In the plus 70 years since it was established, Pratley has successfully weathered a number of different storms, from the 2003 SARS epidemic to the 2008 financial crisis. While CEO Kim Pratley points to the cyclical nature of economics, which has seen a series of up- and downturns over the years, the current business environment is unprecedented.
“Most changes in the business climate are relatively gradual. In this instance, it was almost a case of waking up one morning to find that the world had changed overnight. The net result has been a marked impact on strategic planning over a short period, including those plans in place before Covid-19. Therefore, it has been a very different type of situation that companies have had to deal with,” points out Kim.
Input from management has been critical, especially in terms of clear communication about the company’s plan of action and the implications for employees. “I think employees look to their employer to both mitigate the impact and inculcate confidence about their future. The mere fact that a contingency plan has been put in place speaks volumes about business continuity and confidence,” stresses Kim.
However, there is a real danger of companies becoming stuck in survival mode. “If you exclude all notions of growth and just hunker down, you are actually not going to survive in the long run. There is a delicate balance between survival mode and actualising growth opportunities for the future,” asserts Kim.
While business fundamentals remain unchanged, the tools of business have changed dramatically, especially in the digital age. “People want products they can rely on, in addition to service and value for money – that will never change. We have certainly had to adapt, but not as much as one would have thought,” reflects Kim.
Pratley’s resilience is largely due to the company policy of maintaining zero debt. “We have never financed anything other than from our own resources. There are lots of companies that are highly geared and very successful. We have chosen not to go that route, which has certainly been one of our major strengths in this difficult time.”
Maintaining its fundamentals as a family-owned business has also stood Pratley in good stead since its establishment. Asked if smaller companies are inherently more nimble, Kim believes it depends on how they are structured. “Larger corporates tend to have a lot more inertia. From that perspective, smaller companies are able to change direction much more easily.” However, smaller companies do tend to have limited resources, both in terms of depth of management and access to capital.
In terms of the former, Pratley has been lucky to have the buy-in of a large number of long-term employees, who contribute significantly to the company’s IP and skills base. “It is vital not to rest on your laurels,” is one of Kim’s maxims. Here sons Andrew and Charles are carrying on the legacy into the ‘new normal’ and beyond. Such a focus on innovation and flexibility is part of the DNA of the company, established by George Montague Pratley in 1948 in the long shadow cast by the Second World War.
In addition, Kim attributes the ongoing success of the company to the loyalty and commitment of its staff. “It also has to do with the passion and excitement of the employees and their engagement with the business. We like to think of our employees as being part of our family.” Added to this is the fact that the marketplace has an implicit trust in Pratley as a brand.
“I think that, especially in a time like now, people see a proudly South African company as an anchor in a stormy sea. This comes back to the survival versus growth mindset. Our resources have certainly been affected, especially as we had to cease trading during the hard lockdown. There have been overheads that have had to be carried, and no one has been immune to these economic conditions. But we have emerged in a relatively stronger position compared to many other companies.”
In general, the manufacturing industry has been hardest hit by the lockdown, which has had an impact on the entire industrial supply chain. “We are also finding ourselves having to weather an unfriendly business and legislative environment. That is really the biggest challenge, as it has a knock-on effect on everything.” Yet Kim remains fundamentally positive. “South Africa has some of the world’s best resources, such as a treasure trove of minerals. All we need is an enabling environment to be able to unlock all of this.”
In response to this, Pratley has reactivated a number of projects in progress prior to the Covid-19 pandemic and subsequently put on hold due to the lockdown, which has seen the company embark on a recruitment drive. “We have actually employed additional people during this time due to our growth plans,” highlights Kim.
The manufacturer’s short-term goal is to bring to market a number of products in its R&D pipeline, including its electrical and minerals divisions. “We are also commissioning a major new production facility for our adhesives,” reveals Kim. A longer-term goal is to tackle export markets much more aggressively. “We are looking to add completely new businesses into our mix. We actually have a huge product range that lends itself to many more markets and applications, and hence our focus on differentiation,” he concludes.