Offering contract manufacturing, blending and packing, and primary and/or secondary packaging of HPC, cosmetics, pharmaceuticals and food products in an array of formats, the company’s mission is to deliver a full range of services, based on cost efficiency, flexibility and the forging of close partnerships, and to expand into new markets in South Africa and beyond.
Says founder and CEO, Amien Patel: ‘We have spent the past three decades building service excellence based on delivering solutions within stipulated turnaround times and reflecting a firm foundation of skills and technical knowledge that match and surpass industry standards.
‘In addition, we’ve formed partnerships with customers by adopting their products as our own, and working with passion and commitment to manufacture and/or package these products to the best of our resources and expertise.’
The past four years have seen the most dramatic transformation in the company’s history with the establishment of Gauteng-based operations in response to the geographical importance of that market. ‘Most of our long-term HPC sector partners are headquartered and have their distribution centres in Gauteng, and the transportation costs from Durban were no longer sustainable,’ comments MD, Riaz Dhai.
‘In 2017, we took a leap of faith and made a significant investment in setting up a 5 000m2 greenfield HPC manufacturing site in Boksburg, equipped with the latest technology and tooling available in South Africa (and probably the rest of the continent) for producing toothpaste, lotions, creams, emulsions, hair care products, and liquid and powder detergents.’
The plant also handles primary packaging and filling of products in a variety of formats: tubes (50 to 500ml), bottles (250ml to 5-litre), jars (50 to 750g), pouches (30ml to 1-litre) and canisters (500g to 1kg).
‘Our experienced in-house team and partner network supports customers by identifying each product’s optimal packaging. We also facilitate new product development, including production trials,’ Riaz explains. ‘With our investments in the latest technology and a fully-equipped laboratory we can undertake 95% of standard HPC testing procedures in-house, and we have a proven new product development track record. In fact, our flexibility and agility allow us to get products to market faster and more efficiently than our multinational partners in their own factories or when they’re importing from Europe, especially when considering lead times and regulatory requirements. This has been successfully demonstrated during the Covid-19 pandemic, where we’ve assisted with turning around and launching changes in product formulations, packaging formats and new product introductions within a very short space of time,’ he adds.
In 2018, the company launched a Renovations Centre as the second phase of its Gauteng expansion project. The centre offers flexible logistics solutions and quick turnaround times for customers requiring reconfiguration of pallet and case stock, and rework on manufactured products that have been produced locally or internationally. Rework typically includes relabelling and date coding of imported products to comply with local regulations and creating secondary packaging that helps customers with special marketing campaigns – for instance, banding of gift packs or 2-for-1 promotions, where different products such as a dishwashing liquid and a laundry bar are banded together.
Sachet believes that the promotional packs market is undercapitalised locally when compared to international trends, where these packs play an important role in driving retail sales. ‘Prior to Covid-19, we witnessed growth and increased customer interest, but now demand patterns have changed and the market is a bit unsettled,’ reports Andy Budree, head of supply chain. ‘But we expect a big upswing in 2-for-1 deals in the future as they represent better value for money for cash-strapped consumers.’
ACCORDING TO Gauteng GM, Salim Suffla, the most remarkable part of Sachet Manufacturers’ three-phase Gauteng greenfield project has been building the 150-strong team from scratch.
A significant number of these employees had little or no experience and had to be trained from scratch to make the project sustainable. ‘They were committed to learning on the job and recruited in batches as we built capacity line by line. It took around six months to get a sound base in place, and we’ve continued building on that,’ Salim explains.
According to MD, Riaz Dhai, South Africa is blessed with some awesome skills across many industries. ‘We tapped into the exceptional skills base that has been created over the past 50 years, as well as our 30-year historical pool of business partners, associates and consultants who have moved around the sector’s value chain,’ he reports.
‘Managers were attracted by the company’s culture of entrepreneurship – where people who are looking for challenges to apply their skills and experience to make changes within the organisation – are given the opportunity and flexibility to run with decisions and get projects off the ground,’ he continues. ‘It’s relatively quick and easy for them to get approval for ideas because, unlike most corporate environments, key decision-makers are involved in the business on a day-to-day basis,’ he states.
Reflecting on his journey of spearheading the setting up of the Boksburg HPC manufacturing plant from A to Z and then donning the MD mantle, Riaz comments: ‘Nothing is impossible when you set your mind to it, and everyone works together. The project was initially daunting because I have a financial rather than technical background, but I soon realised that I don’t need to be an expert in every field because we’ve assembled the right team with the necessary skills to achieve our objectives. I also enjoy the operational side of the business and have learnt a lot from founder and CEO, Amien Patel, who has been very operations-focused during the past five years. He can now spend most of his time concentrating on business strategy and growth.’
Rationalisation and future prospects
Earlier this month, the final phase of the Gauteng project went live at a third facility established to help the company rationalise and streamline operationally as it expands different line offerings.
Once Sachet Manufacturers has stabilised and rationalised its Gauteng-based HPC operations, the company plans to increase its footprint vertically and horizontally by examining ways in which it can ensure even greater customer supply chain agility and flexibility.
‘We have successfully implemented the global third party logistics provider model of forming long-term partnerships with customers so they can reap the benefits of outsourced manufacturing functions. Now that the local industry is changing from a supplier to partnership-based approach and looking to outsource even more production, we can strengthen our supply chain by increasing current storage and warehousing capabilities, reviewing how ingredients are supplied into the business, and exploring other longer-term possibilities such as partnering with packaging converting facilities. The latter would improve our flexibility in providing customers with a one-stop shop service,’ Riaz reveals.
Other opportunities to be exploited include expanding and servicing post-Covid-19 export market needs. As Riaz points out, the current exchange rate makes it more attractive for overseas companies to import certain products manufactured to globally-recognised quality standards. ‘Our commitment to producing multinational standard products for a variety of retail environments starts with extensive water treatment for in-plant use, Good Manufacturing Principles and processes to meet ISO 22716:2017 certification standards, as well as significant investments in traceability and inventory management,’ he emphasises. ‘Undergoing various quality, safety, health, and compliance audits assures retailers and brand owners that we meet and exceed international quality requirements. Furthermore, the ongoing ability to sustain and improve on excellent service levels as a contract manufacturer and packer for over 30 years gives Sachet Manufacturers a distinct competitive advantage in South Africa.’
And are there opportunities for launching operations in the rest of the continent?
Riaz concedes that although a few possibilities have been investigated in Kenya, Ethiopia and Nigeria, it’s quite difficult for a small family-owned business to successfully launch such ventures. To receive the green light would require a very cautious approach and the right partners.
Covid-19’s impact on pack format trends
Covid-19 has forced some multinationals, which have traditionally been very comfortable with overseas supply chain agreements, to find local manufacturing capabilities to mitigate high import costs and 12-16 week lead times that have resulted in a loss of first-mover advantage in the retail environment.
Andy Budree, expects further disruptions in the shipping of equipment and raw materials to South Africa for the next few months because ports have to be closed and ships quarantined plus crew rotated when anyone tests positive for Covid-19. He commends packaging suppliers for offering great levels of support and service during the lockdown period.
Now that consumers are under even more economic pressure, Sachet Manufacturers anticipates a resurgence in demand for promotional and bulk packs that provide greater value for money. Primary trends in household products are shifts from smaller individual packs of under 500ml to larger one- and three-litre (sometimes even five-litre) sizes that represent better value for money, and refill pouches. However, Andy concedes, the lower end of the market still depends on sachets and unit packs of less than 500g for affordability.
In terms of personal care products, Sachet Manufacturers has witnessed an increase in demand for detergents and washes. As the distribution chain to rural and cross-border areas keeps improving, an increase in demand for ethnic-based products to these markets is expected.
The company’s equipment has been specified with built-in flexibility to accommodate such changing format trends.
‘The challenge is to find and capitalise on opportunities in adversity, especially because the economy has taken a huge beating. Although most print service providers, packaging converters and contract packers have been more fortunate than other sectors, negative effects will continue to be felt during the next six months,’ Andy states.