A big, wide-open market equals growth opportunity for the tent business.
By Barb Ernster
Having grown up in Uganda until age seven, Nick Lavy, managing director at Röder UK Ltd., says, “There’s something about the lure of Africa that brings you back. It gets in your blood.” From his office in Cambridge, U.K., Lavy can see on a world map that Africa is 10 times the size of Europe. That leads him to believe there is a rich market for tents ready to be tapped. Facing a crowded tent market in Europe, Lavy is looking south to sub-Saharan Africa for new growth.
“Europe has had clearspan structuresÂ for the past 80 years; there are too many companies chasing the same dollar, prices are going down and it is a saturated market,” he says. “It is cheaper in real terms and actual terms to buy a 9m wide marquee now than it was nearly 20 years ago when I started. Margins are so tight as the competition is fierce.”
Beyond the U.K.
Röder UK is responsible for business in the U.K. and Ireland, but can pursue business in countries where Röder does not have a subsidiary or an agent; consequently, the company has supplied to Japan, Zimbabwe and South Africa. It has businesses in China: one a rental office in Beijing and another in Shanghai. It also has a manufacturing company in Shanghai that manufactures mainly party tents and covers, using imported European PVC.
Röder UK also has a rental business in Moscow. Its Chinese and Russian markets started from small bases but are growing very fast, Lavy says—partly because they are virgin markets, but also by making large investments in inventory. There’s not much competition, but there is an economy hungry for growth and there’s plenty of business to be had.
“If the market is there you have to supply that market because if you don’t, someone else will,” he says. “This also applies to Africa.”
South African leadership
While it is hard to gauge the potential size of the African market, South Africa is an emerging market for all kinds of tents and events, and Lavy knows that whatever happens in Africa, South Africa leads the way. Röder UK attends some exhibitions in South Africa that are specific to the tent market, and some South Africans come to European exhibitions. That has helped garner sales in South Africa, but it is also the country where they copy European structures and sell them at advantageous prices with no import fees, says Lavy. In fact, Röder UK had an agent in South Africa until that person decided to start making his own tents.
Lavy adds that the Chinese are pushing hard into South Africa and all surrounding countries. A lot of the infrastructure in many countries is being built by the Chinese in return for mineral rights.
Röder UK has established customers in Zimbabwe and Kenya and is also targeting Nigeria. As is often the case in developing countries, there is enormous wealth in some areas and tremendous poverty in others. Landlocked countries like Uganda and Mali, where Röder Germany has done some business, require shipping in from other countries and ports, and that can be a problem when there are conflicts with other countries. While it’s difficult to get a foothold in African countries, Lavy believes exhibitions are the way forward.
“We believe that exposure to the product is a valuable selling tool. European prices are considered high for many African customers, but European quality is also widely recognized. We are trying to get companies to come to us for their tenting needs, knowing that the quality of European equipment is better than homemade structures,” he says. “The first one is always the hardest to sell. After that the quality will show in comparison to local manufacturers.”
The Röder Group holds an exhibition every two years in Germany called INNOSCENE, which is widely attended by people from many countries. Lavy connected on the Internet with a company in Zimbabwe and invited those people to the show, which resulted in orders for 25m marquees. That led to another customer in Kenya who, through connections with the Zimbabwe customer, contacted Röder UK.
Pauline Nyachae, CEO of Wonderland Events based in Nairobi, Kenya, comes from a family that has many business interests in Kenya, including tea and coffee plantations, but predominantly exporting roses to Europe by air freight. For her event business to continue growing, Nyachae determined she needed her own supply of marquees to avoid relying on other suppliers for the right structures.
After corresponding for some time with Lavy, Nyachae settled on a standard size 15m-by-30m marquee, strong enough to cope with high winds and African rains. Nyachae also wanted pleated linings to finish off the marquee effect, which were made by Custom Covers, a Southampton-based manufacturer. The roof covers and gables were made with opaque PVC to help keep the heat out, and the walls were made with translucent material (Ferrari F502) to let light in. Three roof covers also included a window section to allow the sun to fill the marquee with light.
Nick Lavy of Röder U.K. flew to Kenya with Vaughn Coutts of Custom Covers to train a crew from Wonderland Events in Nairobi on how to set up and take down the chosen product. The installation orientation was held over two days in April, and included procedures for fitting the hardware and linings, developed by Custom Covers. Lavy spent significant time with the crew foreman explaining the marking out procedure, which is imperative to ensure the baseplates are in the right position and the frame is straight. This makes the covers easier to fit and improves the appearance.
The 12-man crew was able to set up the heavy frame, designed to handle the high winds and heavy rains, but anything bigger would require cranes and other machinery to assist. This is an important factor to consider when doing business in Africa. The availability of mechanical aids, such as forklifts and cranes, is not as great as in Europe or the U.K.; however, labor is much cheaper, so it is possible to have bigger crews to set up and dismantle a tent.
“I believe this is the first Röder to be sold into Kenya. It certainly won’t be the last going to Wonderland Events. We already have plans to introduce different sizes as her business grows,” says Lavy. Nyachae is looking to extend the length of the structure and also obtain more gable ends so she can split the marquee into two marquees. She is also planning to attend the show in January 2014, and will hopefully be able to bring some of her customers with her, notes Lavy. That is the kind of foothold he is looking for to cultivate markets in Africa.
“Like we found when we started in Moscow, the sky is the limit,” he says. “I think there is massive potential in Africa and we are not even scratching the surface yet.”