The company raises German production to increase efficiencies.
Bell Equipment CEO Leon Goosen says ramping up production of its flagship trucks in its German factory will increase efficiencies as the product will be closer to its main market and free up space in the SA factory for the manufacturing of new product ranges.
This comes as the R1.6bn group identifies underground mining as an untapped opportunity for growth and gears up for the launch of its newly developed motor graders, which are expected in the fourth quarter of this year.
Goosen told Michelle Gumede of Business Day after a presentation to shareholders on the results to end-December 2023 that part of the group’s strategy to become a global player to succeed in the long run meant managing efficiencies and increasing capacity in both countries.
“The overwhelming majority of our main product, the truck, is now sold in the northern hemisphere so it is cheaper to put it together in Germany and then send it to the USA, and into Europe, as opposed to sending all the components and all the raw materials down to SA on a ship, then putting the product together and sending everything back again,” said Goosen.
“So, this will give our customers assurance that we will build closer to the market and then you are also not exposed to load shedding,” he said. “So, from an SA perspective, us ramping up on that side will mean that we have more capacity on this side to do more of the new products.”
In preparation, Bell said it has already entered a seven-year lease agreement for a portion of its neighbouring property in Kindel, Germany. While a 10-year lease for a property adjoining its Richards Bay factory, which houses a new warehouse, was also concluded.
“The one in Richards Bay is quite significant in size and it helps us in terms of flexibility to introduce all these new products and to pursue the growth. On both sides we will increase capacity,” said Goosen.
Additionally, the group’s original equipment manufacturing (OEM) business has now been restructured into three distinct divisions: Mining and construction, underground mining, and forestry and agriculture, to provide a more dedicated focus on product lines, distribution and support.
Goosen said underground mining has been identified as another opportunity for growth, and a focus on expanding the product range, providing specialised customer support and establishing new global markets will guide the group in the short to medium term.
“Underground mining I think is going to be a fantastic business unit for us, we are definitely going more aggressively into it than what we have looked at in the past,” said the CEO. “I’ve put a lot of engineers on developing new products for the SA market and we’ve pulled a dedicated division that will start focusing on growing that business and revenue stream.”
Bell reported its two underground articulated dump truck models and a rock scaler have been well accepted in existing African markets for their inbuilt levels of safety, and use of the latest technology and economical productivity, adding that this range would be expanded.
Goosen said there were several products under the forestry and agricultural sectors that were in the pipeline, while Bell’s construction and mining division is expanding its product offering to include motor graders as it expects some improvement, which could lift the local construction industry out of the doldrums.
Richards Bay-based Bell offers advance dump trucks, haulage tractors, tractor loader backhoes, front-end loaders, and sugar cane and timber-loading equipment through its nine marketing and support operations based outside SA, with more than 150 offshore distribution outlets and dealerships.
“We are hoping to look back in a good number of years from now and have a proper international business with various product lines into all these different segments,” Goosen said, but “we need the space to do all of this new stuff as well”.