May 04, 2012
Caterpillar boss upbeat about Africa's future, mulling investmentBack
Construction|Africa|Caterpillar|CoAL|Components|Copper|Gas|Road|Africa|China|USD|Capital Equipment|Capital Equipment Manufacturer|Construction-related Equipment|Energy|Equipment|Manufacturing|Manufacturing Plant|Manufacturing Sites|Mining|Natural Gas|Product|Screen|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
Article contains comments
Updated 26 minutes ago South Africa did not produce enough graduate engineers, which was worrying, as good engineering made a significant contribution to social welfare, Science and Technology Minister Naledi Pandor said on Monday. Speaking at the official opening the United Nations...
Updated 1 hour 38 minutes ago As South Africa entered the “spring” of its ambitious South Africa (SA) Connect broadband strategy, Telecommunications and Postal Services Minister Dr Siyabonga Cwele on Monday assured stakeholders that South Africa’s information and communication technology...
Updated 1 hour 51 minutes ago South African utility Eskom said on Monday that a report in a business newspaper that power supply would be "highly constrained" for the next five years was a "worst-case scenario." "It would not be correct to say categorically that it would take five years. That is...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...