Lumotech Strengthens Market Position by Diversification and Natural Geography...
Lumotech South Africa, supplier of automotive products to global car giants Volkswagen, Toyota and Ford motors, is once again preparing for a growth phase after seeing revenue rise 100 percent in the last three years.
The company’s products within the automotive range include headlights, taillights, spotlights, signal lights and specialised plastic injection mouldings and Lumotech is currently the only manufacturer of headlights and taillights for the automotive industry in the whole of South Africa.
Based in Uitenhage, Eastern Cape, the Lumotech firm commenced operations in 1957 and has been wholly owned by parent company Metair Investments since 1993. It currently supplies three of the seven motor manufacturers in South Africa for the original equipment market.
Managing Director Wolfgang Ropertz said: “Automotive lighting is the major portion of our business. Then we have the commercial side where we develop our own low-energy streetlights, and we have won some tenders on that locally; we export too. We also have warehouse lighting under the Envirolight brand, so we are really developing our commercial side.”
Being the only indigenous manufacturer of headlights and taillights for the local motor manufacturers is a definite advantage because it means that the lights can be tuned to the body that is being built locally by the motor manufacturers within South Africa, instead of imports being designed that may differ slightly in body structure tolerances. It is therefore a relationship that is mutually beneficial.
Ropertz explained: “If the light is imported it would be built to suit those tolerances but it may not be the ideal build for the local body.
"That is one of our big selling points because we can assist the local motor manufacturers to tune the lights to exactly their specifications and tolerances within the body work.”
Another benefit is the elimination of risk in the supply chain, and the obvious reduction of transportation cost when manufacturing locally. Lumotech prides itself on being highly skilled in injection moulding techniques, and as the lighting for original equipment customers is a visible item that needs to be aesthetically pleasing, the firm has been developing its name as a brand that can be relied upon.
As well as being a major supplier in the original equipment market (OEM), to the likes of VW, Toyota and Ford, Lumotech also sells small spot lights through a technical aid agreement with Hella Germany into the aftermarket for replacements.
Another major strategic focus is on the commercial range of products which includes energy-efficient streetlights and warehouse lights marketed under the Envirolight brand. Its LED and CFL street lighting has seen some pleasing initial success, but the product Lumotech has in production is currently classified for B-class, suburban roads.
Andrew Meikle, Director at Lumotech, said: “Therefore we have actually finalised the design of an energy-efficient streetlight for the main roads and motorways which will increase our product portfolio and obviously give us the opportunity to compete in more projects.
“Continuous improvement is part of our philosophy, so we are always working to try and improve our productivity. We have to become more competitive, that’s always the drive for us. Going forward, we are working to localise some existing products. We have a number of projects in the pipeline.”
The Lumotech strategy is to grow as a supplier while simultaneously increasing its product spectrum in the non-automotive commercial side, so with the development of new products and widening of the range, the strength of the business increases as a result of increasing the scope.
Currently Lumotech has 410 employees; in recent times this has fluctuated because of volume changes and some projects have come to an end but now the firm will be growing again as it goes into the next phase of development.
Ropertz said: “We will be increasing our staff; it all depends on our manufacturing volume and what’s going on with the motor plants, and our core structure is in line with that. But because we are introducing new technologies as well, we will be employing more.
“The majority of our suppliers are from overseas from Japan, Thailand, Singapore, China all over Europe and also some from the USA, mainly because most of the material we use is quite specific and it is a very technical raw material. Obviously we have local suppliers too and things like lenses for tail lights, we will be localising in the future.”
Since 2008 Lumotech’s capital expenditure has been in the region of R100m. It has invested substantially in new equipment; mainly injection moulding machines and metalising machines. The growth strategy is to get more work from the remaining four motor manufacturers in South Africa. It has already targeted two and is fine-tuning cost to tool up.
“We have a five year strategic plan in place to get the business for the models of what we are producing, wherever a production cycle is coming to an end and the model is running out.
“We must also get the business to lead to one new model, headlights and taillights while increasing our non-automotive business. Potentially, we could see our turnover increase by 25 percent,” concluded Ropertz.