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 Manufacturing success for rebel business owner

 

 Paul Pretorius is one of the small breed of people who have always known that they want to run their own business. Over his entire career, the 51-year-old business owner only ever worked for six months for someone else.

But even in that rarified group he is something of an oddity. Ten years ago, when the repurposing of South African factories into warehouses was in full swing as local manufacturing was being outsourced to the Far East, Paul decided to start a large-scale factory to make agricultural implements, including ploughs, rollers, fertiliser applicators, harvesting machines, grain cleaners and trailers.

“An entrepreneur has to be something of a rebel, with an obstinate belief in their own plans,” says Paul.
Today, he owns AgriCAD, a 60-worker factory based in a 2500 square metre workshop in Waltloo, Pretoria. The company produces millions of rands worth of high-quality agricultural equipment for the local agricultural industry and has already exported to nine countries in the rest of Africa. It has designed, developed and brought to market more than 60 different agricultural implements so far over the last ten years. 

Paul grew up in Nelspruit, and spent his childhood taking things apart to see how they worked. His qualification as an electronic engineer at the Pretoria Technikon in the early nineties coincided with the advent of personal computers and the internet, and after completing his six months’ internship at a company - his only employment ever - he started his own computer business.

For the next 20 years, Paul’s business, SP IT Solutions, thrived as it participated in the IT revolution, landing contracts to install computer networks worth millions of rands. 

But after two decades Paul was ready for something else. Besides the frustration of having to compete against an ever-rising number of fly-by-night IT companies, he yearned for the opportunity to produce something tangible. 

The idea came from his brother-in-law, a mechanical engineer with strong links to the agricultural sector.
Agricultural implements were largely imported into South Africa, or, to a lesser extent, produced by rural mechanical workshops who copied the imported equipment with nothing but an eye and a tape measure.
There seemed to be a gap in the market for equipment professionally designed to suit local needs and conditions and produced at a consistent quality. 

The brothers-in-law took the idea to Afrit, the truck trailer company, and helped them start a subsidiary to produce agricultural implements. The experience proved that there was indeed a market, but differences of vision prompted Paul to step out after two years and start his own company, AgriCAD, from scratch. 

With only their own limited investments, together with that of a local farmer, AgriCAD had to turn a profit from the beginning. They managed to do so, but it took them three hard years before they could breathe slightly easier. During that time, Paul’s brother-in-law decided to immigrate to Australia, and since then Paul ran the company as sole director. 

How difficult was it for an electronic engineer and IT specialist to adapt to the manufacturing of huge pieces of agricultural equipment? Paul says in certain ways the shift was not that challenging, because engineer-thinking is similar across industries.

But he laughs when he remembers that he thought that manufacturing would be easier than running an IT company. “Nothing you build from scratch is ever easy,” says Paul.

Particularly challenging is staff limitations and restrictive labour laws, which Paul believes punishes South African manufacturers in their competition against those from the East. He also found that outsourcing any part of the work to other local companies is difficult because timeous delivery, which AgriCAD prides itself on, is not universally valued in South African supply chains.

For this reason, AgriCAD set about acquiring state-of-the-art manufacturing equipment such as laser cutters so that they do virtually every aspect of the production process in-house. Most of their machines have been funded through their own cash flow, but when the building in which they operated was put up for sale, Paul needed a financier fast to buy it. The banks proved too slow, and Business Partners Limited (BUSINESS/PARTNERS) was willing to finance 100% of the property.

BUSINESS/PARTNERS took a minority stake in the property which Paul will be able to buy out in future. 
The past few years have been challenging for AgriCAD as the agricultural industry was hit by droughts and uncertainty around the land debate and property rights, but that has not put a damper on Paul’s growth plans.

AgriCAD is looking to gain market share in South Africa and a foothold internationally, especially in the rest of Africa and Eastern Europe. If there is one business owner who will grow when everyone else is cutting back, it is a rebel with a clear plan in mind.
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