Fluctuating prices in the market and an increase in counterfeit products are some of the challenges currently facing the South African bearings indus- try, says bearings manufacturer Timken South Africa MD Danie Coetser.

An influx of surplus stock from international bearings manufacturing companies looking to reduce inventory volumes has resulted in price fluctuations. He says that the local bearings industry has remained stable for a number of years and that, previously, there had not been frequent changes in the prices of bearings, adding that the attempts by international companies to offload inventory stock at reduced prices have changed the local market.

“This puts a lot of price pressure on generic bearings, which are produced by the bigger brand names, but we do not want to encourage a pricing war,” he says. Timken South Africa has also seen an increase in the enquiries about similar types of products, which Coetser says is an indication that customers are looking at different supplier and distributor offers to assess what is available before spending money in the current strained econo- mic climate.

Increased instances of counterfeit bearings in the local market are also a challenge that needs to be tackled. Coetser says that, in the past, there were a few cases of counterfeit products appearing on the local market but that, recently, there has been a significant increase in the number of counterfeit bearings.

He says that these bearings are a challenge, given that, when they fail, they can cause significant damage to equipment. As a response to the increased presence of counterfeit products, Coetser says that customers are requesting proof that products supplied are original bear- ings. “I think this has also become an opportunity for customers to gather intelligence about the need to buy their products from the certified distributors,” he adds.

Coetser says that, in the last few years, Timken South Africa has seen a signifi- cant increase in the volumes that it is exporting to the African region. He adds that 95% of the products made in its local manufacturing facility are exported.

While the company experienced a decrease in demand earlier this year, it has secured orders that will see its manufacturing facility running at full capacity until early 2010.

“It is difficult to forecast what is going to happen in the next five months. The guidance we have been given by our parent company is to manage our cash, mobile assets and inventory in such a way that we do not overextend ourselves. This is fine as we have always been conservative in our cash management process,” says Coetser.

The South African market has not been as significantly affected by the global financial downturn as interna- tional bearing markets, says Coetser. “In the Southern Africa region, we are governed by the spending power in the region. “This is a challenge, because most of our main customers are affected by the mining industry and, while we are affected by international markets, we do receive some protection from the South African market,” he concludes.

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