Capital Equipment News April 2018

For informed decision-making APRIL 2018

Jewel in the construction crown

ADR TRANSPORT: Gaining early traction into ADR

MINERALS PROCESSING PROCESSING COSTS DOWN THE DRAIN PAGE 24

COMPACT WHEEL LOADERS: Projecting mini loader growth and innovation

EARTHMOVING EQUIPMENT: Reaching new heights

JEWEL IN THE CONSTRUCTION CROWN

CONSTRUCTION NEWS 37 Hamm product range for every task 38 JCB goes electric MINING NEWS 39 Kwatani takes heavy screen design to new heights 40 Liebherr achieves highest turnover in its history 41 Smart mining with IoT TRANSPORT & LOGISTICS NEWS 43 New CEO for Mahindra South Africa 44 Volvo Trucks Southern Africa names top dealers MATERIALS HANDLING NEWS 45 Return of wind farms to reward Johnson Crane Hire's fleet strategy AGRICULTURE NEWS 47 Zest gensets keep farms running smoothly during outages 6 Gaining early traction into ADR COMPACT WHEEL LOADERS 10 Projecting mini loader growth and innovation EARTHMOVING EQUIPMENT 16 Reaching new heights BUSINESS INSURANCE 20 Bridging the insurance gap for SMMEs MINERALS PROCESSING 24 Processing costs down the drain PROFILE 28 The force behind the Bell empire USED EQUIPMENT 30 10 'Top Tips' for buying a used excavator CONTENTS Capital Equipment News is published monthly by Crown Publications Editor: Munesu Shoko capnews@crown.co.za Advertising manager: Elmarie Stonell elmaries@crown.co.za Design: Anoonashe Shumba Publisher: Karen Grant Deputy publisher: Wilhelm du Plessis Circulation: Karen Smith PO Box 140 Bedfordview 2008 Tel: (011) 622-4770 Fax: (011) 615-6108 www.crown.co.za Printed by Tandym Print The views expressed in this publication are not necessarily those of the editor or the publisher. FEATURES REGULARS Total circulation Q4 2018: 3 793 COVER 4 Jewel in the construction crown ADR TRANSPORT

http://crown.co.za/capital-equipment-news

EDITOR'S COMMENT

DRAGON’S REWORKED APPROACH

W hen you make a mistake, there are three things you should always do about it: admit it, learn from it and don’t repeat it. This is exactly what several Chinese OEMs have done in their quest to seize a sizeable share of the local capital equipment market over the years. During their early days into the market, Chinese offerings were viewed with disdain, and rightly so. We would all agree that

there were genuine concerns around the quality of the products. Added to this was the lacklustre support structures. However, I am of the view that the days when Chinese gear was viewed with contempt are long gone. There is no doubt that the Dragon has upped its ante as far as quality of product is concerned. Most Chinese OEMs have established themselves in the value end of the market. They are armed with a rugged and simple product, not as sophisticated as some of the premium offerings. The approach is to offer a straightforward product, a workhorse with no extra bells and whistles, which is mostly targeted at emerging contractors and entry- level participants into the construction and mining industries. Despite a significant improvement in the quality of their products, it took some time for them to understand that aftermarket support is a key business driver in export markets, contrary to the approach in their domestic Chinese market. Parts supply and service support are key considerations in local customers’ buying decisions. Nonetheless, I believe that most of the early flaws of the Chinese brands have since been remedied. They have had a greater focus on boosting their aftermarket support structures over the past few years, establishing themselves as forces to be reckoned with in the process. A case in point is XCMG. In 2014, the OEM abandoned its dealer model to establish a subsidiary, XCMG South Africa. The move was aimed at re-strengthening the brand in the local market through several initiatives, anchored by the immediate establishment of strong backup support infrastructure. The first initiative was to establish a massive parts warehouse in South Africa to support its customers

across southern Africa. As you will see in this edition of Capital Equipment News , four years later, XCMG’s move has paid substantial dividends. Last year, XCMG SA saw a big jump in its market share. In excess of 100 units were sold in 2017 alone, with the export value exceeding US$5-million for the first time. The company expects to triple its 2017 sales figures this year, considering that a total of US$5-million sales deals were concluded during the first day of bauma CONEXPO AFRICA alone. As you will read in the Cover Story of this edition, Ever Star Industries’ (ESI) success story in recent years has hinged on significant investments into aftermarket infrastructure for its Shantui and Powerstar brands. One of ESI's first initiatives when it took over the distribution of Shantui was to commit a substantial R80-million investment into its parts stockholding. The results of the relentless focus on customer satisfaction are there for all to see. Today Shantui is among the top three dozer suppliers in South Africa. The customer-centric approach has also propelled Powerstar to the summit of the local construction vehicle market, breaking the dominance of premium offerings in this market segment. To date, it holds the second-largest market share in the extra heavy construction vehicle segment. It has taken time for Chinese OEMs to grasp that the success of any brand in the capital equipment sector hinges on the supplier’s ability to offer unparalleled backup support. However, it is encouraging to see that they have corrected their early mistakes and their solutions have become the product of choice for emerging construction contractors and junior miners who often lack the financial muscle to afford premium offerings.

Munesu Shoko – Editor

capnews@crown.co.za

@CapEquipNews

CAPITAL EQUIPMENT NEWS APRIL 2018 2

COVER STORY

JEWEL IN THE CONSTRUCTION CROWN In a market previously dominated by premium offerings, Powerstar, supplied locally by Ever Star Industries, has established itself as a dominant force in the construction vehicle segment. A key pillar of growth is the rugged nature of the competitively priced product that comes with no extra bells and whistles, complemented by a strong dealer and service network throughout southern Africa. By Munesu Shoko.

O ver the years, Powerstar has become a household name in the South African construction sector, and even beyond the country’s borders. Armed with a rugged, competitively priced product that is built to challenge the gruelling terrain com- monly found on local construction sites, Ever Star Industries (ESI) – the southern African distributor of the Powerstar truck range – has achieved continuous growth, even in the face of some serious challenges associated with Chinese automotive offerings and a relatively small business base. While Powerstar caters for many areas of the commercial vehicle market, it is in construction where the range has become the jewel in the crown, breaking the dominance of premium offerings in this market segment. To date, Powerstar holds the second-largest market share in the extra heavy construction vehicle segment. The South African extra heavy commercial vehicle segment is, on average, a 12 000-unit per year market, and construction vehicle sales constitute about 20% of that figure. “Since ESI took over the local distribution back in 2010, we have established Powerstar as the tipper king of the local market,” says Bob Wang, CEO of Ever Star Industries. “A strong R&D regime has informed the continued development of the range. We have continuously listened to our customers, which has led to the non-stop refinement of our product designs to meet the end users’ ever-changing requirements.” The Powerstar brand made its local debut as far back as 2006 under the distributorship of Super Group at the time. During the early days, completely built units were shipped into the country, before ESI started local assembly in 2007 at its state-of-the-art facility in Pietermaritzburg. In 2010, ESI

took over the sales and support duties of the brand in southern Africa, ushering in a period of continuos growth for the brand. Growth pillars Testimony to Powerstar’s success in the local market is a massive 5 200-unit population rolled out between 2006 and end 2017. Of that number, 4 700 units were locally manufactured. Rodney Selesnick, Senior Head of Sales at Ever Star Industries, says the major success factor is the tough nature of the product, which is backed up by a strong aftermarket infrastructure. “In Powerstar, we have a product that speaks directly to the specific needs of the African customer. It is a rugged truck built for the challenging African conditions,” he says. “Our range is not as sophisticated as some of the so-called premium offerings, it’s essentially a workhorse that comes with no extra bells and whistles, making it very easy to maintain for the customer,” adds Selesnick. Another factor that has propelled this range to the summit of the construction vehicle market is the competitive pricing, making Powerstar a good fit for emerging contractors and entry-level participants into the construction industry. Both Selesnick and Wang have seen a big surge in the small and medium construction contracting sector, where Powerstar is playing a major role in providing a strong, reliable construction vehicle solution that is competitively priced. To put this into context, Powerstar’s VX2628 tipper range comes in at just below R900 000, while a same-sized unit from some of the premium OEMs costs in the region of R1,3-million. “Add to that, premium offerings come with obligatory

A key success factor is the rugged nature of the truck, making it a good fit for challenging African conditions.

maintenance contracts that drive up the total cost of ownership beyond the reach of start-ups. The product is very simple and customers can do their own maintenance. Bear in mind we also have a very good support structure of 32 dealers and service centres, with a very good supply of competitively priced parts,” says Selesnick. Wang adds that this is further complemented by the tough nature of the Powerstar truck, which makes the life of the vehicle a bit longer than most of the competition’s offerings. “Some of our customers have run their Powerstar construction vehicles in excess of eight years, of which the first four years is the finance period, allowing them to rack in some much needed profits during the balance of ownership. The lifecycle cost of the product is also very competitive,” says Wang. For these reasons, ESI has seen a growing customer base in the upcoming contractor fraternity, with 65% of its total sales in 2017 going to this group of customers. Selesnick notes that this is largely due to the changing face of the construction market in South Africa.

CAPITAL EQUIPMENT NEWS APRIL 2018 4

QUICK TAKE

• Powerstar holds the second-largest market share in the extra heavy construction vehicle segment • The South African extra heavy commercial vehicle segment is, on average, a 12 000- unit per year market, and construction vehicle sales constitute about 20% of that figure • Testimony to Powerstar’s success in the local market is a massive 5 200-unit population rolled out between 2006 and the end 2017 • Another factor that has propelled this range to the summit of the construction vehicle market is the competitive pricing, making Powerstar a good fit for emerging contractors and entry-level participants into the construction industry

Bob Wang, CEO of Ever Star Industries

Apart from small and upcoming contractors, Powerstar has also become the product of choice for some large fleet owners. A case in point is Radds Transport, which started running Powerstar trucks since 2011, and today has more than 300 units in its fleet. Large range Powerstar has a broad application approach to cater for all the different needs of the construction segment, from tippers, water tankers and concrete mixers, to brick and crane carriers, with driveline configurations varying from 4x2 to 8x4 versions. These can be deployed across a range of applications including construction, mining, plant hire and liquid transport industry. “The VX range is our flagship line in the local construction market. Introduced in 2012, it comprises the 1627 4x2; the 1729 4x4; the 2628 6x4 (SWB & LWB); the 2635 A 6x6; the 3335 6x4 (SWB & LWB); and the 4035 8x4. The range is powered by the proven Weichai engine offering various horsepowers between 290 and 420,” concludes Selesnick. b

“A strong R&D regime has ensured continued development of the range. We have continuously listened to our customers, which has led to non-stop refinement of our product designs to meet the end users’ ever-changing requirements.”

Rodney Selesnick, Senior Head of Sales at Ever Star Industries

“Government has adopted a construction project roll out model which is designed to promote upcoming contractors. Our Powerstar range is a good fit for this group of customers, bearing in mind that they often don’t have a large capital outlay to purchase costly premium offerings.”

TALKING POINTS

“Government has adopted a construction project roll out model which is designed to promote upcoming contractors. Our Powerstar range is a good fit for this group of customers, bearing in mind that they

often don’t have a large capital outlay to purchase costly premium offerings. This is compounded by the fact that most financing institutions are not open to financing this group of customers,” says Selesnick.

CAPITAL EQUIPMENT NEWS APRIL 2018 5

ADR TRANSPORT

Kulani has bought a total of nine Scania trucks since December 2017.

Gaining early traction into ADR In a world of narrow margins, it is attention to detail that makes all the difference. For Kulani Africa Gas Transport, a newly-established transport company that specialises in transportation of bulk liquid petroleum gas, optimised availability, fuel efficiency and uptime, were key aspects that informed the decision to purchase a total of nine Scania vehicles for its very first fleet. The decision is paying dividends in a very short space of time, affording Kulani early traction into a challenging transport sector. By Munesu Shoko.

N o other haulage business is stances, better known as ADR goods. Besides the usual requirements that the vehicles need to comply to, vehicles used to transport ADR need to meet several other additional requirements regarding their build, engine, wiring and other components. Apart from the special laws and regulations, operators have to navigate the ever-shrinking margins. Balancing narrow margins in the face of increasing costs calls for an optimised, fit-for-purpose truck solu- tion, which not only cut costs, but also boosts revenues. It is for these reasons that Kulani Africa Gas Transport, a subsidiary of Kulani Africa Gas, a specialist in the bulk storage and supply of liquid petroleum gas (LPG), chose a fleet of Scania ADR spec’d trucks to kick- start its bulk LPG transport business. The Kulani Group has many years of experience in the supply of petroleum gas and other petroleum products into southern Africa. as tough and unpredictable as transporting bulk hazardous sub-

Having started in 2001 in Cape Town with a special focus on converting vehicles to run on LPG as an alternative to petrol, early years of success saw the business diversify in 2005, changing focus to supplying bulk orders, before the company expanded its business reach into the supply of LPG and propane gas. The latest leg of diversification has seen the group establish its subsidiary that specialises in the transportation of LPG throughout southern Africa. Having outsourced this function to transport companies over the years, the group saw

a gap in its portfolio to offer a reliable transport service for LPG.

Closing the logistics gap Speaking to Capital Equipment News, Stefan Heling, GM of Kulani Africa Gas Transport, says the business was formed out of Kulani’s understanding that southern Africa has very specific energy challenges, compounded by a taxing logistics environment that makes trading in petroleum products in the region a specialist field. Leveraging many years of experience supplying petroleum products

Stephen Heling, GM at Kulani Africa Gas Transport

“Fuel consumption is very important to your total cost of operation. Bear in mind that, on average, fuel consumption constitutes about 20% of your total cost of operation. If you can save at least 5 ℓ of fuel per 100 km per vehicle, that translates to about R8 000 per month.”

CAPITAL EQUIPMENT NEWS APRIL 2018 6

Kulani Africa Gas Transport, a newly-established transport company that specialises in the bulk delivery of liquid petroleum gas, has opted for a fleet of Scania trucks to kick-start its business.

service both our in-house transport needs and outside customers. Though the bulk of our early business is based on moving LPG for the mother company, the transport business is an independent entity that runs separately from the holding company,” says Heling. To kick-start its LPG transport business, the company placed an order of nine Scania ADR spec’d truck tractors late last year. “Since December 2017, we have bought six G460 and three G410 models. The trucks are full ADR specified,” says Heling. There is a strategic plan to grow the fleet to 20 vehicles in the next 12 months, but Heling reiterates that the decision will be influenced by a sustainable business flow during that period. The current fleet will be operated over four years before it is replaced. “We are looking at four years/650 000 km replacement cycles,” says Heling. Why Scania? There were several reasons that informed the decision to purchase Scania vehicles for Kulani’s very first fleet into the ADR business, but more importantly it was Heling’s experience with the Scania brand over many years of his transport management career. For Heling, the most important asset for any business is the relationships you build along the way. Whether those be with customers, suppliers or others in your supply chain, these are more important than bricks and mortar. Heling used to work for one of the largest transport companies in South Africa for many years, where he was first exposed to Scania. From there, he started a new transport operation for another company

QUICK TAKE

To kick-start its LPG transport business, Kulani Africa Gas Transport placed an order of nine Scania ADR spec’d truck tractors late last year

The fleet comprises six G460 and three G410 models

20

There is a strategic plan to grow the fleet to 20 vehicles in the next 12 months

2018

2019

0 km

Kulani is looking at four years/650 000 km replacement cycles for its fleet

650 000 km

into southern Africa, Kulani understands the importance of having the right product at the right destination, at the right time. The company also understands that the transportation of ADR substances is a separate discipline within its area of business. It is for the reason that Heling, who boasts many years of experience in the transport industry, was brought on board to

lead the Kulani transport business, which started operations in December 2017. The bulk of the transport company’s work stream is from its mother company at this stage, with an 80-20 ratio versus outside work. However, Heling says the aim is to achieve a 50-50 work flow balance by 2019, to establish a sustainable stream of work. “Kulani’s transport business will

CAPITAL EQUIPMENT NEWS APRIL 2018 7

ADR TRANSPORT

One of the reasons for opting for Scania was that most of Kulani’s business is cross border based, and Scania has the much-needed support footprint across southern Africa.

which had an existing Scania fleet. During his two years at this company, he purchased a total of 26 Scania trucks in two years. He then left to start Kulani’s transport business, which opened its doors in December 2017, where he has influenced the decision to buy nine Scania trucks out of the company’s initial 10 units. He explains some of the reasons why Scania is the supplier of choice. “Because I have dealt with Scania South Africa for many years, I have a good institutional knowledge of the company,” he says. “I know who to contact when I have any sort of problem, whether it’s an aftersales issue or a product query. Having the right contacts helps solve the problems immediately, considering that downtime is out of question in our line of business.” He also believes that Scania goes out of its way to help its customers. “For example, we ordered six G460s in December and they delivered one the very same month, with the other five due for delivery in January this year. At the beginning of January, they indicated that there was no stock available, which was a bit problematic for us as we had trailers standing. Scania went out of its way and gave us loan vehicles to run the trailers while waiting for our own stock. It’s hard to find any other manufacturer that goes that extra mile for its customer,” explains Heling. David Reynders, sales executive – Gauteng Region at Scania South Africa, says customers’ needs always come first at Scania. “We have built a very strong relationship with Stefan and his team at Kulani. We fully understand the nature of their busines and its needs, and downtime is out of question for Kulani,” says Reynders. “Understanding the customer’s business helps us respond to the specific needs

through proper fleet management practices, such as applying the right truck in a right application. For example, he says that the Scania fleet was specifically bought to operate in specified terrains. The G460, with its larger 460 hp, is deployed on mountainous routes because there is need for more power. The G410 range is deployed on flatter routes such as between Gauteng and Namibia. He explains that the G410 offers a 2 ℓ saving of fuel per 100 km on the Namibian route, while in mountainous terrain such as in Richards Bay, the G460 offers better fuel consumption than the G410 simply because the G410 has less power (410 hp) and works harder in such terrain. “For me, it’s all about horses for courses,” he explains. Footprint matters One of the other big reasons for opting for Scania was that most of Kulani’s business is cross border based. It delivers across southern Africa in countries such as Zimbabwe, Zambia, Malawi, Swaziland, Botswana and Namibia. “Scania has a footprint in all those countries,” says Heling. “Uptime is very important in our line of business and having immediate response to any problems is crucial to avoid downtime.” He explains that uptime has a very big effect on overall productivity, which in turn influences the bottom line. Heling reiterates that a transport company cannot afford to have a truck standing, which means that there is need to partner OEMs with a wide support network across areas of operation. He says, for example, a single truck earns in the region R8 500 a day. “If the truck stands for three to four days, you have lost between R25 500 and R34 000, and it is money that can’t recover,” concludes Heling. b

timely to ensure maximum uptime. We are looking forward to walking the journey with Kulani well into the future.” Details matter For Heling, fuel consumption is a very important factor in the success of any transport business, and he monitors it very closely. With Scania’s Fleet Management Services (FMS), he is able to get down to the specifics of every drop of fuel in each and every truck under his watch. He also finds the service very useful in inhibiting fuel theft. “Fuel consumption is very important to your total cost of operation. Bear in mind that, on average, fuel consumption constitutes about 20% of your total cost of operation,” he says. “If you can save at least 5 ℓ of fuel per 100 km per vehicle, that translates to about R8 000 per month per vehicle.” Heling finds Scania’s FMS of great help in that regard. Scania’s FMS is a set of services that connects your vehicles and drivers with your office. You will get vehicle data, fleet position and reviews of driving performance. And now it also has 2-way communication that includes Messaging, shared Address books and Routing. The result is more control over your business. “The data collected on board Scania trucks gives valuable insight into driving styles, productivity and economy. This level of tracking and diagnostics can bring significant benefits in increased uptime, improved safety and reduced operating costs,” he says, adding that it only takes minor adjustments of an experienced driver’s habits to realise fuel savings of up to 10%, and Scania’s telemetry systems enable that. Heling adds that it is very feasible to generate 10-15% savings improvement

CAPITAL EQUIPMENT NEWS APRIL 2018 8

COMPACT WHEEL LOADERS

Projecting mini loader growth and innovation

As growth in the global compact wheel loader market continues apace, of note is that the market is in the midst of a transformation, with a technological revolution sweeping across the entire segment, writes Munesu Shoko.

A s the global construction industry continues to move in the direction of compact equip- ment, with urbanisation and running costs of capital equipment among the major driving factors, the global compact wheel loader market is set to see considerable growth in the next few years. A recent research report by Future Market Insights – Compact Wheel Loaders Market: Global Industry Analysis (2012-2016) and Opportunity Assessment (2017-2027) – offers detailed analysis and insights on the future direction of the global compact wheel loader market. The report predicts that the market is likely to grow at a moderate CAGR of 2,5% between 2017 and 2026, reaching a valuation of US$314-million during that period. Speaking to Capital Equipment News recently,

a representative from Future Market Insights noted that global sales for compact wheel loaders reached nearly 25 700 in 2017, a figure expected to rise to 31 400 by the end of 2026. According to the report, Asia-pacific, excluding Japan (APEJ), is the most lucrative compact wheel loader market globally, and will remain so in the foreseeable future. The region is home to some fastest growing economies in the world, most notably India and China, and growth of the construction sector in APEJ provides an impetus to the compact wheel loader market in the region. However, the compact wheel loader trend is still to entrench itself in the Middle East and Africa (MEA) region. The region is expected to account for an 8% share of the global compact wheel loader market by 2026, and demand is envisaged to remain sluggish in

CAPITAL EQUIPMENT NEWS APRIL 2018 10

QUICK TAKE

The global compact wheel loader market is projected to grow at a moderate CAGR of 2,5% between 2017 and 2026

The market will reach a valuation of US$314-million during the period from 2017 to 2026

4%

31 400 UNITS

4%

Middle East and Africa region is expected to account for an 8% share of the global compact wheel loader market by 2026

25 700 UNITS

2010

2017

NO GROWTH

2017

2020

2026

The South African compact wheel loader market has remained relatively flat from 2010 to 2017, with an average of seven units sold per month during that period

Compact loaders accounted for 25 700 unit sales globally in 2017, and the market is expected to reach a total of 31 400 units by the end of 2026

Jas Kundra, Compact & Small Wheel Loader product & application specialist at Caterpillar “One of the reasons for the growth is the simplicity in operation of compact wheel loaders, especially when there are shortages of skilled machine operators across geographies. When you are operating a wheel loader for the first time, the lay-out is somewhat familiar since you have a steering wheel, a brake and accelerator pedal, not dissimilar to a car.”

“Customers can realise significant savings in fuel and tyre wear thanks to the Rimpull Control, which allows operators to reduce tyre slip in poor underfoot conditions, promotes more efficient bucket loading for reduced tyre wear and improved productivity. The operator can select among four settings to adjust power reaching the wheels, based on working conditions.”

Dennis Vietze, MD of Wacker Neuson Sub-Saharan Africa

“Our cabs are all state-of-the-art in terms of functionality and comfort. We also place a premium on visibility for the operator. All function switches are colour coded and easy to reach. Due to the hydrostatic drive, there is minimal strain on the operator.”

TALKING POINTS

MEA during the forecast period. Mark Senyard, national support and marketing manager at Kemach Equipment, the South African supplier of the JCB

range of equipment, shares the same view, saying that the South African compact wheel loader market, for example, has remained relatively flat from

CAPITAL EQUIPMENT NEWS APRIL 2018 11

COMPACT WHEEL LOADERS

Meanwhile, Kemach, with its JCB range, also operates in the less than 6 000 kg segment. “We only have the JCB 406 in our compact wheel loader range,” says Senyard. According to Kundra, Cat operates in both the less than and greater than 6 000 kg segments of the compact loader market. Cat’s 906K, 907K and 908K compact models are high volume machines ranging from 5,5 t to 6,5 t. “In South Africa, the largest compact models are the Cat 910K and 914K, weighing around 8 t and 8,5 t, respectively. The compact models are manufactured in our UK plant in Leicester,” he says. “The 906K, 907K and 908K are very popular models and we are experiencing an increase in demand.” Comfort and convenience As growth in uptake continues, the global compact wheel loader market is said to be in the midst of a transformation, with technology sweeping across the entire industry. Increase in comfort and convenience of cabs is one of the major improvements in this range of equipment in recent years. In the past there was a clear disconnect between the needs of the machine owner and the operator, and often the operator’s needs were never part of the buying decision. Today, machine owners have since grasped the fact that operator comfort is a key factor in the overall productivity and total cost of ownership of the machine. Senyard says the JCB compact wheel loaders like the 406 are designed to make work more straightforward. “They are easy to access, intuitive to operate, and are operated from the centre of the machine for superb visibility. After all, a comfortable, confident operator is a more productive one,” he says. The JCB 406 benefits from a optimum all-round visibility, unhindered by components like silencers. The tilting telescopic steering column is easy to adjust for an ergonomic driving position. All the instruments needed to operate a JCB wheel loader are within easy reach of the seat, so there is no need to hunt around for information while working. Kundra agrees that there is a real need for comfortability as operators are increasingly spending more time in the cab. He adds that improvements in this regard can be split into two areas: the interface to control the machine and comfort. comfortable and spacious cab. The operating position is designed for

Mark Senyard, national support and marketing manager at Kemach Equipment

“The JCB 406 benefits from a comfortable and spacious cab. The operating position is designed for optimum all-round visibility, unhindered by components like silencers. The tilting telescopic steering column is easy to adjust for an ergonomic driving position.”

Lofty van Wyk, director of MultiOne South Africa

“Our range is a true compact wheel loader line with the ability to take a vast range of interchangeable attachments. We remain only in the mini loader market under 3 000 kg and are not competing in the bigger loader market.”

TALKING POINTS

2010 through to 2017, with an average of seven units sold per month. Marked growth Jas Kundra, Compact & Small Wheel Loader product and application specialist at Caterpillar, agrees that globally there has been a marked growth of the compact wheel loader market in recent years. “I couldn’t agree more,” he says. “One of the reasons is the simplicity of operation of compact wheel loaders, especially when there are shortages of skilled machine operators across geographies. When you are operating a wheel loader for the first time, the lay-out is somewhat familiar since you have a steering wheel, a brake and accelerator pedal, not dissimilar to a car.” Kundra says that Europe is already a well-established compact wheel loader market, while the recent growth in North America has also fuelled the uptake. “I expect to see the compact wheel loader become a staple tool in other regions, such as Africa and the Middle East, in time,” says Kundra. Despite the slow growth locally, Dennis Vietze, MD of Wacker Neuson Sub-Saharan Africa, says the sector is certainly showing signs of growth, even if it’s from a very low base. Lofty van Wyk, director of MultiOne South Africa, the exclusive southern African dealer for Italian articulated compact wheel loader maker, MultiOne, says proof that the compact loader market is expected to grow is the influx of new

manufacturers in the local market. He already sees intense competition in the sector, where price is seemingly becoming a determining factor. Weight range On the basis of operating weight, the key segments in the compact wheel loader market are said to be the less than 6 000 kg and more than 6 000 kg. Currently, by operating weight, less than 6 000 kg accounts for higher revenues than the other segment. MultiOne SA’s compact loader offering ranges from 600-2 600 kg. “Our range is, in essence, a true compact wheel loader line with the ability to take a vast range of interchangeable attachments. We remain only in the mini loader market under 3 000 kg and are not competing in the bigger loader market. Key to our offering is the capability to transport our loaders on small trailers behind commercial pickups in the most cost- effective manner and speedy way,” says Van Wyk. “We are seeing good growth in the small wheel loader segment, being the sub 1 000 kg range, as more DIY customers are looking at alternatives to unreliable labour-based operation,” adds Van Wyk. According to Vietze, Wacker Neuson operates in the less than 6 000 kg segment of the compact loader market. “Our machines range from 1 720 kg to 5 900 kg of operating weight,” he says.

CAPITAL EQUIPMENT NEWS APRIL 2018 12

frame boom, MultiOne’s range offers increased lifting capacity. “High output radial piston wheel motors as well as the inclusion of Poclain hydrostatic pumps offer greater performance in the hydrostatic drivetrain,” says Van Wyk. According to Kundra, Cat’s state-of-the-art electro-hydraulic system provides low effort, fine control with fast cycle times. The Cat exclusive Road & Load package option includes Rimpull control, implement speed control, hystat modulation, to name a few. “Coupled with this, is our belief in being ‘efficiently powerful’ and there is no better example than the Cat hydrostatic drive system,” he says. “Customers can realise significant savings in fuel and tyre wear thanks to the Rimpull Control, which allows operators to reduce tyre slip in poor underfoot conditions, promotes more efficient bucket loading for reduced tyre wear and improved productivity. The operator can select among four settings to adjust power reaching the wheels, based on working conditions,” adds Kundra. Application range According to the Future Market Insights report, key application segments for the compact loader market include construction, ground maintenance, landscaping, mining, forestry and agriculture, among others. However, construction remains the largest recipient of the compact wheel loader, and sales to the segment are predicted to reach a valuation of close to US$160- million by 2026. Kundra says the reason why construction is the main recipient of this range of equipment is that it is inherent to their design. “These machines do what they are designed to do. Moving

Kemach, with its JCB 406, operates in the less than 6 000 kg segment of the local compact loader market.

“Both are important but one could argue that the interface to the machine plays a larger part,” says Kundra. “Operator fatigue is reduced with low effort, electro-hydraulic joystick controls. Caterpillar is the only manufacturer offering a complete electro-hydraulic control system, and therefore can develop software updates and features that increase productivity, without the need for any hardware changes. And when the machine is serviced these new features are automatically installed, at no cost.” In terms of comfort, Cat has significantly lowered in- cab sound levels. The OEM has just recently released a premium seat option for its range of compact wheel loaders following feedback from owners and operators. Comfort is also an area where Wacker Neuson has paid particular attention in its compact loader designs. “Our cabs are all state-of-the-art in terms of functionality and comfort. We also place a premium on visibility for the operator. All function switches are colour coded and easy to reach. Due to the hydrostatic drive, there is minimal strain on the operator. A unique feature on our machines is also the ability to change an attachment from the comfort of your seat by means of a hydraulic quick hitch system,” explains Vietze. Van Wyk says MultiOne has introduced a number of “fancy” options to its cabs lately with full glass enclosed cabins available, optional air-conditioning units and much improved controls making the M1 range more user-friendly and simpler to maintain, too. “We also offer insulation in the cabs, as well as a host of electronic options to assist with attachment control. In addition, we offer very affordable plexi glass cabins for the local market to keep debris and dust out. We also now offer high back luxury seating on our bigger models,” says Van Wyk. Further improvements Apart from operator comfort, OEMs continue to implement other major design improvements as the compact loader continues to evolve. For example, with a vastly strengthened and redesigned double H-

CAPITAL EQUIPMENT NEWS APRIL 2018 13

COMPACT WHEEL LOADERS

Jack of all trades One of the key advantages of the compact wheel loader is its versatility. According to Senyard, with a quick hitch and standard bucket and forks, compact wheel loaders are well suited to a range of applications, including general construction worksites and various agricultural applications due to the versatility of the bucket and forks for lifting and stacking of pallets. “With the option of additional valves and hoses, numerous other attachments can be utilised with this machine,” he says. Speaking of attachments, Van Wyk says MultiOne offers over 170 different attachments at present, and the list is growing. “Our markets consist of DIY, farming and agriculture, construction, landscaping, cleaning, materials handling and mining,” he says. According to Vietze, Wacker Neuson’s four-wheel drive, four-wheel steer offering is unique to this segment. “Manoeuvrability is key for a compact wheel loader, as is the fact that the 4wd/4ws offers constant load and stability. Sectors where we have been successful with our product offering are builders yards, brickyards, agriculture and general construction,” says Vietze. Task, Tool, Machine. What job needs to be done? What tools are required to complete the job? And then, finally, what machine is required to power that tool efficiently and effectively? According to Kundra, this is a core principle that has allowed the compact wheel loader to venture into a wider range of applications. “Some of the more recent application growth areas are road maintenance and utility work. The compact wheel loaders are becoming a preferred choice when it comes to powering hydro-mechanical tools such as the Cat T15B trencher and hydraulic brooms, among others, and the machines go wherever the tools need to be applied,” concludes Kundra. b

Wacker Neuson’s compact loader line ranges from 1 720 kg to 5 900 kg of operating weight.

MultiOne reports good growth of its small wheel loader range, the sub 1 000 kg models.

more, do more at a lower cost, safely and efficiently. The compact wheel loader is a widely used machine for general construction. It is a relatively simple machine to operate and it offers great visibility. It’s one of the reasons why it’s so popular in Europe: an extremely productive machine that is simple to operate. It can be configured simply or for more complex requirements,” says Kundra.

Locally, compact wheel loaders are finding more application in agriculture. Van Wyk reasons that there has been a significant shift towards compact loaders in materials and grain handling in farming, and it’s opening up a segment of the market traditionally reserved for telehandlers and skid steers. “Our largest market at present is agriculture, although construction accounts for about 35% of the market,” says Van Wyk.

CAPITAL EQUIPMENT NEWS APRIL 2018 14

BAUMA CONEXPO REVIEW – EARTHMOVING EQUIPMENT

XCMG had a successful exhibit at the recently-ended bauma CONEXPO AFRICA 2018.

In 2014, XCMG abandoned its traditional dealership approach to adopt a subsidiary strategy which saw the launch of XCMG South Africa to take charge of the brand locally. Four years later, through a range of initiatives – including an expanded product range, establishment of new markets, reliable parts supply and a strong aftersales channel – the move has paid formidable dividends. Testimony to this is the brand’s increased market share and a recent successful exhibit at bauma CONEXPO AFRICA, writes Munesu Shoko. Reaching new heights

A s part of its international strategy, XCMG – said to be the largest construction equipment manufac- turer in China and the fifth largest globally – launched its XCMG South Africa (XCMG SA) subsidiary in August 2014, ending its long-time association with its local dealer at the time. The move was aimed at re-strengthening the brand in the local market, through several initiatives, but more importantly establishing a strong backup support structure, as well as expanding into other southern African

markets and growing the product range. One of the immediate initiatives after taking over the distribution of the brand in 2014 was to establish a massive parts warehouse in South Africa to support its customers across the southern African region. “The parts warehouse was a very important initiative for us to be able to offer responsible aftermarket support to our customers. We understand that having a good product, but without proper support structures, is a recipe for disaster,” says David Dai, MD of XCMG SA.

CAPITAL EQUIPMENT NEWS APRIL 2018 16

Key initiatives XCMG SA also conducted a market survey to investigate the exact needs of its southern African customers. The survey was part of a fact-finding mission that informed the launch of right products into the market, and this has resulted in XCMG SA’s launch of larger mining machines into the local market. Initially focused on its construction range, XCMG SA now offers a range of larger products, including hydraulic excavators from 70-700 t and dumpers from 90 to 360 t, to mention a few. “For us, customer satisfaction is always at the centre of everything we do. We have worked hard to meet, and even exceed, our customers’ expectations in this regard,” says Dai. The large mining equipment market has always been dominated by premium European and American brands in the South African market. However, over the years, Chinese OEMs have made strong inroads into this market with their large offerings to challenge for a share of the larger mining equipment market. After a long period of relentless efforts, XCMG SA reports that the brand has gained a convincing foothold into the South African mining equipment market, and testimony to this is a sizeable group of mining customers and a growing base of mining equipment sales. “With a range of our large tonnage machines such as the LW800K, LW900K and LW1200K wheel loaders; the XDA40 articulated hauler; the NXG5650DT off-highway mining dump truck; and the XE470D mining excavator, we have broken the monopoly of premium brands in this sector,” says Dai. XCMG SA has also significantly grown its footprint into new southern African

XCMG has maintained its export value to Africa at over US$100-million per year between 2015 and 2017.

QUICK TAKE

XCMG established its own subsidiary, XCMG South Africa, in August 2014

One of the first key initiatives for XCMG SA was to establish a massive parts warehouse in South Africa

XCMG SA has expanded its product range in recent years with the launch of larger machines to challenge for a share of the large mining equipment market

XCMG SA has seen a big improvement in its market share, with over 100 units sold in 2017 alone

XCMG has maintained its export value to Africa at over US$100-million per year between 2015 and 2017

Shen Yu, African GM at XCMG Imports & Exports

David Dai, MD of XCMG SA

“We are set to reach a major sales milestone this year, having seen our orders for the first quarter of 2018 surpassing sales for the whole of 2017.”

“We have, in recent years, invested in the improvement of our products, agent base, distribution channels, services portfolio and spare parts provision in Africa.”

CAPITAL EQUIPMENT NEWS APRIL 2018 17

BAUMA CONEXPO REVIEW – EARTHMOVING EQUIPMENT

With the launch of a range of larger machines, XCMG is challenging for a bigger share of the mining equipment market.

markets. Apart from its parts centre in Johannesburg, the company has also established three other distribution outlets and spare parts centres in Windhoek, Namibia, as well as Maputo and Beira in Mozambique. This is complemented by a professional and experienced sales and aftersales team led by six Chinese sales directors and managers; eight local sales persons and nine spare parts managers and service technicians. The initiatives have already paid dividends. Last year, XCMG SA saw a big jump in its market share, with over 100 units sold in 2017 alone. The export value for XCMG via XCMG SA exceeded US$5- million last year. Dai expects to triple the 2017 sales figures this year, considering that a total of US$5-million sales deals were concluded during the first day of bauma CONEXPO AFRICA alone, where the company showcased a total of seven of its top products – comprising the XCMG QY30K5-I and QY50KA truck cranes; the XE215C and XE335C crawler excavators; the ZL50GN and LW300FN wheel loaders; as well as the 12 m cherry picker. “We are set to reach a major sales milestone this year, having seen our orders for the first quarter of 2018 surpass sales for the whole of 2017,” says Dai. Important market Speaking at bauma CONEXPO AFRICA, Shen Yu, African GM at XCMG Imports & Exports, reiterated the importance of the African market to the Chinese OEM. He says over the years, XCMG has been at the forefront of the Chinese OEM

contingent operating on the continent. “We were the first Chinese machinery provider to be involved in the development of African infrastructure. We have been in Africa for 30 years, with products operating across all the 54 countries, confirming XCMG as a well-established brand on the continent,” says Yu. XCMG has maintained its export value to Africa at over US$100-million per year between 2015 and 2017. The figure reached an all-time high of US$150- million in 2017. Yu reiterates the importance of Africa as an export destination for XCMG, saying that the continent’s GDP will reach about US$2,2-trillion, representing great opportunity for growth as investments into infrastructure development are expected to take centre stage in Africa. To date, XCMG has a total of six branches on the continent, complemented by 25 distribution outlets and 20 parts “We were the first Chinese machinery provider to be involved in the development of African infrastructure. We have been in Africa for 30 years, with products operating across all the 54 countries, confirming XCMG as a well-established brand on the continent.”

service centres. “We have, in recent years, invested in the improvement of our products, agent base, distribution channels, services portfolio and spare parts provision,” says Yu. Positive outlook Both Yu and Dai concur that South Africa remains the most important market for XCMG on the continent, and is also regarded as the springboard into the rest of southern Africa. “South Africa is the most significant market in southern Africa, and we continue working closely with XCMG SA to provide greater support to our customers,” says Yu. Dai says South Africa is the world’s largest resource engine, and is a strategic market for XCMG. Dai is encouraged by the current market conditions, especially on the back of a new political era and a rebounding mining sector. He notes that the improving economic conditions are already starting to translate into capital equipment sales. “We are positive that the South African economy will recover well in 2018. However, there is a strong need to stabilise the mining sector, and quelling all trepidations around the Mining Charter will be crucial for this sector to reach its full potential. South Africa is one of the largest resource-producing countries globally and a healthy mining sector will play a significant role in resuscitating the country’s economy,” says Dai. “We will keep on strengthening our professional after-sales team, constantly improve the response rate and continue to optimise our spare parts inventory,” concludes Dai. b

CAPITAL EQUIPMENT NEWS APRIL 2018 18