OPENING THE TOOLKIT - JSE MAGAZINE

OPENING THE TOOLKIT

Argent’s CEO Treve Hendry sees the current economic climate as an opportunity to focus on new industries

OPENING THE TOOLKIT

Argent Industry Limited’s CEO Treve Hendry is a chartered accountant and somewhat of a raconteur. His apparent honesty coupled with a wicked sense of humour offer some insight into how Argent has managed to meet its targets despite a struggling economy, particularly within the steel industry, which is no longer the main thrust of the business that listed 20 years ago on the JSE.

‘We’ve moved away from steel as a main driver, downsizing it substantially over the past five years,’ says Hendry. ‘There are a number of reasons for this. Pricing for steel is currently as low as it was nine years ago. There is also very little demand; very little government take-off; and most of the players in this sector are in financial distress.

‘Highveld Steel, for example, is facing business rescue. Other competitors are feeling the impact of import tariffs and the construction industry is also floundering. It’s not the kind of business that you would invest your Lotto winnings in.’

Hendry sees this situation not so much as a crisis but rather as more of an irritation. ‘To survive requires a commitment from government to enhance its infrastructure-development programmes,’ he says.

While others wait patiently for this to happen, Argent – with more than 25 branded products in its basket – is not dependent on the resurrection of steel. The focus is instead on the engineering and manufacturing industries. With high-demand brands such as Xpanda, Toolroom Services, Jetmaster and Cedar Paint, this year Argent was able to meet its target of R114 million (before tax). Market cap as at 31 March 2015 was R482 453 020, with an annual turnover of R2 billion in 2014.

The group comprises 32 companies, two of which are offshore – New Joules Engineering in North America and Cannock Gates in the UK. The SA contingent, other than those already mentioned, reads like a who’s who shopping list and includes Giflo Engineering; Sentech Industries; Castor & Ladder; Tricks; Atomic Office Equipment; All-Lite Steel Products; Excalibur; Gammid; Megamix; Paint & Ladders; Life & Leisure; Koch’s Cut & Supply Steel Centre; Allan Maskew; and Hendor Mining.

Toolroom – manufacturers of a wide range of office and home furniture, lockers and made-to-order products for large-scale contracts, shelving and racking systems – is doing particularly well, as it supplies most of the country’s locker needs, says Hendry, although it’s now having to deal with the unsettled mining sector.

Xpanda, the residential and industrial security product provider, is also performing well. ‘That, of course, says quite a bit about SA’s crime situation,’ says Hendry.

‘This is not a normal trading environment, so you need to change the game, adapt and adjust’

Argent’s success lies in being spread across several sectors, each brand run independently but with a culture of cross trading. ‘We spend much of our time creating opportunities to trade among our different outlets,’ says Hendry. ‘This assists in riding out economic downturns.

‘It’s a strange trading environment right now for every corporation. Not only are we all having to deal with factors such as corrupt tendering systems, but the power-grid problem is having a serious impact. We can run our generators but can our clients? What of the international traders? How are they expected to patiently wait for everyone to get back on line?’

In growing the manufacturing side of operations, labour-intensive strikes have impacted on Argent’s business. Hendry says that with labour’s hourly pay rate having an effect, automation and importation are becoming a major consideration. He interprets repeated strike action as signs of an SA workforce that is becoming more and more unproductive. ‘Ironically, all these problems create exciting times,’ he says. ‘At least there are no boring days.’

Hendry’s solution is to constantly revise business strategies. ‘This is not a normal trading environment, so you need to change the game, adapt and adjust. Argent has been around long enough to understand that you need big shoes to walk this path.’

Hendry fits into those shoes, part of which means chairing the Argent social and ethics committee. This role ensures that all operations are run fairly, while ensuring the group subscribes to acting honestly, responsibly and with professional integrity in the entire gamut of its dealings, including with society at large. Socially, Argent is also directed to support and contribute to skills enhancement, deserving welfares, HIV/Aids and environmental organisations.

The most important achievement in Argent’s two decade history? ‘We survived!’ he says.

By Kerry Dimmer