#SARACCA

Competition in the air conditioning and refrigeration industry is currently facing a slow recovery from COVID-19 restrictions which affected the worldwide economy. All industries are grappling with inflation and having to work harder for the same or even less money. Some have fallen into the trap of undercutting prices to win contracts for quick profits. “Throughout the building and construction industry,” says Barney Richardson, Director of the South African Refrigeration and Air Conditioning Contractors Association (SARACCA), “there is this serious competition and it’s tough. You need to be competitive but efficient.” How can you set yourself apart from the pack?

Although your business structure is a private matter, Richardson adds that SARACCA members, especially emerging contractors, are encouraged to pay attention to their overhead structure. “Careful thought should be given to your hidden costs and labour practice.” For instance, have you factored in travel costs and time into your quotation? Are you offering fair wages? Addressing these areas can define you from your competitors and contribute to your long-term success in the market. SARACCA’s regular communication and meetings also provide members with invaluable support by highlighting the latest industry standards and regulations which enables you to offer high-quality and compliant services to your client.

SARACCA has authorised training providers that aim to arm practitioners with sufficient knowledge and skills that make them key industry players. SARACCA provides a subsidy to members for the training of site staff in duct erection, refrigeration, air conditioning, project management via short courses that follow SAQA approved unit standards. The aim is to continually strive to improve the image and standards of the industry, which enables you to deliver quality service every time, propelling you ahead of the competition.

The Competition Act No.89 of 1998 restrains trade practices which undermine a competitive economy. SARACCA upholds this by never interfering in the competition that takes place within the industry. Members cannot expect to be assisted in eliminating the competition to have all practitioners on an equal level. SARACCA gives members skills and knowledge allowing them to be successful in the field, not “market” them as practitioners or generate business for them.

“Give man a fish, you feed him for a day. Teach him to fish, and you feed him for life.”

– Chinese Proverb

SARACCA participates in several forums where industry-wide issues and requirements are discussed so that all members are able to appropriately participate in a competitive market. These include the Master Builders South Africa (MBSA), Contractual and Legal Committee (CLC), the Joint Building Contracts Committee (JBCC) on contracts, the Pressure Equipment Regulations Forum (PERF) and the South African Bureau of Standards (SABS) on duct manufacturing, installation, and refrigeration. SARRACA is not involved in their member’s sales process and does not condone any form of collusion or corruption.

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The South African Refrigeration and Air Conditioning Contractors Association (SARACCA) was approached by a member based in Kimberley, Northern Cape. SARACCA felt that it would benefit others to share contents of this member’s letter as it offers a current, insightful perspective on refrigeration and air conditioning in South Africa from a well-respected industry insider.

The member, with many years of industry experience, is an authorised inspector and designer of refrigeration and air conditioning installations as well as qualified to work with refrigerant gases. They were contacted by an individual who wanted to find out more about who SARACCA and the South African Qualification and Certification Committee for Gas (SAQCC Gas) are. Our member noted in their letter that this individual is a Department of Employment & Labour inspector. It is certainly beneficial for government inspectors, who are responsible for regulating Occupational Health and Safety (OHS) matters in all industries, to be aware of crucial bodies like SARACCA and SAQCC Gas. These associations are tasked with the registering of refrigeration and air conditioning practitioners and ensuring compliance according to the “Pressure Equipment Regulations” as part of the OHS Act.

SARACCA saw this as an opportunity to bring to light that we need more awareness of this regulatory infrastructure in to the public. It is important for the public to understand and for registered gas practitioners to inform them of how these bodies directly impact them.

Registered practitioners are obligated to issue a Certificate of Conformity (CoC) on completion of installation or maintenance in the prescribed format on the SAQCC Gas App. CoC’s are there to protect everyone. They ensure that all refrigeration and air conditioning maintenance/installation associated with refrigerant gas is done competently and safely, protecting practitioners and those using these products containing high pressure and sometimes even dangerous gases. In the event of a product causing damage to property, insurance companies require CoC’s to pay out claims.  In the last year, there have unfortunately been accidents and even a death of a technician. This was all because safety regulations and procedures were ignored, and the gas practitioner was unauthorised. Awareness can drastically limit loss of lives and property damage.

The public can ensure their own safety by always requesting a gas practitioner’s unique number registration card, category of registration as well as the practitioner’s photo. All these details are recorded on the SAQCC Gas website which can be verified by a simple search. Registered gas practitioners can boost public awareness by informing their clients to follow this approach with any gas-related service or product.

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Competitive pricing has evolved. As more players enter the market, businesses are subjected to cost and time pressures in order to beat the competition. Additionally, the economic fallout of a global pandemic includes sharp price drops, excess capacity, and heightened price sensitivity which ultimately destroys value. The risk now lies in becoming too aggressive in pricing, resulting in little returns compromised on the quality of installations.

How can you eliminate pricing risk and still maintain the competitive edge? The answer is to give equal attention to quality, project management and pricing. While appearing to a simplistic approach, businesses that offer reliable, quality service and good value are always in high demand. On the other hand, companies that offer cheap pricing but skimp on quality suffer from short-term profit and long-term decline.

It’s an age-old lesson that too many of us choose to ignore. Although sacrificing quality for pricing may grant you some quick profits, you’ll quickly run out of steam when clients fail to return. Favouring quality over pricing will increase your company’s reputation and product loyalty, which will keep your business sustainable.

What is the solution to the risk?

Become aware of regulations and remain steadfast in offering quality installations, even if this is at an increased price. Sacrificing installation quality merely to outbid your competitor is not only dangerous for your client but for your business reputation and sustainability.

SARACCA (South African Refrigeration and Air Conditioning Contractors Association) believes that the focus on quality is essential. It is up to the client and consulting engineer to select HVAC companies based on the scope of work required as opposed to costs alone.

Will clients pay more for better quality?

Absolutely, but the client needs to be made aware of the pricing shortfalls. Making the risks that are involved in working with high pressures and certain gases clear will discourage a client to choose cheap over safety. Communication with your client is essential to ensure that they prioritise the quality installation. SARACCA membership selection is based on quality, reputation and value of work. Now is the time to focus on quality, while remaining realistically competitive. It is not worth the profit (if any) to work on projects where standards have been sidelined for cost.

Members of SARACCA are informed on a regular basis on quality standards, as well as new laws and regulations governing the industry. It is vital for all HVAC practitioners to be registered with SAQCC Gas, a benefit of SARACCA membership, and attend informative meetings.

Forbes Business Council recently posted their top 12 pricing strategies recommended by a panel of experts made up of successful entrepreneurs and business leaders. One technique emphasised value-based pricing as opposed to cost-based as critically important for long-term success. Becoming skilled at quoting while remaining competitive is a tool all HVAC practitioners need to build their reputation and remain in business.

View the full article here (shorturl.at/bdwDX). Visit www.saracca.co.za for details on membership benefits and joining forms.

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