Capital Equipment News October 2017

BUSINESS

due to falling water levels as drought hit the region. Target industries as far as power generation is concerned include telecoms, banking and railway sectors. Meanwhile, Cummins has also seen increased demand for backup power at the mines, where downtime due to power outages can be detrimental. For example, in one of its key power generation projects, Cummins has supplied backup power to First Quantum Minerals. “We are aiming to diversify to avoid over- reliance on the mining sector. If copper prices drop extremely today, there will be no meaningful business for Cummins in Zambia. We are aiming to reduce dependence on mining to about 50%. The remaining 50% should come from the three other sectors we have set our sights on,” says Kwegyir- Aggrey. Positive outlook Kwegyir-Aggrey is very optimistic about Zambian growth and believes Cummins is well positioned to make the most of the opportunity. He sees lots of opportunity moving forward, especially on the back of the recovery in copper prices and a positive global demand outlook for cobalt, which is set to offer further incentives for foreign miners looking to enter the country, leading

The mining sector constitutes about 90% of Cummins Zambia’s revenues.

to an increase in the number of mining projects. The Zambian mining industry is forecast to grow by an annual average of 5,5% between 2017 and 2021, significantly faster than the average decline of 5,4% experienced between 2012 and 2016. Apart from mining, Kwegyir-Aggrey believes construction is an area where opportunity abounds for Cummins. For

example, more than USD5 billion is being invested in rail and road networks from 2015 to 2020. “I am very positive that we are well positioned to grow the business, and we predict to see a compound annual growth rate of more than 10% in the next five years,” says Kwegyir-Aggrey, adding that Cummins will grow faster as a business than the GDP growth of the country. b

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