Eureka's Positive Outlook On The Economy (May 2008)

Johannes van Rensburg, national sales manager from Eureka, looks at South Africa’s current economic climate (May 2008), however, he does not complain about our situation, but rather focuses on the opportunities. Johann Gerber (DIY Trade News) reports.

It is a dismal May morning in Johannesburg, rain all over town, something uncommon in these parts of South Africa. I arrive at Eureka’s premises to interview Johannes van Rensburg, the company’s national sales manager and a shareholder in Eureka.
Johannes is as bubbly as ever and his positive attitude fills the room with an excitement South Africa has long forgotten. We are troubled by rolling blackouts, high interest rates, xenophobia and high fuel costs, all of which does not concern Johannes too much. “We have had an excellent first quarter,” he says.

This is interesting as most companies have been battling to show growth. “We have given retailers purchasing from our competitors facts as to why Eureka would be better for their business, and the result is that many have decided to rather stock Eureka,” he explains.
This drive has led to hundreds of enquiries as to how retailers can get their hands on Eureka products. “I hopethis trend will continue,” he says. Wait, I have to let him know that South Africa is facing some major problems over the next 24 months:
Steel prices are up.
Delivery costs are up.
Aluminium is more expensive.
Brass is more expensive.
Petrol has sky-rocketed by 70%.
Interest rates are sitting at a prime lending rate of 15% – the highest it has been in years.
It is then that he smiles at me and explains South Africa’s current economic climate as follows: “We are part of a cross-country race, however, our competitors are breathing down our neck and no matter what we do, we cannot shake them. But, there is a very steep hill ahead and only those geared properly will be able to climb this hill. This is our competitive advantage. The strength of your business will come through in this climb, but one needs to be prepared for the challenge, and afterwards, the company will be better equipped to deal with other challenges which may arise.”

Van Rensburg explains that the road to 2010 is still positive and that there are many good situations about to arise out of the current economic demise. “I’ve identified a pattern with countries hosting major sporting events. After each major sporting event, that country has been better off. Why? Infrastructure gets a major boost, international retailers enter the country and, looking specifically at 2010, South Africa is going to benefit from a major broadband network to make the broadcasting of High Definition (HD) signal possible.”
So, South Africa is just experiencing some growing pains? “Correct. Why are we struggling with rolling blackouts? Why is there traffic congestion on certain highways? Why do our roads have potholes? They are being tested, and then being improved,” he explains.

Van Rensburg is excited about current developments in South Africa and believes that after 2010, the country will have an infrastructure better than any other country in Africa. “After the Sydney Olympics, business, property prices and tourism continued to increase for two years,” he explains.
Tourism makes up roughly 8% of South Africa’s GDP and has an indirect impact on the DIY market. “The better our tourism industry, the better for the DIY industry,” says van Rensburg, adding, “The situation is playing straight into our hands.”

Every bed and breakfast, hotel or resort does maintenance. Most of them will be doing improvements to their facilities to ensure visitors return for another visit to South Africa. The maintenance and upgrades require DIY products and as a result stimulate the DIY-sector’s growth. “Unlike Europe and the United States, South Africa’s economy is still growing. We continue to move in the right direction. Maybe at a slower pace, but it is moving,” he says.
If one compares the current situation with 50 years ago we are facing different challenges, but the bigger picture is definitely better. “We are experiencing growing pains, but at least we continue to grow,” he says.
In conclusion, we need to get rid of the doomsayers and stop complaining about our current situation. Rather become part of the solution. “If every business tackles one aspect of a problem in the country, it will be solved much easier,” he concludes.