Export Lifeline

Offshore capital equipment markets come in handy amid ‘turmoil’ in domestic mining sector

- Dylan Slater

South African capital equipment manufacturers that are supplying offshore markets, and have survived the ongoing turmoil in the mining industry and the domestic economic environment, have showed resilience and bear testament to the lifeline provided by exporting products and not relying solely on sales into the domestic market, notes South African Capital Equipment Export Council (Saceec) CEO Eric Bruggeman.

He says, thus far, 2016/17 has seen a 7% increase in exports of capital equipment by local manufacturers (worth R176-billion), compared with 2016. “This trend is set to remain steady or increase towards the end of the year.”

Bruggeman points out that export sales growth appears to be greater than domestic sales growth. The low domestic sales may be the result of the increasing number of South African mines scaling down, considering closure or having already closed, which has resulted in the acquisition of capital equipment being low on the agenda as mining companies look for any way to save money.

He also highlights that new markets are emerging in Namibia, Zambia, Tanzania and the Democratic Republic of Congo as the mining sectors of these countries begin to expand or become more established.

Saceec has a diverse portfolio of capital equipment manufacturing members that can be divided into five categories: mining, agriculture, building and construction, processing industries and utilities. About 60% of its members manufacture products and/or provide services that are required by the mining industry, with 40% catering exclusively to the mining sector.

Bruggeman highlights that local manufacturers’ volumes destined for the South African mining industry shrank from about 80% in 2016 to 60% currently. However, he points out that Saceec’s membership has grown by 35% during the same period, leading to the diversification of Saceec’s portfolio, thus impacting on the statistics.