Capital Equipment News April 2017

We have a very positive outlook for 2017 and are encouraged by an increase in requests and orders from across the global market.

MS: How big is your dealer footprint across Africa? GW: We cover the majority of the continent. There are a few open areas where we are currently looking for representation. Our biggest dealer to date is obviously Babcock, which covers the whole of southern Africa. We also have SMT, which covers 20 territories in central Africa including Uganda and DRC, and is also a very strong dealer. MS: What would you say is the jewel in the crown in your product range? GW: Basically the TR100 is the most long- term successful product we have in the stable. We sell RDTs in the 40 t, 60 t, 70 t and 100 t range. The most successful in this range are the TR60 and TR100. For the big mining projects, the TR100 is the flagship product. Our focus is on a simple product driven by mechanical engines. For us, our strength over the years has always been a relatively simple product. Around 80% of the global market is still the non-regulated markets where a simple product absolutely thrives. If you are working in the middle of nowhere, you don’t want to be hanging around waiting for service because you are not able to fix the product yourself. The reason why the TR100 is very popular, apart from being the best climber in the market and good on fuel efficiency, is that it is simple to maintain, given its mechanical basis.

Despite the downward market conditions, Terex Trucks continues to do well, especially helped by a strong dealer in the region, Bab- cock, which has also invested heavily in our product and aftermarket support capabilities. For example, the recent R100 million Middle- burg facility is testimony of Babcock’s com- mitment to the brand. The high cranage in the facility is able to work on our 100 t rigids. MS: You mentioned that the RDT market was in the doldrums last year. In a good year, how big is that market? GW: The total market in a good year could be as high as 200 units plus. It is also important to note that the rigid market is renowned for being unsteady, as it goes up and down a lot. Last year was a perfect storm around the world. The driver of the market is mostly coal and it is a commodity that didn’t enjoy the best of times globally as demand lowered in China. MS: You mentioned the significance of a strong dealer such as Babcock in southern Africa. Have you seen improved business since you went into the Babcock stable? GW: Absolutely, Babcock is a well- respected dealer well-known for its strong backup support structures. We have benefitted from Babcock’s good reputation, as well as its widespread support infrastructure throughout the region. Babcock has many professional teams working on the ground and has invested heavily across the region to be able to support the product. They also have extensive market knowledge due to working in the region for a very long time, which has exposed us to some customers we didn’t have before.

MS: You mentioned the importance of emerging markets to Terex Trucks. Just how important is Africa for you? GW: In terms of potential market, the whole of Africa, especially for ADTs, is massive. In my EMEAR region, there are other important territories such as Russia with its big focus on coal and gold mining as well as the UK and Germany but Africa is a major focus point for us. South Africa, for example, remains a key ADT destination and we see more growth opportunities in the future. GW: Last year was a very good year for ADTs despite the slump in commodity prices. The southern African market took delivery of just over 500 articulated hauler units, and was one of our priority marketing areas in the EMEAR region. However, it was very different for rigids. The whole market performed poorly with 34 machines sold last year. The main setback was the commodity prices and a lot of second hand machines available in the market. There has also been a big hold back on the release of mining contracts, and mining contractors have also held back on any capital projects. MS: What is the state of market in southern Africa at this stage?

MS: What is your outlook of the business this year?

GW: We have a very positive outlook for 2017and are encouraged by an increase in requests and orders from across the global market. b

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