Project Africa Academy, Kenya

In mechanical engineering, Africa is almost uncharted territory. Nevertheless, Ensinger GmbH, is now investing in a project team in Kenya: the Ensinger Africa Academy in Nairobi, Kenya.

The Ensinger Group from Nufringen near Stuttgart is one of the world's leading companies in semi-finished products and blanks made from engineering plastics used to produce gears, guide rails, nozzles, and thousands of other parts. Jan van Schaik is responsible for the semi-finished products division at this family-owned company with 2,700 employees and €616 million in revenue, alongside co-owner Thomas Ensinger. The 45-year-old Dutchman is also driving forward market development in Africa. Here he explains the role German bottling machines play in this effort and why his experiences in Brazil make him optimistic.

Demand for spare parts is high.

Mr. van Schaik, one of your key customers is the mechanical engineering sector, an industry that is almost non-existent in Africa. Why is that?
Jan van Schaik: It’s true that Africa accounts for less than five percent of our direct sales. However, looking ahead, we see a significant potential demand there. The most important sales market on the continent so far is South Africa, where there are many mechanical engineering companies. This is followed by Egypt, where the industry is also developing, and then Morocco, Algeria, and Tunisia. Beyond these countries, there is indeed very little mechanical engineering in Africa.
Why are you going to Kenya then?
van Schaik: In Kenya, however, there is a demand for spare and wear parts, particularly for equipment that incorporates our components.
The supply of spare and wear parts often faces critical challenges in Africa, and we aim to improve this situation.
Can you give an example?
van Schaik: Bottling plants from German manufacturers are used by Coca-Cola and the global beer giants that dominate in Africa as well. Companies like Krones or machinery manufacturers such as KHS, GEA, Marel, and Tetra Pak install various plastic components in their systems, such as filling nozzles. These nozzles may either come directly from us or from companies that process our semi-finished products—tubes, plates, rods—for such purposes. If just one specific filling nozzle fails, the entire system comes to a halt. This can become very costly. Coca-Cola, breweries, or ketchup manufacturers want to resolve such issues quickly, as do the suppliers of the bottling systems themselves.

Standing out from competition with warranty and service

So customers need rapid availability of parts on site?
van Schaik: Exactly. While there are spare parts warehouses in the country, they're small. And what's needed is always what's not there. Simple products like sliding rails can be sourced and adapted locally by customers, some even produce them with 3D printers. But most parts must be expensively flown in from abroad as original parts. This is also because users want to ensure service and warranty from the system manufacturer. But this takes time and money, and shipments frequently get stuck in customs.
Is local supply through local manufacturers not possible yet?
van Schaik: Our customers tell us that they currently struggle to find both the right material locally and companies that can process the semi-finished products into nozzles or gears. While there are turning and milling operations in Kenya that could machine our tubes, rods, and plates, these companies aren't competitive and don't offer acceptable quality.
The main issue is staff training.

Inhouse-Training for machining mechanics

So you want to manufacture the parts in Kenya yourself in the future?
van Schaik: Yes. If we can supply components from local production, we'll have sustainable business with our semi-finished products and finished parts. We also strengthen German machine manufacturers' market position: they can differentiate themselves with comprehensive and prompt spare parts supply from competitors offering simpler systems with less service.
About three years ago, we looked at companies that could be potential suppliers: none really suited us. That's why we started organizing training for machining mechanics in Nairobi in April last year.
What do you find in the vocational schools?
van Schaik: Many things the economy needs are missing, like proper training for machining. We're filling these gaps. We train teachers and cover electricity and maintenance costs for training machines. Students machine plastics, "our" material.
How are the vocational schools equipped?
van Schaik: Surprisingly well. There are almost new turning and milling machines – barely used because there's no money for operation or teachers are missing. The machines usually come from China, from an extensive program that was funded but evidently not sustainably continued.
Do you save import duties through local production?
Actually, the opposite. Kenya allows finished parts in duty-free but charges 30 percent on semi-finished products. Nobody can explain why. Like many countries, Kenya wants to support domestic production.

Long-term strategy proved successful in Brazil

van Schaik: In Brazil, we entered the market 25 years ago with a similar strategy when the industry there was also underdeveloped. We first invested in training and advising customers—these factors make a big difference. Today we’re well-established in Brazil and profitable there. In Africa, we aim to be profitable within ten years. Such a long-term horizon is only feasible in a company like ours—it’s fully owned by the Ensinger family who also uphold certain societal values.
However, skilled workers alone don’t create a good supplier structure.
Van Schaik: That’s why machinery providers and other customers must also be willing to help build a manufacturing cycle in Kenya. We’re happy to take the lead here and are already engaged in constructive discussions with companies—mainly German ones. Our success in Brazil was also based on collaboration with partners like food processors and agricultural machinery manufacturers.

A pilot project for the continent

How do you currently serve your markets in Africa?
van Schaik: In North and South Africa we work with external distributors who sometimes produce finished parts from our semi-finished products themselves. We don’t have our own branch on the continent yet. The Africa Academy project is currently managed by three employees. Beyond our existing markets on the continent, we see Kenya as the country where we’re most likely to establish a market presence first before potentially expanding this project to other countries later.
Who are your current customers in Africa?
van Schaik: In South Africa, mechanical engineering companies along with various businesses from its relatively diverse industrial sector. In North Africa, primarily near-shoring industries producing automotive or aerospace parts for Europe.
This interview was conducted by Ulrich Binkert, Germany Trade & Invest

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