Company Reports - Karebo Systems (Pty) Ltd
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Karebo Systems (Pty) Ltd
Promoting Energy Efficiency
Written by Rebecca Waters & Produced by Nick Norris
A Division of the Karebo Group, Karebo Systems (Pty) Ltd provides a range of professional services and products to the electricity industry. These services include technical engineering consulting, business improvement and strategy development, and demand side management (DSM) related services.
Since its inception in 2000, Karebo Systems has grown significantly, delivering record growth in turnover and profits. “Indeed it has and we are very proud of that,” says Director Ravi Govender. “This year we are on target again to have another increase in our profit margin and turnover.”
One of the main drivers of this growth is Karebo Systems’ demand side management services, which include program development, strategy development and program management services. The company started offering these services after it became apparent that South Africa was seeing increased demand in power consumption.
However, demand side management is not the only focus area and Karebo’s new factory will also facilitate a lot of growth, says Govender. “Quite obviously, the aim of the business is to grow and we have identified two areas for growth: power projects and manufacturing,” he says. “We found that in South Africa especially, and in other parts of the SADC region, that there is not a lot of attention paid to the maintenance of electrical networks.
“We believe that the repair and refurbishment of equipment is going to be a big market in the future,” Govender continues. “The larger manufacturers, such as ABB, Siemens and Alstom prefer to supply new equipment. Currently, they won’t want to take on orders into their workshops that require refurbishment of equipment and repair of equipment, they would rather outsource that.
“As a result, we set up a factory workshop to manufacture a limited number of new products but it is also set up to do repairs and refurbishment of transformers and switchgear,” he says. “The aim is really to increase the capacity and output of the factory on a sustainable basis.”
Unsurprisingly, the construction of the new factory has meant Karebo has needed to invest in new equipment.
“What we have been doing with all the businesses is we have been identifying ways in which it can be self-sustaining and self-funding,” says Govender. “So for this particular area we didn’t go into the full investment cycle purely because for a new factory, especially in this particular climate, we didn’t believe it to be a good investment case.”
In order to increase the infrastructure in the factory, the company has initiated a strategy whereby it purchases used equipment.
“The current poor economic client, although challenging, presents its own set of opportunities. There is more equipment going to auction and provided that this equipment meets our technical specifications and is in good condition, we find that we can source certain pieces of equipment at very good prices,” Govender explains.
“That is the sort of strategy that we are looking at. It doesn’t always work, for instance you are not going to be getting a lot of core cutting machines in an auction, but we have landed some very good equipment with this strategy,” he says.
EMPLOYING THE SKILL
Govender also places great emphasis on the company’s employees – having a highly skilled and highly motivated workforce is imperative, he says.
“It is not a big company so the permanent workforce is in the region of 37 people, including the manufacturing staff, in total,” says Govender. The majority of these employees are young university or technicon graduates who are “keen to make their mark”.
“We obviously hire on the basis of skill but we hire more on the basis of attitude,” he adds. “If the individual is hungry and someone who can be moulded then we take a person on and we look to develop them.” This is done through skills transfer and skills development, whereby the employees work with retired engineers or experts in that field on a project; from the manufacturing in the factory through to the full commissioning and handover.
One particular example of this is the N$3.2 billion Caprivi Link Inter-Connector Project in Namibia, explains Govender. “After a project of this nature, these guys will be experts in that field.”
In addition to these permanent employees, Karebo also has a pool of around 200 part-time field staff that are called upon at different times of the year, depending on the size of the project.
“One project that we tend to do quite regularly would be the demand side management projects for Eskom. Unfortunately it is not a fixed project cycle; the projects tend to start later during the financial year but our target is to finish by the end of that year,” he explains. “Typically, quarter three and quarter four for us is extremely hectic on that particular side but quarters one and two tend not to be so busy. So it doesn’t make sense to be employ these extra workers on a full time basis but we try to use them as often as we can when projects arise.”
This next year will see the consolidation of five main focus areas for Karebo Systems: demand side management services, the new factory, power transformers, power projects and electrical construction.
According to Govender, the company anticipates plenty of opportunities in electrical construction, buoyed by the investment in new generation capacity by the South African government, which means that further investment in the transmission and distribution network will follow.
“That coupled with power projects and the services we want to grow,” he says, adding that the market for power transformers will remain steady. “We see the demand for power transformers for the distribution network as being steady and the need for infrastructure development as something that is not going to taper off significantly. The credit crunch is going to have an impact in terms of how much utilities can borrow but some of these things are key offerings so they cannot cut down on them totally.
“We still see that as being a big part of the market and we are going to capitalise on those opportunities,” Govender concludes.