COMMENT
S
Equipped for survival
outh Africa appears to once again be going through labour On the hire side, he comments, “We are seeing a growth in the
pains, as violence and mayhem become the order of the contractor sector and this generally increases demand for plant
day, and the sentiment among some is that the Ramaphosa hire companies, specifically medium-sized excavators and smaller
euphoria is fading. This is accompanied by murmurs that although loaders. So dually, growth is in the contractor sector — with road
he is leading, nothing is changing, and he appears to be dragging construction doing well — and plant hire industries. Overall, the
his feet around finalising the Mining Charter. market is looking good, and we are very positive about the year
While this continues to impact on investment and therefore
the economy, in amongst this countrywide angst, there are
2018 so far,” he adds.
Latest results released by the National Association of
equipment manufacturers that continue to thrive, one such being Automobile Manufacturers of South Africa, Associated Motor
Babcock. MD David Vaughn is effusive about the Volvo construction Holdings, and Amalgamated Automobile Distributors, show that
equipment product line, which is showing huge potential, despite the South African commercial vehicle market declined in April,
the volatile politically charged environment. lagging 7.5% behind the year-to-date results of 2017. A total of 7 674
“Despite the uncertainty around the Mining Charter, Babcock
continues to do very well within the mining and quarrying sectors,
new trucks and buses have so far been sold.
April’s sales of 1 838 units was also a significant 22.1% down
and most of the machines we are selling are the larger tonnage,” he on March 2018’s results. According to Gert Swanepoel, managing
assures. These machines are going into the coal mines, hard-rock director of UD Trucks Southern Africa, “Several factors are currently
mining, and into heavy quarrying work specifically. “While we are hampering sales, including the recent violent attacks on trucks on
due to launch the A100 Rigid in Q4 2018 — the first genuine rigid our roads, which definitely hampers business confidence in the
ever produced by Volvo — what is showing tremendous growth is market. Countrywide industry strikes and the number of public
the A60 ADT, up from the smaller A40, with 28 already in the field holidays during April also weren’t very conducive to creating a
and 17 more in the pipeline,” he says and adds with obvious pride: positive buying environment for fleets.”
“We are officially Number 1 in South Africa for ADTs.”
Vaughn maintains that despite the environment, there are
It wasn’t all bad news, however, as sales in the Extra Heavy
Commercial Vehicle segment increased by 8.1% to 956 units,
“big pockets of opportunity,” and elaborates: “Eskom is running compared to April 2017’s results. However, medium commercial
seriously low on its coal stockpile, with only 30–35 days in reserve vehicle sales were down by 12.1% to 493 units, and heavy
as opposed to the 60-day target.” Running in tandem, he points commercial vehicles declined by 8.5% to 333 units in this month-
out, is the debacle with Optimum coal mine — which is currently by-month comparison. A decline in bus sales recorded a significant
in business rescue — supplying around 200-thousand tons of its 30% decline in sales to only 56 units sold during April.
400-thousand-ton commitment. “The business rescue practitioners
are assuring Eskom that they are able to make up the shortfall,”
Vaughn says and adds, “but they want higher prices for their
On the positive side, there is a developing trend within the truck
market going to the online shopping businesses.
It appears it’s more a case of winning on the swings and losing
coal and Eskom is deferring.” This opens the door to the smaller, on the roundabout when it comes to vehicles and plant. Whatever
junior miners, giving them the opportunity to supply Eskom it is, South Africa seems well equipped to survive.
competitively, as they are competing with huge companies that
have equally huge overheads.
On the other hand, although there are rumours and talk on the
street of “big things to come,” Vaughn comments, the civils and
construction sectors remain depressed.
Hennie Louw, marketing manager at ELB Equipment, is upbeat
however: “Generally, we are seeing a positive business sentiment
within the capital equipment industry, and the growth has been
good since the ANC elections in December,” he maintains.
He underscores Vaughn’s observation around the upswing
within the mining sector and agrees that it’s the bigger machinery
that is in demand, especially excavators, where supply has only
recently caught up with the rapid increase in demand.
Kim
Editor
JUNE 2018
1