SPP Pumps – staying relevant in a changing market

By Ilana Koegelenberg

Globally, SPP Pumps has been involved in the design, manufacture, and production of centrifugal pumps and systems for a variety of applications for more than 135 years.

SPP Pumps (South Africa) is the subsidiary acquired by parent company Kirloskar Brothers in 2003. The local head office and manufacturing facility is located in Chloorkop, Johannesburg, with support offices in Cape Town, Durban, and Port Elizabeth.

The South African factory is ISO 9001 certified by TUV (the German technical inspection association).

SPP00 1Inside the SPP Pumps manufacturing facility.
Image: Planet KB Photography

Products and services
SPP Pumps produces pumps across a range of industries, including HVAC, oil and gas, water, power generation, construction, mining, and fire protection. These include a broad spectrum of pump sets, such as end suction long- and close-coupled pumps, split casing pumps, and multistage pumps.

For the HVAC market specifically, it provides these products: Unistream end suction long coupled, Eurostream end suction close coupled, Thrustream horizontal split casing pumps – long coupled, and Instream inline close coupled.

The specifications for these product lines are as follows: the standard construction is made of cast iron casing, bronze impeller and casing wearings, while all shaft sealing arrangements are made with mechanical seals. Unistream and Thrustream base plates are enamel painted or galvanised, and 304 stainless steel drip trays are fitted.

SPP follows industry best practice centrifugal pump applications for the HVAC industry, which requires practitioners to take a ‘systems approach’ to pump selection, control, installation, and commissioning. In a systems approach, attention shifts away from individual components to focus on total system performance. The company also provides a 24/7 service team to assist with breakdowns.

SPP00 2The team is always looking for ways to improve on the quality of its products through research and development.
Image: Planet KB Photography

How it works
SPP’s production cycle starts with the sales person receiving the enquiry from the customer. Sales perform the required selection and pricing and then quotes the customer. If the client puts in the order, the job is processed on SAP and the customer is issued with a general arrangement (GA) drawing for approval. Once approved, SPP manufactures the base plates and places the orders with its subcontractors/suppliers. Upon receiving the parts, the pumps are assembled and a final quality control is done before the pump is ready to be dispatched to the customer. This process takes between four and six weeks; however, special arrangements can be made for urgent orders.


“We are always looking for ways to improve on the quality of our products through research and development.”


Challenges

The quality of local castings used in producing pumps and the high price of local casting are the main challenges the company faces, according to Patrick Hindry, general manager: sales and marketing. “We are competing with cheap imports. These imported products have good delivery times to the customer, which makes it hard for us to be competitive.”

He lists other issues, such as unreliable and poor work, strikes, and strict labour law policies. “The current tough economic times are forcing manufacturers to hold more stock,” says Hindry.

“The South African pump sector has also been affected by severe job losses and many local manufacturers are applying short time,” says Warren Mitchell, process manager for HVAC. “To produce anything locally is becoming more expensive; delivery times are also becoming tight because many of the contracts awarded are done at the last minute.”

SPP00 3The head office is located in Chloorkop, Johannesburg.
Image: Planet KB Photography

“All these pose a conundrum to any pump manufacturer, as we find ourselves in an industry that is not growing,” says Mitchell. “The 3.7% contraction in the manufacturing sector during the first quarter of 2017 is disturbing, and it magnifies the reality that we are in a recession.”

So, what can be done about these challenges? One thing is for employers to work with the unions to find solutions relating to labour. The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) and the employer associations are in the process of finalising the new Metals and Engineering Industries Main Agreement. “The government also has a role to play in promoting local manufacturing,” explains Hindry.

Staying competitive
SPP stays competitive by ensuring that the business keeps up to date and follows industry best practices and requirements. “We usually keep extra stock on site and our business model is customer centric throughout the production cycle in order to meet and fully satisfy the needs of our customers,” says Hindry.

“We are always looking for ways to improve on the quality of our products through research and development,” marketing specialist for SPP Pumps, Tralone Khoza, explains. “We ask every possible question in our interaction with our customers in order to understand their business and what is keeping them awake at night, so we can add more value to their business processes and provide the best solutions.”

“We have full confidence in the reliability and quality of our products and we are customer focused — that will enable us to remain relevant in a challenging market environment,” adds Khoza.

SPP00 4Labour is one of the biggest challenges SPP faces regarding local manufacturing.
Image: Planet KB Photography

Barriers to entry
Why aren’t more companies going the locally manufactured route? “It is due to cheap imports, which reduces labour costs and the cost of capital equipment, which all contributes to high manufacturing costs,” says Hindry. “The fact of the matter is, the customer is always looking for a quality product at an affordable price, and a lot of them are not concerned about where the pump comes from, but only with running their operations efficiently with minimal interruptions.”

Why go local?
It’s not all bad, though; there are some advantages to being a local manufacturer. One of the benefits is lower stockholding, Hindry explains. As you have shorter production lead times, you can make the order and easily customise the products to suit customer requirements.

Future of local manufacturing
So what does the future of local manufacturing look like, particularly relating to the HVAC&R market? “The market is currently down, with very little growth,” says Hindry. “Should both the economy and the business environment improve, there will be more opportunities to serve this market.”

 

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