Few people in KZN are likely to have heard of Hesto Harnesses, which is a pity. It seems to be one of the province’s best-kept business secrets and a sterling example of manufacturing excellence.
Hesto Harnesses is a story of unusual stakeholder collaboration that promises huge investment and an increase in employment. They make the wiring and instrument clusters for vehicles like Toyota Hilux and Isuzu bakkies – often referred to as the veins and nerve centres of cars. For example, it is the instrumentation and wiring system that turns the back brake light on when you tap the brake pedal.
The firm – based in KwaDukuza (Stanger) – is the biggest vehicle harness manufacturer in South Africa and the biggest employer in Stanger, with 2 600 staff there alone.
The name “Hesto” is derived from Hella, Smiths and Toyota, the early investors.
It opened its factory in 1989 with 183 employees and has since grown exponentially. Hesto is jointly owned by Metair, South Africa’s biggest component manufacturer, which is listed on the Johannesburg Stock Exchange (74,9%) and the Japanese headquartered Yazaki group (25,1%), the world’s biggest electronics firm. Yazaki has 306 000 employees across 596 sites in 46 countries and its partnership with Metair in KZN has had a profound impact on the local economy, according to Ilembe Chamber of Commerce CEO Cobus Oelofse.
The company’s success since 1989, with regular expansion, caught the attention of Yazaki in 2006 and the subsequent investment and exposure to world-class technology and systems has seen the company ramp up production and claim a space in global auto components manufacturing.
Hesto Harness’ managing director John Chandler recently briefed Ilembe Chamber members on the R1-billion investment in a 40 000m² new plant in Stanger, where they have signed a long lease with Transnet for a 100 000m² chunk of land for the development. There is a tight deadline to finish the new factory by October this year and company projections based on new business secured in January 2020 could see the workforce doubling by 2022.
According to earlier reports, the new business is to produce harnesses for Ford as the local arm of the US vehicle maker prepares to launch new vehicles. Chandler told chamber members the successful investment was down to a number of things, including being part of an internationally competitive manufacturing process and strong local stakeholder co-operation.
“In Ballito I don’t think anyone knows who we are. We fly under the radar, but in KwaDukuza we are an integral part of the community. We have a strong relationship with the municipality and have a workforce that has three generations of families who have worked in the business.
“Our staff know the business intimately. They know how critical our components are to road safety and they are committed to the success of the company. If we need staff to work seven days a week, 12 hours a day to fulfil an order, they do so willingly. We have 2 600 people pushing in one direction. There is a high skills set and low staff turnover.”
Chandler said the firm was competitive on the global manufacturing cost index and much of the work is done by hand, with about 70% of the workforce being women and the defect rate being two per year. Hesto invested heavily in skills and training – not to tick compliance boxes, Chander said, but to ensure its low defect rate.
The deep company integration in the local community bred loyalty and a stable workforce. Hesto has never had a strike.
“We have managed to align with our stakeholders. If your customers, investors, employees and local government are agreed on joint objectives it makes for a much easier conversation.”
The company is involved in local education, skills development, and healthcare.
Chandler told chamber members the story of a roadside welder who the company had commissioned to make burglar bars for a local school. With Hesto’s assistance the welder was upskilled and will now be a contractor for ironworks at the new factory.
The company’s growth was spurred on by global demands. “It is a good industry to be in. It just gets more and more complex.”
Ilembe Chamber CEO Cobus Oelofse said Hesto’s presence on the KZN North Coast was indicative of the strong manufacturing culture there. “I attribute Hesto’s success to the international nature of the business, the company’s leadership, its people and Hesto’s strong local commitment.”
KZN Trade and Investment CEO Neville Matjie said the agency had partnered with KwaDukuza Municipality and benefitted from the support of Premier Sihle Zikalala, the Department of Trade and Industry’s Lionel October, and Transnet Freight Rail’s CEO Sizakele Mzimela.
“We are pleased that the final decision was KwaDukuza (to establish the new factory there). It shows that secondary municipalities are ready to receive large scale investments such as this one.”
Glen Robbins, the research head of Durban based TWIMS (The Toyota Wessels Institute for Manufacturing Studies), applauded Hesto’s growth. “The company has undergone an amazing transformation in recent years to strengthen its status as a world-class producer. The leadership team and investors at Hesto have worked tirelessly to demonstrate that labour-intensive manufacturing can be competitive in South Africa, even in areas outside the major cities.
“South Africa certainly needs many more large manufacturing companies to help support any economic recovery, and those making policy could learn a lot from understanding the needs of firms like Hesto.”