(Photo credit: KHS)


Africa and the Middle East - a growth region for KHS

6:32 min ONE:21RegionsAfrica

If you deal with the Africa and Middle East sales region, you know that you are dealing with opposites and extremes: wealth and poverty, political instability, wars, terrorism, hunger. Serving the market primarily requires flexibility.

Markus Auinger, Executive Vice President Market Zone Middle East / Africa, and Jörg Thomas, Managing Director KHS South Africa give an insight into what it means to adapt to extremes:

What significance does the market zone of Africa and the Middle East hold for KHS?

Auinger: This market zone makes up 15% of KHS’ total sales. The region is the most important market for us as regards PET lines in particular thanks to the strong growth in this segment. Unlike empty cans, PET is readily available throughout the whole of Africa – and PET systems require much less capital than glass lines as the sum of investment is lower. Small and medium-sized startups thus focus on PET, allowing them to generate turnover very quickly. The glass segment is firmly in the hands of our financially strong global key accounts, among them AB InBev, Heineken, Coca-Cola, Diageo, Pepsi and Groupe Castel, that have been present and established in Africa and the Middle East for decades.


How has KHS’ business in Africa and the Middle East developed over the years?

Thomas: KHS enjoys an excellent reputation here for good reason. After all, we were the first engineering company to sell filling systems on this continent. We opened our own branch office in South Africa as early as in 1971. Some machines have been in operation for over 30 years – and are still running round the clock six days a week. On average our installed base is about 17 years old. The machines are serviced by KHS engineers and we can supply the necessary spare parts, regardless of how old the machines are.

Which types of machine are in particular demand in Africa and the Middle East? What kinds of beverage are KHS systems used for?

Thomas: In our market zone we do about 95% of our business in turnkey lines – unlike in sales regions such as the USA where up to 50% is attributable to single machines.

Auinger: While non-alcoholic soft drinks in cans and PET bottles are chiefly consumed in the Middle East, on the African continent returnable glass bottles for carbonated beverages have a long tradition. This is clearly changing: in North Africa and the Middle East, for us we see a rapidly growing market for still water in PET bottles. Combined with the increasing demand for soft drinks in the Sub-Sahara, the PET container segment here now has a market share of about 80%.


How do the requirements of bottlers here differ from those in other regions?

Auinger: Our customers need more advice on project planning and implementation. In Africa and the Middle East we’re seen as a guarantee for the success of the beverage producer. This explains why turnkey lines are procured instead of single machines: with these, the responsibility for the functioning of the technology lies with a single source. Our customers value the stability and high efficiency of our machinery and reward this quality with great loyalty. Our customers also require much more support with the maintenance of their plant technology. In Central and East Africa especially we thus conclude extremely highly devised service level agreements, in which we define a certain level of efficiency for our systems over a period of many years.


Markus Auinger: ''Our customers value the stability and high efficiency of our machinery and reward this quality with great loyalty. Our customers also require much more support with the maintenance of their plant technology.''


Which strategy has KHS adopted in this market zone?

Auinger: In 2013 the decision was made to strengthen our sales regions and build up technical expertise and capacity on a local scale. In the same year we founded our own regional center in Kenya. Since then we’ve been 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, each of which is managed by a regional center (RC). West Africa and the Maghreb states have been supported from Europe to date but here, too, we’re soon to show local presence by setting up a separate branch office for this region.

Thomas: The aim of these regional hubs – apart from sales organization – is to transfer our local service knowledge to the KHS Group’s entire product portfolio. This allows us to provide proximity to the customer and establish a level of expertise in the region which enables local teams to also install and commission our machinery besides just servicing it. Part of our strategy of regionalization is training, this offered not just to our own employees but also to many local customers. We’ve already opened a KHS training center in South Africa to this end. East and Central Africa are to follow, so that by 2022 we’ll have a training structure in place that covers the entire continent.

Auinger: We’ve also set up a uniform SAP system. This not only facilitates administration and controlling but also functions as a platform for communication to coordinate work locally between the various KHS subsidiaries. Because we’ve identified regionalization as the key to our success, our endeavors have by no means stagnated but instead continue to be permanently further developed and optimized.


Jörg Thomas: ''We were the first engineering company to sell filling systems on this continent.''

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