Eurogerm South Africa was founded in 2013, as an affiliate of bakery ingredient firm Eurogerm France, specialising in the manufacture and marketing of flour correctors, bread improvers and premixes for the milling and baking industry. Today Eurogerm South Africa consists of a team of 30 people specialising in the sector.
“I was part of the creation of the company when I arrived in 2013 as Managing Director,” Pierre-Edouard Molina tells us. “We have been operating in the market for the last ten years, supplying wheat millers in southern Africa. We provide flour correctors and supply industrial bakeries with specific products, premixes, and bread improvers.”
The company has carved itself a valued niche in the market thanks to its ability to offer a bespoke range of products.
“We can do tailor-made products specifically designed according to customers’ wheat quality. We provide a specific solution customised to the flour quality, the customers’ process, their equipment, and according to the organic qualities that the customer wishes,” Molina explains. “We can also tailor for sensory qualities in terms of taste, softness, and volume. That is the essential selling point, to be able to tailor-make a solution.”
That tailor-made solution comes with a specific diagnosis and a detailed understanding of the customer’s production line, equipment, and needs.
“Achieving that is a process based on a strong partnership between our customers and ourselves,” Molina points out.
A Volatile Environment
While Eurogerm South Africa brings a strong competitive edge to the market, it has also faced challenges in a volatile marketplace.
“This year we have seen major increases in oil pricing, which has an impact on raw material and transport cost, significant increases in wheat cereals which means gluten becomes more expensive,” Molina says. “That is a constant challenge for us. To be a performer we need to follow the market carefully with strong, reliable partners and suppliers.”
To face that market volatility Eurogerm South Africa has a team that looks carefully at the market to keep track of fluctuations.
“We have constant discussions with our buying department in France to see where the market is going, so we can be on top of any changes,” Molina says.
Raw Materials and Raw Talent
These challenges are compounded by Covid, as well as climate and economic issues such as a weakening South African rand as well as shortages of resources and skilled workers.
“We have contracts with key suppliers to ensure a steady supply, which is also useful for coping with the implications of a weakening rand,” says Molina. “You have to spend time on contracts so your position on the product is secured for six months to a year, meaning you are less impacted by market volatility.”
Molina cannot overstate the importance of recruiting the right person for the right job. South Africa is facing unemployment levels as high as 35%, but finding people with specific skills or knowledge is a challenge.
“Often you will recruit someone knowing that you will have to implement some training,” Molina says. “It is very difficult to find people with experience and skills in our industry. A training program is essential for everyone from operators to financial managers to technical and quality managers.”
This is one of the areas where being part of the Eurogerm family of companies is a big advantage.
“Significant knowledge is required in our industry, so you need to constantly have budget available for training,” Molina tells us. “We also involve other entities from the Group. As part of a European company, we can benefit from their training programme. It can be very fruitful for their employees.”
At the same time, Eurogerm is still a relatively young company in the South African market.
“Gaining market share is challenging, you need to stay competitive,” Molina points out. “We have to offer strong performance and ensure we have the raw materials to blend and supply. We cannot stop the supply, especially in the food industry. Bread is an essential product. No matter the situation we have to make plans to avoid stopping production.”
That means stock security is a top priority.
“You need to be able to work with a good operating capital, because if your working capital is too tight and you have supply chain issues for any reason you will miss deliveries,” says Molina. “You need to achieve delivery on time and in full, so it is key to have a secure supply of raw materials with backup plans in place.”
It means that production at Eurogerm South Africa is never at 100% capacity. As Molina says, “If there is a problem on one line you need another line available to back you up.”
A Landmark Year
Whatever Eurogerm South Africa is doing, it appears to be working. This year the company has celebrated its tenth anniversary since the company was founded. The firm celebrated with a huge celebration in Durban, inviting all the company’s customers from across southern Africa, including Namibia, Botswana, and Zambia.
“We celebrated over two days,” Molina says. “The first day was a conference with various speakers talking about wheat flour performance and baking trends. We talked about the opportunities for bakers in the market internationally and in South Africa. The next day we had a tour of our production area and our research laboratories, alerting the customers about who we are and what we can do.”
Indeed, Molina has big plans for what Eurogerm South Africa can do next. He plans to increase the business’s production capacity in the short term.
“We are going to increase our production capacity by 50% by acquiring new units from the facility next door to ours,” Molina says. “We are increasing our storage from 2,000 square metres to 3,000 square metres of raw material holding capacity while also updating our production line.”
Molina’s next focus for Eurogerm South Africa is mergers and acquisitions, with an ambitious plan for the next four to five years. But this is not about growth for growth’s sake. Molina is also passionate about ensuring Eurogerm is a company with a positive impact on South Africa and the surrounding region.
“The concept of sustainability is extremely present in the Eurogerm Group,” Molina insists. “We produce a non-financial report every year that presents all that the company does in terms of carbon footprint, environment, and support for communities. It inspires us to work with communities, reduce our carbon footprint and increase recycling.”
