Connect with us

Entrepreneur Today

Buyer Beware When Dealing with the Far East

Get the Best Deal when Importing Manufacturing Machinery from the Far East.

Entrepreneur

Published

on

China-Flag

Imagine spending hundreds of thousands of US dollars to import rollforming machinery from the Far East, only to discover upon its arrival, that the machine does not work and cannot be fixed.

Many businesses, daunted by the high cost of metalforming equipment, decide to buy from the Far East. Their reasons are twofold: prices are often far lower than their American or European counterparts, and local engineers often do not have the experience for advanced machines such as high speed lines with in-line punching configurations.

Once burnt, twice shy

Greg Fuchsloch, CEO of Metalforming Technologies South Africa, has been in the metalforming industry for 18 years and has seen local entrepreneurs forced to shut their doors after buying insufficient machinery from the Far East.

“One client only realised after the machinery was installed that it couldn’t run the material he had bought at a value of R2 million,” says Fuchsloch. “The only way to rectify the problem was to either buy a new machine or buy new material.  It simply would not rollform the material that the client intended profiling.”

According to Fuchsloch, if the price seems too good to be true, there is something to be concerned about.

So, is it possible to procure good quality equipment from the Far East? Fuchsloch believes it is. “It’s possible to find well-made machinery at lower prices, but you need to know exactly what you are looking for and where to go. Take the time to do plenty of research and visit each machine builder personally, even if it means visiting upward of forty manufacturers.”

Choosing the right equipment

Fuchsloch shares five tips on what to watch out for when sourcing a good deal on imported equipment:

1) Can replacement parts be found in South Africa?

Before purchasing any machinery, look carefully at each component and ensure replacement parts can be sourced locally. Some parts and components in the machines are critical in their design, and it is not worth taking a chance with cheaper, poorly designed alternatives. Look specifically at PLCs, electric switches, electric motors, drives and hydraulic components. Ensure the product list is detailed and steer towards brand name components. They may cost a little more initially, but the machines will stay in good working order for longer.

“While you’re at it, double check that all of the components used are authentic,” says Fuchsloch. “In many cases, known brand components are not supported in theFar East.”

2) Get a service agreement and warranties

Take special care when looking at the service agreement. Some manufacturers offer a one year warranty on paper but will refuse to replace the part when it breaks, suggesting the component broke through operator error. The supplier must agree to fly out a technician within a few days and at their own expense, or work with an approved local company who is able to service or repair the equipment.

“A local company recently bought four machines at a very cheap price from the Far East,” says Fuchsloch. “Three roofing panel machines and an insulated panel machine, none of which were in working order when they arrived.

“The client thought it was a small problem and brought in an engineering company to look at the machine. They were unable to fix it and so turned to me to see if I could help. After looking at the machines I determined that they were so poorly designed that the components could not even be used separately.

“The only option was to dump the machines and start over. The client wasn’t happy with my findings and showed me the door. Unfortunately his business didn’t survive this very expensive lesson.”  Be sure to inspect the machines in theFar Eastbefore shipment.

3) What is the delivery date, and what are the repercussions for late delivery?

Have precautions in place for possible problems such as late delivery. Ensure that the company you are dealing with is proficient in English and able to communicate your requirements and any possible future problems you may experience.

“Alternatively use a local company who deals in machinery, who knows the lay of the land and has done this many times before,” says Fuchsloch. “You might pay a little more up front, but it will save you a ton of heartache, lost production time and money in the end if you buy from a reputable company.”

4) Is the supplier also the manufacturer? 

Not all Far East manufacturers have an export licence and so they use a local middle man to manufacture the machinery. It’s hard to tell which one you’re working with, especially when the massive factory floor is filled with many machines you assume are made on the premises or at least by the same company. The agent often doesn’t have the technical expertise to answer your questions or adequately understand your requirements.

Visit the factory yourself; there is no way around it. Make sure you see the factory and not just the showroom, warehouse or someone else’s factory. And take a translator with you  some bigger companies have staff who can speak English, but most of the technical staff cannot.

5) Get a technical manual in English 

Finally, Fuchsloch recommends getting a technical manual written in English. “It often happens that I get a frantic call from buyers who can’t use their machines because they haven’t been supplied with a manual and can’t figure out how to get it working,” he concludes.

Good deals are out there

Despite the obvious obstacles, Fuchsloch does believe that it is possible to find a good deal if you’re prepared to put in extra time and money to research what you are getting, or work with an established and approved company with years of experience.

Metalforming Technologies SA has offices both in South Africa and in China. For more information please visit http://www.metalformingtechsa.com/

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Entrepreneur Today

Fintech Hackathon To Support South Africa’s Entrepreneurs

Xero hosts South African developer technology challenge – and appoints a new General Country Manager.

Entrepreneur

Published

on

colin-timmis-as-xero-country-manager-for-south-africa

 Xero, the global leader in online accounting software has today launched a national competition, to put South Africa’s growing fintech industry firmly on the map. To mark the start of the developer technology challenge, Xero has also announced the appointment of Colin Timmis as Country Manager for South Africa, to take Xero forward.

Launched with Amazon Web Services, the virtual hackathon will enable the region’s technology entrepreneurs to compete with other forward thinking developers on a global scale. To take part, they need to develop an app that can sit within the Xero’s global ecosystem of over 600 apps.

As announced last night at an exclusive event in Johannesburg, the winner will receive R62,720 and the opportunity to attend and exhibit their app at Xerocon the world’s largest conference for over 3,000 accountants and bookkeepers, taking place in London in November.

Related: How The SA Government Can Help Small Businesses Thrive

Xero, which first launched in South Africa in May 2016, is now one of the fastest growing software companies globally, with 1.4 million subscribers around the world. In South Africa, the company is currently supporting tens of thousands of local small businesses, and a substantial support network of accountants. The competition marks the first in a series of Xero-led initiatives created for the South African tech community, as it continues to help more businesses and their advisors thrive.

“Since Xero first set foot in South Africa, I’ve been really impressed by the strong entrepreneurial spirit amongst the small business community. It’s really important that they are supported in the right way; and given space to pursue their best ideas and to grow. That’s why it’s time to open up our global developer competition to a South African audience. Those that have won it elsewhere have instantly been able to propel their business, and compete at a global scale,” said Gary Turner, Managing Director, Xero EMEA.

To support its continued growth in South Africa, Xero has promoted Colin Timmis, to Country Manager. Previously Head of Accounting at Xero SA, he brings a wealth of experience and skill to his new role. Before arriving at Xero, Colin founded South Africa’s first cloud accounting practice, Real Time Accounting, in 2011 – becoming Xero’s first Global Gold Partner in 2013, and its third fastest growing partner in the global territory by 2014.

“With over 12 years of experience in the accounting profession, promoting Colin to Country Manager will accelerate adoption of Xero in South Africa.” said Gary Turner: “His experience in cloud accounting, software implementation, development, integration and best practice is peerless. He’s already done great work for us during our market entry phase and I can’t wait to see how together we can help more and more South African small businesses realise the benefits of cloud-based accounting.”

Continue Reading

Entrepreneur Today

Breaking Down Borders – Top Considerations For SMEs Expanding Into Africa

In light of Africa Day on the 25th of May, more South African small and medium enterprise (SME) owners should be encouraged to look at how they could expand their operations into the rest of the continent.

Entrepreneur

Published

on

africa-map

In light of Africa Day on the 25th of May, more South African small and medium enterprise (SME) owners should be encouraged to look at how they could expand their operations into the rest of the continent.

This is according to Mark Paper, Chief Operating Officer at Business Partners International (BUSINESS/PARTNERS), who says that Africa has for long been regarded as a region with untapped economic opportunity. “The African Development Bank1 reports that the economic growth in Africa is set to accelerate to 4.1% over the course of 2018 and 2019, which can potentially yield benefits for SMEs.”

Paper points out that entrepreneurs should however firstly consider that each of Africa’s 54 countries represents a unique market with differing challenges and intricacies for doing business.

“The various economies, laws, languages and cultures need to be thoroughly assessed as part of the entrepreneur’s expansion plan, which should be structured around the target region’s strengths, weaknesses, potential opportunities and threats.”

Related: Expansion Funding Options For Your Growing Business

He says that once the enterprise is ready to start operations in a specific region, the entrepreneur needs to ensure that the regulatory requirements of the region are adhered to.  “It is crucial to conduct due diligence and understand all relevant regulations. Most of the companies that make mistakes during this phase find themselves facing massive fines or potentially devastating legal action further down the line.”

According to Paper, the information that should be at the entrepreneur’s fingertips include the required permits, business and property registration processes, credit requirements, tax legislation, labour market regulations, and local content requirements.

He adds that the entrepreneur should also know which laws are in place to protect foreign investors. “Developing robust contracts and using local attorneys to ensure that contracts can be enforced under local laws is therefore imperative.”

Next, Paper says that it is essential to have a strong local presence, knowledge of the local market, and an understanding of customer expectations. “Employing workers from the region can potentially be one of the best ways to support the company’s operations. It will not only benefit the business and its reputation, but the local economy too.”

He notes that finding the right employees, creating cohesive teams and implementing skills training within the organisation relies heavily on understanding the culture of the region, and being able to effectively work around the potential language barriers. “It could help to consult local human resources firms and hiring agencies with strong track records in the region.”

Another point for entrepreneurs to consider, is whether the country has reliable electricity supply, says Paper.

“Electricity supply continues to be a challenge in various countries, and there are many regions that only receive electricity from their national power grids for a few hours per day. Where necessary, the entrepreneur will need to budget for the installation of generators, or even consider signing contracts with mobile fast-track power suppliers who can operate and maintain their own generators on the business’s property.”

Related: Thinking Of Cross-Border Expansion? Consider This First

While entrepreneurs need to consider a number of aspects when expanding across borders, he adds that the rewards for getting it correct are significant, and that the perceived challenges should not deter entrepreneurs from taking the leap, rather serving as a reminder of the amount of research that should be conducted beforehand.”

“Africa is open for business. All it takes is enough drive, passion and perseverance to tap into its growing markets,” Paper concludes.

Continue Reading

Entrepreneur Today

President Ramaphosa To Address SA’s Biggest Board Meeting, The Directors Event

President Cyril Ramaphosa will be delivering a keynote address at The Directors event on 8 June 2018, at the Sandton Convention Centre.

Entrepreneur

Published

on

president-cyril-ramaphosa

President Cyril Ramaphosa will be delivering the keynote address at South Africa’s biggest board meeting, The Directors Event, which will take place at the Sandton Convention Centre on 8 June 2018.  Dr Jabu Mabuza, Chairman of Business Leadership South Africa will deliver this year’s Chairman’s Report.

Now in its fourth year, The Directors Event invites industry leaders to unpack three issues of national importance and discuss solutions in a public forum, moderated by highly-respected media personalities.

Youth employment & entrepreneurship, the use of technology to promote inclusive growth, and our political economy will be hot topics in this year’s highly focussed discussion programme which attracts participation from the country’s most prominent business and government leaders, and an audience of 300 ‘board member’ delegates.

“We are honoured to have President Ramaphosa address this important gathering of some of the top minds in South Africa. We invited him as a response to the call he made during his maiden State of the Nation Address earlier this year, calling on all South Africans, in their small corners, to help develop this country. We believe, strongly, that corporate South Africa has a massive role to play and we are very excited that everyone seems to have accepted the President Ramaphosa’s “Thuma Mina” call,” says Bongani Siqoko, editor of the Sunday Times.

Nontokozo Madonsela, Chief Marketing Officer of MMI, the JSE listed holding company for Momentum, Metropolitan and other financial services providers says, “We are incredibly honoured and excited that President Cyril Ramaphosa will be delivering the keynote address at this year’s Biggest Board Meeting. Over the past few months, we have experienced a wave of change in the country that has brought with it much needed confidence in what we can achieve. As a company with deep roots in South Africa serving a broad spectrum of citizens and businesses, we are heeding the President’s call to lend a hand in addressing our challenges. We are saying #CountUsIn, we want to be there. We believe this platform creates a space where we can have constructive dialogue and come up with concrete solutions that can positively contribute to improving the state our country”.

Related: President Ramaphosa’s Support Of Entrepreneurs And SMEs In SONA Had Us Cheering

President Ramaphosa will be the highest ranking government official to address The Directors Event with his keynote message.  Previous keynote speakers at The Directors Event have included Caroline Galvan (Lead Economist & Editor: Africa Competitiveness Report for the World Economic Forum), and Mcebisi Jonas (Former Deputy Minister of Finance).

Mmamoloko Kubayi-Ngubane, Minister of Science & Technology, and Enoch Godongwana, Chairperson of the ANC sub-committee on Economic Transformation will also be representing the perspectives of Government and the governing party during the round-table discussions at this year’s event.


The Directors Event programme is tailored for corporates, SMEs, educators, and non-profit organisations who are serious about turning South Africa’s socio-economic crisis around.

The Directors Event will take place at the Sandton Convention Centre on 8 June 2018.  To view the 2018 agenda, speaker profiles, or to book tickets: www.thedirectorsevent.co.za 

The Directors Event brought to you by the Sunday Times Top 100 Companies and MMI Holdings Limited, is supported by partners Mancosa (GSB), the Institute of Directors (IoD SA), and Greymatter & Finch.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending