Member Stories

Club Africa members share their business experiences with you! How did they get their start? What were their key learnings in setting up their business in Africa?

Good advice from Narcol (Kenya)

Buying heavy machinery in China: “Be prepared to invest time”

Ashish and Milind Majithia are planning to expand the scope of activities of their company, Narcol Aluminium Rolling Mills in Mombasa, Kenya for which an investment in new machinery is needed.

The two brothers decided to order the machinery from China. The procedure of selecting the manufacturer, having the machinery engineered and produced as well as making sure it works when it gets to Mombasa, was a very educational experience for the brothers. Club Africa asked them to elaborate.

What is your business?

Ashish: “Narcol produces household products and utensils from aluminium. We employ 700 people across Kenya, Uganda and Tanzania. In the past, most of our machinery has come from Europe and India, but this time we decided to buy from a Chinese manufacturer. The Chinese have the technical knowledge to meet our requirements, at a lower price but similar quality.”

How did you go about it?

Milind: “From the research I did – size of company, expertise, references et cetera – we identified a number of possible suppliers in the west of China, where the production of heavy machinery is concentrated. We wanted a turnkey supplier that can deliver this machinery to Mombasa and train our workers to operate it. Another requirement was that the machine needs to be able to produce different products, with different configurations.”

Ashish: “We have put a lot of time and effort in communicating with the Chinese factory engineers, just in order to get it right. Actually in the end this turned out to be one of the biggest challenges: communication with Chinese and overcoming the language barrier. We showed pictures of what we wanted and made the necessary specs very clear. In the end we made sure that we did understand each other, but it took a lot of effort.”

Heavy machinery is usually not ordered from the shelf…

“Certainly not! Anybody who buys heavy and complicated machinery will have to go back and forth to China and check, recheck and double-check, until the Chinese engineers get it right. They have the technology and the price is highly competitive.

What do you recommend?

•   “Be prepared to invest time; the rewards will be worth the effort.
•   Check if the factory merely produces for the Chinese market or if they have experience in export. We made sure our short-listed suppliers are capable of delivering and installing machines in Mombasa as well as train our workers until they can operate and maintain the machine properly.
•   Bring an interpreter when discussing important technical details.
•   Invest in the services of a good local agent that helps negotiating the deal.”

“We are now confident that we will get the machine we need. Production in Mombasa is likely to start in 2012. In the meantime, we will travel to China several times for further negotiations and pre-delivery inspections.”