Pietermaritzburg-based E&C Charcoal is one of the country’s leading producers of charcoal products that are used for braaing all over SA. But it’s in the export market where this seasoned organisation really shines, demonstrating that SA is the perfect choice for international customers looking for quality products and service.
Charcoal is the black residue made from carbon and ash that remains after heating vegetation substances to remove water and other basics. It is made by heating the substances, chiefly wood, without oxygen and is a long and arduous process. Once complete, and a saleable product has been created, charcoal has many uses but it’s probably most well-known as a fuel for cooking in BBQs and as an industrial fuel.
Charcoal briquettes and lumpwood are available at almost every supermarket, gas station, corner store and outdoor shop and, because of South Africa’s love for the braai, these products are very much in demand. This has been the case for many years and so E&C Charcoal, one of the leading suppliers in the country, has managed to build a thriving company that is now celebrating its 40thanniversary.
From farming the timbers that are used to make the charcoal, all the way through to processing, packaging and distribution, E&C is involved in every aspect of charcoal production for both the local and export markets.
Having been led by the Holley family since its inception, and now under second generation leader, Charles Holley, the company is looking for ways to grow and the CEO says that exports will become more of a driver going forward.
“The South African leisure market has been pretty static as our economy doesn’t really grow,” he says. “On the other hand, exports are becoming more attractive as other markets seem to be growing and disposable income is improving. The problem with exports to Europe is the weather – it’s not always good for BBQs.
“The growth for us in the future is certainly going to be on the export side and it could well be into industry as there’s a trend now of taking our charcoal and turning into a new grade called activated charcoal and using it for the purification of air and water.”
Activated charcoal is made by heating common charcoal in the presence of a gas that causes the charcoal to develop many internal spaces and these spaces, or pores, trap chemicals. E&C, being Africa’s largest manufacturer and exporter of superior charcoal, is now moving more heavily into alternative products such as activated charcoal and this comes from already having such highly rated, quality product that is SABS accredited and frequently outperforms the rest, in terms of heat and length of burn.
“We have plentiful raw materials in this country and as our market grows in Europe, we are well positioned to grow as there are many companies around the world that do not adhere to FSC regulations so they will fall away,” explains Holley.
“We are FSC compliant, our raw materials come from commercial plantations and forests and these are man-made and regenerated. In Africa, people are chopping down trees and not replanting them, you don’t find many commercial plantations and that’s sad,” he says.
Regarding new products, Holley says that the company is already a leader in its market and will therefore continue to focus on its existing product portfolio which is widely viewed as some of the best charcoal available, coming from commercially grown Wattle and Eucalyptus timber plantations. Growth will come in the form of further exporting to new and existing markets.
“We just started exporting to Australia and New Zealand but those BBQ markets are very gas focussed. We believe that by using gas you sacrifice taste. It’s interesting because here in South Africa and in Australia, the weather is perfect for BBQs but in Germany alone we export around 120,000 tons a year and the SA market is around 60-70,000 tons so even with the bad weather, the market is twice the size.
“We have looked at North America but the freight costs are hugely expensive. We’re very sensitive to freight costs as it’s such a low value, bulky product. With Europe there’s already a balance of trade as we import a lot so the shippers are looking for product to fill containers. We also export to some areas in the Middle East,” says Holley.
HOT HISTORY
The history of E&C goes back a long way and right from the beginning, quality has always been the focus; quality product and quality process. Before the business became known as E&C in 1976, charcoal was being produced as far back as the 1930s. Now headquartered in Pietermaritzburg, KZN has always been home for E&C. Today, the business produces around 20,000 tons of lump and 12,000 tons of briquettes with the vast majority being exported to almost every European country.
“It’s 40 years since we got going on a commercial basis. Most of our products are sold through third parties – we’re big suppliers to Woolworths and Spar. We also supply into Germany, Scandinavia and other European regions, and we have our own brand in South Africa,” Holley explains.
“The history is with farming families in the Midlands of KZN. The origin was to make better use of what is essentially a raw material that couldn’t be used for commercial purposes. Around 10-15% of what grows, remains as a residue in a plantation after harvesting. The conventional way of dealing with that residue is to burn it but that is nasty from an environmental point of view,” he admits. “In the 1940s, it was realised that it was not a good idea to burn the residue. In our part of the world, in the environment in which we live, we have to deal with the residue. Through this process, my family started making charcoal but in those days there was no market for charcoal as people didn’t use it for leisure and the use in industry was minimal. In the 1970s, industry started getting interested in charcoal and the leisure value of charcoal was discovered. In 1976, the company was formed for two reasons. Firstly, for industry but because there were production facilities created for industry, supply quickly overtook demand and the directors, who were desperate to sell, started to export to Europe.
“Initially, exports were only for the leisure market but eventually they moved into industry as well. Charcoal is a great raw material for purifying air or water and so industry now makes up an important part of our market,” he says.
“A number of Midlands KZN farmers pooled their resources as exporting in those days was not an easy job. That’s where the name E&C comes from; Earl and Crow, who were two farmers in the area. Then the Holley family got involved in the 1980s and we kept the name E&C as it has traction in the market and is well known amongst customers. I am the second generation of Holley family leadership and I am very focussed on driving the business for at least the next five years,” he adds.
Thanks to this long history, E&C knows every aspect of the industry and is prepared to deal with any challenge that might arise. It has lived through economic upturn and downturn, political transformation, environmental reform and is now, thanks to its unique positioning and its first mover advantage in the export markets, E&C Charcoal is leading the way, and Holley wants to encourage further investment into the sector so that further rural employment can be created.
“There’s vast competition in our market. From the Eastern Cape through KZN and up to Mpumalanga, there’s huge belts of good productive land where timbers grow well and there’s lots of farmers who make charcoal so it can be difficult to compete. Competition is intense and it’s a constant nag for me that they keep chipping away. However, our situation being very close to the main access and Durban and Johannesburg means that exporting is quite easy as we’re just 120 km from Durban and we’re on the route into Gauteng so getting products to market is comparatively easy.
“We are the biggest company of our kind but we are not the biggest brand. As a company, we are multi-branded and we’re happy with that strategy.
“One of the big problems for us in South Africa is unemployment. Charcoal is an industry which is a rural activity and most unemployment occurs in our rural areas. To work in our industry, you don’t need too much of an education, you just need to be physically able so the opportunity to create employment is not massive but in the rural areas that we operate, it’s very meaningful. We have about 400 employees and I would certainly like to see that grow over the next five years. When buying from South Africa, you are supporting rural people and helping to create jobs,” he says.
QUALITY RECOGNITION
Today, Africa is exporting around 40% of the 800,000 tons of charcoal used in Europe. Nigeria is the biggest exporter with South Africa, Namibia and Egypt also making up big parts of the mix. Because of this, sometimes it can be difficult to stand out from the crowd and put your business in front of the eyes of the customer. But in 1988 and 1991 E&C Charcoal received the State Presidents Award for Export Achievement, further bolstering its reputation as a quality exporter.
“Awards like this give us credibility,” says Holley. “We recently won an award for best South African household product and that also gave us credibility. We’ve won awards with Woolworths and other retailers and it does give traction and it sends out a positive message so it does help.”
With the growing middle class in South Africa, and with economic fortunes expected to turnaround by 2020, E&C is perfectly positioned to grow its share of the local market as well as developing its export opportunities. There’s also now a trend towards eating better and living better, with people looking for quality in every part of the cooking process. Of course, this means that quality materials are being sourced and charcoal is a part of this.
“I braai probably twice a week and I don’t just use our product. I like to know what’s out there. Our focus as a company is all about quality so it’s nice to know the advantages that we have in the marketplace. I love braaing; I find it creative and relaxing – it’s great for family and friends. There’s a changing attitude towards eating and food and people want quality with everything they do so that can only be good for our business,” concludes Holley.