Stainless steel tank manufacturers Grotto and Velo have recently announced their merger into a single entity. The new company will be called Grotto Velo Tank and Equipment Company, registered as GVTec (Pty) Ltd.
The new operation will continue to run at the two facilities in Wellington and Airport Industria, and the combined operation is expected to allow for better purchasing, planning and overhead utilisation.
“In this way, we expect to be able to continue to offer the industry high quality, cost-effective products,” Tony Gerrans, previously at Grotto, says.
Grotto and Velo have been in strong competition with eachother and resulted in cutting prices and profits every year.
“After deciding we cannot continue like this, we sat around a table and discussed opportunities. When both companies wanted to buy the other and hampered on the price so we decided to merge the two companies. Since then, the merger has been in operation since 1 August 2014. The management and line function staff will be drawn from both companies and Tony and I will remain active in the business during the merger and for the foreseeable future”, Chris Wium, previously at Velo, adds.
“We are running both premises at the moment with full staff. We don’t anticipate a significant number of retrenchments and new appointments because we would like things to run smoothly during the merger phase for the next year or so.”
Grotto has been in the tank business for 50 years, and Velo came to SA in 2000 from Italy – where they were very well known in the wine industry all over the world.
“We would like to be a significant role player in the manufacturing of tanks for the wine industry as well as our customers in the breweries, bakeries and mineral water manufacturing industries,” Wium added, “We are now exporting tanks to all over Africa and into America.”
“I am very positive about the merger. The feedback that we are receiving are also positive. There has been an expectation that we will push up the prices due to the merger. But that is not the case and I think that it was very important for us to do this deal as we could not continue to carry on with the reduced prices we were selling the tanks for, because of our competition.”