Shurlok (Control Instruments) has been in existence since 1969 and its definitive entry into the electronics industry came in 1984 when it made a major investment in Piermaritzburg-based Electromatic.
In order to allow this venture to achieve its full potential Control Instruments listed on the JSE in 1987. The company flourished initially but in the '90s declining revenue saw it reorganise its focus in automotive electronics, shedding non-core businesses (such as Nortech and Matrix) and the name of Electromatic was changed in 1999 to reflect the best known brand name in the group, namely Shurlok. As the company has a major export focus, substantial investments from the mid '90s have seen it equipped with some of the most modern SMD and testing equipment in the local industry (SMD placement capacity currently exceeds 110 000 components per hour with defects of less than 100 ppm). The company further extended its capability in leading edge engine control technology in 1999 through the acquisition of Dupec Electronics (a supplier to Delta/GM) while the purchase of the automotive division of Conlog in 2001 made Shurlok the largest local manufacturer of automotive electronics with a staff of some 450 people.
With its state-of-the-art capability, competitive pricing and a comprehensive R&D facility (located in Pretoria) the company boasts an impressive list of clients which include BMW, Daimler-Chrysler, Lotus, Bentley, MG Rover, Toyota, Audi, VW SA, Renault, Proton and Nissan amongst others. In addition to having the manufacturing infrastructure and low defect rate required by the leading luxury marques Shurlok is also certified to an impressive list of quality standards, including ISO 9000, QS 9000, VDA6 A, ISO 14001, ISO/TS 16949 and Toyota 6S Approval. It has also received numerous awards over the year from BMW, VW and Toyota. A Six Sigma quality and improvement programme was recently introduced at Shurlok. Apart from its local OEM and aftermarket business Shurlok exports to countries such as Germany, France, Australia, India, Brazil, Mexico, Malaysia and the UK.
Products designed, developed and manufactured by Shurlok include drive train control modules, general body electronics (immobilisers, alarms etc), CAN BUS modules and seat, window and door lock controllers and more recently full instrument panels. The first of these was developed for Lotus and this year instrument panels for both Bentley and Proton will be added to the range. (The total instrument cluster including the facia and plastic housing is all done in-house). Shurlok's test facility is equipped with the most modern spectroradiometers so that the luminance of these panels is exactly as required by the OEM. During this year Shurlok will be introducing a fully OBD2 compliant engine control unit to be used by VW as part of its Citi Golf upgrade and extension programme. Besides its OEM programmes, Shurlok is also heavily involved in what was its original core business, namely immobiliser and alarm units for the local aftermarket.
Mention must also be made of another division of Control Instruments, namely CI-Fleet Management Services (CI-FMS). The focus of this division is the design and development of on-board computers and associated software. A major coup for this division is that the locally-developed and manufactured range was accepted by Siemens VDO (the world leader in fleet management technology) and is sold worldwide under their brand name. More than 80% of unit sales from CI-FMS are sold internationally through the Siemens distribution network. Control Instruments looks after African sales with recent major customers including Simba (which equipped its entire 570 vehicle fleet with the VDO FM 200) and Schlumberger Oil Field Services which is to implement the system internationally.
To keep its products at the cutting edge, Shurlok has a Pretoria-based development laboratory staff of 39 people, 30 of these being engineers and technicians directly involved in product development. Besides the development of new products, existing products are often re-engineered to be more cost-effective and better suited to modern SMD processes.
While historically over the last few years Control Instruments has not provided great returns for investors, this was linked to the substantial capital investment in new manufacturing and testing equipment. Group MD, Richard Friedman, now believes that with the bulk of the capex expenditure over and the refocusing complete, the company should start once again to generate strong cash returns. The future growth of Shurlok will obviously be greatly assisted by both the increased use of electronics in motor vehicles and the positive effects of MIPD for the local automotive industry.
Shurlok recently signed an agreement to form a joint venture company with Lear Corporation, the latter holding 51% and Shurlok 49%. Using Shurlok's manufacturing base and Lear's design and technical capabilities the joint venture will initially manufacture and supply specialised automotive products for BMW SA, although the plan is to expand the scope to include other OEM manufacturers in this country as well as other selected markets. Lear is already well established in the international automotive electronics supply chain while Shurlok has proved itself capable in the manufacture of world-class products so positive synergies are expected from the joint venture.
This series looks at some of the leading companies in the electronics industry in South Africa today. To simplify presentation and avoid perceptions that they are being 'rated' in any way, this coverage is being presented in alphabetical order. Do not miss the 20 October issue of Dataweek where we look at a Western Cape-based company that is now a key player in the electronics industry.
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