Looks to the future and expresses confidence in South Africa, while at the same time conveying the importance with which it regards the local market and customers.
Bystronic Laser AG, a Switzerland-based company that develops and sells systems for processing sheet metal, has announced that it has opened a fully fledged subsidiary in South Africa, thus demonstrating its confidence in the local market while also looking to the future.
“Sales of the Bystronic products in South Africa have risen dramatically over the last few years, particularly over the last three years, and if we look forward at the potential over the next few years, taking into account the market information we have on hand, we believe the trend is going to continue notwithstanding some trying economic times,” explained First Cut’s current Managing Director Andrew Poole.
“The consequence of that is that the programme has become so substantial that the size and the scale of it makes a significant impact on First Cut’s business from a funding standpoint, as well as changing the culture and dynamic of the business to such an extent that we had to make some decisions. But primarily, it became apparent to myself and fellow directors at First Cut, that the funding of this potential growth and programme going forward, would put the company into a stressful situation,” continued Poole.
Andrew Poole and Philipp Burgener
“When you consider that we as First Cut have more than doubled Bystronic’s footprint in South Africa over the last three years, it puts it into perspective the size of the financial situation we have been dealing with and this is scheduled to get even bigger,” said Poole.
“We firmly believe that this strong growth is a direct result of Bystronic being one of the first to offer a fiber laser cutting product that, from a technology perspective, was ahead of the rest. They were the first to offer a 6kW fiber laser and subsequently followed it up with the 10kw and the 12kw machines. As IPG’s biggest customer worldwide they have been at the cutting edge of not only Bystronic technology but also IPG technology. These factors allowed us to drive sales as fast as we did,” commented Poole.
Transition from CO2 to fiber
“The transition from CO2 to fiber was significant and encompassing, allowing Bystronic to be at the forefront of the technology, to the point now that Bystronic no longer manufactures any CO2 machines,” explained Philipp Burgener, Managing Director of Bystronic Sales AG and responsible for the new entity, which will be known as Bystronic South Africa.
“The significance of this technology implementation at Bystronic is that, despite operating in a market that has contracted in South Africa, it has allowed First Cut to gain the majority share of first time entrants into the market and to make Bystronic equipment their brand of choice. Secondly, it has also allowed them to convince and convert existing laser machine users from another brand to the Bystronic brand when they have expanded on their existing capital equipment purchases, and as a result they have had a very high conversion ratio,” continued Burgener.
“If you look at those two reasons, we believe the same trend will continue in the South African market over the next three years,” commented Burgener.
“First Cut has always had an open and transparent relationship with Bystronic and I explained our concerns and the situation to senior management at Bystronic in Switzerland. Their response was very interesting in that they said they had been watching their South African market grow and it had become apparent to them that, even in their terms, the South African market was substantial enough to warrant a direct and significant investment into the country,” explained Poole.
“Officially the subsidiary has been active since 1 April 2019 and in a few months Bystronic South Africa will operate as a full subsidiary in its own home here in Johannesburg. There will be a movement of 30 staff from First Cut to the new company and these include management, sales, software, marketing, service and administration. During the transition these staff will continue to operate from the First Cut offices and Andrew will continue as the Managing Director until someone is appointed. This is to ensure that there is a smooth handing over and that there is no disruption to customers businesses during this period,” explained Burgener.
“Additionally, our senior staff will be made up of people that have extensive knowledge of our products. This includes Gareth Jackson, Maurice Zermatten and Hannes Pretorius on the sales side, Steve van Wyk on the administration side, Chris van Aswegen as the Service Manager and Joanne Canossa for marketing and public relations,” continued Burgener.
Win-win for customers
“Bystronic have made a significant investment in the South African market and it demonstrates our confidence in South Africa while at the same time conveying the importance with which the company regards the local market and customers,” said Burgener.
“With this direct investment there are numerous advantages that will be directly beneficial for customers as compared to the agent and OEM relationship that has existed in the past. Noticeable changes going forward will be in the area of communication, whereby an agent has to follow a certain protocol in terms of problem identification and problem solving. This can be frustrating and time consuming. In the environment of a direct subsidiary this protocol now falls away and will allow access to information a whole lot quicker,” said Poole.
“The second win for customers will be the access to spare parts, particularly when it comes to big ticket items. There will always be accessibility, logistical and warranty problems for agents, which ultimately lead to extra costs, downtime and frustrations for customers. Again, the direct subsidiary situation will eliminate all these problems and allow customers to have access to a wider range of spares in a much shorter period,” continued Poole.
Going forward with First Cut
“Although First Cut will be losing some critical and key staff, who will now be employed by Bystronic South Africa, we will continue representing our other internationally recognised OEM manufacturers such as Messer Cutting Systems, BLM, Voortman, Timesavers and Everising. These global manufacturers cover areas such as plasma, oxyfuel, and large-plate processing equipment, tube and pipe manipulation machines, automated structural steel processing machines, surface treatment and mid to large size band saws and circular saws,” explained Poole.
“Bystronic Laser AG specialises in manufacturing high technology sheet metalworking machinery, notably flat-bed laser cutting machines, tube laser cutting machines, material storage automation and pressbrakes. So, there will be no conflict of interest for the two companies going forward,” said Poole.
“Additionally, First Cut will continue to strengthen its consumables division, which the company was founded on. We employ close to 250 staff in the rest of the company and have a solid base of manufacturing and distribution of hack saws, band saws, bow saws, butcher saws and various hand tools, that we supply,” continued Poole.
“A new dimension that has been added to the business recently is the manufacture of welding electrodes. This complements our representation of Messer Cutting Systems as they will be manufactured under license to Messer and the electrodes will be branded with the Messer name.”
“From our perspective there are a number of international companies that are deserting South Africa. What Bystronic have done is the exact opposite. They have taken a view of the South African market and made a substantial investment into the country. This is a strong indication of how they want to treat their customers, and potential customers, in the future. They, the customers, should have the confidence that Bystronic regards the local market as important to them,” Poole concluded.
For more information contact Gareth Jackson on 083 288 1111 or email firstname.lastname@example.org