Capital Equipment News April 2018

GB: The major limiting factor on large ADT sizes, until recently, has been the tyre capacity. We came up with the B60 concept, which is a crossover between a rigid and an ADT, and we see that the concept is scalable. It’s feasible to go to an 80 t, 100 t or a little bit more. I can’t tell you when but it’s under consideration and we are working on it. MS: You have also introduced the 4x4 ADT concept. Tell me more about it. GB : We are currently doing it on 30 t and 40 t ADTs. That’s something growing in interest, particularly in Europe, not necessarily here yet. We already have units running in Germany, France and the US. While not possessing the extreme off-road capabilities of a 6x6, the 4x4 still offers sound all-weather characteristics on undulating haulage roads and light terrain, and provides better manoeuvrability in confined material handling areas or stock yards. Having one less axle means no tyre scuffing, which results in significantly reduced tyre wear compared to 6x6 applications on hard ground. Additionally, the lack of tyre scuff means that a 4x4 machine churns up the ground a lot less than a 6x6 truck. On the B30E 4x4, the front tyres are typi- cal 23.5R25 tyres whereas the heavier load- ed rear axle uses 29.5R25 tyres, commonly found on 40 t ADTs. With its oscillation joint providing permanent contact of all wheels, and a well-balanced load distribution (emp- ty: 50/50, laden: 33/66), the 21,5-tonne Bell B30E 4x4 proves itself far superior to rigid tippers or tractor-trailers at load and dump areas, or in wet conditions. MS: From a business perspective, there is positive sentiment all around. What is your take on the prevailing market conditions? GB: The past few years have been difficult, but we have got significant market diversification, which has allowed us to navigate the tough times. For example, 30% of our products are sold into North America, 30% into the European region, 30% into Africa, and the balance into South East Asia and South America. We have done that deliberately to ensure that we run a sustainable business. We are very optimistic of the year ahead. Right now we see that all the major markets are trending upwards. All our markets, apart from one region in the world, have seen significant recovery in recent times. There is a big bounce back in places like Russia, while Africa, at last, is looking positive after a number of neg- ative years, which is encouraging for us. Overall, we are well positioned to make the most of the growth and we expect a much better year in 2018. b

MS: You also have plans to assemble the Kamaz product locally. What are the timelines? GB: All the agreements for that phase are already in place. We hope to free up some capacity in the Richards Bay factory towards the end of this year and early into 2019 we will set up the assembly facility. We have already localised the various components, such as bodies, which we produce ourselves. It’s just a matter of ramping up the local production, probably from the second quarter of 2019. MS: You mentioned the need for an unsophisticated product. Africa is still well-known for its love for a simple product. However, we have also seen that there is a big move towards new technologies to increase productivity, such as telematics. What’s your take on that? GB: We are embracing all the new technologies and we are very fortunate that we work with partners that are well ahead in that regard, particularly if you look at the Bell product, where we have partners such as Mercedes for our engines and Allison for the transmission, to mention a few. They are leaders in their own right and give us access to the very latest technologies. We have embraced new technologies to improve our efficiencies, whether it’s fuel efficiency or cost per tonne, which is obviously very important to every one of our clients. There is still a place for the basic machines, but as your scale increases you need to be deploying the latest tech because there is certainly opportunity. We see it in a number of areas. For example, our Fleetm@tic® has been leading the in- dustry for many years. With this platform, we don’t just give statistics on simple things like engine hours, we give produc- tion data, operational information and fault codes and that’s far more valuable to the customer. With each new generation of machines, we are on the E-series now, we have seen that there is possibility to further improve on our economy. For example, we can squeeze maybe 3% fuel economy out of the engine, or offer better payload-to- weight ratios through the use of lighter materials. However, it is very feasible to generate 10-15% productivity improve- ment through proper fleet management practices, such as matching machines, managing the cycle times and tracking operator behaviour. MS: You have been at the forefront of revolutionising the ADT, which for a long time looked like not getting anywhere near the 50 t size. How big can an ADT get?

be the next big thing, although it’s not yet a big market locally. If you follow the trends in most other places in the world, the compact wheel loader and the mini excavator are the true alternatives to the TLB. It does give us an opportunity to participate in that market segment when that market does start to move. We have used bauma CONEXPO AFRICA to introduce the three mini-excavator models ranging from 5,5 t to 13,5 t to complement the six standard machines that were launched in June 2017. The mini-exca- vator range comprises the SK55SRX (5,5 t), the SK75SR (7,5 t) and the SK135SR( 13,5 t), and became available in April this year. MS: Kamaz allows you to enter the local tipper truck market. Tell me more about your relationship with Kamaz. GB: The relationship with Kamaz started with us working with one of their divisions in Russia. We sell our articulated dump trucks into Russia and they produce the ADT bins for us. We worked successfully with them for some time before we considered taking in their tipper truck range. We had also previously visited their factories and then we started to think about our operations in Africa and we saw that their product fits into our portfolio and would be targeted at our current customer profile. Their truck, which is a very rugged vehicle, looks ideal for conditions in our home markets. While it is not as sophisticated as some of the offerings out of Europe and Japan, it’s essentially a workhorse with no extra bells and whistles. MS: What are the targeted markets? GB: The product is a good fit for emerging contractors and entry-level participants into the construction industry. We have seen a big surge in that sector and see an opportunity in providing a strong, reliable tipper truck, which is competitively priced. With this product we don’t want to com- pete with the long haul-focused operators. We want to focus on the construction and mining sectors, and forestry to some extent. Those are our target markets, and our existing customers, and this allows us to leverage our existing infrastructure, for example, 24 outlets in South Africa and the other 20 up north of our borders. We have been testing the product locally for the past three years in different applications and the feedback has been great. We are ready to roll out the product into the local market. We have already stocked up all the necessary backup spares and parts. We have made huge investments into the training of our people, with some teams sent for training in Russia.

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