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Tanelec: East Africa's Preferred Electrical Manufacturers

Tanelec: East Africa's Preferred Electrical Manufacturers

Powering Through...

An established leader in Tanzania’s manufacturing sector, Tanelec Limited has been awarded the Tanzanian Presidential Award for the best large electrical manufacturer in the country for the last two years.

Tanelec limited commenced its operations in Arusha, Tanzania in 1981 and is the largest manufacturer of electrical distribution transformers and switchgear in East and Central Africa.

Fully equipped to provide full customer support for all their products and at the same time offer comprehensive repair and service capabilities, Tanelec is a responsive and dynamic company that exceeds customer expectations and continues to increase their market footprint and share in Africa through the provision of high quality products and services.

Founding Beliefs

Tanelec firmly believes in their employees being their greatest resource and strive to provide occupational health, safety and ensure safe working conditions by constantly auditing their internal processes and making improvements.

Being committed to their own code of practice and business ethics policies, Tanelec’s senior management team comprises of experienced people whose combined talents and expertise have enable the company to manage and achieve their ambitions and targets.

Creating local added value through their contribution to the country and regional economy is very important to Tanelec. Tanelec recognizes that their own success can provide increased employment opportunities for the local community as well as providing business opportunities for service and supply sectors.

Ian Robertson, Managing Director of Tanelec Limited spoke to us and told us about Tanelec’s existing capabilities and future plans.

Ian Robertson, Managing Director, Tanelec Limited

Tanelec Limited has been awarded the Tanzanian Presidential Award for the best large electrical manufacturer in the country for the last two years.

Tanelec Limited has been awarded the Tanzanian Presidential Award for the best large electrical manufacturer in the country for the last two years.

Mr. Robertson started his career in 1962, with a well known transformer manufacturer in the UK called Bonar Long as an electrical engineer. Having gathered expansive experience over the years, Mr. Robertson was appointed CEO at Tanelec Limited.

Tanelec was established in 1981, supported by Norwegian technical experience. In 1995 Tanelec became part of the BB Group. In 2007 ABB divested its interest in the company and the ABB shareholding was acquired by the Kenyan investment company TransCentury Limited (TCL). TCL have other interests in the power sector through their shareholdings in East Africa Cables in Kenya and Nairobi, Kewberg Cables in South Africa and Avery Limited in Kenya.

During 2011 Tanelec acquired an 80% stake in Pende Electrical (Zambia). Pende are an electrical contracting company who do work mainly for the mining sector. Pende also own a company called Transformco who repair and manufacture distribution transformers. According to Mr. Robertson, it is expected that Tanelec will have improved market access in Zambia and Congo through Pende.

Winning the Tanzanian Presidential Award for the last two years is testament to Tanelec’s commitment of staying ahead of the game and maintaining their role as an industry leader.

The selection criteria for this award include various factors such as revenue growth, export performance, corporate tax contributions, investment, employee training, environmental and health and safety performances. In all these respects, Tanelec has proven its superiority over others in the electrical manufacturing sector.

Current Scenario

Given that Tanelec is the only manufacturer of distribution transformers in East and Central Africa, Mr. Robertson said, “whilst we need to be competitive against external suppliers our main value is our product quality and being local i.e. providing short lead times and quick service response.”

Currently, Tanelec’s principal focus remains in the manufacture of distribution transformers of up to 3000 KVA and 33 kV. However, the company has been growing the service and repair parts of their business and also their LV and MV Switchgear business.

Tanelec is estimated to currently have an annual revenue of $24 million, excluding the company’s new Zambian subsidiary organization.

In 2010, Tanelec invested about $1.5 million in a new transformer drying facility aimed at supporting the company’s projected volume increase from 2,400 transformer/year to 7,000/year.

Alongwith having invested in an electrical steel slitting line aimed at reducing cost and lead times, this year Tanelec have already invested about $1million in some new coil winding machines and other machinery.

Tanelec currently employs around 160 people. Due to the unique nature of the work Tanelec does, most of the company’s employee training is done in-house. However, besides this in-housing training, Tanelec also supports external studies for employees and capacity building through this.

Challenges and Forecasts

According to Mr. Robertson, a big challenge in the current market scenario is the general global economic downturn which has resulted in increased overseas competition and pressure on profit margins.

Mr. Robertson also told us that the copper commodity price fluctuations make it difficult for pricing long term contracts where (especially utilities) do not allow for price adjustment formulas.

However, being a company that has a dedicated, skilful and experienced workforce, Mr. Robertson is confident about future prospects. Tanelec has established a very high reputation for the quality of their products and service, especially since many of the company’s customers prefer to deal with a local organization.

We asked Mr. Robertson, if, according to him, there is some sort of pattern or formula to a successful business. In response, he said, “Obviously pricing and quality are important, however, being local and having a good reputation are very important.”

Tanelec’s parent group (TransCentury Limited) has invested heavily in manufacturing associated with the power sector in a region where only 12% to 15% of the population have access to electricity is important in order to be able to position ourselves for future opportunities.

Tanelec is currently looking at expanding all their present product ranges and at the feasibility of introducing other products associated with the power sector.

Author
Richard Meryn, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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