An exciting new initiative is emerging in the South African fluid power industry, the Hydraulics and Pneumatics Export Cluster (HAPEC). Championed by Honingcraft Moser CEO, Gerhard Hauptfleisch, this new cluster will operate under the auspices of the DTI-affiliated South African Capital Equipment Export Council (SACEEC). SACEEC assists capital equipment sector companies to grow their businesses through exporting of locally-manufactured or engineered value-added products.

The inaugural meeting was held in a packed meeting room at SMC Pneumatics, with Skype links to both Cape Town and Sydney. Together the participants spelt out the new cluster’s vision and mission. This meeting was followed up by a presentation at a SAFPA technical evening, which was very well received.

Active clustering

SACEEC promotes active clustering, where companies cooperate to set up mechanisms to reduce export costs, develop new products and build a common purpose. Current clusters under SACEEC’s umbrella include Valve and Actuator Manufacturers (VAMCOSA). Under the Export Marketing Investment Assistance (EMIA) scheme, exporters can be partially compensated for costs incurred in developing export markets for South African products and services and recruiting new foreign direct investment into South Africa.

A cluster is a group of businesses with a common value chain and it has channels for business transactions and communication. The businesses in a cluster have in common specialised infrastructure, labour, markets and services. Hauptfleisch described clustering as a bottom-up process, driven by industry for industry. It is product and sector specific and is structured to be responsive to opportunities and threats. The setting is informal, differing from the more formal association, and involves collaboration on multiple levels. The platform that clusters provide enables industry to address opportunities and barriers in a way that cannot be done on an individual basis. “A cluster grows and develops champions,” he said.

Key to the immediate HAPEC cluster strategy, is an outward selling mission (OSM) at the end of August to Perth and Brisbane. An OSM is a group of companies that goes as a group to see clients in a region. “This adds credibility, one company alone has a much more fragile base. As a group we can create more impact,” he continued.

Getting into action

Flagship initiatives are important, and the new cluster is wasting no time in getting into action. Honingcraft’s Kavir Singh has already represented the cluster at exhibition pavilions in Angola and Mozambique. There is also huge potential in Latin America, as South Africa is competitive in those markets and an OSM to Peru is on the cards for early August. The main target market will be the replacement market, especially the mines. “The plan is also to find someone in the engineering field who speaks Spanish and knows our products to be our eyes and ears and generate business, probably in Chile or Peru to start with,” explained Hauptfleisch.

Representation is also important. In Australia, the cluster is already represented by Kenneth Barnard in Sydney and Christopher Flint in Brisbane and the team is looking for a champion in Perth. “We need to understand the different cultures and we need repeat visits for success. The aim is to have a three-pronged approach: meet people face-to-face for cocktails, visit shows and exhibitions, and make visits to important players,” explained Barnard.

Also on the cards is an inward buying mission (IBM) that will happen in conjunction with Electra Mining in September. The DTI will fund flights and accommodation so, in essence, they pay for the delegate to come in and buy from us.

Benefits to industry

Another potential benefit is the DTI’s Localisation Programme and the possible designation of locally-manufactured hydraulic and pneumatic products. The DTI will be able to lobby state-owned organisations (SOEs) to buy locally on the basis of the designation of hydraulic-related products. The possibility of HAPEC being designated is on the table.

“There are many benefits for the fluid power industry,“ concluded Hauptfleisch. “Companies can market themselves in other countries and open up opportunities in South America, for example. Many of the costs can be reclaimed from the DTI. If you work on your localisation drive and get your economies of scale going, you will also open up opportunities with SOEs that can impact your globalisation. A good example is hydraulics in the rail industry, which needs to increase its localisation. You can trade both outwardly and inwardly. We should hunt as a pack and be selling together. If you do this, you will help your business dramatically.”

Source: Motion Control – http://www.motioncontrol.co.za/9246a