"Digicore Holdings has been doing some really good things of late." So says Bruce Richards, marketing director of Digicor Fleet Management. "Not only is it becoming an exporter of note but it is also surging ahead on the local front with its C-Track and Co-Driver products while also adding new products to its line-up."
Since its listing on the Johannesburg Stock Exchange in December last year which saw Digicore Holdings capitalised at R215 million, the company has been making headlines in a number of financial journals. The main focus of attention has been on its export activities which financial analysts regard as good news, given that the drive is on in South Africa to build up the country's export capability. Adds Richards, "Having markets outside of South Africa is also seen as clever boxing in that it makes the company less vulnerable to the economic vagaries on the local front."
It is interesting to note that while it is generally recognised that South Africa is a leader in terms of vehicle tracking and monitoring technology, Digicore is business proof that this is so. Says Richards, "In Pakistan, for example, the company has a 30% shareholding in a local operation and is achieving success in penetrating the market with C-Track, its South African developed vehicle tracking and management system, as well as with the Co-Driver vehicle monitoring system."
Co-Driver originated under Durban-based Kivtronics which was brought into the Digicore stable last year prior to the company being listed.
"In Australia, a company called Digicore Technology has also been formed which is being run in association with Digicore Holdings by an ex-South African. News recently came through that following months of tests conducted on 35 vehicles belonging to one of Australia's biggest fleets, Linfox, the company has now started a fitment programme of Co-Driver to 50 new vehicles.
"Linfox's total fleet size is between 1500 to 2000 truck tractors and the plan is to fit every new vehicle that goes into the fleet with the Co-Driver. Prospects are looking good for C-Track in the Australian market," says Richards.
European growth potential
"Digicore has also penetrated the Benelux countries and is expecting big things in that area of the world with 800 C-Track units already fitted in Holland and more to follow soon. Other overseas export markets are also being pursued, one being Ireland where a distributor has already been appointed.
"Closer to home, Africa has always been a big market for the Co-Driver system with breakthroughs being made in Tanzania, Ghana, Zimbabwe, Kenya, Malawi and Zambia. BP, for example, has fitted 45 units to its fleet in Tanzania and," says Richards, "the company has indicated its intention to standardise on Co-Driver throughout Africa. Also in Tanzania, RJ Reynolds has fitted 100 units to its vehicles while in Zimbabwe, an order recently came through from one of the major bus fleets."
In South Africa, both the Co-Driver and C-Track systems continue to enjoy significant success. According to Digicore's group MD, Nick Vlok, about 8000 C-Track units are in operation in the market while Co-Driver runs to over 30 000. One of the largest single orders for Co-Driver came from Eskom with an order for 700 units placed last year. Since then, a further 100 have been installed into Eskom vehicles.
Second largest in the world
"Of particular interest is that municipalities around the country have taken to the Co-Driver with great enthusiasm with the company having penetrated some 19 municipalities around the country - the latest being Pietermaritzburg.
"To date," says Richards, "around 30 000 Co-Driver units have been sold which makes us the second largest supplier of vehicle monitoring systems in the world.
"Although we have made mention of only two of the group's products, there are others, the most recent addition to the stable being the Bekamax central lubrication system which hails out of Germany where it is fitted as standard OEM equipment to MAN trucks. Then there are tachographs and a wide variety of vehicle gauges - and more.
"This variety of product is an important part of the group's growth strategy for just as export activities have lessened its reliance on the South African market, so too is the organisation no longer reliant on one or two products for its survival and growth. This is an important point and especially when related to its activities in the vehicle management and tracking arena via its C-Track product."
Local casualties
As is well known, many players have entered the vehicle tracking arena over the past few years but few have survived. "The main reason for this lies not solely in shoddy product offerings," says Richards.
"In fact, there have been some tremendous products on offer. There has also, of course, been some real junk. Rather it lies in the inability of these companies to hang in over the long term while units sales are building up. In other words, the return on investment has not been sufficient to justify long-term viability. There are many examples of this but let us just mention two. The first was Datatrak which, under the Jasco banner, lasted about a year before having the plug pulled - and that was after an investment of some R53 million.
"Another, and one totally pertinent to this article, was Q-Fleet which, after an investment of around R10 million, pulled out earlier this year. Both companies had good products but both cited inadequate returns on investment due to slow and low units sales as being the main reason behind their pull out.
"It is a long and a hard route to succeed in the vehicle management and tracking arena, requiring great patience and loads of money. However, once you're through the barrier, it's a wonderful industry to operate in - and that's where Digicore now finds itself," adds Richards.
Says Etienne Badenhorst, MD of Digicore Distribution, one of the three divisions that Digicore Holdings has formed to handle the operations of the group, "We're over the hill and are now facing the beginning of our growth era.".
His optimism comes from the fact that Digicore now has some 4000 customers on its books, some of which have C-Track fitted, others have Co-Driver, others have tachographs and more recently, others have installed the Bekamax lubrication system on some of their vehicles.
"Because of our spectrum of products, we can grow into our existing client base with products all aimed at providing solutions to different fleet problems," says Badenhorst. "We've got a good record of bottom line profitability, we've got a wide product range and we've got dedicated and capable people to instal and support our products so we are moving confidently into the future. Our potential is something special."
That is not to say the group is tardy in looking for new clients. In fact, Digicore is now moving out of the transport arena and is looking towards industries like mining, forestry and other operations to offer its products. "Wherever there are wheels in operation is where we want to be," concludes Bruce Richards.
For details contact Bruce Richards, Marketing Director of Digicore Fleet Management on tel: (031) 700 6133, fax: (031) 700 6143, e-mail: [email protected] or visit www.digicore.co.za
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