EIGHT LESSONS FOR ENTREPRENEURS

At 87 years old, serial entrepreneur Alain Leger, who founded one of South Africa’s most successful manufacturing enterprises, is a seasoned business person celebrating the 60th anniversary of the company he founded.

While the art of taking on financial risks in the hope of achieving profits has eluded many, being a financially-savvy innovator has been in his blood for decades.

The battle-scars of the entrepreneurship journey have taught him many life lessons and, for those interested in manufacturing goods or selling services, his story, and eight lessons behind them, is an instructive one.

VescoPlastics founders and husband-and-wife team, Alain Leger and Máire Leger.
Founder Alain Leger with chairperson and son Dr Jean-Patrick Leger.

LESSON 1

Choosing the right partners and business is vital to the success of a company.

More than 500,000 businesses are started each year in the US, with the estimate of the number started globally being considerably larger. With the US start-up statistic translating into one business being created every minute, choosing the right partners for a business as well as the right business are important for the long-term success of a company.

Leger recounts that it was a series of accidents that resulted in him starting his first business in engine reconditioning.

The first of the accidents relates to how he came to be situated in Virginia, in South Africa’s Free State goldfields.

In 1956 he was working at the Merriespruit gold-mine plant but this was closed due to a flooding disaster that killed dozens.

The underground disaster resulted in him being transferred to a uranium plant in Virginia, where he worked as a research engineer.

Then, in 1958, while still working at the plant, two Mauritian emigrés approached him with an opportunity to invest in an engine-reconditioning business in Virginia.

They indicated that they were familiar with the industry and that there was a strong demand for this service. They also indicated that his involvement would be limited to supplying the finances, the property, equipment and the operating capital.

However, the venture did not go well. The partners to the business turned out to be technically incompetent and getting involved in the technical and operational aspects of the business became a necessity for Leger.

The business was failing, and even finding a suitable technically-qualified staff-member failed to rescue the company as a result of a personality conflicts between the other partners and the new recruit.

“It was a matter of using my mine salary to pay for the expenses while working after-hours from 5pm to midnight, sorting out the paper work and so on,” notes Leger.

“It was difficult to fight a lost cause,” he says.

LESSON 2

Experience is the cheapest way of seeing the world as long as you get it from someone else.

This is one of Leger’s favourite sayings and relates to many of the costly lessons that he has learnt during the establishment of his business.

Following the difficult foray into engine reconditioning, Leger considered his options, and whether he should remain in the business.

Fate was about to steer him in a new direction and a visit to Pinetown got him interested in the hard-chrome plating business.

“There were very big companies there that were closing down,” Leger says of his decision to buy a chrome plant in 1960.

“That plant was useless, the machinery was useless and the loss of money was real,” notes Leger of the initially-unsuccessful venture.

“It took a few more years to get the technology working. We had to stop everything and start at developing a reasonably good business in hard-chromed crankshafts on a national basis.”

LESSON 3

Understand industry volatility and adapt to changing conditions.

Technology can alter business fundamentals as can shifts in the business operating environment, including innovations made by competitors as well as social and environmental developments that may change consumption patterns. It is important to assess how these changes might necessitate a fundamental alteration in the business model.

Despite eventually creating a successful hard-chrome crankshaft reconditioning business, Leger looked ahead and realised that he had to start investigating other businesses.

“I could see that the whole engine business was going to come to an end because car engines were lasting longer due to the better air and oil filters,” he notes, adding that he realised that instead of a crankshaft having to be replaced every 30,000 km, it would probably last 300,000 km or more.

This realisation spurred Leger into reconsidering his business options.

“So I worked hard experimenting for about 5 years, taking a lot of my time thinking about possible new directions in which to redirect the business,” Leger says.

“I had some premises and some skilled people in machining and had started doing a lot of polymer experiments, converting a very small kitchen upstairs into a laboratory.”

LESSON 4

Fail fast.

Leger is a fan of this mantra, which is clearly important given the high level of failures among business start-ups and the importance of trying something else, learning from mistakes and not taking failure too personally.

Leger started investigating various polymers.

He developed one-time surface coatings for floors and walls – these were hard-wearing, resilient products.

He also started importing engineering plastic products for resale – nylon mainly – from a German company.
However, both of these projects had difficulties associated with them.

The surface coating business attracted difficulties because contractors had to be used to apply the coatings. These contractors, in many cases, failed to pay for the material.

“That was not such a good business. The product was good but the business was bad,” concludes Leger.
The nylon-importing business was also flawed. The product range that had to be kept was large and the stock that had to be on hand was significant.

In addition, the nylon was used in the underground mining environment. This was characterised by high humidity, which led to the material expanding, seizing up and
softening.

“The weakness of the nylon product was clear,” says Leger, who was never satisfied with the poor likelihood of commercial success of these two early moves into the polymer business.

LESSON 5

Meet the unserved needs of customers and eliminate customer frustrations.

Leger’s own experience of solving a real problem that he was facing echoed an ideal of selling a product that is well-suited to a client’s concerns.

Leger continued to operate the hard-chrome crankshaft business, and started to think about a difficulty that he felt could be addressed.

“I thought a good idea was suitable holders for the anodes that would be resistant to chromic acid solution,” he describes.

“I got the idea of getting some polyethylene granules and melting them in the ovens that we used to anneal the crankshafts after treatment to try to protect them against breakage.”

“And so we started producing cast polyethylene rod, which was nice for machining. This was the beginning of our engineering plastic material business.”

LESSON 6

Find the right product and optimise the business for its sale and production.

Leger continued to be intrigued by the idea of developing his own polymer bearing material. He was inspired by new polymers coming out of Europe, which had properties that he thought would be desired, including lower friction in bearing products.

“So I started experimenting,” says Leger.

“There were a number of ways of lowering the friction from compounding. And from there developing a range of rods and bushes,” he explains.

“There was initially a problem in that, when you machined some of the material, it blew up,” Leger says of the development of the product.

“One would get worried for the safety of one’s staff. So a lot of work was required to gradually reduce the self destruction and it was days and months and years of gradual improvement,” he says.

Leger did thousands of tests to find the best formulation, which had the appropriate wear and friction characteristics. He tested the limits of the material on speeds and loads, both lubricated and unlubricated, and ways of compounding the material and treating the products, and of extending the range.

“And eventually we got it all working, producing the polymer Vesconite ourselves from base materials, which had one big advantage in that it really reduced the cost of the material,” he says.

Leger designed fairly unique processes for his polymer production and then designed machinery for the process.

He believes that having a unique polymer material was key to the business’s flourishing since he would not have been as successful with the type of generic nylon product that he had initially sold along with many others.

LESSON 7

Commitment to the business.

Leger and his wife, Máire Leger, often worked long hours developing the product and marketing it to different industries. Leger notes that he was lucky enough to work an 80-hour week at times and, through commitment and an investment in time, developed the company.

It was gradually a matter of upsizing and increasing the scope of activities.

Leger notes that building the scale of the business was the work of years and, although initially the demand for his polymers was limited, he believed that there were lots of applications.

“The export market gradually developed as did applications in various fields,” he says, noting the steady consistent way that the company grew by setting up a store and business in Johannesburg, South Africa, as well as using distributors globally, all the while containing costs and making prudent decisions about investments.

LESSON 8

Improvement needs to be continuous.

Leger is known for quoting the saying: “The biggest room in the world is the room for improvement”. This is a dictum that the company tries to embody, including in its SABS and its ISO9001 quality approvals and its commitment to client service and manufacturing excellence.

2018 marks the 60th anniversary of VescoPlastics. The company is known for its low-friction bearings and wear material. It produces polymer rods, hollow bars and plates at its 20,000-square-metre factory in Virginia, South Africa. It also has warehouses in the US, UK, Netherlands and New Zealand, with stocking distributors in Argentina, Australia and Singapore.

VescoPlastics serves customers in more than 100 countries, exports over half its total sales, and dispatches large orders regularly to the US, China, South America and Australasia. It produces several polymers with different co-efficients of friction, temperature and chemical-resistance levels and load-carrying abilities.

The company is continuously improving its processes and responding to client needs for improved delivery times, polymers that meet new requirements and engineering for new applications.