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 Lighting the way for the revival of SA manufacturing

 

 G Light is an inconspicuous factory in an industrial area called Sebenza near Edenvale in Johannesburg. But behind the face-brick facade and the staff of 32 beavering away at their LED lighting assembly lines, lies an amazing story that encapsulates the arc of manufacturing history in South Africa.

G Light, which finds itself on the forefront of lighting technology today, has its roots in a company started 83 years ago by William Gardner and his son John. Like so many manufacturing businesses in South Africa, the eponymous W Gardner & Son started around the mining industry and transformed itself several times throughout the years as waves of technological changes swept over the world.

It started as an electrical engineering company that serviced and maintained electrical equipment for the mines and municipalities.  In the 1950s and ‘60s it became the only company in Africa manufacturing electrical instruments such as volt meters. Later on the company started manufacturing high-voltage test equipment, mainly for municipalities.

In the early 1980s, when Richard Gardner, the owner of G Light, and his brother Alan took over the company started by their great-grandfather, it was in serious trouble. The staff complement had dwindled to eight as Richard’s father, John Jr, struggled with a heart condition.

The two brothers managed to turn the fortunes of the company around by manufacturing transformers. In the mid-90s they designed a magnetic transformer that became the industry standard for low-voltage halogen lights, and the company boomed. For five years they ran a 24-hour production line five days a week and made close to a million low-voltage transformers. The company grew its staff to more than seventy.

Then, just as suddenly as it had started, the wave they had managed to catch had run its course. Magnetic transformers were replaced by new electronic transformer technology, and soon the company was down to less than a quarter of its size.

The electrical industry was used to the disruptive effects of new technology, but this time there was another factor at play - the rise of China as a manufacturing superpower. So cheaply were the Chinese able to produce lighting products that South African manufacturers just could not compete. Like so many South African manufacturers, Richard sold the transformer factory facility and W Gardener & Son became an importer of Chinese goods, mainly of lighting products made by the Guangdong-based NVC Lighting Technologies.

During the ten years that W Gardner & Son imported lighting products, yet another technological wave swept over the industry: LED lighting. As an early importer of LED lighting products, Richard was keenly aware of the teething problems with the new technology. The quality was inconsistent, the turn-around times sluggish and the products were not always fit for South African needs and circumstances.

A manufacturer at heart, Richard simply could not resist the opportunity to try to manufacture LED products locally. As an electrical engineer he had the know-how to produce a better-quality product that would be better suited to local standards and needs, and as local manufacturers they could beat the imported products hands-down when it came to speed and after-sales service. He had no illusions, however, that he could compete on price.

In 2015 Richard took the leap, ended the agreement with NVC, and started trading as G Light, the name of the first range of LED lights designed and made by his company.  

It was not easy getting back into manufacturing, says Richard. As an importer, they had a small assembly capacity, and this had to be scaled up into a full production line. They also had to acquire a sheet-metal division to make the casing and fittings for the LED lights, as well as a division to produce the plastic components for the lamps.

As electrical experts, Richard and his team found that they had the know-how for putting the LEDs together, but the learning curve for producing the metal casings was a steep one.

At first, G Light used traditional asset finance from the banks to buy the sheet-metal equipment, but when the business started to grow Richard realised to what extent the banks had abandoned South African entrepreneurial manufacturing. They simply could not raise finance for more machines and working capital and had no choice but to turn to the Industrial Development Corporation (the IDC) for finance.

The corporate culture of the IDC made the finance application process complicated and involved literally hundreds of hours of paperwork preparation and the hiring of a consultant, says Richard. However he eventually managed to secure the much-need IDC finance.

The next problem that the growing G Light team faced was to find suitable premises. The decimation of South African manufacturing had meant that most industrial premises are “glorified warehouses”, says Richard.  G Light found itself in such a premises, with ablution facilities not suited for the growing number of factory workers, too much warehouse space and inadequate power facilities.

After a long search, they found just the right place in the form of an old factory premises not far from where they were.

Because the establishment of the manufacturing facility had absorbed virtually all of their reserves and resources, the only way G Light could finance the acquisition of the property was through a 100% loan - there was simply nothing left for a deposit.

Richard knew of only one institution that provides such finance to owner-managed businesses: Business Partners Limited (BUSINESS/PARTNERS). Fortunately, the cultural fit was also much better, and the finance application was considerably less onerous than that of the IDC. BUSINESS/PARTNERS provided the finance to buy the premises and, in lieu of a deposit, took a minority share in the building.

Today, Richard’s team of 32 workers occupy most of the space in the building, but he reckons the premises has enough capacity for G Light to double its turnover before they have to move again.

The young factory, which mostly supplies electrical contractors working on major commercial, industrial and hotel projects, seems well on its way to doubling its turnover. In the next year, G Light plans to appoint a further fifteen staff members.

Even though the South African market as a whole is not growing, G Light is “a small fish in a big pond”, says Richard, and the potential to grow market share by competing on quality and service is huge.

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