May 04, 2012
Caterpillar boss upbeat about Africa's future, mulling investmentBack
Construction|Africa|Aluminium|Caterpillar|CoAL|Components|Copper|Mining|Road|Screen|Africa|China|USD|Capital Equipment|Capital Equipment Manufacturer|Construction-related Equipment|Energy|Equipment|Manufacturing|Manufacturing Plant|Manufacturing Sites|Natural Gas|Product|Specialised Mining Equipment Production Remaining|Doug Oberhelman|Infrastructure|Power|Rail
© Reuse this
Delivering a presentation at Barloworld, the South African Caterpillar dealer, the 37-year company veteran noted that it would not be long before the continent saw bigger foreign direct investment flows as economic and political conditions continue to stabilise as had been the case over the last ten years.
Africa had seen a mining and energy driven recovery, which had the domino effect of an increase in disposable income, which would, in turn, require an increase in foreign direct investment, he noted.
Oberhelman said Africa had a “huge population” who wanted “to live better”.
“We are looking to make an investment in Africa.”
Oberhelman noted that Caterpillar had on its radar screen the development of an African manufacturing plant, but cautioned that this would not happen within the next two to three years.
Such a facility would also not manufacture mining capital equipment, but more energy and construction-related equipment, with specialised mining equipment production remaining at the company’s existing manufacturing sites.
This meant, however, that the capital equipment manufacturer would need to see “faster growth in the energy and construction sectors” in Africa.
Taking a global view, Oberhelman said worldwide population growth had seen a global consumer base that required infrastructure and consumed commodities – all of which suited the Caterpillar brand.
“Every time a road goes in, or an airport, we want to be there.”
Oberhelman noted that global iron demand was expected to increase from 1-billion tons in 2010 to 2.5-billion tons in 2030. Copper demand was to increase from 19-million tons to 43-million tons, and aluminium from 41-million tons to 99-million tons.
Estimated total mining capital expenditure was anticipated to see a 9.8% compound yearly growth rate to 2015.
Energy demand was very much in the same boat, with oil, natural gas and coal to account for 80% of the energy fuel mix through to 2040.
Caterpillar had certainly managed to cash in on the world’s hunger for energy and commodities, with the company posting record results in 2011 and looking set to repeat this in 2012.
Sales and revenues reached $16-billion in the first quarter of 2012, compared with $12.9-billion in the first quarter of 2011.
“We are in a sweet spot right now,” admitted Oberhelman.
Profit after tax reached $1.58-billion in the first quarter of 2012, compared with $1.22-billion for the same period in 2011.
The outlook is for the company to reach revenues of between $68-billion and $72-billion in 2012, a big jump from the $32.4-billion recorded in 2009.
A $10-billion trail of acquisitions in the rail, mining equipment and electric power sectors look set to spur on these numbers further over the next few years.
Oberhelman was especially positive about the potential contribution from MWM, which “would be our jewel”.
MWM had developed an engine that burnt natural gas.
Waiting in the wings was the acquisition of Siwei, which would be Caterpillar’s largest acquisition in China.
Siwei produced a roof support product line for the mining industry.
* Barloworld on Thursday evening opened a R250-million remanufacturing centre in Boksburg, which has the capacity to rebuild capital equipment components for customers in the mining and infrastructure sectors.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Agriculture News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...