VENTURES: John Thompson Scores On Service
Recent Western Cape Business News
THE Bellville-based John Thompson, which has become a household name across most sectors in South Africa’s economy for its boilers is steaming with activity.
This is so despite the cooling off of the local economy and even those of the export markets, where the company too has an impressive installed base of complete steam generating plants.
Divisional director of John Thompson, Theo Lotter, tells CBN the company achieved record results in turnover and profit for the financial year ending March, with work executed for the first time exceeding R1 billion.
Interestingly, and importantly, revenue from its provision of maintenance and efficiency improvement services exceeded revenues from supply of new plant for the first time. This is a new trend – well planned in advance – that will continue well into the future.
“We realised some two years ago that more emphasis had to be placed on the retention and development of skills, for without these we wouldn’t have a business. We also foresaw, because of changing market conditions, that we should closer focus on the potential that the service market holds”, says Lotter.
This move has already payed off handsomely. Whereas revenue from services represented around 20% of revenue a few years ago, it is now more than 50% and growing.
He points out that John Thompson has a large installed base in the market – for example, John Thompson had supplied more than 2000 boilers in South Africa mostly to the process industry, mines, government institutions like hospitals and prisons etc and power stations– and that it has built up, through the years, long-standing relationships of mutual trust with its customers.
Lotter says increasingly customers realise that they cannot maintain and control efficiency as well as John Thompson, the original equipment manufacturer, with its exceptional expertise in cost effective steam management.
“For example, with power stations, where we have a permanent presence, availability of electricity has improved dramatically over time and unplanned black-outs have become minimal”, he says.
There is a greater awareness across industry that, because of economic pressure and a number of environmental issues, everybody is forced to look at the energy efficiency of their plants.
Partnerships between John Thompson and customers today provide service solutions which is in sharp contrast with most situations of years gone by, where the company was often only called upon “as an ambulance emergency”, as Lotter puts it.
To effectively execute on its service delivery the company has factory-trained technicians based in Cape Town, Johannesburg, Durban, Nelspruit and Bloemfontein to provide a national network of service for all aspects of boiler combustion – electrical, coal, oil, gas and mixed fuel. In addition, an international service is available to customers throughout Africa, the Middle East and South America.
Ideally John Thompson enters into five year partnerships with customers where it takes care of the whole steam generation and distribution systems. It undertakes to provide the client with a reliable, safe and efficient supply of steam, thereby reducing the client’s financial risk.
The efficiency with which the fuel in the boiler is converted into useful energy is the essence of the service and is one of the main sources of containing the cost of steam generation. “High thermal efficiency comes from using trained and skilled manpower, together with experienced supervision and management. A full understanding of the John Thompson boiler design is essential and ongoing preventative maintenance ensures maximum heat transfer,” Lotter says.
As mentioned, the company has beefed up its staff training. It runs a modern boiler house training school because staff training is an essential part of the programme. John Thompson assumes all responsibility for staff training and the supply of skilled maintenance personnel. Where required, existing staff can be used so as to minimise any risk of labour unrest, as a result of outsourcing.
Lotter is optimistic that there will be a growing demand for the company’s services, not only because provinces need more infrastructural spending on healthcare (hospitals) and Eskom’s spend, but that it will also come from across the board in the private sector as a result of the compelling arguments for the company’s service offering.
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