success Editorial – Joe Forshaw Production – Tonnie Geddes
VR Engineering has been manufacturing and selling diesel generators to various industries for the last 54 years. The company is known for providing tailor made, specialised products. We speak to Mick and Nico van Rensburg, the father and son team spearheading the company’s success, to find out what makes them the industry leader.
Have you ever considered what you would do if your business lost power? Perhaps you have experienced a problem like this in the past, after all South Africa has had its fair share of energy problems. If losing power has caused you a problem in the past, there is a company that is more than equipped to help with your energy needs. VR Engineering has been manufacturing and selling diesel generators in South Africa for over half a century. Providing energy during times of emergency has made VR Engineering one of the most trusted and relied upon companies in the country and businesses from all industries have become clients of the family business.
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The company, headquartered in Krugersdorp, Johannesburg was started in the 50s by Mick van Rensburg when he saw a gap in the market for supplying generators to farmers. Today, Mick is still the managing director, a role soon to be relinquished to son Nico. The pair spoke to IndustrySA about the history of the business and what has made the company so successful. “When I started my apprenticeship, I started in this region and I started working on generators. This was in 1955, then in 1959 I decided to start in business on my own and I formed VR Engineering, selling generating sets mainly to the farming community. “Later, we began selling on the open market and to various different industries. This included
“Nico came on-board with the company in 1997. By then we had been in business for a long time and today we are still servicing generators that we sold in the 60s and 70s,” says Mick. Nico tells us that as he takes on more control of the company, the market is changing and more industries are opening up for VR Engineering. “I’m in a good position now. Between myself, my sister and my brother, we will take over the company in the future. “Years ago, the demand for electricity was not anything close to what it is today and agriculture was our main market. “Because of growth and development, markets and demand has changed completely.
There is now a huge demand for emergency back-up power,” says Nico.
PROJECTS ON HOLD The global economic slowdown has affected businesses across the country in different ways. The energy and power industries have reported effects from right across the spectrum with some renewable projects being put on hold to share prices in power companies rocketing through investors looking for a safe haven in tough times. The demand for power will never completely die but the market will change and even through the global meltdown, energy and power markets have constantly adapted.
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Nico tells us that in some cases the tough economic climate has caused VR Engineering real concerns although they have coped because their activities are spread. “In 2008, just prior to the economic downturn, South Africa was faced with a power crisis. Eskom could not meet the demand and during this time we were successful. “When the slowdown came into full effect, we felt it. We had projects lined up which fell through. Especially in the automotive industry, even to this day, companies have not purchased the generators that they ordered a few years ago.”
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CHEAP IMPORTS Apart from the economic slowdown, another challenge faced by VR Engineering has been that of low quality, cheap foreign imports coming onto the market. Expansion and growth is a target for any business but Nico tells us that, for now, the focus will remain on Southern Africa as international markets are already saturated. “Currently, we are faced with many challenges when it comes to expansion and growth. We have to compete with cheap imports coming from the Far-East and Europe. That makes it tough for local manufacturers.
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“We concentrate on one of kind and special builds to meet specific customer requirements”
“We are well placed to serve the Southern-African market but beyond that it becomes a competitive war especially with the challenges in South Africa arising from labour issues, inflation and rising manufacturing costs.” Even though some generators coming in from cheaper markets may sound like a good idea initially, they do not offer the specific, tailored, customer made service that you would receive from VR Engineering. “We concentrate on one of kind and special builds to meet specific customer requirements,” says Nico. “In this form we are a very competitive company. “Our core business is specialised generators so on the general market we are not very competitive although we do have regular customers that will only but generators from us. We are not a mass production facility, we outsource a lot of the work.”
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While the automotive industry in South Africa is growing and contributing significantly to the economy, the industry has seen a decline in local engine manufacture in the past three decades and this has impacted on the business of VR Engineering as Nico explains. “There used to be a big local engine manufacturing scene in South Africa back in the late 70s and 80s but all those plants have closed down now. “The main components of a diesel generator are the engine and alternator; these items are now imported from Europe, America or the Far-East. We procure engines direct from overseas or from local agents and from there we will manufacture the rest of the item such as the fuel tank and the control panel etc.”
“As far as I know, we are the only company in the world to have built these machines and we have done so with a very high success rate”
MINING BUSINESS With contracts across many industries, the business conducted by VR Engineering encompasses a range of different clientele. Most recently, the company has seen major work coming from the mining industry; an industry that obviously could not operate without power and has a substantial need for emergency and backup power. “We are working with some of the biggest mining companies in South Africa and we work with all divisions, these guys are our biggest clients right now,” says Nico. “The machines we are making for the mining industry are very specialised. As far as I know, we are the only company in the world to have built these
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machines and we have done so with a very high success rate. “Any new designs or concepts have highs and lows, we built a new machine in the 90s which had a success rate of around 70% but like every industry, we learn from mistakes and constantly make improvements.” The products supplied to the mining industry by VR Engineering have become vital for their customers with some generators working twice as much as initially planned for. “Some of our machines have been so successful, we have refurbished them and sent them back to the mines where they are doing much more work than they were originally designed to do,” says Nico.
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RENEWABLE ENERGY? In March, Vodacom unveiled the largest array of solar panels ever installed on a single building in Africa. The project formed part of the company’s drive towards energy efficiency and cutting the amount of electric it takes from the grid. The building in century city is now equipped with over 2100 solar panels, expected to provide 75% of the electricity required during peak times. With such a large emphasis being placed on renewable energy projects, you may think that VR Engineering would suffer and sales might decline - after all, diesel generators are not viewed as environmentally friendly power sources but Nico tells us that these new sources of power are not a concern. “I don’t see it as a threat,” he says, “our work is concentrated on emergency situations.”
As for the future, Mick explains that the company is firmly focussed on continuing to deliver quality generators to customers, saying: “In the future, it is possible that a larger company might take us over. Right now, our business is supplying specialised diesel generators to customers, especially from the mining industry, as soon as they require them and that is what we excel in.” The family business is in a strong position and looks set to continue with the exceptional success achieved over the past 54. “My father is now 74 years old and he will be looking to slow down a little bit,” says Nico. “If my children are interested and have the passion for it then it would be nice to have them involved,” and this would ensure the businesses success continues to draw from van Rensburg roots for many years to come.
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+27 11 762 5431 www.vrengineering.co.za
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