Barloworld, a South African distributor of Caterpillar equipment, expects spend- ing by mining companies and governments on infrastructure to boost Africa sales of the mach- inery by more than 10% a year.

“We are still in the infancy of growth of Caterpillar products in Africa,” says Barloworld CEO Clive Thomson.

“Anything that is going to require infrastructure build – roads, dams, bridges, ports, harbours, airports, railway networks, new power grids – requires our construction equipment in one way or another.”

Sales of the machinery will probably grow “by a percentage in the strong double digits” over the next five years, Thomson says.

Barloworld sales of Caterpillar equipment rose by 30% to R25.3-billion ($2.5-billion) in the year to September, compared with an 18% increase in total reve- nue, according to the company’s annual report. Barloworld has exclusive distribution rights with the Illinois-based manufacturer of heavy machinery in Russia and eight African countries, including Zambia and Mozambique.

Barloworld, which also operates car dealerships and a logistics unit, seeks to take advantage of new mining projects in commodity-rich African countries to sell equipment. The company has won a R1.1-billion deal from Vancouver-based First Quantum Minerals for its Zambian copper projects and a R1.2-billion contract from Swakop Uranium to supply drilling and loading equipment in Namibia.

Sales of Caterpillar machinery, including spare parts and ser- vices, have a profit margin of 7.2%, higher than the 4.5% for Barloworld’s automotive and logistics division, according to Thomson.

Net income for the six months to March rose by 50% to R643-million, the company said in a statement released on May 20. Revenue increased by 11% to R31.3-billion, driven partly by the contribution of sales from local distribution units of Bucyrus, which were bought from Caterpillar in 2012.

Barloworld is countering the impact of a weaker rand as its international operations trade in US dollars, Thomson said at the time of the first-half earnings announcement. The rand has fallen by 17% against the dollar this year, making it the worst performer of 16 major currencies tracked by Bloomberg.