General optimism ahead of bauma CONEXPO AFRICA 2018
bauma CONEXPO AFRICA 2015.
Image credit: ©Messe München GmbH
This year sees the third edition of the bauma CONEXPO AFRICA construction and mining equipment exhibition taking place at the Johannesburg Expo Centre in South Africa from 13 to 16 March 2018, and expectations among exhibitors are high.
With exhibitors coming from all over the world to show off their portfolio to prospective customers, not just from South Africa, but from Africa as a whole, bauma CONEXPO AFRICA 2018 promises to offer even more experience to those who pass through its doors. “In 2018, we will be introducing TECH TALKS, presented by CONEXPO-CON/AGG,” says Elaine Crewe, CEO of Messe München South Africa, organiser of bauma CONEXPO AFRICA. “These talks will allow visitors to take advantage of a comprehensive technical programme, with a variety of presentations focused on future technology for the mining and construction industries.”
Elrene Smuts, group communications manager for
Chryso Southern Africa Group.
Image credit: Chryso Southern Africa Group
Over the course of the four-day event, exhibitors will also present innovations, case studies, challenges, and solutions for the industry in the all-new Speakers Corner.
While the first two editions of the event took place on a two-year cycle, the organisers decided to adjust the timing to better serve both the local and the international visitors and exhibitors. “As we have now moved into a three-year cycle, we are encouraging our exhibitors to show off their latest innovations,” says Crewe. “Our demo area will cover the full product categories of the trade fair, and a revised layout will improve the visitor experience.”
“Our aim for 2018 is to increase the number of visitors from Africa,” she continues, “and we are working closely with our agents in various African countries to promote this. In November, we went on a promotional roadshow to Zimbabwe, Botswana, Mozambique, Zambia, and Kenya, and delegations from these countries will be visiting bauma CONEXPO AFRICA 2018.”
In the lead up to the show, we spoke to some of the exhibitors that will be present at this year’s event about their expectations for the show and for the southern African — and African — mining and construction industries in general. We also asked them about the challenges facing those operating within the equipment industry, and what they believe to be the prime areas for investment and the important trends to watch.
The feeling among these exhibitors was of general (if somewhat cautious) optimism, with many pointing to the expected upswing in the mining and construction sectors. A number of exhibitors will also be using bauma CONEXPO AFRICA 2018 as a springboard to launch new products, services, and offerings to a market they believe is finally beginning to recover from a tumultuous few years.
Since the beginning
BurGerS Equipment & Spares, distributor for Chinese construction equipment manufacturer LiuGong in South Africa and Namibia, has attended both previous editions of the show, according to MD Tiaan Burger, and expects this year’s event to surpass the previous ones. “Our hope is that the construction market will pick up this year, because for the last few years, the construction market has been very down,” says Burger. “Our aim is to show visitors to the show that we are here to stay.”
When it comes to mining, Burger believes that coal and chrome are the sectors to watch and that they will remain steady throughout 2018. “The equipment industry is heavily influenced by the political situation, with the price of imported machines dependent on the exchange rate, which thus plays a significant role in getting the machines to the end user at the most competitive price possible. While things are currently stable, this could potentially change at any time.”
While the company’s primary focus is on South Africa and Namibia, Burger believes that over the next few months and years, Zimbabwe is the country to keep an eye on.
Waylon Kukard, sales and marketing manager at
Wirtgen South Africa.
Image credit: Robyn Grimsley
Vaughan Ellis, MD of Maximum Equipment.
Image credit: Maximum Equipment
Chryso Southern Africa Group is another exhibitor that has been involved in the show since it first started in 2013, and based on previous experience, the group is expecting an excellent visitor turnout from within the mining and construction industries. According to group communications manager Elrene Smuts, the company expects to see growth in export volumes, with generally flat volume growth in the construction sector and an increase in mining volume growth.
“While there are very low activity levels in the building sector, the demand for construction chemicals is significantly impacted by refurbishment in the building sector,” says Smuts. This is something the company expects to see continue for the next couple of years. The mining sector, as always, will be primarily affected by a combination of commodity pricing and demand.
In terms of focus areas for African growth, Chryso identifies countries in East Africa — primarily Kenya, Uganda, and Tanzania, although with possible recovery in both Zimbabwe and Mozambique — as well as West Africa — Nigeria, Angola, and Ghana — which Smuts says could see a possible recovery linked to higher oil prices.
South African OEM Bell Equipment will also be making its third appearance at bauma Africa this year, having attended both previous events in 2013 and 2015. “We are proud to be associated with a great local show of this calibre,” says Mark Hughes, director of sales and marketing at Bell Equipment Sales South Africa. “Since this is the third such show, we are confident that it has established itself in the market and will be well attended by decision makers and our customer base from all industries and subregions.”
“Apart from showcasing our extensive product range,” he adds, “we will be using the show to officially introduce our new strategic partners and products following our exclusive distribution agreements concluded last year with Kobelco for its range of excavators, and KAMAZ for its range of heavy-duty tipper trucks. We are expecting this to generate a fair amount of interest in Bell and our stand in general, particularly as we’ll also be hosting Russian and Japanese theme evenings to celebrate our new partners.”
Hughes also highlights access to funding as being the biggest challenge the industry is currently facing. “We find there is more equipment available than funding, and the onus is on OEMs to have new and unique ways to fund the equipment that they sell.”
Despite this, he echoes the general feeling of optimism going into 2018. “The newly established stability in the Zimbabwe mining industry bodes well for strong growth, and the coal sector is another one we will be watching closely, as it is traditionally the sector with the largest uptake for our products. There is a wave of change across the subregion and we hope to see investment in the Copper Belt region with the upsurge in demand for cobalt. The construction industry in South Africa is another primary area for investment, and we are already seeing the first signs of support and aid to Zimbabwe for its agriculture sector.”
Larry Smith, Eazi Access national sales executive.
Image credit: Eazi Access
As far as the outlook for southern Africa’s mining and construction markets in 2018 goes, Hughes says Bell is expecting to see continued good demand from the coal sector, but that there are concerns that platinum group metals will remain under pressure. “Copper and cobalt are exciting commodities to watch as there has been excellent recovery in the copper price and the cobalt price is at an all-time high, given that it is the principle ingredient of the battery industry — this is giving that sector a much-needed shot in the arm. As for construction, the market is steady but remains under pressure, largely due to the lack of government spend, although the road construction and aggregates sectors are holding up well.”
Like many other exhibitors at bauma CONEXPO AFRICA 2018, Wirtgen South Africa plans to showcase the Wirtgen Group’s latest innovations alongside its equipment. The company, which attended both previous editions of the show, plans to use the show to display to its African customer base a range of its available solutions and a broad range of its services tailored to specific requirements for all areas of road construction, as well as mining and processing of minerals. This includes all of its brands: Wirtgen, Vögele, Hamm, Kleemann, Benninghoven, and Ciber.
Speaking of the challenges and expectations facing the equipment industry, Wirtgen South Africa sales and marketing manager Waylon Kukard says: “South Africa’s political and economic instability over the last couple of years has had a negative impact on the equipment industry, as can be seen from the dramatic decline in the total equipment sales during the past three to four years. For example, compaction roller sales in 2017 were down 15–20% year-on-year in the different ranges in South Africa, with 350–400 units being sold per year for the past three years. Roller sales are linked to infrastructure development, and government expenditure has been very limited in the past few years and in some provinces, non-existent. The sector is currently under pressure and declining with no real growth potential in sight. We hope, however, that the market will now start to stabilise as it is an integral part of the southern African countries and is key to our country’s growth.”
And when it comes to trends to watch in the mining and construction industry, Kukard points to an increased focus on both safety and efficiency, as well as towards autonomous operation. “The primary area for investment in Africa as a whole is infrastructure,” he adds. “This is a vital area for any country to grow its economy and to promote investment.”
Facts and figures
bauma CONEXPO AFRICA is presented by Messe München, organiser of bauma in Munich, and the Association of Equipment Manufacturers (AEM), organiser of CONEXPO-CON/AGG.
bauma CONEXPO AFRICA 2015:
Eazi Access, which turns 15 this year, will be attending bauma CONEXPO AFRICA for the third time, having participated in both previous editions of the trade fair. “It is a wonderful opportunity to exhibit at bauma CONEXPO AFRICA, network, and share insights around the mining and construction industries,” says Eazi Access national sales executive Larry Smith. “It is great to see how CONEXPO and bauma have joined forces to create bauma CONEXPO. This provides us with an extended platform with better exposure to a larger group of quality customers, to showcase our work at height and our material-handling solutions.”
Smith believes that in 2018, mines will continue to focus on sustainable growth. “With the appreciation of the rand, we expect that mines will be under increased pressure to keep costs to a minimum and ensure they increase production output. We also see a clear focus developing on specific types of machines: for construction, rotating telehandlers and compact crawler cranes have dominated the European market for many years, and are getting good traction in our local markets. When it comes to mining, customers are looking at alternative material-handling solutions, especially to lift materials to specific heights. Compact crawler cranes offer a cost-effective solution that can not only significantly increase productivity on site, but also ensure that construction contractors can meet their tight deadlines.”
“bauma CONEXPO AFRICA is the perfect platform to meet key decision makers, network, and exchange industry know-how.”
He adds, however, that times are still tough for southern Africa’s equipment industry, and businesses across the country need to spend wisely. “Some are not able to make investments into purchasing new machines, but we believe rental solutions will allow them to enjoy the use of the required equipment without an impact on their already strained capital demands. This will allow companies to focus their capital to fund their core business activities.” Given the continued increase in commodity prices over the past two years, the company expects regions with significant mining activity to benefit substantially from increased activity on existing sites, as well as from the construction of greenfield mining projects that have been on ice for the past few years.
Not all exhibitors have been involved with the show since its beginning. Some are signing up for the first time in 2018 in the face of improving market conditions, while for others, this will be their second time taking part in the exhibition.
Having previously attended the 2015 exhibition under the name Maximum Equipment upon launching its range of Hidromek excavators, this year the company will be exhibiting under the Hidromek brand name. “We are really excited about this year’s event, because in addition to showcasing our range of Hidromek excavators — including launching the new heavy-duty 39-tonne HMK 370 LC HD excavator to the South African market — we will also be launching the Hidromek TLB [tractor-loader backhoe] range,” says Vaughan Ellis, MD of Maximum Equipment. He adds that while the Hidromek TLBs have been available in the country for a number of years, Hidromek has made the decision to begin consolidating its product range under a single dealer, and this will be Maximum Equipment’s first official event as the newly appointed dealers for its TLB range.
This optimism carries over into the market as a whole. “We are expecting to see a reversal of the last two years’ decline and a turnaround in the industry in southern Africa,” says Ellis, adding: “The major challenges facing the market for 2018 will likely be sociopolitical issues and the resultant rand volatility.” He identifies new industry players, improving technology, and advances in machine design as areas to keep an eye on, pointing to infrastructure development in South Africa and Zimbabwe, as well as new mining opportunities in the SADC region, as primary investment areas for the region.
Also attending for the second time following its participation in the 2015 event is southern African Kubota distributor Smith Power Equipment (SPE). Operations manager Robert Keir explains that this year the company will be showcasing new equipment in addition to its Kubota excavators. “We are going to be showcasing our new brand, Ausa, which includes articulated dumpers, rough terrain forklifts, and telehandlers.”
SPE is optimistic about South Africa’s mining and construction markets in 2018, says Keir. “We think it’s going to be a good year. Our research leads us to believe that southern Africa is going to do better in terms of new unit sales than last year, although financing will still be a challenge,” he says, adding that SPE has some unique financial packages to help its customers deal with this issue. “We also believe that companies are going to see the potential usefulness of smaller and more compact equipment — bigger is not always better.”
In terms of areas to watch in 2018, Keir points to housing developments, which he says is always a good sector when it comes to construction. “Mining is still down in South Africa, but Africa in general is growing in very favourable ways and we are working hard to open roads into those markets.”
Global wet-processing technology company CDE is one of the exhibitors who will be at bauma CONEXPO AFRICA for the first time in 2018. Wayne Warren, business development manager for sub-Saharan Africa, explains that the company plans to take advantage of the platform the event provides to introduce both its Combo range and its full range of wet-processing solutions to the southern African construction and mining market. “The CDE Africa team is looking forward to growing market awareness of our equipment in Africa at the show, which presents an ideal platform to interact with existing businesses that currently run materials washing plants,” he says. “We will also be meeting with potential customers who want to go into wet processing as a way to expand their current crushing and screening operations.
“Southern Africa is a natural bed of various mineral resources, which can be exploited in a highly profitable and environmentally friendly manner through wet-processing technologies,” Warren adds. “And in the context of depleting natural resources and increasing needs for washed materials, both the construction and the mining sectors are starting to embrace technological changes to ensure that not one ounce of valuable material is wasted.”
Looking at 2018, Warren says CDE expects a year of renewed optimism. “We’ve already seen some positive changes in the political landscape of sub-Saharan Africa countries and we will hopefully see the effect of this in our construction and mining sectors sooner rather than later. Of course, there are still challenges to be overcome but we have had a positive start to the new year.”
And what are these challenges? “I would say that the general health of the economy is the main challenge facing the equipment industry in Africa. Contractors and plant hire companies in construction and mining are made vulnerable by the lack or shortage of solid long-term contracts and the correlated difficulty in accessing bank finance for new capital equipment, which frustrates investments and industry growth based on economic certainty.
“The confidence factor should not be underestimated,” he adds. “There may be really interesting opportunities out there, but companies are still uncertain about the future, so making large investments in capital equipment will not be an easy decision to make. However, those who invest in new, high-tech solutions that add value to their operations will hopefully lead by example and encourage others to take a leap, therefore generating new dynamism and confidence organically.”
According to Warren, the southern African construction industry is growing and aligning to global modernisation trends. And with an increasingly younger, active population and the correlated need for investment in large-scale infrastructural projects, the future of concrete (and other construction materials) production is bright. “To lay out the best foundation for a fast return on investment and long-lasting building structures, South Africa and its neighbouring countries are pulling out all the stops to align to international standards of excellence.
Wayne Warren, CDE business development manager for
sub-Saharan Africa (on left), with client
Kobus Janse van Rensburg of Cluster Holdings.
Image credit: CDE
“While mining is still depressed, the sector is showing encouraging signs of recovery and, in line with the construction industry, mining corporations are now aiming at better practices and optimal recovery of saleable materials from their sites,” he continues. “This has become an essential factor for companies who want to retain an edge in a highly competitive market.”
CDE believes that the business case for investing in the African construction market is compelling and unopposed. “Africa is the continent to watch in terms of global economic development and impact,” says Warren. “It is poised to become a major player on the international scene, with an immediate need to plan for infrastructural developments that will accommodate its increasingly developing, politically aware, and technologically savvy populations. With a growing interest in ‘green’ concrete, higher quality, durable materials, sustainable urbanisation, and saving natural resources, southern African mine and quarry operators now turn to processing solutions that will allow them to reach optimal efficiency in these fields.”
The optimism among exhibitors this year is refreshing after the past couple of years of guarded to negative expectations. And with the expanded offering, together with sub-Saharan Africa’s economic comeback and positive market opportunities in South Africa, the trade fair promises to be an event to remember.
“bauma CONEXPO AFRICA is the perfect platform to meet key decision makers, network, and exchange industry know-how,” says Crewe. “We pride ourselves on being a trade fair that gives both local and international clients a platform to showcase themselves as leaders in their market, and we will continue to lead the way in being the premier trade fair for the mining and construction industry in Africa.