Pupkewitz Dismisses Fears of Monopoly

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By Mbatjiua Ngavirue Windhoek The recent Pupkewitz MegaBuild takeover of Builder’s Warehouse raised eyebrows in some quarters following so closely on the heels of the company’s acquisition of M&Z Hardware only three years ago. There were fears about what some see as increasing concentration within the hardware sector, particularly the perceived market dominance of Pupkewitz MegaBuild. Harold Pupkewitz, the Chairman of the Pupkewitz Group, in a recent interview tried to dispel some of these fears. He said Pupkewitz MegaBuild acquired M&Z Hardware at the request of the M&Z Group, and apparently not because of any predatory instincts on its part. For a variety of reasons M&Z’s hardware division ran into severe difficulties resulting in a situation where it could no longer continue trading. Nearly all M&Z Hardware’s branches around the country were already shut down by the time of the takeover, with the exception of the Windhoek and LÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼deritz branches. The LÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼deritz branch was kept open mainly for sentimental reasons because Metje & Ziegler was founded in the town. The purchase included the land occupied by M&Z Hardware at the corner of Edison and Mandume Ndemufayo Streets and the remaining stock. M&Z Hardware however kept its debtors book. The Pupkewitz Group similarly acquired the Rudolf Schuster Hardware company with branches in Windhoek and Grootfontein in the early 90’s, well before the M&Z Hardware store purchase. Here again Pupkewitz said they bought what was left of the business at the request of Rudolf Schuster, which by then had already closed its Walvis Bay branch. He dismissed claims that Pupkewitz MegaBuild was becoming a monopoly, saying there was more than enough competition in the hardware sector. Consumers could choose from a wide range of hardware companies including Cashbuild, Penny Pinchers, Build-it, Ark Trading, Timber City, Mica Hardware and a number of specialist paint suppliers. Build-it is a franchise of the huge South African Spar retail group. Crown Building Supplies is the Namibian franchisee for Build-it with branches in Windhoek, Grootfontein, Omaruru and Tsumeb. There were as many as forty specialist hardware businesses including businesses such as Obeco, CTM, Italtile and J&S Hardware. He mentioned that at the coast W&B Hardware was a strong and long-established competitor. Many hardware items sold by Pupkewitz MegaBuild can now be purchased at stores such as Game and Cymot, as well as in supermarkets such as Pick ‘n Pay and Woermann Brock. Manufacturers also sold directly to contractors, among them Wispeco, Plascon, Dulux and Holcim. “The important thing is not to look at whether there is concentration in the sector, but at whether there is enough competition,” he said. In his view, there was more than enough competition because Namibia was part of SADC and goods could flow freely within the region. There was always competition from South Africa. In the past, residents of Oranjemund often met their hardware needs from suppliers in Springbok, although a Pupkewitz MegaBuild branch has now opened in the town. The Upington-based company Bou Benodighede also supplies parts of southern Namibia. Pupkewitz felt MegaBuild’s purchase of M&Z Hardware was beneficial for both companies, as well as for the public. M&Z were able to invest in their motor division thereby strengthening their position in the motor trade. The extra financial resources allowed M&Z Motors to modernise and open new branches. Pupkewitz MegaBuild on the other hand was now able to give members of the public better service. “The public have scored. We are now able to handle bulk goods more efficiently and more speedily,” he noted. The new acquisition, Builders Warehouse, concentrates on sales to contractors, which complements the operations of MegaBuild. Pupkewitz MegaBuild and Builders Warehouse would serve big customers in the construction, mining and public sector in direct competition with each other, and with large South African suppliers. Pupkewitz was pleased that Builder’s Warehouse has spacious premises in Swakopmund, meaning MegaBuild would now be able to give its customers in the coastal town better service.