BAC: sustainable local manufacturing


BAC has been manufacturing in South Africa since the 1960s and continues to grow its brand through a strong focus on people — both staff and clients alike. By Ilana Koegelenberg 

BAC00 3BAC looks after its employees well and has about 80 staff on the factory floor currently.

BAC was founded in the US in 1938 by John Engalitcheff Jr, a Russian immigrant. Engalitcheff pioneered cooling system technologies in every sense, aware of the promise of the emerging air-conditioning and refrigeration industries. Initially focused on evaporative condensers and evaporators, the company slowly began branching out into cooling towers and fluid coolers in the 1950s. Then, in the 1960s, they began branching out globally.

The BAC South Africa factory in Philippi, Cape Town, was established in the late 1960s to effectively serve the African market.

Today, BAC has manufacturing plants in the US, Belgium, Italy, Australia, South Africa, China, and Japan.

Products and services

BAC predominantly serves the air conditioning, industrial refrigeration, and industrial process cooling markets. They manufacture the following products locally in their Cape Town factory: cooling towers; fluid coolers; evaporative condensers; hybrid cooling towers and condensers; adiabatic coolers and condensers; evaporators; and ice thermal storage.

BAC South Africa is also the only BAC factory globally that manufactures its own fibreglass. “It makes our factory in South Africa unique within the global BAC organisation,” explains Chris Willis, BAC’s market and channel development manager. “We are lucky to employ highly talented artisans in our FRP section who previously worked in the local boat building industry.” Since that industry went into decline, BAC is one of the few manufacturers now keeping those skills alive in the market. Cape Town is also the only factory in the BAC group that manufactures evaporators for industrial refrigeration.

The factory floor today employs 80 people whom all hail from the Cape Town area. Many of these staff members have been with BAC for many years, decades even, with the longest-serving employee having been at BAC for 40 years now. “We find that our staff want to stay with us because of our strong culture around people’s well-being and development, staff social interaction, and a hands-on approach of the management,” explains Willis. “We treat our staff like family.”

Their factory manufacturing processes have been set up specifically to operate within a lean manufacturing concept, similar to those used in the automotive industry, so as to eliminate non-value-adding activities (or ‘waste’) in all areas of manufacture.

Challenges in local manufacturing

Supply chain for specialist parts can be problematic locally. So, while BAC always strives to buy locally first, they are sometimes forced to bring in some specialist components from overseas, which can be difficult due to the fluctuating exchange rates, explains Willis. Luckily, as a global company, they can leverage their global supply chain — which ensures benefits of global sourcing volumes on availability and pricing.

Other than that, they do not really experience many other challenges with manufacturing locally. “We have not really found labour unrest in South Africa to be a major problem for us,” says Willis. “With our focus on staff development and social initiatives, we have excellent employee relations and a very loyal employee base.”

Staying competitive

“We focus on having a range of innovative solutions so as to offer to our customers exactly what they need. We can fit a product exactly to a customer’s requirements — whether that be a focus on power, water, maintenance, operational flexibility, or anything else,” says Willis. “We sell on value to our clients — not on price.”

When it comes to the products BAC manufactures, South African customers prefer to buy these locally, partly because the typical sizes make importing from overseas time-consuming and costly. “But also because they want to support local manufacturing and they want local manufacturing that can personally support them,” says Willis.

These products are individually selected engineered solutions and BAC’s South African customers value a supplier who can provide them with that local support to tailor the solution exactly to their needs, rather than picking a generic solution from a catalogue that only partly meets their requirements, explains Willis.

This helps them stay competitive with imports.

Barriers to entry

So, why aren’t more people locally manufacturing in this sphere? Investment in research and development, as well as state-of-the-art manufacturing equipment and processes required to be at the forefront of the heat transfer market, is considerable. Not to mention that the South African market has high standards and it values the best technology, certified thermal performance, innovative solutions, and being at the very forefront of global engineering. There are few companies even globally who can offer that, explains Willis.

South African customers also value trusted personal relationships and a long-proven history of serving this specific market with its specific challenges. “For a new company to manufacture here, it would require significant initial investment, and a relatively long time to gain the trust of the market,” says Willis. “Therefore, BAC’s customers keep coming back to BAC — we have been here a very long time, and they know we will always stick with them through all their challenges.”

Why go local?

“At BAC, there is a culture among our people of huge local pride — the staff love working for a prestigious international brand like BAC and being able to play a part in providing important equipment into their own country,” explains Willis. “There is a tangible responsibility felt towards our local market, and that is shown in the customer focus that all our staff share. That level of personal care and connection to the market just wouldn’t be felt if products were imported instead — and that matters to our customers.”

BAC South Africa also offers solutions and products specifically tailored to South Africa and the challenges we face in our local market. They recognise the possibility to constantly develop new solutions as those challenges evolve and shift over time. This gives their products the edge over imported alternatives.

Sustainability matters

BAC South Africa, just like the rest of the global company, has a strong focus on sustainability. “As a company, we focus on sustainability in everything we do,” says Willis.

This includes:

Future of local manufacturing

Is there a future for local manufacturing in the South African HVAC&R market?

“I expect there to be continued manufacturing in South Africa for our market,” says Willis. The personal support and ability to adjust to specific South African needs is a huge value to the market. “South Africans are very proud of their own capabilities domestically and will continue to support domestic manufacturing over imports.”