Safrique celebrates 25yrs of intra-Africa trade
INTRA-AFRICA trade specialist Safrique of Johannesburg is celebrating its 25th year of doing business across the continent. Cross-border trade is difficult on most continents, and in Africa the challenges are possibly even greater, but Safrique has survived and thrived during this period, with Merwyn Moodley and Safrique’s team of traders having literally crisscrossed the continent to supply a variety of materials, products and more recently, even machinery to manufacturers.
It is Mervyn particularly who has refined the skills required to do business in Africa, which few other South Africans have marshalled. Originally from Durban, Mervyn qualified as an industrial engineer and first worked in the automotive sector before joining SA Nylon Spinners in Cape Town. A manufacturer of PET material and nylon fibre, SANS (no longer in operation) gave Moodley his first opportunity to travel in Africa … and the man has literally not looked back.
Merwyn, you were originally involved in PET manufacture here in South Africa, what prompted you to start selling into Africa?
My first trips into Africa were actually prior to the establishment of Safrique. My employer at the time in 1991, SANS, gave me the opportunity – possibly because no-one else seemed interested – to try to market both the PET materials and textile yarns SANS was making to customers in Africa.
My first trip was to the Ivory Coast, and involved a two-and-a-half hour drive to see just one customer. The interesting thing was that I met three or four other manufacturers in the vicinity, just by referrals. From that first trip and meeting people, I just loved the experience.
Safrique got going in 1996, just after the first democratic elections in SA, were you welcomed when first visiting manufacturers in other African states?
The main problem was, because of South Africa’s political dispensation, there were only two countries trading openly with South Africa – Zaire (now DRC) and Ivory Coast – so I didn’t have a lot to work with. But the sanctions began to drop after 1994 and the situation opened up a bit.
I started Safrique, based in Johannesburg, in 1996 and at the time SANS (ex-employer) was still our main supplier. The SA Foreign Trade Organisation office was helpful and supplied some business contact details, but I found it difficult to do business over the phone. I preferred a ‘knock on the door’ method. That worked well. People in Africa, especially business people, like to meet guests from elsewhere in Africa. They in turn referred me to others and, what can I say, we just kept on going.
Was it tough in the beginning?
Yes, of course it was. But to be honest I’ve found it more enjoyable than inconvenient, all along actually. There have been moments when there was serious competition from China and other sources. And my scariest moment was being forced to remain in Mauritania after a coup d’état. My hotel was on lockdown for two days and the airport was closed, but then I managed to get out. Besides that it’s been fine.
Did the momentum built up encourage you to try to supply other materials?
There was good interest in the textile fabrics, used in mattress and furniture manufacture, all along. But then in 2009 SANS announced the closure of their PET plant, so we were facing a potentially very difficult situation. I then had a bit of a ‘light bulb moment’ (while walking one of my favourite mountain tracks) to offer a wide range of polymers to our customers in Africa and thus we started to supply Safripol’s materials into Africa.
Then it became apparent that Safripol could at times not supply its polyolefins on a continuous basis, so we started looking at supplying recycled materials. And that too became very popular. With recycled material it’s very important to have a good quality and consistency, and at Safrique we put a lot of focus into getting the best quality we can from recylers in South Africa. Soon thereafter, demand outgrew supply and today we continue to source whatever we can from South Africa as well as Europe, Middle East, SEA, as well as North and South America
Safrique got involved in cross trading and participation in exhibitions both in Africa and Europe?
We were originally very focussed on material supply, virgin or recycled, but we have spread out from there. Our main market focus, however, remains in the plastics industry. We at Safrique have used trade shows as one of our main platforms to find both customers and suppliers. Of the shows, the K in Germany has probably been the best for us. We also participate in several regional shows in South Africa, East Africa and West Africa
A lot of our business is cross trading, where we arrange the sale from a manufacturer in one country to a customer in another country. At our office in Johannesburg we have people who are extremely good and experienced at handling and managing these transactions. And although our market is Africa, it has developed to the point where we supply goods from virtually anywhere to anywhere. For example, a shipment could go from Bangkok to Cameroon, with all the paperwork and logistics managed from our office in Jo’burg.
And then you got involved in equipment and machine supply; wasn’t that a completely different and more difficult challenge?
Well, that was virtually a natural step for us. Our raw materials were the conduit to customers who have expansion plans for machinery such as blown film lines, flexo and roto printing press and lamination. We partnered with W&H and Nordmecanicca for selected countries in Africa. On the sustainability side we partnered with NGR & Herbold.
Thus five years’ partnership has yielded success in West and Southern Africa and IOI.
What are the biggest challenges to doing business in Africa?
Look, there are countries in Africa where it is dangerous to operate, like Somalia, but I don’t really see that many challenges besides. Yes, the roads aren’t that good, but I get there to meet people. For French and Portuguese customers, we have personnel who are fluent and that obviously makes it far easier to conduct business.
How do manufacturers across the continent compare with manufacturers in SA?
Originally most of our customers in Africa were of Indian or Lebanese and Chinese descent, and it has been a bit disappointing that the local populations in most African countries have been under-represented in the manufacturing sector. But it’s been improving in the last few years, and I have especially noticed the emergence of more female entrepreneurs. We offer our full support to small, medium and large-scale manufacturers.
It’s obvious that manufacturing can grow in virtually all African countries, SA included, how do you see the future?
After what will this year be my 30th year travelling in Africa, I would say the manufacturing sector in Africa has matured quite a bit. Many of the businesses started small, but the appearance is that they are now investing in better equipment and becoming more efficient and professional.
How is Safrique coping during the pandemic?
When the pandemic first started and the lockdown was implemented in March 2020, we had travellers in the various markets who literally made it back a day or two before the lockdown started on 26 March 2020.
Over the years we have experienced different forms of crises in our business, for example, the exchange rate crisis previously, but never did we and other businesses experience a pandemic in our life time.
So, when the pandemic started we really had no clue about the implications it would have on our business. However, the team worked the hardest that we have ever done in our work history, pursuing every single opportunity.
We are pleased to report that instead of having linear growth, which we normally do year on year, during the pandemic we have experienced exponential growth.