Founded in 1876 and today headquartered in Düsseldorf, Germany, Henkel is a recognised holder of globally leading market positions in the consumer and industrial businesses. Boasting a host of reputable brands including Persil, Schwarzkopf and Loctite, Henkel has some 47,000 employees operating throughout the world across the group’s three business sectors; laundry and home care, beauty care and adhesive technologies.
In the last of these categories Henkel is undoubtedly at the top end of the market when it comes to delivering adhesives, sealants and surface treatments to consumers and craftsmen, and for a wealth of industrial applications.
Part of the group’s Europe, Middle East and Africa region, Henkel South Africa is seen as one of, if not the major player when it comes to adhesives in Southern Africa. The company’s operations cover a wide customer base including companies operating in the industrial, automotive and metal industries, all of whom it serves from its manufacturing facility in Johannesburg.
Much like the wider Henkel group, Henkel South Africa has built its reputation on delivering good consistent results and its ability to compete across various applications and technologies is something that industry watchers have come to know and respect.
Having its own manufacturing facility is another important positive for the company. What it has found with many of its competitors is that they rely on importing products into the marketplace. This can have a negative impact, particularly in difficult economic times, when you consider factors like the highly volatile interest and currency rates that we have experienced in recent years. What this means for Henkel South Africa is that by manufacturing locally it actually benefits from significant cost advantages in the long run.
While the company did experience strong business growth in the years immediately following 2008, it is correct in saying that the current global economic climate has called for a more conservative outlook. Nevertheless, what gives Henkel South Africa confidence is that fact that it believes that its superior products, brands and technology, together with its competitive internal cost structure, can carry it through the more challenging times.
Don’t take this to mean however that this is a company prepared to rest of its laurels. Indeed there is a great deal happening throughout Henkel South Africa to not only respond to today’s market conditions, but also to better equip it for the future. Over the last two and half years the company has been involved in an important logistics redesign project with the aim of reviewing the whole of the company’s logistics chain.
At its most complex, the company’s logistics chain previously involved working with some 17 different service and logistics suppliers. What it has done now is to redesign the entire logistics model of the country and it is currently looking to find service providers who would be capable of covering the whole of that model. Successfully doing so would of course bring cost savings to Henkel South Africa, however the biggest and most important beneficiaries would be efficiency and customer service.
Meanwhile, Henkel South Africa has continued to look to make positive investments throughout the business where possible, perhaps the best recent example being the capital it has spent to install a series of new effluent filtration plants. Taking up a space of just 3x5 metres these plants will take used water and reduce its effluent content be up to 100 times, thus allowing the filtered water to be completely reused.
This investment is another example of Henkel’s global strategy to improve its sustainability footprint being put into action. Considering the geographic markets that it operates in, the company has found its sustainability credentials have become a significant point of sale. With South Africa being something of a dry country developments like its use of these effluent filtration plants are all the more important, not only for its reputation as a responsible company but for the communities in which it operates.
Across the wider Henkel group there is a major global rebranding initiative currently going on,with the aim of reducing the complexities that arise from possessing a huge portfolio of trade and brand names. As recently as early July the first Henkel business unit kicked off its rebranding activities. The process Henkel is involved in involves reducing its total brand portfolio to five major brands that all other products will then be grouped into. This is obviously a major logistical expertise and one that it is very focused on throughout the organisation at present.
Southern Africa, south of the Sahara, is of considerable strategic importance for Henkel and as such it has been working extensive over the last two-to-three years to evaluate the opportunities the market has to offer. The company has always understood that in order to grow accordingly it needs to first identify applications or markets that best suit its operations before targeting them. What it also knows to be true is that the African market needs to be approached with due care, research and understanding, and that is precisely the way the business operates.
This methodical approach has enabled the company to successful expand upon its export side of the business to other important African markets and it such growth that Henkel South Africa is clearly focused on. Going forward it will continue to use all of the strengths at its disposal in terms of brands, technologies and innovation in order to identify those areas in which it can grow, while also retaining its competitive advantage.
Written by Will Daynes, research by Paul Bradley
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