The Value Group

Source: Supply Chain Digital

Date :01/08/2008 00:00:00

Founder and CEO of Value Group Ltd Steven Gottschalk has seen the business grow alongside customer demand. Exec charts its rise

Written by Ellie Duncan and Produced by Paul Radbourne

The Value Group, founded in 1981 as a truck rental business, has grown to one of the largest transport and logistics companies in South Africa. It offers over 200,000m² of warehousing space to its customers, together with a fleet availability of approximately 4,500 vehicles.

Founder and CEO Steven Gottschalk spoke to Exec on the company’s flexibility and adaptability to change that has given rise to its success.

“Our development from truck rental to total outsource business has been driven by the needs of our customers,” he explains. “Pressure on them, from various factors such as shrinking margins, the threat of globalisation and the economic climate in South Africa, to name a few, necessitated change within our structure.

“We needed end-to-end flexible logistics solutions - from warehousing and distribution options, to materials handling equipment and clearing and forwarding - that are supported through a strong partnership approach which yields an ongoing efficiency drive.

“We listened to our customers and refocused the business to not only meet but exceed their expectations by providing a supply chain platform that can support them. This recipe has proved successful,” Gottschalk continues.

Value made a number of acquisitions as part of its strategy, including the purchase of Freightpak, an accredited dangerous goods warehousing and distribution company, followed by Rent-a-Bakkie, Fleetrent and Fridgefleet, which complimented the suite of distribution options of the group.

IJS Global

When Value launched its clearing and forwarding division, it entered into an exclusive partnership with IJS Global Inc. “We’ve become their agent for South Africa,” says Gottschalk, explaining the company’s affiliation. “Anything that goes out of South Africa, we send it to IJS, and anything that comes into South Africa, IJS sends it through Value.”

The business has strived to recognise its customers and identify their requirements during the course of its history. “We are actually quite a unique company in that we’re able to offer our customers a service from A to Z.”

The company’s most recent development is Value City, a project that Gottschalk describes as his “baby”, although he acknowledges it would not have been possible without “a good team of people”. With 10 divisions in total located throughout Johannesburg, Value’s CEO took the initiative to unite each part.

“I decided that the correct thing to do would be to consolidate all 10 of those operations together into one unit,” Gottschalk explains. “So I did a lot of exploration and I did a lot of investigation. I did visit Europe and I visited a few of our customers’ facilities. We put down some ideas, and then we designed Value City.”

Value City

The city places the business firmly in Johannesburg, the industrial centre of South Africa, thereby confirming its importance as a total outsource service in the country. Value City consists of 90,000 square metres of warehouse facility and transport is located on site.

The consolidation of the transport division is of particular significance in the current economic climate. “With the cost of fuel today, it also eradicates a lot of cost hire having the transport here, instead of having the transport operation a few miles away,” Gottschalk says.

The group has made the vital but necessary decision regarding the increased cost of fuel to pass fuel prices onto its clients. Gottschalk justifies the strategy: “It’s very much a case of having to survive. If we don’t pass that cost on, we’re not going to be in business.” He believes the company has taken a firm stance but one that has stood them in good stead. “In order for us to create a secure environment for our staff who work at Value, and for our customers, it’s only fair that we pass the fuel increases on.”

When it comes to its staff, the company lives up to its name, providing its 5,000-strong workforce with a training centre and the chance to be part of its soccer league. In fact, Gottschalk does not hesitate when asked to explain the reason for Value’s success. “I think what it really comes down to is actually good people,” confirms the CEO. “When you’re in logistics, you’ve got to have people who have the ability to think on their feet and make decisions.”

Despite the current state of the economy and the challenges that come with doing business in South Africa, if Value continues to adapt as they have done, its continued success seems guaranteed.