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is Caterpillar. The “yellow” is known
wherever you go. Always Cat. Why?
Because locals know how to fix the
machines. And they know where to get
spare parts. This preference is reinforced
by a good dealer network, although
Komatsu is also well-regarded. In contrast,
parts from Chinese manufacturers are
currently difficult to obtain despite their
efforts to build up dealerships.
Essential sales tips
There are a number of tips to bear in
mind to ensure a successful transaction.
The equipment has to be suitable for the
African environment. Computer systems
and advanced electronics are classed
as unacceptable. With newer equipment
models there simply isn’t the expertise on
the ground to keep them working.
If a project is undertaken in the middle
of the jungle and the machine breaks down
the purchaser has got to be able to fix it.
The dealer might be able to help eventually
but the need for an immediate response is
what is fuelling demand in older models.
Emission levels also vary considerably
from the strict compliance observed in
markets such as the United States.
The desire to buy older technology
is a fundamental characteristic of the
African market. For those selling older
equipment this is a great opportunity, as
it is likely to keep prices solid for many
years to come.
Stability and opportunity
IronPlanet anticipates a very strong
future for the region, with “phenomenal
opportunities” available in the used
equipment marketplace. The optimism is
based on a broad range of factors. With
the population expected to double from 1,2
billion to 2,4 billion by 2050 – in a continent
currently containing 650 million mobile
phones – there are enough “raw materials”
for developing IronPlanet’s success. Less
tangible, but equally persuasive, is the
identification of the spirit found from many
visits. There is an energy about these guys
in Africa – they get on with life; there is
great drive and they want to get on.
Where there is stable government, used
equipment markets will grow, thrive and
flourish. Mozambique, Botswana, Namibia
and Kenya are prime examples. Ethiopia,
Tanzania and Uganda are also stable and
investing countries where the outlook for
purchasing equipment is strong. Nigeria
has great potential if circumstances align,
whereas the countries of French West
Africa are viewed as better for finding
equipment.
In East Africa and certain parts of south-
ern Africa, economies are more diversified.
Those countries that add value will be in
the best economic shape: those that go
away from just shipping raw materials and
convert these into products. And once the
oil price goes up again, requirement for
plant will be strong going forward.
Kenya and Tanzania have a lot of
construction projects coming up. There
are major rail projects on stream in
Mozambique and with the Djibouti to
Addis Ababa rail link to the sea. Chinese
investment is responsible for many of the
infrastructure projects and the country’s
influence in Africa is considerable. It is
an influence that is driving opportunities
but also shifting ways of doing business;
often leaving European companies, with
their adherence to strict compliance, less
competitive.
b
Paul Williamson, sales director
for Africa at IronPlanet, says
Caterpillar remains the most selling
brand in the used equipment
market in Africa.