Construction World February 2019

COVER STORY

The main application of SEM soil compactors is road base compaction and ground/foundation compaction.

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. By Munesu Shoko GLOBAL SHIFT TOWARDS VALUE BRANDS

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 low-spec, low-priced equipment, better known as value brands. In fact, available figures show that today value brands contribute about 80% of the global construction machine sales. In response to the growing demand of 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) 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 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 a product and dealership expansion programme. 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.

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CONSTRUCTION WORLD FEBRUARY 2019