If they build it, they will come!

Bell Equipment is one great example of South African engineering expertise at its best.

I recently had the opportunity to visit a leading a South African truck body builder and trailer manufacturer in Rosslyn, just outside Tshwane in Gauteng.

One cannot help being impressed by the family-owned Afrit’s success over the years. Its large premises boasts a factory and, just as importantly, a training academy that provides the necessary skills to implement the unique designs that has kept this local original equipment manufacturer (OEM) on a growth path.

At the same time, we also regularly feature new developments from South Africa’s own OEM powerhouse Bell Equipment, which recently announced the expansion of its dealership network in South America, bolstering its already strong export activities.

There are other great examples of South African engineering expertise at its best.

It is for this reason that I tend to side with African policymakers who drive home the need for more localisation of capital equipment used on their ambitious infrastructure projects. The capability certainly exists.

However, the reality is this ideal is dampened by the reality of the situation, namely the volumes needed to justify even the establishment of an assembly plant in some construction hotspots on this continent of ours.

They simply do not exist at this point in time, despite the insatiable demand for infrastructure on the continent. The fact of the matter remains that the slow rate of rollout of the mega projects hinders these grand plans of African policymakers.

Yes, they want to see more localisation on their ambitious infrastructure programmes that have already reached a “shovel-ready” state, but it is going to take more to drive up real demand for “yellow metal” in these countries.

A conference hosted about a year ago by Chinese participants in the nuclear industry shed some interesting light on the matter, and gave one real insights into the sheer extent of construction activity that is needed to really draw an international OEM to our shore.

A representative of a well-known Chinese OEM of construction equipment made it very clear that should South Africa opt to go ahead with its contentious plans to build nuclear power plants, it would warrant establishing an assembly operation in the country and, at a later stage, possibly a factory. These operations would service these builds and other projects in the larger southern African region.

The fact of the matter is we all know that the reality of a protracted nuclear build in the country anytime soon is scant.

The closest we are able to get to anything similar to South Africa’s big base-load aspirations is Ethiopia’s ongoing investment into hydropower. The country is home to the Grand Ethiopian Renaissance Dam and other large construction projects, complemented by those in Tanzania and Kenya. Yet, the reality is that while there have been talks about attracting OEMs, the demand for “yellow metal” simply does not exist at this point in time.

It is worrying that these talks often take place long before that much-anticipated mega project eventually plods along to a shovel ready state. And, that so many of these projects, especially in the southern African region, are followed by protracted periods of famine where contractor’s order books would rather justify a less risky rental option than an upgraded and extended fleet of new equipment.

The continent needs energy, water and transport infrastructure, but it is going to take more than meaningless rhetoric to attract investments into assembly plants and factories.

Yet, if they build it, they will come.

Enjoy your browsing!

David Poggiolini


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