The Saudabel “World”
With 12 years of existence, Saudabel is preparing itself to increasingly strengthen its position on the Angolan waters’ market. África Today talked to Sheila Stiller, Finance Manager of PT Águas, in order to better understand the story of the Saudabel “World”. A journey through the waters’ universe, its personnel and the diary of a visit to the company’s facilities.
Since when does Saudabel exist in Angola?
With the first unit of Saudabel having left the production line in March 2000, the brand has just celebrated its 12th anniversary.
What is your opinion about the bottled water market in the country?
Ten years ago the Angolan market for consumer products was dominated by imported products from virtually every corner of the world. Bottled water was no exception. The last decade, though, has seen the establishment of a number of national brands that are gradually gaining consumer’s confidence and in the course are replacing imported products with national ones. As the country as a whole develops, GDP growth translates directly into an increase in individual purchasing power, giving more people access to healthy consumer products such as bottled water. With the Angolan economy expanding as a whole, with the positive momentum we have seen over the last years from the public institutions in supporting and facilitating commercial activity, it is clear that industry will continue its growth in sync with business opportunities created by the country’s development.
And how would you assess the competition? Are there good companies in this industry, or is there still a deficit in this area?
The question asked, really contains two elements. Please allow me to respond to them one by one. With regards to the question of the level of competition, it must be noted that the Angolan bottled water- or more globally the market for beverages - is probably one of the most competitive and dynamic industries in existence today in Angola. We have seen numerous companies entering the market over the last 5 years, introducing a level of competitiveness unknown before. We regard this clearly as positive both for consumers and manufacturers alike, keeping us alive, alert, on our toes, leaving no room for complacency and forcing us to continuous improvement to distinguish ourselves from our competition. This then leads directly to the second part of your question, the concern about quality. We at PTA-Aguas, Lda. have a strong quality pedigree with part of our top management and equity holders being of German nationality. We strongly believe in the values of quality, quality and even more quality and we go out of our way to provide the Angolan consumer with a top quality product that truly deserves the attribute Angola’s premium drinking water. It remains to be seen to which degree our competition will be able to keep up with increased consumer expectations and increased awareness for product quality.
In what regions of the country is your company physically present?
We currently have two independent production sites, one in Kifangondo and one in Soyo.
What is the amount of water daily produced?
In line with our growth expectations for the Angolan market, we currently have an installed water treatment capacity exceeding 500m3/day, a bottling capacity of 17,500 units/day for our 5 gal product and 200,000 units/day for our PET disposable bottle. Obviously the degree of capacity utilization and the daily production vary in accordance with demand and seasonal oscillations.
Is your factory unit able to meet the national market demands?
We have recently opened and started production at our brand new production facility in Kifangondo. Installations and equipment are state-of-the art, with ample capacity to serve the Angolan market for years to come. In addition, provisions have been made to be able to easily expand our water purification and bottling lines, which will allow us to dynamically respond to changes in the market’s demand.
What products does Saudabel make available to the market?
Our focus so far has been on the production and commercialization of our Saudabel brand in so called 5 gallon bottles, bottles with a content of 19 liters, which are mainly used in conjunction with water dispensers and are delivered to our customers through our convenient door-to-door delivery service. At the occasion of the FILDA 2012 edition last July we have launched Saudabel in a 1l disposable container, now widely available to the consumer through conventional wholesale and retail channels.
Is this a profitable business?
PTA-Águas, Lda.is a commercial organization and as such depends on profits to operate, meet its financial obligations and develop. Profit margins as we all know are in function of operating expenses, which unfortunately are often exorbitant in this country in comparison with other parts of this world.
Who are your customers?
Our customer base covers the entire range of possible consumers from private and public companies to institutions, individuals and private households.
Do you have contracts with large retailers?
The 5 gal bottle, which we use to package and commercialize our products is a non-disposable, recyclable container, which during its useful life goes through multiple cycles of delivery, collection, washing, filling and capping back to delivery etc.. For us at PTA-Águas, Lda., the quality, timeliness and reliability of the delivery/collection service is an intrinsic part of the product quality and the overall customer satisfaction. We strongly believe that such vital element of the value chain should not be delegated to third parties or outside commercial entities. It is for this reason that until the introduction of our product in disposable bottles, we did not and never considered entertaining contracts with other commercial entities for the commercialization of our products. The introduction of our new 1l disposable bottle however opened our access to the wholesale and retail market allowing us to expand our footprint across the country through the use of commercial partners.
What are your major difficulties in the market?
The main difficulties we find in operating in Angola are (i) Lack of qualified personnel (ii) lack of and/or unreliability of general infrastructure (iii) lack of access to external sources of material and human resources. For an industry utilizing complex technology and operating in an environment, that offers little in terms of material support for spares and expertise, it is essential to have access to and be able to rely on a pool of highly qualified, trained and experienced personnel. Despite obvious efforts to improve this situation, the demand for such personnel by far outstrips the supply, forcing industry leaders to search for often unnecessarily costly alternatives. Throughout the years though, we have been fortunate of having been able to recruit and retain local talent, that have shown incredible dedication, commitment, initiative and responsibility and consequently have grown through the ranks into the company´s top management. We strongly encourage initiative and active participation in the development and improvement of the way we operate thus allowing our local talent to grow and develop irrespective of formal education or certificates. We consider ourselves part of a family and are proud of the strong team spirit and service attitude our people have embraced. The lack and/or unreliability of a general infrastructure remains a huge concern and cost factor. Infrastructure includes roads, electricity, water and communication which are by no means up to any international standard. Lastly the lack of ready access to materials, spare parts and technology to maintain complex industrial installations requires high and normally unnecessary stock levels of expensive items to cover for any contingency. Quick access to foreign technicians and expertise to assist in a technical emergency situation is virtually impossible due to inflexible, lengthy and complicated visa procedures, making it nearly impossible to call upon foreign technical assistance within acceptable time frames.
Has the Ministry of Industry been sensitive to your concerns?
The ministry of industry has proven to be an invaluable partner, source of information and recourse for help, advice and assistance. Easy, open and un-bureaucratic access makes it a pleasure to work with. We do see though room for improvement where competencies are shared across ministeries.
What was your turnover in 2011? And what do you expect for 2012?
With all due respect and understanding for your curiosity, we would like to keep this confidential. I believe though that the strong presence and visibility of our brand, conveyed through TV commercials, billboards, printed media such as Africa today and last but not least our eye catching delivery vehicles within the streets of Luanda and elsewhere is testimony to the size, that PTA-Águas, Lda. has grown to ever since its inception and the role it plays in the Angolan market place.
From where do all the equipments and materials come from?
The majority of equipment and materials used in the making of our products are sourced from the United States and Europe. As we see improvements in the tie-in of the angolan road network with its neighboring countries and obviously based on geographical proximity, South Africa and Namibia are becoming ever more interesting as possible source of materials.
Has the international crisis had negative effects on the water business?
Yes, we have and still see the effect of both the 2008 economic crisis, the recession that followed and the current Eurozone crisis. Growth rates are directly affected slowing down the company’s development.
When presenting a product, what is your major concern?
As mentioned above, providing the Angolan consumer with a product of the highest possible quality is at the center of our vision. Consumer perception is largely influenced by the the way a product is being presented, which is why we invest not only heavily into every step of the production process but also every element making up our product, from the quality of our bottles, the design of our labels, the appearance of our delivery vehicles all the way through to the design of our website. Even though we may at times fall short of our aspirations, we are doing our very best to constantly improve the way we present ourselves to our customers.
How many workers has Saudabel? Are they mainly Angolans? What training do they have?
We are currently employing close to 200 employees coming from all walks of life and cutting across the board of every conceivable educational level from primary to secondary level for the more operational personnel all the way to academic level for middle and upper management. In line with the government’s efforts for angolanization, we recruit almost exclusively from local resources and fall back on international staff only in cases where we are unable to find equivalent knowledge or expertise in the local marketplace.
What is the estimated investment volume for 2012?
We are planning to invest a total of approx. four million dollars during the 2012 calendar year.
Do you predict any innovation for the near future?
We have spent considerable effort and resources into improvements to the way we currently handle deliveries to our customers. We have recently started field testing a PDA (short for Personal Digital Assistant) based delivery system developed inhouse to electronically and digitally recording all product delivery transactions. Instead of working with multiple paper copies, delivery lists etc., the transaction of delivering x amount of bottles and receiving y amount of empty bottles at the customer location will be recorded electronically with a receipt printed out onsite and handed over to the customer much in the same way as this occurs at any cash register in a supermarket. This should allow us to better keep track of the thousands of delivery events occurring every months and should help us minimize human errors. Also some of you might have logged in and seen our new website at www.saudabel.com. The site has been set up to tap into this information offering customers to log into our servers and browse and verify relevant account information online.
What are your growth prospects for the sector?
There is reason to believe that the year 2012 will economically be a stronger year than the previous year. We would like to believe in this oracle and hope that we will be able to grow and strengthen our position in the Angolan marketplace. As mentioned above we have launched our new product line in the middle of this year, which - given the market response we are seeing- should help us consolidate our sales revenues for this year.
What is the Saudabel’s growth and expansion potential in this industry?
Despite considerable efforts, the industrial development of Angola as a whole is still in its infancy. Even though the beverage industry is probably more developed than any other national industry, much remains to be done, developments that have occurred and that have been implemented in the greater area of Luanda are waiting to be carried into the provinces, where new markets are waiting to be developed.
Diary of a visit to Saudabel / PT Águas
The challenge was huge: to wake up on a Saturday morning and involve ourselves on the Viana road’s hellish traffic, which would take us up to Kifangondo. Tremendous, undoubtedly! To make things worse, the mist gave respite and the blue sky showed up. With it, the heat. The temperature rise. Even harder!
Nevertheless, a transcendental motivation was invading Africa Today’s team. Getting to know the “Saudabel World”. Knowing the water that we drink and which is distributed by the city of Luanda. Meeting the facilities and the state-of-the-art technology that existed, as we knew in advance.
And so it was. A two-hour guided tour that could have been more, but hunger pressed and the stomachs could not bear it. To the two-hour tour, one must add 90 minutes of travel, plus a breakfast without that reinforcement, always crucial for those who will spend long hours without touching food.
Going back in the story [to Saudabel’s facilities], we had an authentic lesson of Physical-Chemistry. Making us remember those 50 minutes in the secondary school, talking about atoms, cells, water, osmosis, filters, electricity, reservoirs, among other elements connected to this science area.
At the end, after drinking more than four glasses of water (yes, it was very hot), the confirmation that quality reigns at Saudabel. Not only in the technology, but also in human resources. Qualified and with a contagious sympathy.
Closer to Luanda, on Avenida 21 de Janeiro, are the company’s offices. Here, the tanks give way to the meeting/training rooms, and the wide area existent in Kifangondo is replaced by spaces designed to welcome Saudabel’s employees. The professionalism is maintained but, above any other characteristic, the good mood overflows. Starting from the front desk, passing through the logistics, until we finally enter the directors’ offices. A trait that is common, we confirm.
In the inside [of the directors’ offices], the same sympathy, the same smiles, the exchange of ideas and… the story that is told here in interview. The Saudabel World’s story.