BATA SOUTH AFRICA: Bata Steps Out of Lockdown with Strength and Quality

The famous Bata Toughees have been a mainstay for South Africa’s school children for generations. Smart, hard wearing, reliable and made for quality, Bata school shoes come out of KwaZulu-Natal, South African-made from heel to toe. The same goes for Bata Industrials – trusted by hard workers across different industry sectors, these shoes are safe, attractive and affordable. Made in South Africa, the range uses premium materials and South African tanneries. The Bata Industrials range further compliments the powerhouse portfolio that is busy searching out opportunities for growth.

Originally founded in 1894 in the Czech Republic, Bata arrived in South Africa in 1947 and the sturdy brand was immediately popular in an economy based on mining, heavy industry and agriculture. Today, at group level, Bata is the world’s leading shoemaker by volume, and in South Africa the company enjoys strong market share, with 500 people delivering years of industry experience.

MD Michael Wyatt tells Enterprise Africa that, after a need for refocussing during the pandemic, Bata now has Africa at its feet.

“When the pandemic came, unlike a lot of businesses that were involved in fast fashion products or those with seasonal patterns and trends, we went back to basics,” he begins. “We are, at heart, a school shoe and industrial and safety product manufacturer, with a fashion arm for our famous Bata brands. We focussed on our core competencies and, after the pandemic in 2022, we plan to further strengthen our manufacturing or expand it to really look at those lines which saw us through the pandemic for new opportunities.

“We applied for a permit as an essential service provider and were allowed to restart manufacturing. We provided PPE/safety footwear and this was a key in leveraging strategic sales opportunity during the pandemic. We opened our factories with strict Covid protocols and that was key to our success in 2020 compared to our competitors, leaving us in a strong position for 2021. Even with the hardest challenges there are opportunities.”

ONWARDS AND UPWARDS

Wyatt sees the opportunities for Bata in export markets. Africa has long been a key element in the company’s strategy, and strong relationships are already in place across strategic territories. Traditionally reliant on imports from the East, Africa’s footwear industry has a lot to offer but has been priced out of the market.

By teaming with local suppliers and marketing ranges in an effective manner, Bata has created an exciting portfolio for retailers to take to market.

“One of the most interesting areas in our business recently has been our export division,” confirms Wyatt. “A lot of African countries work within various anti-dumping duties or prohibitive importation policies around certain products to protect local industry, so what we’re doing at Bata in South Africa is to build footwear collections using local African suppliers. We then showcase those collections to the rest of the Bata group. We have branches in Zimbabwe, Kenya, Uganda, Zambia etc and we have become a hub for sub-Saharan Africa. We put the collections together, and our retail sister companies from Africa come and view in the showrooms and put in their orders. We then facilitate the whole process from South Africa for export across the SADC region. That is a key project and something that we will focus on more going forward. It all plays back into the idea of being self sufficient in sub-Saharan Africa and South Africa, relying a lot less on imports from China and others.”

Bata is capable of supplying a large chunk of the market, and its footprint in terms of impacting people is significant within the South African manufacturing industry. The company sells around 4.5 million pairs of shoes each year and Wyatt wants this to grow.

“Our goal now is to rebuild the business back to pre-pandemic levels. When the vaccination programme has run through South Africa, we will start to open up and get back to where we were before, and this is largely the target for most businesses locally. So whilst up until now, we’ve focussed on the core aspects in the business, we want to grow the Bata brands and will continue to expand into fashion areas of the market. E-commerce is going to be important going forward. We also want to drive a continued expansion into Africa, working alongside our sister companies in Africa and other new markets where Bata doesn’t have a presence,” he says.

FEET ON THE GROUND

Before the pandemic hit, forcing businesses to close and many retail operations to come to a grinding halt, Bata’s output was climbing. Strong relationships with the country’s merchants – including Pepkor (Ackermans, Pep, Tekkie Town & Shoe City), Massmart (Builders), Mr Price Group, The Foschini Group (Jet), Agrinet, Matus, SPAR and more – Bata was rolling out an expansion programme with market leadership in mind.

“South Africa had a record year in 2019 and equally strong start to 2020 before hard Covid-19 lockdown in March. We developed a strategic Covid mitigation plan early to strength test Bata South Africa resilience to the pandemic long-term to ensure we could see the company through both 2020 and begin to regrow in 2021 which proved successful in H1. We focused primarily on simplifying operations, focusing on our core production competencies and collections whilst mitigating and reducing any cash or stock risk – basically sticking to basics due to ongoing market uncertainties.”

Wyatt had only recently returned to South Africa before the pandemic impact became clear. A South African who had previously emigrated to Australia and then New Zealand before working for Bata in Eastern Europe, Wyatt wanted to get back to SA, knowing the market was immeasurable.

“I moved to Europe to manage Bata’s business retail and e-commerce in the Czech Republic, Slovakia and Poland. The European market is very dense and very populated whereas, as a manufacturing business in South Africa, it can be volatile yet dynamic. There are 60 million people in South Africa alone, and then we have sub-Saharan Africa growing with our export partners.”

Wyatt has a personal ambition to develop the manufacturing industry in the country, which was hammered by the pandemic, falling by 2.1% year-on-year in February 2021. In fact, manufacturing as a whole has declined almost every month in the past 24.

“South Africa has a number of challenges but the main problems is unemployment, and I wanted to bring skills back to the country. My intention was to come back and strengthen our standing as a local manufacturer in the country. I returned at the end of 2019 just before the Covid pandemic began going worldwide. A lot of businesses import, and that is fine, but our drive has been to be a 100% locally made manufacturer in South Africa, for both local and export sales into Africa.

“We have a fairly complicated political landscape and with that comes a lot of emigration to Europe or Australia and New Zealand resulting in a loss of skills, so for South Africans who can come back, who can support the country, and through their efforts grow the economy and create jobs – it’s very important,” he says.

During the early stages of the pandemic, many jobs were shed in manufacturing, while companies were closed. For Bata, the idea of redundancies was a last resort option, and the company managed to keep every single member of staff on payroll.

“That was a strategy from our side and relates back to unemployment in South Africa. Unemployment is above 34% and can be as much as 70% in the youth category so we tried to and come up with as many support structures as possible to avoid laying people off.”

 Employee loyalty is something that few companies can genuinely boast, but when it is achieved, product quality is improved, and industry knowledge drives a healthy business. Wyatt – who has been in the industry for 20 years, across multiple Bata sites in different markets and various roles – truly appreciates the unique knowledge held within the South African workforce and utilises this longevity as a strategic asset.

“There are not too many companies where the average employee has 20-30 years of knowledge with the group,” he smiles. “Additionally, Bata is extremely resilient, after trading for 127 years there are not too many situations that the company does not have learnings and solutions on. Our customers and suppliers find security in this longstanding history, so Bata is a trusted brand globally. Logically, we also realise that nothing is certain forever so we cannot be in any way complacent. There is always a drive to improve, make progress, and move forward to find solutions. Overcoming the recent Covid-19 pandemic and riots in South Africa are examples.”

LACING FOR GROWTH

In Bata’s key product lines of school shoes and industrial wear, the focus continues. In these markets, Bata has a dominant position, and it is not about to take a step back. In other sectors, including new Bata fashion brands, there is no doubt that a quality focussed, local manufacturer could make a big impact – especially one with retail relationships in place all over the country.

Wyatt is clear that developing the sector, creating jobs, and highlighting locally produced goods over cheap imports is the way forward for Bata, and for manufacturing.

“Look at the challenges with international shipping, container costs, ability to get bookings, various lockdowns around the world, availability of finished goods or raw materials price increases – it’s wreaked havoc on those who are solely importers. Our ability to turn on and turn off production, or adjust production accordingly is a fantastic positive that not a lot of businesses have and has allowed us to mitigate and find our way through this pandemic. 

“Previously in our industry there was a heavy reliance on China for imported finished goods. The last two to three years have taught us that having our own manufacturing, and being able to control product in house, is key to overcoming global challenges. In the next three years, we will continue to focus on South Africa and Africa. Re-starting and growing local industry is the only solution to South Africa’s youth/job challenges. This is the primary reason I decided to return from Europe in 2019 and bring learnt skillset back to South Africa.”

Like Bata’s Toughees, its famously strong school shoes, and all the brands within its portfolio, this is a business built to last. The decades behind it provide the perfect base for the opportunities ahead. This is a South African manufacturer, using local materials and local suppliers, working in African markets to play its part in the Bata vision of creating shoes for everyone in the family.

“There are of course exciting new expansion plans in place for the post-covid market. Firstly, it’s about positioning Bata in 2022 to recover to pre-pandemic levels, then it’s about expansion in South Africa and Africa in general,” Wyatt concludes.