Now settled in its new home in Midvaal, Paramount Trailers is a shining light in the SA manufacturing sector; creating jobs, delivering quality and driving innovation.
Last year, The Economist described Africa’s manufacturing sector as an ‘awakening giant’. The global business-focus newspaper stated that ‘a quiet boom in manufacturing in Africa is already taking place’ and ‘manufacturing’s share of GDP in sub-Saharan Africa has held steady at 10-14% in recent years’. According to the paper, industrial output in what is now the world’s fastest-growing continent is expanding as quickly as the rest of the economy and with six of the world’s ten fastest growing economies being situated on the African continent, it is certainly fair to expect a manufacturing sector to thrive in the coming years.
In South Africa, an established and diversified manufacturing base that has shown its resilience and potential to compete in the global economy has been developed over the years so that it now provides stimulus in other sectors such as services.
Manufacturing is split across different sectors with automotive being one of the most prominent. Despite its distance from some of the major markets Africa, and particularly South Africa, produces high quality products at prices competitive with other automotive manufacturing and assembly centres. The South African automotive and components industry is growing rapidly and is perfectly placed for investment opportunities. South Africa’s aim is to become an automotive investment destination of choice and investment from the government and the private sector has prompted the establishment of several small, medium and large manufacturing outfits that are creating employment and growth around the country.
One business that has a long and proud history is manufacturing is Paramount Trailers, the Midvaal based trailer builder and repair specialist.
FAMILY OWNED
Founded in 1997 by current Chairman and CEO Fernando Marques, Paramount Trailers is now run by Managing Director and Fernando’s son, Warren Marques.
Warren is particularly proud of the company’s main milestone of the past few years – the move into a new facility which expanded production capacity from 40 to more than 250 trailers a month.
“We decided in 2011 that it was time to either grow the business where we were at the time or to buy new property and develop. We were operating very inefficiently where we were as we had bought smaller properties and we were moving around, across streets, and it just wasn’t efficient so the decision was made to spend the money on a big facility to makes us more efficient, more competitive and more professional,” explains Warren.
“We started building in early 2012 and we moved in in August 2013. Capital expenditure was R150 million on the project itself with an extra R30 million on machinery and equipment. The facility covers 75,000 m2of land (equivalent to nine soccer fields), 25,000 m2 of factory and 2000 m2 office space.”
The company’s previous facility in Alrode covered just 16,000 m2and was not allowing the efficiency and growth that the new base offers in abundance.
“In recent years we have evolved as a company by diversifying our product range and bringing more options to market,” Warren told MetalWorkingNews.
“The investment in the new machinery, with more to come, has allowed us to improve our efficiencies as well as bring in house and manufacture a number of components that we were outsourcing in the past. Naturally this is also going to bring down costs.”
“These new facilities are a reflection of our commitment to investing in this industry and becoming a leader in customised trailer manufacturing across the African continent,” continued Fernando.
When the new facility was completed, and in the following months, Paramount acquired a range of new industry leading equipment including a Durma AD-R 30220 CNC hydraulic synchro press brake featuring 3-axis CNC control as standard (3050 mm x 2600 mm between frames and a 220 ton bending force), a Durma SBT 3010 HS hydraulic NC guillotine for shearing sheet thicknesses of 10 mm and a cutting length of 3100 mm, a Durma DC8 – S360 bandsaw and a Durma DB – S 560 bandsaw that comes with an automatic feeding line.
Now settled in its new home, Paramount is situated in the Kliprivier Business Park. This location was strategically selected by the management because of its easy access to the important N1 and N3 highways and its close proximity to the railway line and station adjacent to the development, running parallel to the R59 – from Germiston through Meyerton to Vereeniging.
Following the move into the new premises, Paramount expanded its staff base to cope with increased capacity and demand. The employee count jumped from 120 employees to 200 and reports suggest it could eventually reach 400 when the facility soon reaches full capacity.
But even through all of the growth and development, this remains a family business, focussed on delivering quality, just as it has for the past two decades.
“Our reputation and success can be attributed not only to the excellent trailers we produce but the superb client relationships we foster. Paramount Trailers is committed to supplying excellent customer service, an affordable quality product and leadership in innovation and design,” Warren told MetalWorkingNews.
“We like to maintain a finger on the pulse of the company, personally knowing the majority of the customers and being able to put a face to a name,” added Fernando.
ROAD IS THE WAY TO GROW
Many Paramount trailers are used for the transportation of heavy goods, such as mining materials and agricultural supplies, and the company is now well-known for manufacturing commercial flat deck trailers such as tri-axles and super-links, small parts manufacturing and offering trailer service and repairs.
These products often dominate the highways of the country and a growing transport industry, albeit with certain drawbacks, is obviously beneficial for Paramount.
In October 2014, KPMG said that the transport sector is ‘a vehicle for growth in SA’s economy. Richard Machett, Divisional Director at WSP Civil and Construction Engineers Africa said: “If you can’t move goods, services and people around, your economy stagnates. Having a long-term view when preparing budgets for new infrastructure or for upgrading existing transport networks is critically important. That said, once this infrastructure is in place, it’s important to ensure it is well maintained – in fact, it’s cheaper to maintain infrastructure than to build new replacements.”
But SA has not always been bullish when it comes to investing in road infrastructure. Many still require attention, particularly in more rural areas. Then there is the issue of the cost of travel. Fuel prices continue to rise (although they have evened out recently) and the weakening Rand hasn’t helped this one bit making life extra difficult for road transport businesses. Also adding to the mix of problems is tax. According to the Road Freight Association of South Africa, the road freight industry remains one of the highest taxed industries in SA with ever-increasing road user charges, cross-border taxes, toll fees, vehicle licensing fees, inspection fees and other legal requirements.
Of course, it would be beneficial for Paramount for these issues to be addressed and would give customers that little bit of extra flexibility and purchasing power but even with these challenges, the business is looking to grow in the SADC region and is also diversifying its offering to bring rental services and used trailer repairs and sales to its portfolio.
“Paramount has built its reputation on being able to develop and manufacture trailers to meet customer requirements. This is even more critical when manufacturing a trailer for countries across the border. It is important to understand the conditions in which the trailer will be operating. We have developed and manufactured an export trailer that is more robust for cross-border transport. The design uses stronger materials, which allows for longer trailer life under tough road conditions while ensuring that carrying capacity is not compromised,” said Financial Manager, Paulo Ribeiro in a recent interview.
“It is important not to sacrifice trailer strength for payload. A lighter trailer will more than often not be able to last in tough conditions. Engage with your trailer manufacturer to ensure that the correct trailer is purchased for your operating requirements, i.e. application, road conditions, type of trailer, etc. Consider purchasing a trailer that will provide you with greater versatility in transporting different types of cargo as this will assist in having loads delivered both to and from the SADC destination,” he added.
As Paramount continues to drive into markets north of the border, it will continue to create opportunities and jobs for people in Gauteng and this is excellent news for the manufacturing industry.
Even though our developing economy is one which now looks to the service sector for most of its growth, India has boomed for more than two decades on the back of services, while steadily building a manufacturing sector from a very low base and we should not bet against Africa doing the same.