Entrepreneurship Zone: 15 November 2024: The South African entrepreneur who found opportunity in plastic pipes

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Entrepreneurship Zone: 15 November 2024:  The South African entrepreneur who found opportunity in plastic pipes

 


 

 




 


 

 


 

 



Kgomotso Lekola

Interview with Kgomotso Lekola
FOUNDER AND CEO, BT INDUSTRIAL GROUP

Lives in: South Africa

  _____  

After making a three times return on his previous venture, South African entrepreneur Kgomotso Lekola spotted an opportunity in manufacturing heavy-duty plastic pipes for industries such as mining, agriculture, and construction. His company, BT Industrial Group, also offers engineering consulting services and ventured into medical product manufacturing a few years ago. Jaco Maritz spoke to Lekola about his entrepreneurial journey.

Topics discussed during the interview include:

·         Achieving a 300% return on his investment in Africa Weather

·         Identifying the opportunity to manufacture plastic pipes for the mining industry

·         Strategies for winning clients from the competition

·         The company’s foray into the medical products sector

·         Expansion into the rest of Africa

·         Business leaders that Lekola admires

Watch the full interview below:


Interview summary


BT Industrial Group has its roots in a Johannesburg-based business called Africa Weather, in which Lekola acquired a stake in 2013. Africa Weather provides advanced forecasts to clients, including mining and agricultural firms, helping them prepare for adverse weather events. Lekola financed the acquisition through a bank loan, and during his time there, the company grew its operations across Africa and into Australia. The business also introduced a product that sent SMS alerts to insurance clients, warning them of upcoming severe weather to protect their assets.

About four years ago, Lekola sold his remaining stake in the company, making three times his initial investment.

The birth of BT Industrial Group

Through his involvement with Africa Weather, Lekola became familiar with the mining industry, one of the company’s key target sectors. He identified a business opportunity in providing engineering consulting services to mines. BT Industrial happened to get involved in water management projects for mines, a critical aspect of the industry – water needs to be pumped out of mines, and it is also needed for certain processing activities.

But Lekola encountered challenges with suppliers of high-density polyethylene (HDPE) plastic pipes, essential for water conveyance in mining. Both the overall quality of the pipes and the professionalism of the suppliers were significant issues during that time.

Some of Lekola’s team members suggested that BT Industrial should begin manufacturing its own HDPE pipes. “I was like, ‘No, you’re mad,’” he remembers. “But then they persuaded me.”

He and the head of engineering flew to China to visit several pipe manufacturing machine suppliers. After finding the right partners, the company purchased the equipment and set up a small factory on the outskirts of Johannesburg, again financed partly through bank loans.

However, there were early challenges in obtaining certification for its pipes. “We were told that it was going to take three months to get the certification that we needed. We believed it. It ended up taking almost a year,” Lekola explains. “We had anticipated buying the machine, setting up, then waiting three months before being certified so that we could go into the general market and grow the business. That’s not what happened. We had an almost 12-month delay, meaning that we were burning money every month with no ability to sell. Those were proper nightmare times.”

BT Industrial managed to win over clients from its competitors by advising them on more cost-effective system designs, which ultimately saved the clients money. Lekola points out that many systems in mines are over-specified. “So when our customers understood that dynamic, it made it easier to sell. It didn’t always work. Some people are obsessed only with price, and unfortunately those people I choose not to sell to them because otherwise you end up in the gutter and being a price player.”

Today, BT Industrial supplies pipes to a range of industries, including agriculture, bulk water infrastructure, and construction.



BT Industrial Group’s factory in Benoni, South Africa

 

Tapping into the medical industry

The company has also branched into the production of medical products, an area that Lekola finds particularly exciting. The company’s entry into this field was driven by the Covid-19 pandemic. “During the Covid lockdowns, we couldn’t run our factory, we couldn’t produce pipes,” Lekola recalls.

Recognising an opportunity, the company started manufacturing protective masks. The team realised that the melt-blown fabric – a key component of masks – was made from polypropylene, a type of plastic, through an extrusion process. Since BT Industrial already had experience working with plastics, they figured out how to produce the fabric themselves.

The company successfully sold these mask products to several businesses. However, as the pandemic eased, demand for masks declined.

Next, the company saw a gap to produce syringes for vaccines. Lekola explains that Covid-19 vaccines needed to be delivered in very small doses, and there was a global shortage of syringes specifically designed for administering such small doses.

BT Industrial developed and patented a syringe capable of administering the vaccine doses. But despite the innovation, it didn’t turn into commercial success. “Unfortunately, that turned out not to be a very commercially smart move. It didn’t work. We didn’t sell even one syringe despite the scientific and engineering brilliance,” Lekola admits.

The company did, however, use this experience to develop a range of pre-fill syringes, which it now sells to hospitals across South Africa.

BT Industrial later also introduced wound-closure products designed to treat complex wounds, reducing complications and minimising scarring during the healing process.

While most of its medical products are sold within South Africa, Lekola sees significant export potential.

Expansion into the rest of Africa

BT Industrial has also expanded its mining operations beyond South Africa. The company now has offices in Lubumbashi, Democratic Republic of Congo (DRC), and Lusaka, Zambia. “Zambia and the DRC in particular are very interesting because of the types of minerals they have. They have copper, lithium, cobalt, and the other rare-earth minerals that are all required to support the global energy transition,” Lekola notes. “There’s an incredible amount of investment going into mining in those areas … And where there is big mining investment, there’s going to be a need for pipes and all the other things that we provide.”

—Howwemadeitinafrica

 

 


 


 


 

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

 


 

 


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