Capital Equipment News November 2016

COMPACT EQUIPMENT

The CASE 570T backhoe loader and the SR175 skid steer are key market drivers for CSE in South Africa.

Through its local dealer, Avant Tecno continues to grow the population of its articulated loaders in South Africa.

Looking ahead While there are signs of growth for compact gear in the local market, many agree that there is still a long way before it becomes the prime tool of choice. “In terms of unit sales in Africa, 75-80% of machines sold are still heavy ranges. The more developed the continent will become, the more the growth for compact equipment will be realised. In Europe, 60% of construction machinery sales are in the compact line, and only 40% are heavy liners. I believe in the next few years Africa will also move towards that direction,” says Invernizzi. Looking ahead to next year, Griesel be- lieves the compact industry will remain a challenge in 2017. But, it is not all doom and gloom as he foresees growth opportunities in the compact excavator segment for Wacker Neuson in the 5 t class size. Kemp is of the same view as he believes that the market will still be under pressure next year. “The total equipment market in South Africa is anticipated to be approxi- mately 4 200 units strong this year, excluding drum rollers and ADTs. When considering the rate at which the total industry volume has regressed in the past three months, rel- ative to the past 12 months, indications are that the market will decline further, before it starts improving in the latter part of 2017 / 2018,” says Kemp. Nicoll says that the compact equipment market is very price sensitive and if the ex- change rates hold or improve, there should be increased volumes. “Earlier this year things slowed down significantly due to pricing that rocketed alarmingly on account of exchange rate woes,” reasons Nicoll. “But if this volatili- ty is to settle, we should be seeing good move- ment of orders.” Nicoll believes that organic growth of the compact equipment market is indeed a reality too as more and more clients add compact machines to their fleets. b

Meanwhile, Griesel is also of the view that the compact loader is economical to run in terms of fuel consumption compared with the skid steer, while it can also load more material per run than the similarly sized skid steer. However, he believes that, like any other market segments, it is tough times for the compact loader market, which he says is down 53% on a monthly average between 2015 and 2016. Elsewhere, through Avant South Africa, Finnish articulated loader maker Avant Tecno has made significant headway in growing the population of its articulated loaders in South Africa. With its headquarters in Cape Town, Avant SA also has a branch in the developmental hotspot of Johannesburg. According to Jukka Vaattovaara, sales manager – export at Avant Tecno, the local dealer, in its six-year presence, is already selling between 80 and 100 units per year in the local market, but envisages that this number can grow to between 400 and 500 units in the next few years. He believes space is becoming a big factor on construction sites, translating into a big need for compact solutions such as the compact loader. Competitive solution Vaattovaara says the competitive edge of the compact loader over the competitive

solutions, such as the skid steer, is its lower price. This is because it is a simple concept with very little extra “bells and whistles” when it comes to componentry. “As a result, its pricing is a lot cheaper than the skid steer,” he says. He believes that simplicity also translates into ease of maintenance. Over and above the price, he believes that the articulated loader’s versatility is a big plus. “It can work with a wide range of attachments, making it a boon for a range of sectors, such as construction, mining, landscaping, fencing contractors and property maintenance, to mention but a few,” says Vaattovaara. Meanwhile, Vaattovaara believes that South Africa has gone down the compact loader road than its sub-Saharan Africa peers. But, he is upbeat about the uptake prospects of this seemingly cost effective solution on the whole continent moving for- ward. Through Avant South Africa, Avant Tec- no has also penetrated the Namibian market. The focus is now on the rest of southern Afri- ca in the immediate future, with Vaattovaara saying the company is targeting to establish a footprint in countries such as Botswana and Mozambique. “The medium-term plan entails growing our distributorship footprint in the rest of sub-Saharan Africa. Countries includ- ing Nigeria, Tanzania and Kenya are on the top of the list of preferred destinations,” he says.

“The most interesting growth prospect at this point is the compact excavator. To date, we sell about 15 mini excavators per year, but I believe in the next five years that number will grow tenfold.”

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