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Interview

Louwrens Erasmus – General Manager, Rand-air, South Africa

Louwrens Erasmus, general manager of Rand-air South Africa, and his team share the key milestones of the company in the past few years, their strategy for adapting to a challenging business environment, and their commitment to investing in new innovations and technologies to deliver the best offerings to their clients.

Louwrens, what have been some of the key milestones since we met you in 2012?

“In this respect, a main focus now is on digitalization in order to better cater to the ‘millennial’ generation.”

As a company, we strive for continuous growth on an annual basis, and I am pleased to say that we have achieved that over the past few years.

Continuous technology advancement is also very important to us. We always seek to improve our products, technology and offerings to our clients. Being part of the global organization Atlas Copco helps us achieve this; they have actually set the target of expanding their product offerings on an ongoing basis in order to better serve their customers. For instance, they have recently released a light set with a reduced fuel consumption of 60 percent. We have also been able to decrease the airflow of our portable diesel-driven oil-free machines from 1600 cfm (cubic feet per minute) to 800 cfm (cubic feet per minute), which means less wastage and lower costs. This is important to most industries, including oil and gas.

We have also bought our first nitrogen generator. Where previously the only nitrogen available in South Africa had to be purchased in bottles, now companies have the option to rent a nitrogen generator. We are also seeing demand in the pump market and we are currently building our expertise and equipment to cater to that market.

The goal for us is always to enhance our product offering as much as possible, not only in the hire of compressors but also generators and other related equipment in order to cater to a broad base of customers. We take a more service rendering perspective, which is evident in our slogan: exceeding customer expectation is our passion.

Rand-air caters to a number of sectors in addition to oil and gas, which represents around 20 to 35 percent of our business. Our oil and gas operations in South Africa are downstream, specifically in the supply of compressors and generators to refineries and so on.

How has the company adjusted to the market realities – globally and locally – in the past couple of years?

Economic growth in South Africa has been quite flat over the past few years, which is a rather challenging situation, but under such circumstances, we need to ensure that we maintain our technologically advanced fleet of equipment, improve our services to provide our customers with quality and reliability, and continue operations.

It also means looking for more opportunities. For instance, we entered the high pressure booster compressor market a few years ago in response to market demand and subsequently moved away from it after a period of time, also in response to market demand.

We have also recently acquired a high-pressure unit that can also be used in the manufacturing sector in addition to oil and gas. Diversifying our customer base into other industries as well as broadening our solution offerings to clients are necessary to adapt to difficult market conditions.

We continue to see more opportunities in the downstream sector, where we expect to see great uplift as a result of increasing consumer demand for petroleum products as well as the need to refurbish our existing refineries. In addition, gas is increasingly becoming a very attractive proposition in South Africa and there is still not a natural gas processing plant in the country so there is a lot of potential there too.

Part of the slump has been due to the fall in commodity prices as well. These have been recovering in Europe and the US over the past 18 to 20 months. South Africa is typically 24 months behind European and US markets so we do see growth on the horizon. Similarly, business confidence levels in South Africa are currently one of the lowest in the world, but with the new political situation, I think there is a new energy in the country that will be positive for companies.

Finally, we also benefit from the fact that around 20 percent of our business is fixed long-term rentals, so that is something we can fall back on. But this also requires the planning and long-term vision to adjust to market conditions in order to secure long-term. This relies on building strong relationships with customers so that they actually come to us when they do need something. A long-term rental contract takes all the risk out of owning the product or equipment for our customers so that our clients can focus on their core business.

What do you see as the competitive advantages of Rand-air?

We always try to maintain the highest service and quality standards. For instance, we can typically respond to a breakdown in South Africa within 2.5 hours. We also guarantee our clients that if the machine is down for more than 2.5 hours, we will not charge them for the day – that certainly gives us an incentive to respond quickly! We also ensures that we do a quality check before we send a machine out. Quality and timely service is critical to us because if a machine is not running, it means that our client cannot continue working. After a breakdown, we also conduct a full investigation to prevent it from happening in the future.

Our clients are generally happy with us so we must be doing something right!

This emphasis on quality becomes even more important in the current climate, because the environment has become very price-sensitive as a result of the political and economic uncertainty. This is why we have been vigilant in ensuring that we continue with our top-notch service levels, if not even bettering them, and continue to refuse to compromise on quality.

We also replace between 15 to 17 percent of our fleet annually. This ensures that our fleet stays up-to-date with new technological advancements.

Finally, as a division of global company Atlas Copco, we are able to leverage on their global network. We know that we can always call on our colleagues in a different office to draw on their insights, for instance, in Houston, Singapore or Aberdeen when it comes to oil and gas. Atlas Copco provides rental globally and we benefit from that global network, whether in terms of knowledge, skills, expertise, and also actual equipment and services.

With this level of service and quality standards, how do you build that service-oriented culture in your employees?

Continuous training and staff development is key. As General Manager, while I may not be the one doing the training for individual employees, it is my responsibility to drive that training and development. Ultimately, for a service company, it is the quality of our staff that differentiates us and builds our value proposition.

We also pride ourselves in having a staff turnover below five percent, which is extremely low. Having long-serving staff enables us to build that knowledge base. An employee that stays two years with us would have significant experience and knowledge from exposure to equipment breakdowns and so on. This is also how you instill the culture of exceeding customer expectations and providing top-notch service. A lot of our training and development is also focused on building soft skills that can be applied to other circumstances.

In this respect, a main focus now is on digitalization in order to better cater to the ‘millennial’ generation. It is important for youths to understand that work is a learning experience. While everything on the other side of the fence always looks greener, it is only through persistence and trial and error that they can grow and learn. They need to decide to invest and grow with a company so that the company can also invest and grow with them.

How does Rand-air in South Africa support Atlas Copco’s African operations?

Within South Africa, we have a good network of offices across the country to ensure prompt service delivery times. For instance, we have recently set up a small satellite office in Saldanha to support the developments there.

As part of our parent company, Atlas Copco, we have also supported the establishment of offices in Angola, Kenya and Mozambique. Africa is a very complex continent and it is not always possible to replicate the business model we have here and implement it in a different country. However, we are committed to supporting our South African customers in their operations on the continent, and will send our technicians there and supply from here, if necessary.

I would like to highlight our success stories in Kenya and Tanzania, where we started operations four to five years ago, and we have seen both operations double their revenues in the last few years. This is extremely good news for us. We have built up our operations there on a broader customer base and we are now well-established to capitalize on the imminent oil and gas boom in East Africa.

Do you have a final message?

What we say, we do. We keep our promise, we exceed customers’ expectations, and we are committed to advancing our fleet technologically.

I also believe there are huge opportunities in South Africa. The current environment may be difficult but companies should not let themselves be driven by negative news. We should focus on the opportunities, which will allow South Africa to return to becoming the country in Africa with the best economic growth!

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