GRW puts South Africa on top of the global stage

GRW has once again shown that South Africa companies can reach the highest levels of excellence on the global stage – and this time the proof is given not via another export success story but rather via a buy-in into the company by Europe’s largest and most renowned trailer manufacturer writes Patrick O’Leary.

It is not often in the manufacturing sector that you hear of an overseas company investing into a local, home-grown South African organisation. Yet this is exactly what has happened with Schmitz Cargobull AG acquiring 33% of the shares in Worcester-based GRW Holdings (Pty) Ltd effective from August 1, 2017.

This development marks a huge milestone in the progress of GRW onto the world stage and pays high tribute to the ability of South Africans to engineer and design products that serve to attract the best in the world. In short, it stands as a huge accolade not only to GRW but also to South Africa’s manufacturing capabilities.

On this point, it was earlier this year that GRW was featured as the cover story on the internationally respected ‘Global Trailer’ magazine. The story was headed “A New Narrative’ and essentially highlighted GRW as a company which has bucked the trend of perceptions of Africa being a continent only of poverty, famine and disasters.

The article quoted from a TED speech given by Nigerian novelist, Chimamanda Adichie, where she pointed out that clichés about poverty, famine and disasters dominated mainstream reporting and, as a result, the public’s understanding of Africa. There was rarely a rounded, balanced or nuanced approach, she said, laying bare a conflict that is still impacting almost every aspect of life on the 54-nation continent today – including trailer manufacturing.

This was put to Gerard van der Merwe, CEO of GRW, who agreed saying in the article that: “We find a lot of negativity towards Africa when dealing with foreign people. While we are a proudly African business, we are often perceived as a Third World company, which we are certainly not. People often don’t realise how professional we are until they come visit us and see what we are all about. We see ourselves as a global competitor manufacturing in Africa. We compete with the very best in the world, which in turn gives us an advantage in the local and African market – not the other way around.”

Apart from this latest Schmitz Cargobull deal, GRW’s local success across Southern African markets, we well as its success in the wider global markets such as in the Middle East, Australia and the UK – among others – tends to give muscle to Van der Merwe’s words that GRW “competes with the very best in to world”.

The story behind the Schmitz Cargobull development goes back to when GRW started manufacturing refrigerated semi-trailers for the local market as part of its diversity plan to grow beyond its traditional tanker offerings. The first refrigerated semi-trailer was launched at the Johannesburg Motor Show in 2011 and immediately caught the attention of the market.

GRW started its reefer operations with imported panels from CIMC Vehicles, part of the China International Marine Containers Group. It was later that CIMC bought Top Trailers in South Africa and in so doing, in effect became an opposition to GRW which was an untenable situation.

 It was thus that in 2015, Van der Merwe went to visit the Schmitz Cargobull operations in Europe given that the company was widely recognised as a global leader in the manufacture of refrigerated bodies. Their advanced technology such as Ferroplast® panel technology is the market leader across all of Europe. Ferroplast bodies combine the increased insulation properties of NX-17 polyurethane hard foam with durable steel skins giving advantages such as:

  • No water ingress into the panels meaning no weight gain over time.
  • Low heat storage capacity meaning faster pull-down times.
  • Age resistant steel covering skins never get brittle.
  • Easy repairs meaning low cost and more uptime

What also impressed was the company’s development of bolted technology for the chassis as opposed to welding. This may sound pretty simple but it represents a break-through in chassis design using a modular system along with specially designed bolts to give the chassis strength where it is most needed according to the load situation.

All this will come later but what was most important is that GRW and Schmitz Cargobull found they shared the same overall values in terms of quality, an accent on engineering expertise and an uncompromising focus on customer care.

“We found we had so much in common and it made sense that instead of going forward under a supplier/customer relationship, we should link hands,” says Van der Merwe.

It was thus at the beginning of 2016 that the Chief Executive Officer of Schmitz Cargobull AG, Andreas Schmitz, visited GRW’s Worcester manufacturing plant – and was seriously impressed. As Van der Merwe has stated: “People often don’t realise how professional we are until they come visit us and see what we are all about.”

Well, that visit led to Schmitz Cargobull AG deciding to put forward a 33% investment proposal which was accepted by GRW. So the deal is now done and it’s all systems go with multiple benefits for both companies.

For GRW, not only does it give the company access to all the latest technology coming out of Europe, but it also opens up markets through Schmitz Cargobull’s extensive network in Europe, Eastern Europe and Russia where the company has some 440 sales points. Schmitz Cargobull, by the way, produces 59 000 trailers per year. This is as opposed to GRW’s current 1 400 per year which, Van der Merwe says, they plan to up to 3 000 per year within a three year time span. He also hinted at the building of another manufacturing plant in the Gauteng area.

For Schmitz Cargobull, it will open the tanker market for them in Europe as the company does not manufacture tankers. GRW does and its quality is globally accepted as being among the best. Then again, GRW does not make tippers whereas Schmitz Cargobull does. It is obvious that there are enormous synergies and multiple benefits to both companies.

Something customers will warm to is that being part of the large Schmitz Cargobull group will give GRW some price advantages due to the huge purchasing power of its European partner. Consider this: The company produces one completed reefer every 15 minutes on its European production line. That’s huge volumes.

Apart from the business advantages for both companies, what this deal also does is it acts as an example of how South Africa can elevate itself onto a new platform of global strength moving away from our traditional reliance on commodities for our economic growth.

It was only recently that, speaking at the Southern African Development Community (SADC) Industrialisation Week conference held in Johannesburg, SADC regional standardisation president, Dr Eva Gadzikwa, said the SADC region must diversify away from its reliance on commodities for economic growth and prioritise industrial development. “Industrialisation can contribute to transformation in the agriculture, trade, transport and other sectors and is key for economic development,” she said.

GRW is a step ahead on her urgings and is leading the charge.