Reflecting on 2022

As the festive season dawns upon us in South Africa, it is time to reflect on 2022. A year that was, well, full of surprises and challenges. But as South Africans we always seem to find a way to overcome these challenges.

Load Shedding

Load shedding has officially made it's way to the nr. 1 used phrase in SA for 2022. This is no surprise as we have had a 200% increase in power cuts over the previous year. The massive increase in load shedding has created a demand for residential back up/solar systems never before seen from a distribution perspective. When you deplete what used to be 3 months worth of inventory in 2 weeks, with replacement stock 90 days away and continuous demand increases - you know that you are heading for the perfect storm.

Supply Chain

As expected 2022 was filled with supply chain issues and rising shipping costs. One of the biggest challenges was to manage customer expectations when it came to inventory lead times and deliveries. Customers needed to adapt to forward ordering and planning vs buying on demand off the shelf. This method also has its challenges as many customers couldn't make these kind of financial commitments, but needed to secure stock for their projects. When we realised the situation wasn't going to improve we decided to secure enough inventory through massive financial investment and finally broke through the supply shortage to find ourselves in a stock positive situation towards the end of the year.

Currency Fluctuations

Adding to the chaos, our currency depreciated due to load shedding, which in turn has made the cost of solar/back-up skyrocket. We saw the ZAR reduce to over R18.50 against the USD of from a firmer R14.50 earlier in the year. This was very difficult for distributors and installers to manage as the cost of inventory would increase between quote and acceptance. At least we have seen a stronger ZAR towards the end of the year and we were able to pass these reductions to our customers immediately.

Covid-19

2022 was our first full year post covid and what you can clearly notice is how eager people were to get back to their everyday "normal" lives. "Normal" was working from remote locations and office blocks standing empty. Getting used to supply chain disruptions as well as high shipping costs. Nothing was "normal", but it was better than wearing a mask and not being able to visit public events. Covid is far from over and with the current outbreak in China I expect more supply chain disruptions to hit us in 2023. Inventory planning will be a key factor in 2023 again.

Expansion

During 2022 Herholdt's Group added 3 new branches in Centurion, Gqeberha and Durban. Durban will have its official opening in Feb 2023 and we look forward to welcoming our KZN customers to our brand new state of the art facility. Durban will also serve as a logistics hub for unpacking of containers received via Durban port.

We also re-located our Cape Town branch to a much bigger warehouse in Montague Park and we welcome all our loyal Cape Town customers to visit us there in 2023. We will also be bringing the full Herholdt's stock offer to Cape Town, not just renewables.

During 2023 we will also re-locate our Randburg office to a brand new 9000m2 facility. This will also serve as a distribution hub for Gauteng and the northern areas of South Africa.

We also expanded our workforce from 163 employees to 290 employees by Nov 2022. It's amazing to be able to provide for so many families.

The Numbers

In 2022 Herholdt's assisted our distribution and installer partners to help thousands of South Africans to reduce their carbon footprint and become less dependant on the national utility. In 2022 we distributed over 100MW of PV modules, over 39000 residential inverters, 129MWH of residential storage and 104MW of commercial inverter power with 29.7MWH of commercial storage.

Partners

We have partnered with many high quality suppliers over the last 5 years and they have become more like family than suppliers for Herholdt's. I would like to thank all of you and we are looking forward to continuing the growth with all of you in 2023. Some of our major partners include, but is not limited to: Solaredge, Sunsynk, Freedomwon, Sungrow, Atess, Victron Energy, CBI, EM, SoladMD, Zamefa and Synerji.

Trusted Installers

2022 saw the take-off of our Trusted Installer Program where we assist end users in finding quality installers that can assist them with their journey to independence. We have very strict regulations on trusted installers. We believe that this is the way forward to make sure that all installs are not only according to OEM specifications but are also safe, since this should be the nr. 1 priority for any PV installer. If you wish to join our the program please head over to https://herholdts.co.za/installer.asp to register as a trusted installer.

2023 and Beyond

I fully believe that we have learnt a lot from the challenges of 2022 that has enabled us to plan better for 2023. Our main objective for 2023 will be to serve our customers even better by providing uninterrupted stock flow for the new year. This will enable us as a community to assist South Africans in their quest for independence and self sustainability. Our industry is young and it is growing at a massive rate. This is good for our economy and also shows the world that we are not afraid to run the renewable race with the rest of the world.

Giving Thanks

As a company we would not be able to achieve any of this without you, our loyal customers. I would like to personally thank each and every one of you for your support throughout this year. I hope you have a very Merry Christmas and enjoy the time with your families wherever you may go. Please travel safely and return well rested so we can take on the mammoth new year side by side.

Lastly to each and every one of the 290 employees working at Herholdt's. You are the most amazing team any leader could ask for. You are the heartbeat of Herholdt's and all the honour goes to you for keeping the ship on course.