The Manufacture and Wholesale of Machinery for Mining, Quarrying and Construction Industry in South in South Africa 2022

Introduction

Manufacturers and wholesalers of mining, quarrying and construction machinery increased sales and exports on the back of the commodities boom, which offset subdued demand from the construction industry. Ongoing challenges include limited construction activity, poor economic growth, high input costs, power cuts and the declining competitiveness of South African manufacturers. A major local company indicated it will increasingly move some manufacturing offshore to be less exposed to local risks. Imports of primary inputs and finished machinery and parts pose a threat to the industry. Companies with operations in Russia felt the effect of sanctions and cancelled orders, and suspended some operations.

There is significant innovation including the use of telematics and autonomous and remote-controlled machinery.

Opportunities

Export growth due to the African Continental Free Trade Area agreement.

Long-term demand from other African countries as a consequence of development and infrastructure investment. Mining industry growth due to the clean energy transition. Planned government spending on infrastructure.

Outlook

Demand for metals and minerals needed for clean energy is expected to increase, requiring more mining equipment. Capital expenditure of the 20 largest mining companies is forecast to rise sharply in 2022 to the highest level since 2014. Order books of major players are strong.

Urbanisation and the need to upgrade infrastructure in several countries present an opportunity to construction machinery suppliers.

Report Coverage

This report focuses on the Manufacture and Wholesale of Machinery for Mining, Quarrying and Construction in South Africa.

It includes information on the state and size of the industry, key trends, technology and innovation and the performance, developments and corporate actions of notable players. There are profiles of 43 companies including the major players such as Barloworld, Bell Equipment and Master Drilling, local operations of international groups such as Thyssenkrupp, wholesalers such as Komatsu and equipment importer and seller Invicta.

Strengths

Large, well-established consumer markets.

Manufacturers invest in R&D and innovation. Manufactures high-quality products. The provision of good after-sales support. Well-established companies with a large manufacturing capacity. Well-located to supply machinery into southern Africa.

Threats

For local manufacturers, competition from numerous importers and distributors of international brands.

Inconsistent supply of electricity. Increasing costs of steel, electricity, water, labour and logistics in particular, pose a threat to the industry’s profitability and sustainability. Poor economic growth affects demand for machinery. Subdued demand from the construction industry. Supply chain disruptions due to the impact of COVID-19.

Weaknesses

Low manufacturing competitiveness relative to key exporting nations like China. Severe skills shortages of artisans, technicians, engineers and project managers.