Equipment Producers Hope For Improved Fortunes In 2022

According to the CEO of the South African Capital Equipment Export Council (SACEEC), Eric Bruggeman, SA exports around R150-billion worth of specialised mining equipment for both underground and surface mining each year.

But, he says, given the mountain of challenges being faced, including the pandemic and its knock-on effects and unrelenting load shedding, local equipment manufacturers are taking a huge hit to their businesses.

The SACEEC, which has a membership of 165 members ranging from large equipment producers such as Bell Equipment to small business with a turnover of less than R10-million per year, says the pandemic is causing upheaval in the supply chain, wreaking havoc on the timelines of product import and export across the globe.

“The supply chain challenges continue to have a massive impact on business. The lack of supply of steel and general shortages, for instance, are having a negative impact on the sector.

“These factors coupled with the recent riots and unrest, strike action by the National Union of Mineworkers and load shedding are all certainly not conducive to good business or sustainable production,” says Bruggeman.

These factors are having a ripple effect across the entire manufacturing sector, especially the transport sector, which is having to deal with extended product lead times.

“Our borders are also not functioning normally – including the road border posts, ports and harbours. Overall this is affecting the performance of the South African economy, as goods cannot be shipped in a cost-effective way, and more importantly in a timely manner.

“In fact, the associated financial impact is massive and delivers a body blow of some several percentage points to our gross domestic product for this year.”

Despite the wide-ranging impacts, especially the disruption to the travel and exhibitions industries, the sector has found new ways of communicating with its client base, i.e. through one of many social mediums such as Zoom and webinars. While these mediums of connecting get the job done, they are not as effective as business-to-business or face-to-face meetings.

“Our industry is not an online catalogue buying business; it is a highly specialised equipment trading sector designed to deliver products to specification. In particular, this new way of communicating with clients has had a huge impact on new business with new clients, given that face-to-face meetings were discouraged. To this, new business has been drastically reduced.”

But Bruggeman remains hopeful that in 2022 a semblance of normality will return with exhibitions and world travel once again on the cards, “as this remains the most effective way to gain new business for our members”.

Bruggeman says the South African mining industry is not in a good growth position, with a lack of new mines and expansion projects being developed currently.

“There is insufficient investment into the South African mining sector and absolutely no growth of any large proportion currently under way,” says Bruggeman.

He says there could be greater political will injected into increasing investment appetite and creating a strong level of confidence in the sector – “something which is greatly lacking in our country at the present time”.

By Nelendhre Moodley.