SmartStone December 09 www. bus- ex. com 41 T he early years of this decade saw a boom in the construction industry in South Africa. During this time SmartStone rode the wave to generate phenomenal growth for itself and its licensees. But it's a bit harder to grow turnover and to sustain performance when things turn down. At the heart of the company's growth were people who were up to the challenge. " We bought the SmartStone licencing company in 2002," says James Metcalf, managing director. " We were a licensee- it's similar to a franchisee- from the mid- 1990s and we became the biggest licensee by far in that time. " When we acquired the business we immediately set about building the brand through classic marketing initiatives and the development of new products. SmartStone and its licensees enjoyed phenomenal growth until 2006/ 7." Numerous competitors had also entered the market by then and, of course, the construction market began to turn down. But SmartStone, which is based in Midrand, has weathered the hard times well. Its market emphasis naturally rebalanced between residential and commercial markets. " A large part of our market has traditionally been residential- homeowners renovating or building new homes. That's quieter at the moment but we're still getting some pretty nice projects," says Metcalf. " About 40 to 50 per cent of our production is for driveways, parking and roadways. The balance comprises larger flagstones, which are used for patios, piazzas and the like, tiles and landscaping products." SmartStone makes cast stone products, which are manufactured from a mixture of ' wet' concrete, high quality oxides ( colour pigments) supplied by Cathay Pigments and other raw materials that are cast in moulds to create products with the same appearance as natural stone. The range of products is very wide; products are used as cobble paving, flagstone paving, tiles, wall cladding and landscaping products. The products are protected by copyright but SmartStone has also invested in process technology and efficiencies in order to stay ahead of the game. " Even while we were just a licensee, we brought a level of professionalism to the industry," Metcalf explains. " We set ourselves up to first world standards and we have invested in one of the most advanced automatic wet- cast concrete machines in the world." SmartStone has a total
42 www. bus- ex. com December 09 of nine manufacturing facilities around South Africa; the main company operates two factories in Midrand, one of which is fully automatic. " The machine was developed jointly by S R Schindler, a German company, and ourselves. It offers the ability to produce a wide range of products, ' dosing' various amounts of concrete at the press of a button. We worked as partners- we specified the requirements for the machine and got the concept together; S R Schindler did the design and built it. A number of the concepts incorporated into the machine have been patented. Interest has been shown in it from our local market, Europe and the UK, the Middle East and Australia." SmartStone supplied the Melrose Arch mixed- use development in Johannesburg; the V& A Waterfront development in Cape Town; Parliament; the Presidential home; most of the casino developments around South Africa; and many private homes including Nelson Mandela's. It recently supplied a 28,000 square metre project, which is a very large project for cast stone. SmartStone has also supplied cobbles to some of the stadiums being built for the 2010 Soccer World Cup. " We're very proud of our association with these prestigious projects. It sets us apart from our competitors," says Metcalf. He believes that SmartStone is selected for large commercial projects because it has proved that it can be depended on to deliver large volumes on time. SmartStone has also been awarded the coveted Concrete Manufacturers Association Award for Paving Excellence twice- in 2002 for the Melrose Arch project; and in 2008 for cobbles supplied to a residential home. " The awards are held bi- annually and are the Oscars in our industry," says Metcalf. Licensing makes complete logistical and commercial sense. While it might be appealing to keep control of every facet of the operation, the reality is that shipping cast stone products over long distances is simply uneconomical. It's better to have manufacturing close to where the product is being used. The licensees benefit from the technology, technical support and the strength of the brand. " The licensing approach is a winner for both parties,' Metcalf continues. " The business owners drive the business with more passion than a manager does. They also have our support. We spend a good few hours every week providing technical advice. They have the advantage of a ' big daddy' holding their hand when needed.