Eqstra Fleet Management - Dec 2019

EQSTRA FLEET MANAGEMENT

EQSTRA FLEET MANAGEMENT

Fleet Partner

of Choice PRODUCTION: Karl Pietersen

As Eqstra Fleet Management begins a new period in its long history, the company’s position as a market leader is not in question. After significant technology investments were completed, and the customer base across southern Africa brought on to a new Enterprise Resource Plan (ERP) system, this is a business in a stronger position than ever, and one that is looking for continued growth. www.enterprise-africa.net / 161

INDUSTRY FOCUS: AUTOMOTIVE

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Are you part of a company that is on the road? Does your business operate vehicles or have a need to move people and goods around the country, or even cross border? Even if you don’t own your vehicles, do you spend money on rentals? The organisation of vehicles and transportation can be a headache. Depending on the size of your business and the nature of your work, you could insource this function and create a team to look after your fleet, or you could outsource and trust an experienced partner to handle all things driving.

Once you have the fleet sorted, the next challenge is all the ancillaries. Insurance, taxes, tolls, fines, maintenance, navigation, tracking, resale, acquisition, roadside assistance; just one of these issues could be enough to take up all of the attention of a full-time employees, depending on the size of your operation.

So, often, the easiest and most effective option is subcontracting.

162 / www.enterprise-africa.net

It can be cheaper, it allows you to focus on what you do best, you remain in operational control, but it gives you flexibility.

In South Africa, there are several great examples of fleet management businesses, both local and international, and the industry is an important sector, helping clients to navigate the country’s 747,000km road network – the tenth largest in the world.

One of the industry leaders, not just in South Africa but across Southern Africa, is Eqstra Fleet Management (EFM). Founded in 1988, the company has grown from a small regional player into a powerful multinational organisation that has significant bargaining power with industry suppliers.

ALL ENCOMPASSING Starting out as a leasing business, there was a clear opportunity in the market for EFM to expand its service portfolio, and after a decade

in business – now understanding the business of its clients in more detail than ever before – EFM made the move, becoming a full fleet management business.

Of course, the early days were hard. “From the moment we started, the new strategy brought us into a lot of new areas that we had not traditionally been in,” says Director Murray Price.

Warranties, fuel cards, documentation – EFM had taken on a whole host of new responsibilities. Today, the company is a multifaceted business with exposure to more than 1200 clients and complex vehicle networks.

“Every month we process over 5000 traffic fines, manage over 1000 accident claims from end to end, negotiate and approve over 12,000 maintenance events, provide roadside assistance to over 60,000 drivers, and provide live tracking with unique active management to over 30,000 vehicles,” states EFM.

EQSTRA FLEET MANAGEMENT

In order to handle the shift from simple leasing operation to becoming a business with so many touch points, the first thing that had to be addressed was the technology.

A whole new interface was needed and EFM made a large investment into a new IT system that would allow for smooth operation and implementation of services.

“As part of the project, Eqstra Fleet Management now implements a web portal that allows customers and suppliers to transact directly on the ERP system. This enables us to keep track of all individual transactions and reduce the duplication of effort seen in the traditional fleet management value chain.

“In addition, it delivers a single point of access to the full array of our fleet solutions, providing more

control to our customers as well as better reporting capabilities across all aspects of their fleet,” says Price.

“You can recognise the pioneer in any business because they are the ones with arrows in their back. But I believe that that this business would not have had a future unless we had changed direction,” he adds.

The new Microsoft solution developed in partnership with PwC was the source of a lot of pain in the early days, as the company made the switch over. But after staff, customers and suppliers became familiar with the system, it has become invaluable, proving its worth now that the company has shifted from 95% of revenue coming from leasing to around just 50%.

All in all, the company spent eight years and R250 million implementing

// YOU CAN RECOGNISE THE PIONEER IN ANY BUSINESS BECAUSE THEY ARE THE ONES WITH ARROWS IN THEIR BACK // its new system.

“To never forget that mission of finding a system flexible enough to accommodate the needs of every customer, we called this system Quest,” the company says.

“Global fleet directors have said they haven’t ever seen anything like Quest. Even our competitors have admitted that it represents the future in

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www.enterprise-africa.net / 163

INDUSTRY FOCUS: AUTOMOTIVE

// IT DELIVERS A SINGLE POINT OF ACCESS TO THE FULL ARRAY OF OUR FLEET SOLUTIONS, PROVIDING MORE CONTROL TO OUR CUSTOMERS AS WELL AS BETTER REPORTING CAPABILITIES ACROSS ALL ASPECTS OF THEIR FLEET // fleet management, and some are even investigating ways to introduce similar functionalities to their own systems.

“Quest merges technology with software to give customers insights never seen before, and full control and visibility through powerful reporting.”

164 / www.enterprise-africa.net

ALWAYS GROWING With 16 locations around southern Africa and a market share in among the top five in the industry, EFM has undoubtedly built a strong and resilient business. Earlier this year, in Namibia, EFM was rebranded as Omatemba Fleet Services. Omatemba is the local word for ‘a fleet of wagons’ in the Oshiwambo and Otjiherero languages and EFM, which is in Namibia as part of a Joint Venture with Epia Investment Holdings, has developed strong and lasting relationships with large clients including the likes of Nampost and Namdeb Diamond Corporation.

“Our team in Namibia is fullygeared to provide complete fleet solutions to our Namibian clients, including companies in the private sector as well as public entities. Our service offerings are provided inhouse and controlled through service level agreements; we outsource/subcontract vehicle washing in Namibia, fuel cards roadside assistance and short-term vehicle insurance. We will rely on Eqstra Fleet Management

in South Africa only for financial administration and human resources control and administration,” Price said of the Namibian operation.

Just like South Africa, the Namibian operation offers a simplified approach to fleet management for customers and offers up the ability for those customers to deal with one single point of contact, streamlining and bringing efficiency improvements and cost savings.

FUTURE PROOFING The future looks bright for EFM and, with its expertise, experience and knowledge of the sector, it is an attractive business for both customers and investors.

This was evidenced in July 2019 when Bidvest Group announced that it would acquire EFM from enX Group for R3.1 billion. In October 2018, enX suggested that it was interested in disposing of EFM despite only acquiring the company three years ago. enX paid R7.8 billion for the business, from Eqstra Holdings, in November 2016. In group results

EQSTRA FLEET MANAGEMENT

released by JSE-listed enX in February, EFM’s performance was described as satisfactory and there was optimism behind the company’s ambitious plans for UK growth, where it was seeking out acquisition opportunities with industrial equipment vehicle businesses.

But in October, enX said that EFM would benefit from being part of a

new structure which would be able to better optimise its value proposition.

Bidvest was attracted by the 12,300 vehicles that EFM had under lease at the end of August 2018. “The acquisition of Eqstra is in line with Bidvest’s stated strategic intent to focus Bidvest Bank on its fleet management niche,” Bidvest said in July.

The desire for Bidvest is to

gain further traction in the fleet management market and bring a “cradle to grave” solution combined with Bidvest Bank and the group’s automotive division, have resulted in the acquisition.

The hope for the future is that EFM can add to its 120,000 fleet assets under management, capture further market share, and gain further access to the sector’s value chain.

The company is confident in its ability and knows it has the experience to deal with customers big and small, offering them savings, efficiency and excellence as they navigate the complex world of fleet management.

“Because we know that all fleets large or small are unique, the solutions we offer have all been customised to suit our customers very specific fleet needs,” EFM concludes.

WWW.EFM.CO.ZA

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