Hudaco Industries Limited (JSE:HDC)
Hudaco Industries Limited (JSE:HDC) is a South African group specialising in the importation and distribution of high quality branded automotive, industrial and electrical consumable products, mainly in the southern African region.
The group operates in two primary categories. The automotive aftermarket, power tool, security and communication equipment businesses supply products into markets with a bias towards consumer spending, while the mechanical and electrical power transmission, diesel engine, hydraulics and pneumatics, steel, thermoplastic and fittings and bearings businesses supply engineering consumables mainly to mining and manufacturing customers.
Hudaco sources branded products, mainly on an exclusive basis, directly from leading international manufacturers and to a lesser extent from local manufacturers. Hudaco seeks out niche areas in markets where customers need, and are prepared to pay for, the value Hudaco adds to the products it distributes. The value added includes product specification, technical advice, application and installation training and troubleshooting, combined with ready availability at a fair price. The group has a network of specialised branches and independent distributors throughout southern Africa to ensure product availability to its customers. With the exception of DD Power in which Deutz AG has a 30% share, all Hudaco businesses are 15% owned directly by BEE shareholders.
The group strives to achieve three main objectives:
- It seeks out and secure exclusive distribution rights from leading international manufacturers with a global brand presence and a commitment to maintaining market leadership, particularly through technical innovation.
- It looks for products with which it can add value through the distribution chain through stockholding, product availability and providing technical support. Typically, these would be technical specification, advice on usage or installation and customer training. The extent of value add is determined by whether the customer’s purchasing decision could be influenced by the addition of a technical support function.
- It focuses on offering maintenance spares for critical customer equipment. Purchasing decisions for these items are made easily and quickly without onerous tender procedures.