The environmental issue continues to impact a vast array of industries. Within the paint industry, the effects are two-fold, impacting both production processes and the composition of the paint itself. Whilst the name Cedar Paint may be relatively new to the market, the company has a rich and colourful history, giving it ample experience to cope with the current changes.
“Cedar Paint is a manufacturer of decorative coatings as well as a range of eco-friendly products for the mining, agricultural and industrial sectors,” states Eben Van Zyl, Managing Director.
“It is important to note that we are non-automotive, given our parent company’s expertise in that area,” he continues.
That parent company is Argent Industrial, who purchased the operation five years ago and has since embarked on a major drive to promote Cedar Paint and to streamline the business.
“Our history is the culmination of three brands: Vadek, Albestra and Cedar Radex. Since 1961 these three companies have merged and then changed ownership several times. By the end of the last century the company was struggling, having not been marketed very much, but in the early 2000s the business was rescued by Roy Fouche and then sold on to Argent in 2008.
“We started shaking the cage and began to streamline a number of key processes including procurement, manufacturing, logistics, warehousing and marketing – the brand had become almost completely dormant for two decades,” Van Zyl recalls.
In fact, the acquisition of Cedar Paint was not top of Argent’s priorities at the time of the purchase as he explains:
“Argent were actually acquiring a company called Paint and Ladders, which was involved in aluminium ladders and scaffolding – they just happened to own Cedar Paint so we actually inherited the business as part of the deal! Although it was not a key part of the transaction in 2008, we certainly saw a rough diamond.”
Polishing that rough diamond in what Van Zyl describes as a depressed market, is a big commercial and operational challenge. Originally based in Germiston, Johannesburg, the company has relocated to its present headquarters in Silverton, Pretoria and also runs a manufacturing plant in Durban and a smaller facility in Cape Town.
Despite the economic downturn, having a diverse customer base is paying off for Cedar Paint and its growth can be measured by the fact staff numbers are around 208, having been roughly 120 when Argent first took on the business.
“The business has – and continues to grow rapidly and that is primarily down to focusing on paint and increasing our volumes,” Van Zyl reflects.
An ever-growing customer base is of course also helping to build the double digit growth that Cedar Paint has enjoyed in recent times and that is built around a number of key sectors: at present the decorative market accounts for roughly 40 per cent of business, with clients including Pick N Pay and the Essential Hardware Group – Van Zyl suggests that selling direct to the consumer is the main focus at present as it is perceived to be the easiest way to increase volumes.
The mining sector accounts for approximately 30 per cent of business and the company provides specialist solutions to the large mining houses operating in South Africa and neighbouring countries.
Similarly the company manufactures solutions for the agricultural and industrial sectors, predominately serving large clients.
In total Cedar Paint manufactures over 1,000 different products, with pot sizes typically ranging from half a litre to 20 litres, although some of the mining products come in 200 litre drums and the company also produces a range of 1,000 litre drums called slow-bins, which are used for spraying.
The key challenge with so many sku’s in the present economy is speed to market, with many retailers keeping stock levels to a minimum, meaning they have to replenish stock more regularly. That in turn puts pressure on Cedar Paint to maintain sufficient stock and distribute quickly, something that has greatly improved since 2008:
“We began by centralising our buying office – previously the three sites had ordered their own stock and were often using different stockists. By centralising we get the best possible deal on supplies and the best products – and we can also carry out Quality Control (QC) testing from one centralised location. This has also enabled us to strengthen relationships with our key suppliers.
“Some chemicals we have to import and we also took the decision to do this ourselves rather than relying on third parties – that way we can keep some level of control on our margins.
“The third element is distribution itself and we work closely with the larger Argent Group, which has over 350 trucks around the country. I have access to trucks at any time on the major routes and the synergy within the group means we are able to get deliveries to our customers when they need them.”
QC is an absolutely essential aspect of Cedar Paint’s operations – and that has become more apparent with the trends – both legislatively and commercially, towards eco-friendly processes and products.
“We have invested a lot in QC processes and in the ongoing, in-house training of our staff; we have a handful of folk with incredible knowledge who are able to train the youngsters,” Van Zyl says.
He explains that whilst the factories are automated, the machinery in place is dedicated more to QC than manufacturing processes and the company are proud members of the South African Paint Manufacturers (SAPMA) and the Aerosol Manufacturers’ Association (AMA) as well as ISO2008-accredited.
“The local Fire Chief visits us a couple of times each year and we have to maintain high safety standards for our workforce,” Van Zyl explains. “We also have to be mindful of the environmental impact of our manufacturing and we have tried to take the ethical route when it comes to recycling and responsibly disposing of waste.
“With the environmental legislation and new processes within the industry all the time, keeping up to date is a day to day process and our people have to evolve.”
The seasonal nature of DIY dictates that November and December, along with June through to August as traditionally the busiest times of the year for Cedar Paint. That presents a number of challenges, not least of which is the ability to accurately forecast demand:
“That is partly due to the historic data we have,” Van Zyl admits, “we use a programme called Sysspro for forecasting but the historical data reflects the bad days when sales were much lower, so we have to impart an element of guesswork on an almost daily basis now that we are growing,” he adds.”
Forecasting of another kind has helped to establish Cedar Paint as a provider of eco-friendly products:
“Our R&D department is based in Silverton and between 3 and 5 per cent of our annual turnover is reinvested into this facility. Our team investigate the ethical manufacturing shift – particularly now that the industrial sector is using water-based products.
“There are also ongoing technical changes and existing formulations are constantly changing and need regular testing – it is crucial that we stay in touch with the current markets.
“New products from R&D also give us a competitive edge when it comes to marketing and we have to innovate; we were the first South African company to market water-based bonding liquids which are environmentally better.”
Water-based solutions certainly appear to be de rigeur at present while Cedar Paint is aiming to gain ISO 14001 accreditation eventually and can already boast a product range 100 per cent free of lead.
Cedar Paint has very much been hauled up by the laces in the last 5 years and whilst Van Zyl says there is much more to accomplish (eventually he anticipates the decorative retail side will generate 60 per cent of business), he is happy with the direction the business is now steered towards:
“Our next big project is to upgrade our raw material warehousing and testing facility in Silverton over the next 12 months. Argent has committed to investing between 5 and 7 million rand and we will be demolishing the existing facility and constructing a new building where we can safely store flammable raw materials and install new QC machinery. This will enlarge out raw material capacity and further enhance our QC facility.”
After many years in relative obscurity, Cedar Paint now has a lot to be excited about.