Staying true to its ‘Affordable Innovation’ mantra, in the nine years since its decision to enter the construction machinery industry, Revaro has become a one-stop shop for all machinery, consumables and auxiliary equipment needed in the brick-making value chain. It has also successfully bridged the gap for a value product in this market segment to cater for both small and established companies. Speaking to an interviewer, MD Reyno van Rooyen, revealed that the next big venture is to offer ‘affordable’ equipment to the agriculture industry, as well as developing the much-needed support infrastructure.
Revaro has become a one-stop shop for all machinery needed in the brick-making value chain in southern Africa. How did it all start?
Reyno van Rooyen: Revaro Started in 2000. The original start up was an IT company which evolved into a business management consultancy, specialising in business turnarounds. I was one of Productivity SA’s consultants, an institution funded by the Department of Labour. To give you an idea, when companies need to embark on a mass retrenchment in South Africa, they need to give a six-month notice period to the Department of Labour. The department then appoints Productivity SA to offer consultancy services to rescue struggling businesses through a possible turnaround strategy to avoid job losses. So, I was one of the consultants offering these services on behalf of Productivity SA.
My last turnaround project in 2009 was for a brick manufacturing company. As part of the solution I suggested a geographic and product diversification to give the business a breath of fresh air. To be able to diversify its product range, obviously the company needed new machinery. I then went into the market and contacted several local engineering companies that manufacture brick-making machinery. It is from that point that I realised that the pricing was the biggest hurdle, especially for start-ups.
And that’s when you saw the opportunity to offer ‘affordable innovation’?
From that project, I saw the opportunity to bridge the pricing gap in the market. In an environment where we want to create new businesses, with the government focused so much on small and medium enterprises (SMMEs), I was of the view that the cost of machinery in the market made it difficult for most SMMEs to get into this sort of business. The pricing was out of their reach. I then decided to investigate the international market to look for machinery that we could supply to local start-ups at affordable prices. That is what Revaro is all about today. Our slogan is ‘affordable innovation’. We deal with more than 50 factories across the world for our machinery needs. We constantly look at ways to innovate together with them for us to be able to offer world-class innovation at an affordable price.
Where do you source your machinery?The business started when I decided to fly to China in April 2010, where I identified various factories which could supply us with quality but affordable gear. We have since cast our net wider and we now source our product from India, Turkey, Italy, Spain, Austria and Germany as well.
We exhibit at trade-shows across Africa to showcase our broad range of affordable, innovative equipment. The wide network of suppliers allows us to source the very best of products. China is very good for certain products, while India is also better in some product areas. The same applies for Turkey, Italy, Germany, Spain and Austria, they all have their strong points. It’s very important for us to make sure that we have the right product for each market segment.
How broad is your product range?We started with purely brick-making machinery and brick production pallets. We then expanded to offer the complete solution of the brick-making process, all the way from crushing plants, aggregate batchers, concrete mixers, block and paver-making machines, lintel and hollow core slab machines, kerb making machines, roof tile machines, concrete pipe machines, to standard and all-terrain forklifts, readymix concrete plants, brick production pallets and self-loading concrete mixers. We later saw that there was also an opportunity to supply all the auxiliary equipment around it. We saw a need to offer well-priced yellow metal equipment such as the wheel loaders, backhoe loaders and excavators.
To become a true one-stop shop, we also decided that we needed to supply all of the consumables around the brick-making process. We also supply all the admixtures, colouring oxide for roof tiles, pallet wax oil, PC wire and strand, as well as concrete reinforcing. If you look at a typical brick factory’s needs, the only things that we don’t supply are sand, stone, water and cement.
You were able to identify opportunity and bridged a crucial gap in the market. What sort of growth have you seen as a business?
The company has grown 8 000% from 2010 and it has now become a substantial player in the brick-making machinery supply chain in southern Africa. Eight years later since our inception, we now export into 20 countries in SADC. The only country we are yet to supply is Angola, but we are confident that our first machines will roll into the country soon as we have already had a lot of enquiries. Our biggest export destinations are Zimbabwe, Malawi, DRC, Mozambique and Zambia, as well as Lesotho and Swaziland.
From an affordability point of view, how do you compare with the so-called premium offerings?
Our pricing, on average, is 50% of some premium suppliers’ cost, but for the same machine output. There is a huge price difference and it is part of the reasons for our exceptional growth since we started. We feel that the market was waiting for a value-for-money products of this nature. This type of growth is only achievable when you offer something the market needs.
You also have advanced plans to expand the current product offering. Tell me more about that.
Part of our strategy is to add a new product every year. We are working very hard in developing our dealer base of more than 70 dealers across Southern Africa. Everyone whom we have contacted so far has shown tremendous interest in becoming a Revaro dealer. From a product point of view, we already have the small loaders and rough-terrain forklifts, skid steer loaders, telescopic loaders, telehandlers and have recently added side-by-side recreational vehicles. This will give Revaro dealers a broad and profitable product range that makes it really worth while to be part of the Revaro family.
