Automation Systems Market Outlook for South Africa


South Africa offers not only huge opportunities in mining, but also in many other industries.  Next to the infrastructure markets in power generation and water & wastewater, the markets for food & beverage and automotive offer high growth potential, according to a new study by ARC Advisory Group.  After the end of Apartheid, South Africa developed to become the largest economy in sub-Sahara Africa, representing 40 percent of the continent’s industrial output and 25 percent of its gross domestic product (GDP), while accounting for only 3 percent of its surface area.

“South Africa has the strength to not rely solely on its underground resources and the mining business.  In today’s global economy, every country has to find its place in the global value chain,” according to analyst Florian Güldner, the principal author of ARC’s Automation Systems Market Outlook for South Africa”.

Internal Drivers
Growth in the South African automation market is coming from various sources both inside and outside the country.  Within the national borders, increasing consumer spending and the ongoing privatization in the infrastructure markets are driving growth.

Consumer spending is one of the main engines for stable, long-term development.  The main factors that determine development are distribution of income and population development.  While the population of South Africa will continue to grow and the country will evolve into a more urban society, distribution of income is a problem.

Unemployment in South Africa remains high.  This creates social tension and lowers private consumption.  Poverty is also stubbornly high.  Nearly a third of the population lives on the equivalent of less than two dollars a day.

Finally, the educational system is a major obstacle to growth in South Africa and also a challenge for global companies seeking to invest in the country.  Skilled workers are a rare asset, but one that is needed for South African manufacturing to be competitive on the world market.

External Drivers
South Africa is a stepping-stone to sub-Sahara Africa for many global companies.  Much of the country’s exports go directly to neighboring countries, so the future of South Africa’s economy depends in part on the development of Namibia, Botswana, Mozambique, and Zimbabwe.  Positive development in these countries will also boost economic growth in South Africa.

South Africa also benefits from foreign direct investment (FDI), especially from China.  Sub-Sahara Africa accounts for 14 percent of Chinese non-financial outward investment, such as production facilities, office buildings, and mines.  While a large share of investment goes into exploiting commodities, an even larger share goes into manufacturing.

Automation:  No Way But Up!
The largest single industry in South Africa is mining.  The country is rich in resources of all types and this will guarantee a stable inflow of capital and investments.  The product focus is on DCS, PLC, and AC drives.  The second largest sector is power generation — typical for developing countries.  Overall, mining, power generation, and water & wastewater make DCS the largest product market in South Africa.  Other important sectors are food & beverage and automotive.  However, both are characterized by a high import quota, meaning that much of the automation equipment is already installed on equipment that is imported into the country.

Overall, the South African automation market does not differ much from its “western” counterparts, and the product split equals roughly the structure that we see in Europe or North America.  In general, automation is seen as a value-add and not simply as a cost factor.  For this reason, end users are willing to invest in the latest high-end automation systems.

European automation award


Emerging Company Award in the Automation and Control System Services in the EMEA market.

The 2009 Frost and Sullivan Emerging Company Award has been presented to Adroit Technologies for its distinct competence in catering to exact customer requirements in the EMEA (European, Middle East Africa) automation and control system services (ACSS) market. Having created a unique identity in the Southern African market, the company is now emerging as a strong participant in the European ACSS market. Adroit develops SCADA and HMI software for major process and discrete industries and has a diverse product offering specific to end-user requirements. The company’s aim to focus varied market segments and expand its customer base globally has forced it to take a leap, which has started yielding profitable results.

Joint Venture a Way to New Market Penetration

Being a small participant in the EMEA market has given Adroit the advantage and
opportunity of working closely with its customers. Started as a software producer for the SCADA/HMI and Reporting products the company is now focused on offering its VIZNET Information Portal product. Recognised by Microsoft, VIZNET is a software platform that answers the age old challenge of collaboration and content delivery of data, information and knowledge through a single Smart Client User Interface. The real-time mine operations management portal built by partner Polysphere was also based on the VIZNET product.

Product Features and Benefits

Distinctive advantage of VIZNET Information Portal introduced by Adroit in 2008 helps in retrieving the real-time data and combines it with the MIS, MES and ERP information. It presents these data in the reporting structure through a single-user interface. The wizard driven and visual configuration makes development and maintenance of any application quite simple. The security model, built on Microsoft’s active directory offers clients peace of mind when using the smart client connectivity over the internet.

Chart 1.1

Chart 1.1 provides EMEA Automation and Control System Services Market: Key Factors Contributing to Adroit’s Growth (EMEA), 2009

Diversified Focus

Award Description

The Frost & Sullivan Award for Emerging Company is presented each year to the company that has emerged as a significant participant within its industry. This company is perceived to have exhibited outstanding management, superior market growth, exceptional customer service and the ability to combine technology and successful strategic initiatives. This company has the exceptional know-how to take advantage of market changes through the execution of innovative strategies within the existing competitive landscape.

Research Methodology

In order to select the Award recipient, analysts quantify several market factors for each market participant according to predetermined criteria, paying close attention to their combined operations efforts. This process includes interviews with market
participants, customers, and suppliers, along with extensive secondary and technology research. The companies’ efforts are then analyzed based on the number of new customers, new segments, and commitment to business expansion coupled with market growth.

Measurement Criteria

In addition to the methodology described above, there are specific criteria used to determine final competitor rankings in this industry. The recipient of this Award has excelled based on one or more of the following criteria:

• Proof of success executing a restructuring strategy
• New market penetration (geographic, product, etc.)
• Marketing, promotion, and visibility of the company
• Degree of strategy innovation
• Technological innovation and leadership
• Increased name recognition
• Revenue and market share growth

The company is introducing the advanced alarm management product and a version 3 of VIZNET in May 2009. Knowing the fact that innovation is the key factor to compete in the dynamic market, Adroit invests close to 30 percent of its revenues in the research and development (R&D) activity annually. This has helped the company to survive even in the toughest period of economic slow down to have 30 percent growth in 2008 compared to the previous year. Adroit achieved this with a strategic approach where it focused on end users who were working on single-vendor approach. Adroit catered to these companies with its maximum benefits and at reduced cost.

Utilities and Energy Management – Need of the Hour
Adroit is a clear market leader in Southern African delivery in the latter half of 2008, Adroit added additional features to its maximum demand agent product which assists large companies in energy management. This product calculates the predicted maximum demand in any one metered period allowing demand side management to be carried out. This has helped the customers to limit the usage of power and electricity which had been the need of the hour. As reduced energy and fuel consumption can bring significant cost saving in the industry environment, Adroit is taking relentless efforts towards achieving this.

Their major end-user segments   are the water and the mining industries, some of the energy efficiency projects in which they participated in recent years were DBS Mines, PPC cements and Johannesburg Water plants.

Customer Testimony: “Girlock currently has an international SCADA product running at our other plants, but we are so impressed with the Adroit system, that we are considering switching all our SCADA software to Adroit,” says Andre Ziemski, Senior Project and Development Manager for Girlock

Wider Market Reach
With global expansion plans and clear focus on the target customers Adroit emanates its products with utmost efficacy. Participation in various industrial tradeshows, conferences and road shows has provided more visibility to the company. Some of the recent trade shows in which Adroit participated are CEBIT in March 2009, The Durban Control Road Show in March 2009 and SCADA & INDUSTRIAL AUTOMATION CONFERENCE in March 2009. In the process of educating its customers, they  frequent training programmes to the new, existing and advanced users of Adroit’s products. These courses last for 4-5 days on regular basis and customers can gain maximum knowledge out of these programmes, which would equip them to have a thorough understanding of Adroit’s products.

Adroit’s Corporate Social Responsibility
Having understood the need for expertise in the automation field, the company has started training the engineering students for a competitive future. Adroit’s corporate governance policy equips the students to gain expertise in the automation field and also provides qualified workforce to the company. Various other activities such as providing sponsorship for sports persons are also a part of the activity, which Adroit carries out for the public welfare.

Market Expansion
Adroit has installed close to 13,000 SCADA/HMI systems within EMEA and in the international market across different end-user segments such mining and water and wastewater after having understood the customer requirement completely. Adroit is concentrating more towards intelligent devices which aims at distributed process control and multifunctional communication protocols, providing customer friendly environment in the plants.

Geographic Penetration
The company works with reliable distributors who are also value-added resellers and systems integrators. This has provided Adroit more scope to clearly penetrate geographies such as Great Britain, Belgium, Italy, Poland, Canada, Australia, Thailand, New Zealand, South Korea and Malaysia with its capable partners in these geographies respectively. Adroit’s wider customer base extends to the following end users such as pulp and paper, food and beverages, petrochemical, pharmaceutical, cement and many others. Its serves more than 5000 clients and holds a strong presence in the South African market and is emerging as an efficient participant in the European automation market, handling most of the state-owned water and utilities projects. Apart from the process industries, the company is increasing its customer base in the telecommunication and the building management segments. It is also planning for global expansion by 2010 by partnering with the major automation companies.

Adroit’s key strength lies in understanding the exact customer demand and catering to it without any deviation. Being an emerging participant in the EMEA market, the company has created clear visibility for its products. In the dynamic automation market, Adroit is witnessing a stable growth as a result of multiple partnerships and value-enhanced offering. The strategic focus towards market expansion and diversified end-user segments is making Adroit an emerging participant in the automation and control system services market. These factors make Adroit Technologies the deserving recipient for the 2009 Frost & Sullivan Emerging Company Award in the Automation and Control System Services in the EMEA market.

e-learning Experience


Like Father like Son

Learn and qualify at your desk!

Learn and qualify at your desk!

Online training via the internet really is coming of age when two generations from one a South African company both enrol in the same distance learning course provided internationally by IDC Technologies.

Elite Electrical Services is managed by the Liebenbergs, father and son in a family owned business based in Johannesburg. Both enrolled earlier this year in IDC Technologies’ 18 month Advanced Diploma of Electrical Engineering. And both remain excited about the course several months down the road.

This course is one of many offered online by this company that attract students from all over the world.

We asked son Chris Liebenberg for some comments about the course, his progress, and what it was like sharing the study with his father.

“Let me say I’m a big advocate for this e-learning approach,” states Chris. “If it had been this good when I was younger I probably would have studied at least as much as I should have done back then! It is more flexible than classroom based learning. For example, we can always review the recordings of the live sessions if we miss one. But the live sessions presented each week have been fantastic and with an excellent instructor such as we have it is hugely motivational to ‘attend’. I’ve been completely thrilled.”

He explained that his background was mainly in IT. He has several of the trade certifications required for electrical work, but both he and his highly experienced father wanted to ensure they remained at the cutting edge of industry by adding to their knowledge of electrical engineering. Their company is a third generation family business and Chris says that right back to his grandfather the emphasis has been upon developing knowledge and expertise to add value for clients. Personal advancement has worked hand-in-hand with the development of the company. It’s in the blood too, it seems, because Chris’s 12 year old son already has his sights set on joining the family business. “He was born with a multimeter in his hand,” says Chris.

He adds: “After only a few months I’ve already been able to apply what I have learned in the course to my daily work. It has given me more confidence to tackle complex issues, and in fact I have been surprised by the number of times that what we cover in a week’s work has cropped up in the workplace.”

“We are fortunate our business is still going very strong despite the global recession. We are working our teams 5 days a week minimum when some others seem to be cutting back. I think part of the reason we are travelling well lies in our ability to tackle more advanced work. I think it is important that none of us rest on our laurels or use these tough times as an excuse to delay broadening the spectrum of skills we can offer.”

For more information about the course and other distance learning subjects offered by IDC Technologies, talk to Ric Harrison

IDC Technologies has been providing high quality training for more than 15 years on an international basis from offices around the world. In the past few years tens of thousands of engineers, technicians and scientists have attended their workshops. They provide short workshops, on site training, conferences, masters series, and publish a comprehensive range of practical manuals and texts. In the last two years they have been steadily expanding the range of courses offered internationally via distance learning.

They currently offers 16 different 3 month Certificate courses and an 18 month Advanced Diploma in Industrial Automation. The list of courses available through e-learning is constantly growing. Here is the current list. Cost depends upon local currency.

Advanced Diploma of Electrical Engineering
This course is an 18-month part-time course, which is quite a commitment for students with full time professional careers to manage. But Chris says he and his father have experienced the benefits first hand and are prepared to put in the hours to be successful. At the moment he is putting in well beyond the 6 hours per week average that the course requires, but this is because he likes to research thoroughly in new subject areas to ensure his depth of knowledge. “Not everyone wants or needs to put so much time into the course,” he notes, “it is just that I like to be fully confident with the fundamentals. We are both definitely highly motivated and the e-Learning delivery provides tremendous flexibility.”

Both father and son seem to be benefitting by doing the course together. They have developed some “healthy competition” over their assignment work but also compare notes and discuss some of the exercises and problems presented by the instructors. “My father occasionally needs some help with his computer connection, and in return it is good to have someone close by to discuss the material with,” reports Chris

Does Chris have any advice for someone contemplating enrolling in this course? He says “Yes, go for it.”