CJP CHEMICALS: New Recipe for Growth

South Africa’s manufacturing industry has faced years of decline, stretching back way before the onset of the Covid-19 pandemic. For the best part of the last decade, manufacturers have struggled to keep up with demand has created an opportunity for importers to fill market demand at competitive prices. Locally, the economy continues to struggle to create sustainable manufacturing jobs despite the best efforts of business and government.

In January, Stats SA announced that manufacturing as a whole shrunk by 0.7% year-on-year to November 2021, with sub-sectors ranging widely in their contribution. Power supply constraints, supply chain constraints and rising input costs resulting from the pandemic continue to stunt the manufacturing industry’s growth ambitions. But there are companies that able to navigate this tough environment and buck the trend.

South Africa’s manufacturing value chains are vital and those contributing know their reliable and robust offerings are significant in the country’s wider economic picture.

CJP Chemicals, part of the Bud Group of Companies, is South Africa’s leading stockist and supplier of raw materials and ingredients for multiple industry sectors. This business has had to adjust to the ‘new normal’ and prepare for continued disruption across its importation operation, but continues to deliver for its clients, bringing products that are in high demand so the country’s manufacturing sector can work.

PHENOMENAL LEARNING ENVIRONMENT

Whether food and beverage, industrial, pharmaceutical, personal care or more in a long list of sectors, CJP Chemicals is part of the manufacturing value chain that keeps South Africa moving.

At the end of 2019, a new Managing Director was onboarded to steady the CJP ship amidst challenging economic conditions. But, for Karabo Radebe – an experienced business leader – the challenge was about to get much more difficult.

“My tenure was accelerated and compounded,” he smiles. “While only 27 months in, it feels like a lot longer given what we had to navigate. It was the most phenomenal learning environment which exposed strengths and weaknesses, and offered areas of focus in the business. It has provided a very good base for us to move forward as a business. Everyone has had to introspect and thoroughly understand what it is they bring to the market and how they can sustain themselves in this volatile, ever-changing environment.”

With consumers increasingly under pressure, many businesses temporarily closed, and investment and capital projects placed on hold, demand was squeezed and the company had to adjust quickly to take advantage of limited opportunities.

Thankfully, more than 30 years in South Africa, almost 200 permanent employees, a strong presence across the country, experience in sub-Saharan Africa, and an enviable product range resulted in CJP Chemicals achieving relative success through extraordinary circumstances.

“Our whole business is the importation of products and that is where the impact of the pandemic was most acutely felt – in supply chains,” asserts Radebe. “Be it an imbalance in shipping container availability, ports operating at limited capacity, if at all – both in source countries and in South Africa – it was a function of adapting to circumstances with rising commodity prices, rising shipping rates, unknown and unreliable commitment on timing. It was about whether we could adapt and communicate to our markets while securing stock from our suppliers.”

BEST-IN-CLASS

As a best-in-class supplier, covering every FMCG category – with relationships across 26 international principals – CJP Chemicals strategy was to be open, transparent, and clear with clients about exactly what could be achieved.

“The biggest thing is levels of communication, and being agile and able to turnaround and respond to information we receive to provide as much certainty as we can in a very uncertain environment,” says Radebe.

Working hand-in-hand with suppliers, the flow of product continued through 2020 and 2021 and the company has now moved approximately 200,000 tonnes in the past three years. 

“Last year was very difficult,” admits Radebe. “South Africa went through hard lockdown restrictions which impacted the markets which we serve. There was less demand and less buying power; certain industries were completely closed for months – that was a very difficult period for us. In retrospect, the government appreciates that we cannot go through that extent of lockdown. We are still subject to the volatility that we are seeing globally, but, with regards to our customers, we are focussing on increased levels of communication so that they can understand where we are and make decisions with added certainty. We are carrying higher levels of stock than we normally would so that we can give certainty on price, availability, and volumes. It’s also about working closely with our suppliers to ensure shipments are loaded on ships and we have availability of stock.”

CJP Chemical’s experience is vast and the company calls on years of practice dealing with clients of different size and scale. Its ability to supply products to solve bespoke and unique problems make it the partner of choice for many, and almost an extension of client’s business by delivering what others cannot. By handling the entire journey of product from suppliers around the world, through South African ports, into CJP storage, and overland to customer facilities, clients are allowed to focus on excellence within their core business.

“We leverage off our infrastructure and our core competency which is bringing in products to South Africa, warehousing it, distributing it, and covering that last mile for our global suppliers while being the port of call for local manufacturers who don’t have to deal with imports or warehousing. They can come to us, place and order, and 24 – 48 hours later get the products they need,” details Radebe.

“We service various markets but our biggest is the food industry followed by industrial, and personal care and pharma. Within that, there are several subsets,” he adds. “So, in food, we supply products into beverage, confectionary, wine, bakery, processed meats, flavourings, dairy etc. Under industrial, we supply products into construction materials, paints and coatings, mining chemicals, water treatment, lubes and energy. In personal care, we supply products into make-up and cosmetics, shampoo, body lotions, carriers and fillers.”  

This portfolio demonstrates quite the expansion from the early days of CJP Chemicals when the family business of the 1980s serviced only the local food space. Over time, either by the product portfolio growing organically, or people joining the business with knowledge of other sectors, CJP Chemicals branched out into new industries. “That is how we find ourselves as so diverse today,” highlights Radebe.

It is this diversity, combined with the agile approach from a flat management structure, that helps the company to differentiate itself from others in the market.

AGILE AND NIMBLE

“All of the big internationals are also in our market and smaller entrepreneurs are also servicing the market. We are able to take advantage as we have scale and we are established, but we are still able to be nimble – we’re not bound by big global processes, we can make decisions here. The leadership team is close to the action, and we can respond quickly to our customers’ requirements.

“The relationships we have with our clients is unique. We have a long history and a lot of our relationships extend over a number of years. Just knowing the level of service we can offer and being a sound player in the market – being able to offer customers certainty – that is key to our success and sustained performance over the years,” says Radebe.

In the future, this is a company that can grow and intends to do just that. CJP Chemicals realises the importance it provides across multiple sectors, and the manufacturing industry in particular is reliant on companies that can supply certainty and reliability. As local manufactures look for long-term, adaptable, secure, well-priced partners, CJP Chemicals is positioned with its hand up.

“We will be stabilising and strengthening our diversity,” says Radebe. “I want to introduce a focussed approach to each market, strengthening the depth of expertise in each of our core pillars, to create a sustainable business. We have to remain relevant against the big bears and gorillas that have come into our market in South Africa.

“Our heritage is a very commodity driven business and is also moving further up the value-added business into value added products and services as a pillar for growth. We also have to look at geographic growth. We are very South African orientated right now and we want to unlock opportunities outside of SA in a sustainable fashion. We have seen a lot of people go out with aggressive acquisitive strategies and that has not always served well. For us, it’s around exploiting opportunities while being sustainable.”  

After a whirlwind of a start, the Managing Director is confident about the future. The company’s mantra of ‘driving excellence through innovation’ is being spread through the business from the top down. Targets are in place, and a clear strategy around sustainable growth is documented across various industries and geographies. 

Even in the toughest of times, with severe strains on all aspects of business and the economy, CJP Chemicals has demonstrated its abilities. This is a company with a proven recipe for success.

“There’s chemistry in our service,” Radebe concludes.