TROX SA – built locally, supported internationally

TROX SA – built locally, supported internationally

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By Ilana Koegelenberg

TROX SA has been manufacturing and installing HVAC products for nearly half a century in its Pietermaritzburg factory, growing its product offering strategically to adjust to the local climate and demand of its customers.

TROX is a global company that specialises in the development, manufacturing, and sale of components and systems for the HVAC market. It was founded in 1951 in Germany by the brothers Friedrich and Heinrich Trox. The company boasts 25 subsidiary companies in 22 countries, 13 production facilities, 25 additional own sales offices, and more than 50 importers and representatives worldwide.

TROX South Africa (SA) was established in 1971 by one of the original founders. It was the first manufacturing plant that the company ever established outside of Germany. They started small but have grown significantly over the past 47 years.

They purchased a piece of land back in the day and purpose-built the TROX facility, expanding over the years in various phases to accommodate its growth in the market. The company is based in Pietermaritzburg in KwaZulu-Natal, with an administrative office area of 360m2, and a total factory area of 6 856m2, of which 5 876m2 is production area. It has various sales offices throughout the country, servicing sub-Saharan Africa.

We sat down with Etienne Steyn (production director) and Gonnie Pandither (production manager) to find out more about how things work in the TROX factory and how they stay competitive against imported products.

A truly local approach

About seven years ago, the local company decided it was time for a ‘fresh start’ and underwent a management change, relooking at the business in terms of what its customers want. The main change was moving away from the rigid historical structure they had inherited from the past, as the South African market required a more flexible approach whereby they could customise products according to a customer’s needs and not simply manufacture standard catalogue products.


Photos by Ilana Koegelenberg

Since adopting a more flexible approach, the company has been able to set itself apart from import competitors by offering products aligned with the South African market’s requirements. “We still have the reputation and the strength of TROX Germany in terms of quality and standards, but now coupled with the benefit of being able to re-engineer the products in a way that suit our clients and their specific applications,” explains Steyn. As a start, the company decided to first look at redesigning its top-five products to better suit the African market.

The first market they tackled was the air handling unit (AHU) section. Although they had a strong regional presence in this market, nationally they were losing a lot of market share. This was because they simply were not keeping up with the technology of their competition, and flexibility in design and application was a challenge.

They realised there were many opportunities for diversifying their AHU options on offer, and designed a very innovative new AHU, called the E-Cube. They also introduced a variety of options to suit their clients’ individual needs — from offering a fully built-up unit, to delivering modular options, or even fully flat-pack design for plant rooms that were being refurbished or challenging to get equipment into. Not only does this allow for piece-by-piece assembly, but it is also done by TROX-skilled technicians who ensure that the unit integrity and quality are intact at all times during the site assembly process. Thereby ensuring that the unit, once assembled on site, is as good as any unit that was built in the factory itself.

It is imperative that a proper skills development structure is put in place, with more assistance from government, which will encourage young school leavers to enter the trade and technical fields, to prepare them for industry.

This allowed the operation to increase its production volumes on AHUs by nearly five-fold over the past six years. “We experienced a phenomenal growth curve as a company after we reinvented the AHU business,” explains Steyn. This wasn’t all they did, though. They broke away from the traditional all steel/aluminium frame structures and designed a frameless PVC structure for the AHU, which is fully flexible in size and application, and is non-corrosive, modular, manufactured of high-density, impact-resistant, UV-stabilised PVC, among other benefits. This includes the first ever PVC filter mounting frames as well. All of the above have been achieved without compromising on quality and specifications, as it still complies with EN 1886 standards.

However, the biggest benefit since introducing the new E-Cube, has been the fact that manufacturing lead times and costs have been reduced significantly, resulting in a substantial saving in the overall product cost, which has been passed on to the customer.

TROX is busy redesigning its fire damper range, which is currently with the South African Bureau of Standards (SABS) for certification. “We have re-engineered it to be more flexible and meet the changing market requirement,” explains Pandither, who himself has worked in the TROX factory for over three decades, starting on the floor and working his way up.

The company has also looked at its AWR shade louvres, redesigning their aluminum louvres to be applied as building façades and shade louvres too. This is now presented as a simple click system that can be assembled on site in sections from flat-pack. This saves time and transport costs — just one of the ways the company has innovated to stay competitive and offer customers what they need.

They now also offer a newer version of their variable air volume (VAV) diffuser range, which has been re-engineered with better controls and a broader spectrum of application in buildings. Providing the customer with a wider selection of options to choose from for their specific application.

Why go local?

The company manufactures about 96% of its products and components locally, and only specialised products are imported from TROX GmbH. The local company manufactures most components you would require for an HVAC installation and boasts a massive range. But they don’t just design and manufacture the products — they also look at customising their standard product range to suit the specific needs of the customer.


Photos by Ilana Koegelenberg

The main benefits of going with a local company are a complete solution and backup. “We have a credible quality product available; we have qualified technicians available, on your doorstep, to assist; and we also offer assistance in the extended installation of the product,” explains Steyn. “We really are a one-stop shop. This sets us apart from the average ‘job-shop’ around the corner, and importers of HVAC equipment.”

But it’s not just about range and flexibility — quality also matters. Sometimes imported products are not manufactured from materials best suited for certain harsh climates or applications, resulting in sooner-to-be-expected failures, and then there is very little recourse to get it serviced or repaired effectively. This has been evident in recent times, whereby TROX SA was called upon, by other agents who had imported units, to go on site and assist them with the repair and replace products, as they were not originally manufactured locally.

Other challenges faced by imported products are lack or shortage of replacement parts, no service teams or skills available locally, and long lead times being experienced when spares are needed, often resulting in downtime of equipment on site.

This is where it is beneficial to deal with local manufacturing companies such as TROX SA that can manufacture their own spares as and when they need it, exactly to the client’s spec.

Whenever a customer requires assistance on site, a local manufacturer can get to site quickly to investigate any issues. “If there is a problem, we always address it as quickly as possible, no matter where it is,” explains Pandither. “We get our teams there, do the analysis, and we deal with the issue and fix it.” Yet another advantage of dealing with a local manufacturer is that they have all the necessary facilities and technology readily available to tackle any issue a customer may encounter. They have a full test lab and testing rigs, which can simulate site applications, allowing them to exact-engineer a product within a very short time, thereby providing the customer with precisely what they require. The customer can view these tests while they are being conducted; this is something that imported items cannot offer.

Part of the TROX family

TROX SA does not have a high staff turnover and has some workers who have been employed for close to four decades.

“We definitely have that family feeling and we have a good relationship with our staff,” explains Steyn. “From a labour point of view, we are very stable and we have a very relaxed relationship with the unions.”

The trick is being hands-on and being involved with the workers on the floor, explains Pandither. The management team even has overalls in their offices and will get their hands dirty on the floor when things get busy. “We believe that if something needs to be done to achieve a deadline for a customer, it affects everyone, and we need to pull our weight too and help out.”

Reputation and respect in the market are very important to carry you through the challenging times.

“If we want the best out of people, they must believe we are the best,” says Pandither. “I must be able to do something as well as the operators can do it. That way, respect and trust is earned.”

“To be a successful company, we need to lead by example and experience what the employees are going through daily, so that we can make informed decisions on how to improve the processes and conditions, to ease the load on the workers. This allows us to improve the efficiencies and flows in the factory, and have total buy-in from everyone,” he explains.

Challenges

Infrastructure is one of the biggest challenges to local manufacturing, explains Steyn. Things like power cuts and water supply are huge issues. Although they do have generators to run the office and key manufacturing areas, it remains disruptive at best. 

“The cost of labour is also a huge challenge in the industry,” explains Steyn. “However, one does not mind paying a higher rate if the skills are there, but this is exactly where the problem lies. Firstly, there are many workers who retire from the industry, and the skills are being lost in that manner. There simply isn’t enough skilled labour out there anymore,” says Steyn. Often you end up paying a higher rate, but still face the challenge of having to train people before they can become an asset in your business.


Photos by Ilana Koegelenberg

It is imperative that a proper skills development structure is put in place, with more assistance from government, which will encourage young school leavers to enter the trade and technical fields, to prepare them for industry. They can use retired employees as mentors, and thereby ensure transition of skills and experience.

Staying competitive

It’s not just on the product range side that TROX is flexible. They are also flexible in terms of their labour and shifts they can apply. Production can adjust to suit the ever-changing demand on the factory, thereby ensuring that the company stays competitive. Currently there are approximately 70–90 workers on the factory floor, who work the standard hours, with double shifts only when required. A pool of flexible labour is available when needed.

Another thing that helps the company stay competitive is its good relationship with other local suppliers, in particular its raw material and steel suppliers. Because Pietermaritzburg is a relatively small industrial hub, being a medium-sized company does give them the benefit with suppliers. Especially because they have been doing business with them for so long and have nurtured this relationship over the years. This ensures a good quality and consistent supply for them.

Having the backup from their head office in Germany also gives them an edge. They have an international pool of technical knowledge and expertise to fall back on. TROX Germany has some of Europe’s best test facilities, which are used to test and develop its products worldwide.

Furthermore, these test facilities and engineering support are part of the TROX SA quality and compliance procedures, which ensures that the product they offer is developed and tested at the highest standards, internationally, and offered locally with full backup service.

Then there is the added advantage of being able to bring the German engineering experts over to share their product knowledge with the local team and customers. This is done regularly to share the latest technology with the local HVAC industry.


Photos by Ilana Koegelenberg

They have an in-house R&D department, allowing them to always innovate and stay ahead of the competition.

But it’s not all about the factory. Financial stability is key for manufacturing, explains Steyn. “It’s important that the numbers and the expenses make sense, otherwise we won’t have the peace of mind to focus on the manufacturing and engineering of products.”

The company has invested heavily in plant and machinery over the past few years, adding several new machines such as CNC punching machines and presses, installing a roller conveyor AHU assembly line, extending the paint and phosphate plant, as well as creating independent flow lines for high-volume product ranges. This has been another key to its success — financial stability, and the ability to invest locally.

Barriers to entry

So, why aren’t more companies looking to manufacture HVAC products locally? The biggest barriers to entry are start-up cost and the fact that you need volume to support the investment cost, explains Steyn. And the South African market simply isn’t that big.

Also, it would be hard to start a company now. “Reputation and respect in the market are very important to carry you through the challenging times,” explains Steyn. You cannot simply start something up — especially not in this challenging economy we are currently experiencing. Also, it takes a long time to build up a range as extensive as what TROX can offer. “There are a lot of fly-by-nights who set up shop and offer basic products, but they can’t offer the complete solution and the quality is not as good.”

Even if you overcome all of the above challenges, you still need a credible, well-engineered product range, which has been proven over time, and can be backed up with locally available support structures. “The trust and the reputation in your product take time to earn,” says Steyn.

Then of course the technical and engineering skills are hard to find, as mentioned. Not to mention that the existing skills pool is diminishing rapidly as older workers retire without any new blood coming in. “For the industry to grow in the future, we need more mentorships set up,” says Steyn.


Photos by Ilana Koegelenberg

Future

“We see a bright future for TROX in South Africa,” says Steyn. This future includes various innovations on product redesign and improvements, as well as the introduction of new products and diversification. The company is looking at add-on services to support interest in its products, as well as offering extended services. They want to expand the range of AHU technology, too.

The strategy is to revisit its well-established, trusted products by re-engineering them, improving the assembly processes, and reducing all costs without compromising on quality.


Click here to read the June 2018 issue of RACA Journal

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