Shaves buys into Natal Associated Chemicals, the manufacturer of Dekade Paints
Aggressive competitive pricing, low profit margins and the absence of a medium price brand had become major concerns to Shaves – as had their dependence on their major suppliers Dulux and Plascon.
In March 2006, Shaves Industrials Pty Ltd was approached by founding NAC director Bob Kirk, manufacturers of Dekade paints for 27 years in Pietermaritzburg, to buy his 25% interest in their company. With the support of founding NAC shareholder Pieter du Plooy, this investment was ratified on x, bringing another 13 stores into the fold.
Shave’s stake in Dekade Paints provided it with the ability to price Dekade products competitively and put a halt to the continued undercutting of Dulux and Plascon prices by national retailers, which used their buying power to sell at prices unprofitable to Shave`s. In the trade market, Dulux and Plascon often supplied prices direct to contractors well below their best price to Shaves which it categorised as a retailer.
For NAC, Shaves brought its sales and purchasing power to the table, which gave it an almost immediate 50% turnover boost.