Deposit Manager, based in New Germany, Durban, develops and manufactures cash acceptance solutions for use in the retail cash market. A cash acceptance solution industry pioneer, Deposit Manager now also supplies solutions to all of Cash Connect Management Solutions’ cash acceptance needs, branded under the Connect label (Cash Connect owns 51% of Deposit Manager).
Deposit Manager develops and manufactures solutions primarily for the local industry as similar products, often imported from international suppliers, mostly do not address the very specific and real needs of the local market. South Africa, as in most of Sub-Saharan Africa, has a very unique criminal culture which can be considered to be very sophisticated with regards to the methodologies applied to affect attacks on especially safes and cash vaults.
Products manufactured in First World environments often exhibit an over-confidence or perceived superiority over Third World products (such as products developed in South Africa) due to the high level of user-interface driven technology used in their products. Granted, overseas product presentation is usually very good, but the physical security, robustness and longevity of the imported product mostly does not stand up to the very hostile environment which is Africa.
At Deposit Manager we have noticed that the South African consumer is often under the assumption that a local product is automatically inferior because it is cheaper than similar products sourced from either the EU or several USA-based suppliers. Quite often products are also imported and introduced into our local market with the help of a subsidised, very effective marketing campaign. Nothing could however, be further from the truth, an assertion which has been validated through our recent interaction with EU-based distributors of similar products.
South African products are in many respects technologically and physically far superior to similar products developed and manufactured in the EU and other First World countries. For years, the EU-consumer has been wowed by the bells and whistles included in most products with very cursory attention given to providing a sufficient barrier against prolonged, violent and focused mechanical attack, as is the case in the majority of safe break-ins experienced in South Africa. Developed countries and economies do not face the same threat-levels as apply to emerging countries and economies, and are less prepared to deal with such.
The skills question
Skills, although always an important factor to which we at Cash Connect assign substantial resources, can however be considered subjective when business policies decrease the security demands over time. The starting point for skills development in the industry needs to be the reintroduction of more stringent security measures and the associated skills development training. It seems that many of the key lessons that contributed to bringing down the high incidents of robbery in the CIT industry in the ‘90s are being forgotten and steadily undermined by the introduction of technology that is often not compatible with best-of-breed CIT systems and processes.
For example, many CIT carriers are sticking to a two-man crew configuration (driver and guard) and without the use of dye protection technology, this combination cannot provide meaningful protection. Even a two-man guard crew cannot provide a sufficient deterrent to a gang of many armed criminals, let alone the average 15-man armed gang.
Additionally, many insurers do not seem to be prescribing or enforcing the SABS categorisation to value-insured ratios any longer, as we see upwards of R1 million being housed in nothing more than a 6 mm steel plate construction – an open invitation for disaster.
Moreover the retailer of this new decade does not have the advantage that his/her predecessors had – namely a conscientious insurance industry providing informed guidance as to best practice and enforced by what insurance package could be bought. Today’s retailers may be innocently buying into technology that cannot stand up to the purpose for which it is purportedly designed, and on the basis that they are insured.
African market challenges
To enable Deposit Manager to remain competitive in a global market, we have opted to farm out the bulk of our fabrication and manufacturing to multiple suppliers. In this manner we avoid having to set up, maintain and manage a manufacturing plant and only require a limited skill-set workforce to assemble components into major sub-assemblies. This provides us with an ability to expand and contract our production volumes to suit the current requirement.
We have not yet found a product which matches our range feature by feature. Importing components is however, often cheaper that manufacturing the same locally, especially if the item is commonly used in a variety of different applications. Economies of scale drive down production costs and items can often be imported at a fraction of the cost to manufacture the same in South Africa.
As the cash acceptance market is largely influenced by the volume and quality of cash in circulation, markets to the north of South Africa are considered as hostile environments. Most of the cash acceptance and validation technologies available globally, are not optimised for the very poor quality and volume of banknotes in circulation in most African countries. Currencies which are considered unstable and are subject to high inflation often devalue faster than it can be recirculated. As a result, most validator manufacturers actively avoid development of products and software to cater for these environments; it simply costs too much to keep product current.
That having been said, huge opportunities do exist in a handful of countries and several leading suppliers are slowly busy expanding into those markets that are considered to be the most stable.
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