Political and economic instability and the increasing cost of doing business in South Africa remains a key concern and the group continues to evaluate the merits of increasing activities at its German facility, in closer proximity to the higher volume northern hemisphere markets.
One of the biggest challenges facing South Africa’s largest manufacturer and distributor of heavy equipment, Bell Equipment, is the increasing cost of doing business in the country, says CEO Gary Bell.
This includes import duties, regulatory costs and the costs of BEE.
“We deal with these as best we can, but if it gets more difficult we will need to migrate some of our manufacturing to our European factories,” says Bell, who released his company’s interim half-year results recently.
The discovery in the first quarter of 2016 of fraud in the Democratic Republic of Congo (DRC), which resulted in the entire local management team and a number of other employees being dismissed and required squadrons of legal and tax professionals to get the operation back on track set the company back in what would otherwise have been an improvement in profitability year on year.
The group has focused on directing its efforts away from the mining industry into construction. Miners continue to count the pennies and sweat their assets to the maximum, with their mobile equipment fleets now at the oldest they have been for a dozen years.
This will clearly provide great opportunities for Bell when the pendulum starts to swing back to the mining industry but, meanwhile, it is focused on reducing production costs and adding products and services to its distribution network.
As from the second half of 2016 both Bell manufacturing plants in South Africa and Germany will have converted and will only be producing the new and upgraded range of E-Series Dump Trucks which will match these market needs.