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October - November 2016
MODERN QUARRYING
3
AROUND THE
INDUSTRY
EDITOR’S
COMMENT
A
company I have respected throughout
my career as a mining journalist is Bell
Equipment which, with a history span-
ning six decades, has made continuous progress
through its mechanical and technological innova-
tion, it’s quality and highly-efficient manufacturing,
a diverse product range and the expansion of the
group’s geographical footprint.
I met the founder of this remarkable company,
the late Irvine Bell many, many years ago, when he
took me on a personal tour of the manufacturing
facility. A gracious and modest man; so incred-
ibly smart; and I recall his immense pride as we
walked through the facility. In 1984, I was present
in Richards Bay for the launch of the company’s first
articulated truck, and again in 2001 for the exciting
launch of the D-series ADT.
The company employs 2 200 people around
the country with 900 abroad, and sources compo-
nents and services from almost 1 000 companies
in SA, 250 of which are in Richards Bay. However,
when it made a bid to supply Richards Bay munic-
ipality with its world-class product, it lost out to a
company importing ready-made machines from
Hungary, with no value add, local content or jobs.
According to CEO Gary Bell, this was supposedly in
the name of BEE.
Bell Equipment is SA’s only major manufacturer
and distributor of heavy equipment and over the
past five years, has pumped around R800-million
into the upgrade and expansion of its product
range. However, a major challenge facing this local
company is the cost of doing business in this coun-
try; an ever-increasing cost which includes import
duties, regulatory controls and the costs of BEE.
Sadly, every time the municipality imports fin-
ished equipment, those supplier employees move
another step closer to losing their jobs.
In the
Business Times
a week back, Gary Bell
spoke to Chris Barron, and reiterated the fact that
250 companies in the town rely on the company.
“Local people paying taxes and shopping here
would benefit if our local municipality bought a
machine from us instead of buying imports.
“But in spite of SA’s high unemployment rate,
regular assurances by President Jacob Zuma that
creating jobs is his priority, and commitments
to the ratings agencies that the government will
prioritise job creation – having the right number
of points of the BEE scorecard trumps jobs every
time.”
He points out that less than 3,0% of the com-
pany’s business done in SA comes from the pub-
lic sector. “We don’t get any preference at all from
local municipalities. The way that these tenders are
adjudicated has very little to do with local produc-
tion or local jobs.”
The Bell Equipment division comprising 22
sales outlets across the country is BEE compliant.
Bell’s BEE partner exited last year, and the company
is about to confirm a new deal. However, the bulk
of its product comes from small and medium-sized
entities that are not compliant to the same extent.
Bell believes this is a legacy of the past.“There’s
a huge shortage of engineering skills, which starts
at school level where maths is a problem. It will
be 20 years before we get the right number and
quality of engineering people coming through our
colleges and universities.”
Most of the product produced at its Richards
Bay plant is for markets in Germany, the US, UK and
Russia where BEE compliance is not an issue. The
irony is that Bell Equipment would be more compli-
ant if it shipped products from its German factory
to its South African company.“Because the product
would then be imported and not made here, we’d
get a higher BEE rating,” Bell says. “Any of our com-
petitors who bring a product from overseas get a
better BEE rating because they import.
“If you procure from a local entity that does not
have the highest BEE rating, you’re disadvantaged.”
He would like to see BEE scorecards giving
more preference to local products and local jobs.
“A lot of people don’t understand what our value
add is in this country. We have a huge multiplier
effect. Every time we sell a piece of machinery in
this country, there are 980 companies deriving
some benefit. However, at a local government level
there’s not a very good understanding of the mul-
tiplier effect.”
Doing business only with companies that score
the highest business points is not helping job cre-
ation, and this challenge affects most local busi-
nesses in South Africa.
Pious attention to BEE
is not helping job creation