PRESSURE DIE CASTINGS: Adaptation, Adjustment, Agility Allow PDC to Prevail

For Jaco Wiese, Managing Director at Pressure Die Castings (PDC), 2020 was a whirlwind. An engineer by training, this young an energetic leader found himself crossing South Africa and relocating his family to take the reins at PDC. But a global pandemic, economic uncertainty, and supply chain chaos was what met him since he arrived in Pietermaritzburg.

Established in 1952, PDC has grown in size and influence. Celebrating 70 years in business next year, this unique manufacturing business remains in a strong position, despite the challenges of 2020 and 2021.

Supply chain constraints as well as employment requirements have amplified the need for a thriving local manufacturing industry, and PDC is working hard to carry the torch.

“I got involved in April 2020 and, from the investors’ point of view, the appointment of a young ‘industry outsider’ was a commitment that the metal and castings industry is still a vibrant and live industry,” Wiese tells Enterprise Africa. “We have a young team and we wanted to revitalise, bringing in new approaches but holding onto the established foundation that is already here.”

But organising a 250-person manufacturing operation, with a relatively flat hierarchy, in a single premises, and where all people are hands-on in the process, is no easy task. Producing mostly brass, aluminium and zinc components for multiple industries including building, plumbing, automotive and power, PDC and Wiese had to adapt quickly to the new normal as Covid swept through the country.

COVID CONTAINED

“We were well-protected through South Africa’s first and second wave,” he says. “We invested in our people and their families early, getting good quality masks and sanitiser. We audited each person and looked at what living conditions are like and how we could assist. We paid all our suppliers early to ensure they can continue and assisted those which requested assistance in advice or direction when Covid first came on the scene. We set that trend very early on and we spent a lot of time on education of our staff and direct community. The result was that we didn’t have a lot of issues through the first and second wave.”

In the second quarter of 2021, South Africa hit a third wave as the country’s vaccine rollout remained slow. Businesses again had to adjust to a changing environment.

“The third wave was difficult,” admits Wiese, who had only been in the business for 12 months at this point. “We had senior people away sick and we had to move guys around. We had to be more fluid at that time but we did make it work. It was not the biggest issue that we faced.”

Global and South African attempts to fully re-open economies and return to some form of normality, together with people having to go about travel and business again, resulted in PDC realising positive cases. Thankfully, a culture of quick decision making, adjusting and adapting to needs of clients, and a nimbleness that is not present in big international manufacturers resulted in PDC continuing to serve without major interruption. This is a business that is dedicated to its clients and willing to rethink strategies to achieve results.

This nimble nature was instilled before Wiese arrived and has been a key driver of success over the years. Thanks to this, and several other contributing success factors, PDC shareholders are setting out a vision for ensuring a growing South African manufacturing business, using current clients as a base while constantly innovating.

“I moved my whole family right across the country, but I have never looked back. We are loving it here and I am loving the culture of the company and everything that we stand for,” says Wiese.

“We are positive about the future,” he adds. “The one thing the past year has taught us – around the world and inside PDC – is that we always think things will become more difficult. If you actually look at how people have reacted to the pandemic, there has been a lot of growth and a lot of positivity. We believe that our order book will continue to grow, and we believe that if you have made it through this then you will be able to grow in a big way.”

BULLISH

A specialised high-pressure die caster, the company services clients around the country and internationally, always ensuring the best process solutions. Initially established in SA making steel window fittings, electrical transmission componentry, and even horseshoes and other pieces of riding equipment at one point, the company grew into other sectors, spawning the development of many companies within these specialised spaces. Today, the company’s chosen metal is brass, with various building hardware – especially window fittings, handles, and hinges locally – and automotive remaining key industries.

“Over time, we have grown to where we are now as a privately-owned company that concentrates on a client first approach, supported by a strong technology set,” says Wiese.

Competing locally against imports from the East, PDC has always had to remain price competitive but with a heavy focus on quality and delivery. Bulk containers full of parts being shipped around the world from China, Vietnam, Thailand or elsewhere struggle to react as fast or provide customer support as accurately as for product coming from PDC’s Pietermaritzburg facility. For this reason, local customers are very keen to invest in long term local partnerships.

“We are seeing a massive uptick in demand globally and locally as people are revisiting how their supply chains work. There is obviously a mishmash in the supply chain and a lot of confusion, resulting in lost sales opportunities as stock levels run dry. Being an established company, and having an innovative approach, we are seeing that we can actually address and react to the demand that is spiking in different areas of our business. We are fortunate to be in business in a booming market segment with established and loyal customers. The shareholders do see not only a future for manufacturing in South Africa but a company with a very strong base to grow from,” states Wiese.

But for manufacturing, the figures paint a stark picture. Manufacturing production increased by 1.3% in September 2021 compared with September 2020 but seasonally adjusted manufacturing production decreased by 3.9% in the third quarter of 2021 compared with the second quarter of 2021 with Stats SA highlighting negative growth rates for the period across eight of the ten manufacturing divisions. Covid and civil unrest in July continues to blight manufacturers.

Weak local demand, fiscal austerity, and the ongoing power crisis have dimmed confidence in the industry with many hoping for a rebound in importer economies that will drive pipelines.

Asked if this negativity has been felt at PDC, Wiese reports a contrasting view.

“South Africa is a vibrant economy,” he says. “Although we see things being very tough in this country – and they are, we have a lot of challenges – there are people who want to make the country work. We can see that the formal and specifically informal economy is very much alive. Manufacturing is struggling due to power cuts and supply chain issues, but the demand side is very alive and we are bullish about where the economy can go.

“We try to be dynamic, innovative and try things that we think will work so we can take our teams on a journey,” he goes on. “If you want to be a manufacturer in South Africa, you have to be able to react fast while keeping your feet grounded. We as South Africans fortunately have a tenacity and innovative drive which helps us to realise this. You must be a stable supplier, with stable foundations, but you need to be able to react and incorporate technology so that you can stay nimble and address issues. There are many challenges in South Africa, but if you can embed a culture where people stay nimble then we can adjust to these challenges – that is what makes manufacturing work. Obviously, a good set of clients and a strong order book gives you runway to dream, and PDC is blessed with that, but if you don’t react to reality you will die – so you must stay nimble.”

SMART FACTORY

As well as staying nimble and delivering first-class product and service, PDC is investing in the future and looking at new tools to drive efficiency and add to its thriving human capital. The South African government is backing a Fourth Industrial Revolution drive, and there are obvious benefits for automation and digitisation. The PDC team is busy with a plan around the ‘factory of the future’ and the ‘Smart Factory’ but claims that many of the basics are already in place.

“We want to create value – that is what PDC is built on,” he says. “You have to create value for your customers, employees, shareholders and the government. To ensure longevity and to keep creating value for all, you have to innovate and stay competitive. That means bringing in new ways of doing things. The Fourth Industrial Revolution and the Smart Factory were things that we thought were being spoken about at big conferences and only applied to the big technology companies. Then we started delving into it and we realised that a lot of those concepts are already happening here and we just didn’t realise it. It’s not a science fiction movie – it’s very tangible if you just look at it. We were amazed at how many things we are already on top of.”

Having factory-wide Wi-Fi access, automating basic counting tasks using AI, digitising packing operations to remove human error, and working on cloud computing systems to make the most of efficiencies is creating more value for customers and allowing employees to focus on innovation and creativity.

“We have Wi-Fi for everyone in the factory and they are taught how to use emails and digital log sheets. It sounds arbitrary but that skill allows the guys to stop doing written sheets and reduce the amount of paper we use. All of this helps to digitise our environment and when you look at it this way, it’s not all about VR and AR; it’s very simple things,” Wiese reasons.

“One of the basic things, but one of the more exciting things that we have started realising is how accessible artificial intelligence is – automation and artificial intelligence is not to move people out,” he confirms. “We have a great example where a person can sit in the factory with a camera and the AI checks colour, quality and handles the counting, while the person packs the box with hinges and checking the mechanical quality of the part. The two work together to ensure quality and remove the chance of packing the wrong colour hinges in the same box or other mistakes. It’s amazing how these things can work together and that is exciting.”

PDC hired server space through Google Colab, using the extra capacity to develop python code before executing, testing and understanding what resources would be required to run the system on a workstation desktop.  

“We tested everything using cloud computing before localising and putting it all on our own system. The system now assists with ensuring customer satisfaction and the employee’s life is made easier. It sounds arbitrary, but it is very practical, it is tangible to us and it is not that difficult,” says Wiese.

90% of businesses in Africa are micro, small and medium sized enterprises and are non-digital. Start-ups, corporations, and policymakers must ensure these organisations are not left behind and efforts are being poured into education, upliftment and reskilling to bring about digital transformation on the continent.

In 2019, President Ramaphosa said at a press conference around the Fourth Industrial Revolution that the country and its businesses must adopt technology, where possible, to drive improvement in the economy. “We have in a short space of time and rapidly changing technology advanced from being a nation of late bloomers to one of early adopters. To ensure that we are able to make waves, government has committed itself to a skills revolution that will give us the human capital required in the digital economy.” These skills are being driven within PDC as the company again leads by example in the manufacturing space.

BUSINESS, BETTER

Adjusting strategy to cope through the pandemic, pushing forward with a tech-based strategy to prepare for a competitive future, driving efficiency through digitisation, but always keeping long-held human skill and knowledge at the forefront of the business is positioning PDC on a robust platform for future growth. But it is a historic focus on excellence that has allowed the company to gain competitive advantage. Wiese is keen to further build on success by highlighting the environmental attributes built into PDC products, not to boast but to emphasise a longstanding process considered the normal within the business.

“We make a product that lasts,” he smiles. “The product will outlast the person installing them in most cases. This longevity of the product is an attribute built into our product type and also a PDC product. In the same instance the re-use and recycling of material is built into our processes and supply chain over years. As humanity we have taken so much metal out of the ground and the supply is finite. It makes so much sense to recycle. At PDC we don’t really market that aspect of it. Recycling is embedded in our industry where there is a large volume of recyclable materials available.”

With foundries traditionally having a negative environmental connotation, PDC focussed on building in efficiencies long ago and continues to make use of recycled material, minimising wastewater and energy wastage, and is planning for further improvements.

“The environmental aspect, for us, is around efficiency. We want to do the same but with less energy. Most of South Africa’s energy is still derived from coal so our thoughts are around how can we use that energy better and not waste it. We are also thinking about what we can do directly to get green energy on our site. These are the most relevant questions in the environmental space right now,” suggests Wiese.

Like many companies in South Africa, where the sun shines for 2500 hours each year, PDC is investigating the potential for a rooftop solar installation. A factory with a high base load and a roof space of around 7000 m² provides the perfect base for a sizeable project.

“We are investigating that now,” confirms Wiese. “Solar panels have proven themselves technically and they have proven that the cost has diminished to a point where they will not get much cheaper per kilowatt peak that you install. PPA style funding models with a positive cash flow from day one have also matured and proven to be viable. Now is a good time to consider it and that is why we are getting quotes. We already have many efficiency projects, but solar on the roof would certainly be impactful. If we go ahead with it, we would be looking at an installation of just below 1MW.”

For the 250 people active at PDC in KZN, this constant feeling of forward momentum and an ongoing desire to do the right things by the customer, shareholder and environment drives a culture of excellence and ambition. This is the catalyst of quality and the reason the company enjoys long-lasting relationships with its clients around the world.

“If you create value, you are at the forefront and you can grow the business. A growing business is good for everyone in the business,” says Wiese.

“We have a healthy people and business culture and that comes from a number of things. Innovation helps, the industry and market momentum helps, but it is all about the people,” he adds.

PDC funds and operates an onsite clinic and offers accessibility for people who struggle to get time off to visit the doctor. They can walk over and see a doctor, collect meds or see a professional about any medical or social problems. “It helped during Covid with the vaccination drives and education around the pandemic. At the end of the day, a company is people and we think that value we put into people comes back into the business through an amazing culture,” says Wiese.

According to Forbes, positive company culture – especially in manufacturing businesses – can lead to strong brand image, healthy employee identity, and solid retention rates. PDC is the proof of the theory.

HEALTHY OUTLOOK

With economic conditions expected to remain unstable for the foreseeable, both globally and in SA, and manufacturing as an industry continuing through a transitional period, future outlook for most is unclear. But at PDC, an optimistic approach to growth, building on years of history and durable partnerships, is helping to bring about clarity.

“Right now, our first, second and third focus is our current clients,” says Wiese, unequivocally. “It is an uncertain time and if you leave clients without a quality product then you are dropping them. Our growth strategy launches from that. It’s not wise to chase something else and lose what has been so good for us over the years. Our growth strategy is all about a quality product, quality service, and looking after our current clients.”

This means the company is not actively seeking out new business, but rather being entrepreneurial and inventive in its approach.

“We are looking at different areas and thinking about the skillset and technology that we have and where we can apply it in other geographies, industries or product ranges. For us, it’s all about building long-term relationships – that is the core of our growth strategy. We are not chasing specific numbers by specific dates.”

For PDC, lasting relationships are about shared value with suppliers and customers. The company is able to offer such a wide variety of products and services – including a fully equipped tool room and end-to-end in-house tooling solution – they can find a solution for all customers. PDC starts with customer need and then goes about finding the most suitable solution.

“We have a very hands-on team in the factory and they know all there is to know about the mechanics and electricals. We have a very flat structure and an open-door policy. We share and talk to everyone. Because of that culture, combined with an innovative way of working and trying to solve problems, we have a great system and everyone in the company remains involved in all aspects,” explains Wiese.

Having overcome the initial shock of taking over a company during a global pandemic, steadying the ship and focussing a strong workforce with a brilliant ethos, Wiese and PDC, and specifically PDC’s clients and suppliers, have been able to capitalise on PDC’s ability to react positively where others may be struggling. Finding opportunities, respecting existing relationships and remaining calm when times are tough is a key trait of a lasting business. PDC has this in abundance and, for Wiese, the future is bright.

“I’m happy and feel very fortunate,” he smiles. “I landed here in what the other guys had built. A lot of credit must go to the company, things didn’t just happen. Adaptation, adjustment, implementing solutions quickly, and reacting to the needs of clients was essential. Without that, we would not have had the good year we have been experiencing.”