In a challenging and competitive environment, it always pays to have a shrewd game plan. That has certainly been the case for Johannesburg-based Temp-U-Air, a business that has successfully expanded its business in the fast-changing world of HVAC.
This family-run business continues to grow at a time when bigger names have gone out of business, so what is the secret to Temp-U-Air’s success? We spoke to Leon Van Rooyen, CFO, who firstly took us back to the company’s formation, nearly 40 years ago:
“The focus of our business is that we do HVAC installations and provide servicing and maintenance for shopping centres, industrial clients and office blocks. We have 3 divisions: contracting, servicing and an electronics and controls division,” he describes.
“The company was started by my father Gert in 1976; he had come out of the HVAC industry and had previously worked as Managing Director for a company called Aeromatic. He started Temp-U-Air in northern Kwa-Zulu Natal and expanded to Durban and then Johannesburg. We eventually moved to Randvaal, Johannesburg, where we are headquartered today,” he continues.
“Sadly my father passed away in 1990 and my younger brother took the business over. I joined 11 years ago to help with the expansion as we adapted our business model. When my father passed away we had 8 employees; today the company has 100 full-time workers and a further 250 sub-contractors.”
Temp-U-Air is the company’s contracting division and was established in 1991. This side of the business specialises in the HVAC industry with its focus in: Data centre cooling; Chilled water installations; Industrial cooling; VRF installations (variable refrigerant flow); Commercial cooling systems; Shopping centre installations; Ventilation; Refrigeration; Maintenance and Domestic cooling.
“We don’t manufacture but we do outsource manufacturing for duct and piping products and we have formed strong relationships with local supply chain,” says van Rooyen. “Up to 90 per cent of the air con products, the bigger parts are imported from Europe or China,” he adds.
Whilst the construction sector in South Africa has faced challenging times, the rise in retail malls in South Africa over the past decade has been good news for Temp-U-Air. It is a trend that van Rooyen says is continuing – and expanding into other areas of Africa.
Currently around 70 per cent of Temp-U-Air’s business is still derived in South Africa, although the company has significantly increased its geographical footprint over the last decade, as van Rooyen explains:
“The main reason for our growth has been that we learned a lot from our father, but that we were also lucky to have a better education that we have been able to apply to the business. We understood the industry well in terms of business plans and we adapted our business model to cater for South Africa.
“We are slightly unique in terms of our employee size but our approach has always been that we maximise our business by worrying about our business and not other people’s and by focussing on what we do well. We have also built good trust and reputation with the mechanical engineers; they trust us and continue to give us work.
“But we also embraced working in Africa much sooner than other companies and that has stood us in good stead,” he continues.
That last point is an important one in understanding how Temp-U-Air’s fortunes have soared and today the business operates across the Continent, as far north as Rwanda and Dar es Salaam, with prospects in Ethiopia and Kenya.
“We started going abroad about 10 years ago and before I joined, I had extensive prior experience of the rest of Africa. We have often worked in collaboration with business partners as they have worked in new territories and we have been able to dovetail with quantity surveyors and electrical engineers.
“We now operate satellite offices which are important given the nature of our work is servicing and maintenance and we have an office in Maputo and one due to open shortly in Luanda, with a further site likely in Botswana. However, most of our employees are based in South Africa, where our growth has been sustained.
“South Africa will still grow and there is lots of scope for more development, particularly around the Johannesburg area. There is a growing population that will need to be serviced, so there will be more shopping centres built.”
At the same time, van Rooyen says that the company has in the past 12 months successfully modified its business model to deliver a greater focus on service:
“We have doubled the service division in the last year – an area that covers facilities management and repair work – and that has seen us double our staff compliment in turn. We typically install a system and then take over the maintenance of the air con units thereafter.
“The big challenge is to find skilled people to join our company and training becomes an important issue. Most of the training is provided by the distributors although we also use a couple of external companies,” he says.
At present most of Temp-U-Air’s work is derived from the private sector, although the company has worked on projects with the Universities of Pretoria and Johannesburg. Within the private sector, there is an increasing demand for greener technology on projects and van Rooyen says that his company has embraced this concept from an early stage:
“We’ve been to lots of training courses and seminars run by the Green Buildings Council and I would say that as a company, we are slightly ahead of our market, although I am sure that the greener concept is going to become more regular.”
Bigger challenges he says, are posed by financing and the need to manage staff effectively when it comes to meeting deadlines and project plans. The company has met these challenges thanks in part to an efficient IT set-up, which van Rooyen says has included employees working on tablets and via remote access for over a decade now.
Van Rooyen suggests that it is not an ideal time to be in the HVAC industry unless you are running a well-managed business, but has high hopes for the coming year:
“Unless you have a seriously good operation it is not the best time to be involved and that is really just down to the economy and financing issues. We have seen 2 big companies go bankrupt in the last year and that is unprecedented.
“However Temp-U-Air continues to grow and we are looking at purchasing premises and ducting manufacturing machines for ourselves. We are currently looking at buying the building next to us and hope to establish this by the end of the year.
“Our main plans for the next 12 months involve expansion into Angola where we see huge potential for growth, and to continue expanding our service division,” he concludes.