Exploring Macsteel’s presence in the heartland of South Africa: In conversation with Kobus Stoop and Mike Benfield

The primary industry served by VRN Klerksdorp is mining, particularly in the KOSH area (Klerksdorp, Orkney, Stilfontein and Hartbeesfontein). The branch also serves the transport industry, providing merchant and value-added materials for the construction of heavy-duty trailers and side tippers to customers as far off as Bloemfontein. Additionally, they supply materials to cement factories in Lichtenburg and Mafikeng and are active in the earth-moving industry, especially in the yellow goods market.

"Value-adding is our core business," Stoop emphasises. "At least 70% of our operations involve value-adding, while the remaining 30% consists of merchant sales, primarily in stainless steel and Q&T for customers who handle their own value-adding." VRN Klerksdorp also functions as a sales outlet for Macsteel Special Steels, ensuring a broad product offering and maintaining adequate stock levels for prompt delivery and excellent service to the customer.

Geographical Challenges and Advantages

Klerksdorp's location, approximately two hours from Johannesburg, presents unique logistical challenges. "We are remote, so we need to carry more stock," Stoop explains. "The area we serve is extensive, covering places like Bloemfontein, Makwassie, and Schweizer-Reneke. Transport can be a challenge, especially since no other company in the immediate vicinity offers the same services."

Despite these challenges, being centrally located within their trading area provides a strategic advantage in terms of transport costs compared to suppliers from the Gauteng region. However, the proximity to Gauteng also brings competition, particularly in areas like Potchefstroom, where rivals can easily penetrate the market during slow periods.

Mike Benfield, CEO of Macsteel Service Centres South Africa, makes the point that the central warehouse, based in Johannesburg, has always been a contributor to VRN's success. “They hold stock centrally to serve the entire group, which eliminates the need to duplicate stock. To offer the customer the best service possible, we need to constantly focus on our planning and make realistic promises to our customers, enabling us to keep our word."

Evolution of business since 1998

The direct supply to mines in the area has dwindled to less than 10% of VRN Klerksdorp’s annual tonnage. Instead, the branch's core business has shifted to supporting the engineering sector, which undertakes expansion projects, maintenance, and new builds for mining houses, often in regions beyond their immediate trading area, including Rustenburg, Mpumalanga, Lesotho, and sub-Saharan Africa.

Stoop says: “The mining industry’s operational strategies have evolved, reducing their on-site labour and increasingly relying on contractors for maintenance. We supply value-added services to local manufacturers who then assemble and deliver to mines, regardless of location.” This strategy not only broadens their market reach but also ensures they remain a crucial link in the supply chain.

VRN Klerksdorp serves a wide range of customers, from small farmers to large fabricators. "Our customer base is very diverse," Kobus notes. "We support everyone, regardless of project size. If we lack capacity locally, we leverage the capabilities of other branches within the group, ensuring we can handle any project." This collaborative approach ensures consistent service quality across the board.

Standing out from the competition

To differentiate themselves from the competition, VRN Klerksdorp focuses on superior service delivery. They offer a range of cutting processes, including plasma, oxy-fuel, and laser cutting, alongside rolling, bending, and CNC drilling. However, their true differentiation lies in their commitment to customer-centric service and building long-term relationships.

VRN Klerksdorp is only one example of many dynamic Macsteel branches in South Africa. Despite their challenges, VRN Klerksdorp remains a vital player by adapting to industry changes, leveraging a diverse customer base, and prioritising exceptional service. Their commitment to continuous improvement and technological advancement ensures they remain leaders in the market, fostering long-term relationships and sustainable growth.