Celebrating its 50th anniversary of doing business in South Africa, Avnet Kopp can look back at a remarkable period of growth that has seen it not only survive the ups and downs of economic and political turmoil, but end up as one of the largest electronics distributors in South Africa and part of Avnet, which is the largest global distributor. And the story is not over.
Avnet Kopp traces its history back some 50 years to the founding of H. Kopp & Co. in 1958 by Hugo Kopp, the father of Albert, the current CEO. The company started out as a manufacturer's representative and transformed itself into a full-scale distributor known as H. Kopp Electronics. The new company was focused on distribution and warehousing, aimed mainly at passive and electromechanical and mechanical components and materials.
Kopp Electronics listed on the Johannesburg Stock Exchange (JSE) in 1987, where it remained until 1996, when US-based Avnet bought the company and created the current Avnet Kopp.
The company has moved from strength to strength since the acquisition and, looking ahead, Albert Kopp remains positive about South Africa and the industry as a whole. Perhaps the company's long history, which saw it coming through the political changes after 1994 as well as the economic slump in the early part of the century, provided it with the experience necessary to realise that cycles of ups and downs happen.
The new political dispensation of 1994 broke down many of the old protectionist policies and service deals and brought in a new era of increased competition and a drive for efficiency. This benefited the market tremendously, including Avnet Kopp.
Of course, a business cannot rely on positive market conditions for success. Creating a strong and viable company in the ups helps weather the downs, which is what Avnet Kopp has managed to do. Moreover, being in an industry that has been integrated into every aspect of commercial and non-commercial life, bodes well for the future.
Additionally, Kopp notes that South African companies need to focus on niche markets if they wish to operate successfully in the international space. "Our customers and suppliers cannot compete globally in the mass market with manufacturers in the East, unless they focus on selected areas and add value to their products. Focusing on our areas of expertise has delivered positive results for us throughout the life of the company."
Growth forecast
Looking ahead, Kopp believes there is still more than enough scope for growth in this market, both for Avnet Kopp as well as the industry as a whole. The company is determined to be the dominant player in all the sectors it operates in, with a 30% to 40% estimated share of the DTAM (distributor's total available market), a goal it achieves.
Providing some assurance that this goal is still and will be achievable into the future is the international trend that sees the share of products manufacturers sell via distributors increasing. Manufacturers are not capable of selling to the thousands of companies out there, especially the smaller ones that buy restricted volumes, preferring to focus on their larger, primary customers. This is where a reliable distributor with the appropriate in-house skills is a critical partner.
"Avnet Kopp is in the prime position to service these manufacturers in South Africa because we are owned by the largest distributor in the world," explains Kopp. "Moreover, we are able to offer the best of both worlds: the broadest international product range combined with half a century of local expertise, reliable service and solid, long-term relationships."
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