An increasingly competitive market across Africa has forced multinational IT company Fujitsu to implement changes to its business in order to stay afloat. Fujitsu's less than two hundred employees now serve 'English speaking Africa' from new offices along a busy Johannesburg highway.
The move into new office premises, along with the appointment of a new Managing Director, are the latest changes the Japanese company has made in order to relieve growing pressure on its profit margins.
Quentin Schots, outgoing Managing Director for Fujitsu, says the company intends to improve on its market share in Africa because the continent is regarded as an important emerging market. "We do business and application services, managed infrastructure services and we have a raft of data centre solutions that we do and it is important because Africa is one of those continents that continues to grow. Whilst in South Africa GDP growth is a bit low at the moment, there is still a huge amount of potential and that is why there is focus on this region," said Schots.
After five years as MD Schots will make way for current Sales Director Hannes Burger and looks forward to a new role that has yet to be confirmed by Fujitsu.
Speaking to ITWeb Africa about some of the challenges they have had to tackle over the years, Schots says marketing their business has been limited because humility is a key trait of the Japanese people and a significant part of the company culture at Fujitsu - and that means they shy away from aggressive marketing.
Economic-related challenges, including the devaluation of currencies, has also impacted on market perception of the company.
Says Schots, "I think what makes it difficult sometimes is that if the rand continues to devaluate, since you are reporting in other currencies it looks like your business is shrinking when it really isn't. I can't say how much we grew locally because we are only supposed to be reporting at group level, but we are definitely generating double digit growth in key areas of the business like the data centre solutions space which is a high focus and we see the success that has produced in the market over the past five years. From a local market perspective we must grow."
Payment challenge
Schots explains that Fujitsu's experience of selling exclusively through distributors in Africa, excluding South Africa where, at times, they sell their products directly, has empowered the company with a strong sense of challenges in the market.
"We've got the obvious challenges. I think it is fairly easy to secure business, it's another thing to get paid. You need to be extremely smart as to how you do business certainly when it comes to places like Angola and Nigeria where even getting funds out if the country is extremely difficult and can sometimes take up to - if you do it the traditional way - a year or two."
Schots says there is huge potential in Africa despite the tough economic climate globally which can be tapped into to with the help of stable governance and ease of trade.
Fiscal position
Michael Tsandilis, Financial Director at Fujitsu would not give further details about the company's performance in Africa, although 2015 Full-Year Financial Results for the global business released at the end of April show profit before income taxes was 131.8 billion yen, down 67.0 billion yen from the previous fiscal year.
"It is a challenging environment for many companies, very competitive and we have made changes over the last two years. The laptop business is a very competitive business, our price points are generally higher but we've got a much higher quality computer. We've also got a good service business and we are provide services to the aviation industry as well as municipalities."
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