South Africans shouldn’t resign themselves to being outcompeted by global giants like India and China. This is the view of OrangeImpact founder Gerhard Coetzer whose perseverance allowed him to eventually get the innovative steel processing technology his company needed to stay competitive.
“I am passionate [that] we [in South Africa] should become the hub of manufacturing for African development and not leave it to India and China,” says Coetzer. “We need to reap the rewards of African development.”
“For a small business in the manufacturing sector to keep customers, you have to be at the forefront of the technology. We searched globally for the best and most appropriate technology that would solve our customers’ issues related to their steel’s surface finish and logistics,” he says.
OrangeImpact, which specialises in mechanically removing scale, manufacturing surface profiles and applying coatings to customers’ steel is based at a 7,000m² facility in Ga-Rankuwa outside Pretoria.
They began trading as Advanced Coating Company in 2006 and for the first few years focused on a single large client who consumed almost all their capacity. This made it difficult to expand their operations as this would raise their overheads.
The solution was a machine co-developed by OrangeImpact that de-scales hot rolled steel in a single process, in an environmentally friendly way.
Building the system proved to be challenging until they found a partner in Mexico who could finish developing the technology and manufacture it. It was at this point that they ran into a roadblock. The banks weren’t willing to finance the project.
“Banks are reluctant to finance complicated and innovative projects that small businesses typically have to resort to in order to remain competitive without huge capital,” he commented.
Critical timing for the grant
After hearing about MCEP and applying for assistance, OrangeImpact received a grant of R3.64- million in February 2015.
Coetzer says he was impressed by “the diligence, solid checks and high work ethic in validating our claim”.
The grant came at a critical time, enabling OrangeImpact to bring the new technology to market and begin expanding its customer base. Without it, “we would have been without any business prospect”, said Coetzer.
It allowed them to recover from the huge cash flow drain and to market the new technology – and its investment in innovation is now bearing fruit.
The technology has allowed the company to rapidly ramp up capacity from around 1,000 tons a month to 10,000 tons a month. This has resulted in a bigger client base, as well as new clients in industries as varied as infrastructure development, road and rail freight, and automotive and shipping.
“Now they can use our products and steel and we have the prospect of growing our business nationally and eventually internationally.”