KEMTEK: Diverse Strategy Delivers for Leading Tech Team

Like most sectors of the South African economy, printing technology has received its share of disruption over the past decade. Those companies that have failed to keep up with trends, and have been unable to meet the quickly changing needs of customers, have fallen to the wayside. Today, clients want easy, instant, quality, and advanced systems that deliver solutions for a range of problems. In South Africa, declining spend on traditional print material, as well as a focus on digitisation, has fuelled change, but many have seen opportunity in this multimillion Rand industry.

Kemtek – the Johannesburg-based supplier of technology for printing, bar coding, labelling, additive manufacturing and more – has advanced its product portfolio to meet the needs of the modern customer, and is thriving as a result. “As technology has evolved, so have we – we are moving beyond technology to embrace and offer holistic business solutions that will deliver opportunities for growth,” the company says.

Working with top brands from all over the world, Kemtek brings unique technology to South Africa allowing for innovation and adoption of enhanced levels of quality. Whether 3D printing, scanning barcodes, labelling produce, or producing mass advertising campaigns, those that receive products and service from Kemtek can rest assured that they are working alongside one of the continent’s best.

But it hasn’t been easy for the company. Following a period of unprecedented turmoil in global supply chains, catalysed by component and material shortages, getting products into the country and out to 2800 resellers, and then to clients, has made for a tough operating environment.

DIFFERENT REACTIONS

“A lot of things have happened in South Africa and there is an interesting story around what impact that has had on Kemtek,” smiles Managing Director, Graham Comins, former CFO who joined the company in April 2020. “As a company, we are very focussed on technology products but we have three very different businesses. We also have a new business which is in its incubation phase at the moment.”

The supply chain crisis emerged as a legacy of the Covid-19 pandemic as shifts in demand, labour shortages, and structural macroeconomics turned traditional procurement upside down. Now, Russia’s war in Ukraine and fresh Covid-19 lockdowns in China add new challenges to the mix, causing further havoc for those reliant on a connected world.

“All of our businesses have reacted very differently to different events that have taken place. We are very proud to be the channel partner for HP Indigo Digital Presses and a lot of the finishing equipment that goes with that. We took a fundamental strategic decision a couple of years ago to move out of the older technologies around flexographic and lithographic printing, and focus on digital and the products that support digital printing,” says Comins, highlighting the global boom in digital printing, which allows for faster, more efficient processes.

“With HP Indigo, we have a fantastic range of products, but because it is all Dollar-based, it can become very expensive very quickly in the South African market. With the volatility in the Rand, it affects our customers significantly. We have had to come up with some clever ways to price at the right point,” explains Comins.

Since September 21, the Rand has fluctuated wildly against the Dollar, now sitting significantly lower than it did last year resulting in constant planning and adjusting for the company.

ALWAYS HOLDING STOCK

Kemtek distributes to 2800 resellers, all over South Africa, and these resellers export to other sub-Saharan African nations, providing installations in Botswana, Angola, Zimbabwe, Mozambique, and soon, Mauritius. However, servicing machines and keeping the technology it supplies up to date is big business, and the company faces challenges here that can only be overcome with great people and relationships.

“The global shortage of components has had an impact in terms of our ability to delivery and timelines to repair. Our principal suppliers are good at supporting us with that, but being stuck at the bottom end of Africa, we are often faced with delays as parts sit on aircraft or with courier companies for weeks. These are challenges we have to face and how we manage those sets us apart,” explains Comins.

Kemtek’s 136 people, working from bases in Johannesburg, Cape Town, Durban, Tshwane and Gqeberha deliver a carefully planned strategy that ensures customers are always serviced. For Comins, quality service delivery is paramount.

“Despite the issues we’ve had with supply chain issues and component shortages, we carry a lot of stock. We have always held stock and we have always recognised that you must have the stock to sell the stock. We have invested a lot of money into our inventory to ensure we carry a wide range. Generally, one of our differentiators is that we give exceptional service and quick turnaround to our customers. The other thing we do is offer strong relationships with principals and OEMs. They recognise the skillset and strength that we have, and so they prioritise our needs,” he says.

“The partnerships that we have created go back a long way. Some of our suppliers like Datalogic, Honeywell, Epson, Sato, Argox – unless you’re in the industry, you might not know. Brother is a phenomenally good international brand and so we are very lucky to have those sorts of brands in our portfolio. Those brands bring credibility and that brings opportunity for us,” he adds. “By carrying those brands, you carry the same level of integrity. That creates a huge obligation around responsibility. We spend a lot of time and focus ensuring we can support those ranges properly. We have a great technical team and one of the things we do from an environmental viewpoint is try and fix products that are out there before we replace.”

DIVERSIFICATION

Established in 1988, shifting through several iterations before becoming the Kemtek of today, the business has learned a lot and built a skillset that is unrivalled in South Africa. The company’s understanding of local needs, as well as its network of relationships, allow for a thorough understanding of what is required. Diversification underway right now to continue delivering into the future.

“We have an industrial 3D printing business, both selling equipment as the agent for global leaders, as well as a print bureau. There are other challenges that impact that business because the SA environment is very different to Europe where additive manufacturing is becoming a very accessible and recognised method of prototyping and manufacturing of spare parts – it’s not like that here yet,” explains Comins.

“We have recently started a sustainability initiative where we look at water solutions. Water and power are major problems for South Africa and so we are looking at a number of different technologies around water including water from air technologies, especially for the coastal regions. Where there is high humidity, there is a product that is really cost-effective in terms of getting something into people’s homes for extracting and filtering water from air. We are also looking at other products around water treatment.

“Kemtek has diversified as we are trying to get to a point where if one business slumps, another will boom and we can hedge against dips in our markets,” he adds.

Right now, the company is busy addressing some shortages in the supply chain around Auto ID and Bar Coding – a core offering for Kemtek. As local agents for labelling systems, orders have to be made far in advance to ensure availability. As supply issues bite, some chain stores have been prepared to use alternative solutions but for large national brands this is a big challenge. Thankfully Kemtek has delivered.

“Firstly, it’s all about quality,” says Comins. “Everything we do, product or service, is quality focused. Kemtek’s name is attached to products, being a distributor, so we look at build quality, support, spare parts, availability, and opportunities in the SA market. We always take the local environment into consideration so we require products to be more flexible and robust.”

HUNTING MARKET SHARE  

The global printing market is expected to grow from $311.53 billion in 2021 to $322.43 billion in 2022. The African printer technology market is expected to exceed $235.3 million by the end of 2031. To ensure it aligns itself with this industry growth, Kemtek is looking to grow in all markets in which it operates and take advantage of any opportunities that arise.

“This company has always had a very entrepreneurial nature and we encourage new ideas. We are very keen on trying new things and working out how to make them successful. That mentality continues to this day,” explains Comins.

“Last July, there were riots in KZN and the following months were extremely busy as businesses tried to restart and needed to replace their point-of-sale equipment, and they had to restock their shelves with new products which all required new labels to be printed. We had a fantastic opportunity there.”

During this turbulent period, as the country emerged from strict lockdowns, Kemtek – designated as an essential services provider and allowed to trade during lockdown – also thrived in ancillary sectors.

“We have a local ribbon plant and we buy jumbo rolls of thermal ribbon which we split into different sizes. It’s agnostic in terms of the label printers it can go into and we have grown a significant market share here. We cut every size, even for competitor products, so any customer can buy from us. We have nine ribbon machines, with a great team, and we bring in world-class products from Europe and the Far East and we split and sell here,” details Comins.

In 3D printing, a market set to hit $62.7 billion globally by 2028 – where Kemtek already boasts a strong presence – the company has bolstered its portfolio. “Around six months ago, we became an agent and started bringing in the Creality range of 3D printers. That has given us a lot of growth. We have tried a number of brands, but Creality has a great name in the SA market,” highlights Comins.

Industry, universities, and government are driving a 3D printing industry in SA, with a number of designers, prototypers, and SMEs enhancing interest in the technology. Away from additive manufacturing, Kemtek continues to enhance its range, always focusing on product quality, regularly bringing the world’s best to South Africa.

“We have just launched a new product for a colour label printer, a Rebo Systems colour technology that is very well suited to the SA market. We are about to launch another Epson colour press,” says Comins. “The nice thing for us is that we have team members who specifically go and hunt out new technologies from around the world. They build relationships, bring demo units in, and test the market. We understand opportunities before starting to distribute.”

Staying ahead of the disruptors in the market, often by partnering with them, is essential for Kemtek. Fortunately, the company has been doing this for decades and is the go-to for most in the country to understand new trends.

“The changes we’ve seen, especially on our print side, have been fast. We have seen a decline in sales of commercial presses and a massive increase in labels and packaging – especially on the digital print side.

“The SA environment is unique in that there are lots of different challenges and whichever way you go, you end up with lots of different consequences around the decision you’ve made,” says Comins.

Almost always, the outcomes of Kemtek’s strategies are positive, both internally and externally. As this burgeoning industry provides so much scope for growth, this is a company perfectly positioned to thrive.

“We have a really diverse set of opportunities,” smiles Comins.