for us local manufacturers. We have competition from Indian, American, European and Chinese manufacturing in South Africa.
“We also find that other governments provide tremendous assistance to their own manufacturers, which means we battle when it comes to pricing.”
Kayton is proud of the fact that Powertech is a South African manufacturing operation. “We employ South Africans, 4 500 of them, and if we fail to make a success of manufacturing in South Africa it could have dire consequences for the country.”
Powertech, he says, “is here to stay.” This means, however, that it will need to diversify and take orders from across South Africa’s borders.
Africa might be the fastest growing continent at the moment, but as Kayton states, “Africa needs electrification.” It is the tool most necessary to move a country forward – without power no country will grow. “The African union has identified both the electrification of Africa and an increase of broadband penetration as major focus area, and these are both areas we are investing in”. “Electricity will provide the ability to manufacture”, he says, and this will not only lead to more jobs in Africa, but also an improving economy.
Powertech wants to get electricity into Africa regardless of a few challenges we face. The world often views Africa as one place, opposed to viewing it as a continent of 53 different countries, all with different cultures and languages, making it a complicated environment in which to operate.
“You need educated, understanding people - people with experience.” The logistics also pose an issue “as you have to get transformers, cables, generating power stations etc into the relevant country.”
Of course, money is also needed to undertake this kind of project and you also need “feet on the ground.” We have seen that African supply is generally solution driven, not product driven. Everything must be supplied from project management to product and logistics, implementation and maintenance.
South African companies that want to succeed in Africa have to move from being purely manufacturing to being solutions driven. This is why we at Powertech are also expanding our offerings into engineering and project management and maintenance.
There is much scope for growth in Africa, particularly those that are growing faster than South Africa. . Even with challenges faced by Eskom and its limited capacity, there are plenty of opportunities on the horizon. Says Kayton: “Without electrical and electricity growth the country cannot grow.
“From a Powertech perspective, we can promise that we will continue to produce quality products that are acceptable in a professional way. That’s one thing we will refuse to compromise on.”