EW_WE_Icon

Web Exclusive – February 2018

Enjoy this free, featured article only available online.

Taking on the Big Guys

South Africa’s Nu-Line has a strategy for success.

As international vertical-transportation (VT) companies continue to expand their operations in Africa to take advantage of a growing elevator repair and maintenance market, small and medium-sized elevator and escalator firms on the continent are branching into niche industry services to survive the competition and even attract additional business by leveraging the needs of the bigger competitors that have set up shop in the region. South Africa, undergoing a construction expansion that includes multifarious malls and skyscrapers, leads the Sub-Saharan Africa elevator market not only in terms of performance, but also in the number of small and medium-sized VT companies that are marching on to achieve good sales and expanded operations, despite the presence of global giants such as Otis, KONE, Schindler and thyssenkrupp.

Cape Town-based Nu-Line Elevator Products, which has maintained a year-on-year growth of 20%, despite operating in this competitive climate, has embraced a business model that not only takes advantage of being local, but also benefits from an increasing trend of larger elevator firms in the country outsourcing certain unique services. Said Allan Behr, Nu-Line managing director:

“Our company’s growth has never really been linked to aggressive marketing, but rather on the constant increase in sales and market share driven mainly by the continual return of good product and repeat business from professional teams that we have worked with on previous projects, especially architects, building contractors, consulting engineers and clients. Our growth has called for production expansion requiring larger premises and equipment, and we have recently acquired separate premises for our service department.”

You can find Nu-Line dumbwaiters at PathCare South Africa.

Currently, Nu-Line is executing VT contracts for 192 projects across southern Africa, after successful assignments for installation of commercial and residential passenger elevators, wheelchair platform lifts, goods hoists, dumbwaiters, car lifts and funicular/incline elevators at various buildings and structures in the region. Nu-Line’s signature can be found on escalators at the Cape Town International Airport, funiculars at the University of Cape Town, platform lifts at Woolworths and dumbwaiters at the South Africa PathCare offices and laboratories.

“We have been blessed with a significant increase in sales over the last year, and we are currently manufacturing at the maximum capacity within our available space in Cape Town and are looking for alternative premises,” said Behr.

Behr says that as a medium-sized VT company in the competitive South Africa market, Nu-Line’s growth is fueled by factors that go beyond conventional marketing and product sales to whomever responds to brochures and advertising efforts. “We have focused on offering our clients an alternative product choice between less-costly standardized elevator products and the more-expensive customized products,” Behr told ELEVATOR WORLD.

Behr said the approach has helped Nu-Line address the challenge of some clients who opt to import products directly from China, as these suppliers’ bulk production makes their pricing more competitive. He continued:

“However, through further R&D, we have improved the design on some of the elevator products to simplify the manufacturing process, thereby reducing manufacturing costs. This enables Nu-Line to offer clients a more competitive price structure.” With Nu-Line being based in South Africa, Behr said, “we are able to control and oversee the production process to ensure the manufacturing takes place as per client specifications and in consideration of existing site restrictions and applicable laws. Most of the other elevator companies import complete elevator products and are, therefore, less flexible with regard to offering custom specifications and shorter delivery periods.”

In addition to manufacturing and supplying its own products, Nu-Line is also scaling up investment in new solutions for the modification, upgrade and full replacement of elevators in existing buildings. One strategy that Nu-Line has successfully employed is the production of non-standard products that are easily adaptable to existing building restrictions, which Behr said was prompted by the fact that few suppliers in the market can alter their products to existing buildings because of limited overhead space, pit depths and irregular shaft sizes.

The company not only focuses on upgrading technology and software, and refurbishing interiors, but also on ensuring that the modifications it makes to existing buildings comply with South Africa’s relevant regulations and standards.

There are times, however, that Nu-Line is forced to import components, which affects the company’s profits as well as its product pricing. Said Behr:

“We have to import some of the parts for making elevators because they are not available in South Africa. Obviously, with the importation of some of the components, our manufacturing costs and profits are affected because they are dependent on the performance of the Rand against major currencies."

Behr says Nu-Line is working to expand its exports by partnering elevator companies that are established in the export market. Export-oriented international players in the VT sector are under increasing pressure from contractors to have elevator suppliers with a local presence to ease problems that can arise from demand and supply of operation and maintenance services. “If we are able to enter into beneficial relationships with elevator companies in the area, we can offer to manufacture at very competitive rates, and the local company can then attend all meetings with project teams, install our products and take over the service agreements,” said Behr.

Nu-Lin, a member of the Independent Lift Association of South Africa, manufactures products for global industry giants KONE, Otis, Schindler and thyssenkrupp. Leading contractors in South Africa, like WBHO Construction Ltd., Murray & Roberts Construction Ltd., Grinaker-LTA, Berman Brothers Construction, Stefanutti Stocks Ltd. and R&N Master Builders Ltd., are some of the companies with which Nu-Line has worked on southern Africa projects.

Apart from the increasing direct imports from China, Nu-Line, like many elevator companies across the globe, is struggling to find enough skilled labor to meet the increasing demand for its products and services in southern Africa. Said Behr:

“The elevator industry in South Africa is quite limited with the supply of qualified personnel, which has made in-house training at Nu-Line vital. The company [holds] training workshops with staff regularly and has ongoing training with regard to health and safety.”

Globally, Future Markets Insights says in its Elevators And Escalators Market: Global Industry Analysis and Opportunity Assessment 2016-2026 report, “Lack of skilled labor for after- sales maintenance is expected to hamper the growth of the elevators and escalators market.”

Behr said that during the peak production and elevator servicing seasons, Nu-Line, which has 125 permanent staff, contracts for temporary staff to assist in the factory and subcontractors to install some of its products. “These additional hands remain under direct supervision of [the] Nu-Line supervisory and management department at all times,” he said.