Markus Auinger (MA): This market zone makes up 15% of KHS’s total sales and is the most important market for PET lines. Unlike empty cans, PET is readily available throughout Africa – and PET systems require much less capital investment than glass lines. Small and medium-sized start-ups thus focus on PET, allowing them to generate turnover quickly.
Jörg Thomas (JT): KHS enjoys an excellent reputation thanks to its track record as the first engineering company selling filling systems on the continent. We opened a South African branch in 1971, and some machines that have been in operation for over 30 years are still running round the clock six days a week. The average installed base is 17 years old – KHS engineers service these machines and supply the necessary spare parts.
MA: This market zone represents a dichotomy, as it includes some of the richest and poorest countries in the world. In addition to the significant economic divide, there are many underlying problems such as incalculable climatic, economic and political risks; import restrictions; sugar taxes; famine; wars; and terrorism. These challenges require constant adaptation to changing situations, new ideas, and excellent accessibility to customers at a local level to ensure that they receive the support they need at all times.
MA: Systems and solutions are now installed in every country within this sales region and looked after by KHS engineers. Although we’re successful in countries with branch offices, we also have good business relations with customers in Cameroon, Tanzania, Mozambique, and other countries with a turbulent history.
Overall market growth in the region isn’t as strong as you might imagine because countries that are booming are juxtaposed by nations suffering setbacks following positive developments. Angola is a prime example – the market has been quiet for the past four years, following several large investments.
MA: Although returnable glass bottles for carbonated beverages have a long tradition on the continent, the PET container segment now has a market share of around 80% in Sub-Saharan Africa. There is also a rapidly growing market for still water in PET bottles in North Africa.
JT: About 95% of business in our market zone is in turnkey lines. This differs from sales regions such as the US, where up to 50% is attributable to single machines. Developing nation customers require more project planning and implementation advice and greater support with plant technology maintenance. In Central and East Africa, we conclude extensive service level agreements, defining certain system efficiency levels over a specified period.
MA: In 2013, KHS decided to strengthen sales regions, establish a regional centre in Kenya, and build up technical expertise and capacity on a local scale. We are continuously checking where branch offices or service hubs would be prudent in line with our market development and then establishing them.
In 2016, we split the market zone into six clusters managed by regional centres. Although West Africa and the Maghreb states are currently supported from Europe, we plan to set up a branch office for this region soon.
JT: Apart from sales organisation, regional hubs aim to transfer knowledge of the Group’s entire product portfolio to over 250 local service specialists. The benefits are customer proximity and empowering local teams to install, commission and service the machinery. Because training forms such an important part of KHS’s regionalisation strategy for employees and local customers, the company has opened a training centre in South Africa, with East and Central Africa to follow. The goal is to have a training structure in place that covers the entire continent by 2022.
JT: In Africa, people are used to working with returnable glass bottles. More action is needed in the fast-growing PET segment, where it’s often not possible to set up a closed-loop system. Big customers tend to practice sustainability only if costs remain neutral, so in many countries, political pressure is required to expand the implementation of environmental initiatives. There are, however, several positive examples, including plastic bag bans in several countries and a PET bottle recycling rate of over 70% in South Africa, with much of the recycled material going to the clothing industry.
MA: The pandemic has hit hard with key global accounts suspending their investments for the time being, and more regional private customers continuing to invest.
Local technical teams have helped KHS overcome travel restriction challenges. For instance, service engineers in Nigeria have installed complex machinery and passed acceptance tests without outside help. KHS’s remote support unit has assisted customers in Mozambique to complete commissioning processes.
