BI celebrates its 65th anniversary with solid growth and expansion
Leading supplier Bearings International (BI) grew its countrywide distribution network by four branches this year alone and is looking to add a completely new complementary business unit to the existing four. This comes as BI celebrates its 65th anniversary in 2022.
“Growth into Africa has been good and sustained even during Covid-19 due to demand. It is just a matter of how we approach that market. We do not want to grow too quickly, as it must be sustainable growth giving us a solid foundation. I am very positive, however, and believe we will continue to go from strength to strength,” says BI MD Bart Schoevaerts.
At the helm of the business for two-and-a-half years, Schoevaerts came onboard during the difficult Covid-19 period. Designated an essential services provider, BI was able to operate during the lockdown and even continued with its restructuring process. “It was the ideal time to drive change in the business. Although we had grown significantly up to that point, the existing structure was insufficient to support ongoing growth.”
Schoevaerts reflects: “We had transformed from being a bearings company to supplying ancillary products from motors to fasteners. We stepped back to refocus and segmented the business into four distinct business units, each with its own operational structure. This, in turn, allowed us to look much more closely at our customer service and support.”
A company specialising in technical products invariably ends up with a technical mindset. “Today the market has evolved away from the traditional concept of technical support to one where customers are much savvier in terms of trends and latest developments. They are now inquiring if specific products and technology is available on the market and how quickly they can access it. This has meant we have had to adapt on the retail side of the business as well,” says Schoevaerts.
The renewed focus means ensuring sufficient stock of all the latest products at branch level. “That was a mindset change we drove throughout the organisation and one that has definitely resulted in significant growth.” Turnover has grown since Schoevaerts became MD and is expected to increase by more than 50% this year.
“We achieved significant growth in difficult circumstances and against a backdrop of global supply chain disruption by firstly the Covid-19 pandemic and then the conflict in Ukraine,” says Schoevaerts. “All of our products are imported, and we had to contend with issues such as ports being closed in China and no vessel or container availability.”
Another key factor has been price volatility. “Customers have been used to stable, incremental increases on a yearly basis but now are confronted with a situation where they have to review their cost basis at quarterly intervals to mitigate the impact of escalating prices,” notes Schoevaerts. A side-effect of this volatility has been a lot of smaller players falling by the wayside, which has separated the wheat from the chaff and levelled the playing field for the entire industry.
In the light of all these changes, and especially Covid-19 ushering in a digital or remote age, Schoevaerts says the traditional sales approach of physically visiting customers on a regular basis to introduce them to new technology or products and to gauge their specific requirements has given way to a new business model.
“If you see how quickly South African companies adapted to online shopping, from the retail to the commercial and industrial sectors, and how quickly they came up with new business models to remain relevant, we realised we had to go that route as well, even though we did not have any internal capacity at that time,” says Schoevaerts.
“I believe after successfully migrating to remote marketing we will end up at the point where 60% to 70% of our direct business-to-consumer and even business-to- business sales will be online,” Schoevaerts says proudly. This has largely been driven by BI’s development of its own online portal, a project that took longer than anticipated due to the steep learning curve. In addition, there is far more complexity in terms of choice and specification when it comes to industrial products.
He says the online portal is effectively “just another means of engaging with BI, over and above contacting our sales representatives or visiting your nearest branch.” An exciting development going forward is using the online platform itself to provide technical content to add further value to its customers’ businesses and projects.
“We believe this trend will only increase. As more and more businesses operate 24/7, there is a greater possibility of a breakdown or issue arising outside of normal operating hours when expertise and technical assistance may not be readily available.” In such a scenario, any parts required can be ordered online for expedited delivery so that customers can be up and running again as quickly as possible, thereby minimising costly downtime.
A key strength of BI remains being part of the larger Hudaco Group. “It is a definite advantage in Africa due to economies of scale. Major customers such as the mining industry and breweries are more likely to see us as a trusted partner into Africa. The advantages we offer being part of a larger group are security of supply and financial stability of the overall business,” says Schoevaerts.
The group largely operated in a decentralised fashion up to Covid-19 when it realised there was more value to be extracted from each individual company. Clusters were formed, with BI in the materials handling cluster along with another five companies in the Hudaco Group. “Adopting such a strategy will deliver distinct advantages for us in future. The group will remain decentralised, but cooperate and collaborate on a bilateral level,” says Schoevaerts.
Reflecting on the 65th anniversary, Schoevaerts acknowledges it is a milestone. “It is something we are very proud of. Our slogan is ‘Always There Making It Work’ and everyone considers this in their own sphere of operations. That has contributed towards our ongoing success. We have remained a family type of business but with the outlook of a big corporate. In South Africa and on the continent, that is valued.”
A key part of this strategy is BI’s three-tiered approach to any product it distributes. “We have really tried to bring the world to South Africa through our leading brands, which has been a focus since day one,” says Schoevaerts. However, “not everyone wants a Rolls Royce product.” In terms of energy-efficient motors, for example, BI offers high-end IE3 and IE1 at the lower end.
Looking to the future, Schoevaerts says customers are increasingly looking to outsource their maintenance requirements as a non-core part of their businesses. This has resulted in BI collaborating with project houses and consultants.
“Here we maintain a purely technical relationship whereby we share innovative new products and technology so that they can anticipate developments and consolidate these into their own design work for industry, manufacturing and mining. Obviously building such relationships bolsters our own credibility and on the back end of such partnerships we get a lot of business,” says Schoevaerts. “It is important to bring new technology to the market and we have indeed launched several new products over the years and continue to do so,” he concludes.