OG Safety is engaged in the business of importing and distributing branded industrial products in southern Africa. The company sources from suppliers located in USA, UK, Canada and Australia. We supply various customers mainly in South and Southern Africa, and market +-500 line items either in stock or on an order basis. Our main business is the supply of containment solutions for hazardous and flammable liquids, spill containment, environmental rehabilitation solutions, waste management, and SHE consulting services to industrial customers. Core demand for our product range is relatively stable, being influenced more by ISO standards and SHE requirements than cost. About 50% of our business is derived from the manufacturing and mining sectors, with the balance mainly from printing, automotive and oil/gas industries.
Main distribution range, with ISO 9001 manufacturing certification, has been secured with EAGLE MANUFACTURING (www.eagle-mfg.com/). We look for manufacturers with a global brand presence and a commitment to maintaining market leadership, particularly through technical innovation and international certifications. We seek products which require a “value add” beyond just product availability, such as technical advice or training on installation and usage. Experience has taught us that markets or customers who just demand the lowest price are best left to other distributors with a different business model. Although our markets are highly specific with few if any players, no products we distribute are manufactured locally nor are they likely to be in the foreseeable future unless under licence from our Principals. The lack of a well-developed manufacturing industry capable of competing on a world stage without some form of international certification or local protection and economy of scale inhibit this.
A typical sale is a relatively high value transaction. Having the item in stock is a must but value can be added to the sale in a number of ways including technical application advice and training, preventive maintenance inspections and management of the customer’s procurement cycle. A high quality branded product (with warranties) offering ensures repeat business, allowing us to develop lasting relationships with customers and enabling us to utilise our own and our suppliers’ skills to improve the customer’s productivity levels.
OGS’s business does not require significant investment in property or plant and equipment to operate and the group balance sheet consists mainly of working capital, with inventories being our largest component as product availability is a key competitive advantage.
As we are predominately an importer, prices charged are linked to the Rand exchange rate whilst the overhead cost base grows at the local rate of inflation.
OGS has developed a management style so far that has proven successful over the last year. Concentrating management by putting key decision-making responsibility into the hands of directors/ managers is a key OGS philosophy. Delegating authority and responsibility empowers employees and allows them to respond quickly to customers’ requirements. It instils self-discipline and encourages leadership, initiative and innovation. In return, high standards of performance and accurate and comprehensive reporting are expected as a matter of course.
The group is committed to growing through innovation and close personal interaction with clients. Where we already represent a major world brand, acquiring distribution rights for a competing brand is not feasible. Generally, our only option is to acquire businesses distributing product lines not already in our portfolio but this will be a focus further down the line in our cycle of growth. Consequently, opportunities to acquire distribution rights present themselves only rarely, which means that our acquisition strategy tends to be opportunistic in nature. Investing in our own businesses represents the least risky growth route and a high priority is placed on ensuring that every internal growth opportunity is exploited.