Capital Equipment News January 2019

COVER STORY

SEM – ‘START EARNING MORE’

With an extended range of new machines that come with a host of improved features for better efficiency, complemented by a relentless dealer expansion programme, new and existing SEM customers are guaranteed to start earning more out of their machines, writes Munesu Shoko.

T he value equipment segment has grown by leaps and bounds during the past decade. The trend within the global construction market is for customers wanting machinery that costs less and capable to undertake less rugged jobs where premium machines are not essential. Barry Fang, business manager at Barloworld SEM, says there is definitely a big global shift towards value brands. In fact, available figures show that today value brands account for about 80% of the global construction machine sales. In response to the growing demand for service type of machines, premium OEMs have resorted to acquiring Chinese brands to strategically position themselves to compete in this market segment. One such transaction saw Caterpillar buying Shandong Engineering Machinery Co. Ltd, better known as SEM, back in 2008. In 2014, the SEM Company transitioned to Caterpillar (Qingzhou) Ltd. and continues to produce SEM branded products. As one important strategic utility product brand of Caterpillar, SEM has its own brand proposition, distribution channels, marketing strategy and product support. In 2016, to further enhance the SEM brand, Caterpillar approved the endorsement “SEM – A Caterpillar Brand”. The SEM brand of compact, small and mid-sized wheel loaders, soil compactors,

mid-sized motor graders, and track type tractors are targeted at utility customers for Chinese domestic and select growth markets around the world. SEM products target customers who emphasise initial acquisition cost over long-term total cost of ownership. By leveraging Caterpillar product development processes and proven technology, SEM products offer initial affordability, high reliability, simplicity of use and maintenance and responsive support to help customers build a strong foundation for future success. In South Africa and neighbouring SADC countries, since 2008, the SEM brand has established an installed base of close to 800 units. Given that for the past six to seven years, the brand has only pushed certain wheel loader models into the market, Fang is excited about prospects of growth in 2019, set to be driven by product and dealership expansion programmes. The growth trajectory was set in motion in 2018 with Barloworld SEM selling about 250 units during the year, representing almost a third of the installed base since 2008. As a result, in the year-to-September 2018, the company saw a 40% growth of its business against the industry’s downward trend. Product expansion Ewan Bradley, national key accounts at Barloworld SEM, says over the years

the 3-t 636 wheel loader has been the flagship model for SEM in the local market, with almost 50% of market share in this size class. “In the past eight years, this model has served our customers beyond expectations,” says Bradley. To enable the growing customer base to “start earning more”, Barloworld SEM has embarked on a new product launch programme that will introduce a range of new and improved machines during 2018-2019. New machines on the arrival deck comprise two soil compactor models, the 510 and 518, with 10 and 18 t operating weight, respectively; the New Generation 919 motor grader; two bulldozer models, the 816D (18 t) and 822D (20 t); and four wheel loader models comprising the 618D (6 t), 636D (10 t), 656D (17 t) and the 660D (20 t). A fifth wheel loader model is expected to be launched during the first quarter of 2019. The main application of SEM soil compactors is road base compaction and ground/foundation compaction. With the 510 model, the hydrostatic drive provides better manoeuvrability and grading ability, making the machine ideal for use in projects such as city road construction and building ground construction in urban areas. “Reliability is a key design focus area on the SEM 510. This is achieved via its hydrostatic drive system which features a world class variable displacement piston

CAPITAL EQUIPMENT NEWS JANUARY 2019 4