SMT DRC invests in a promising DRC market.
AL: I arrived in DRC in 2007 and at that time, I was involved with Chanic; after three years there, I moved on to join Societe Petroliere Congo (SPC), which is a wholly owned subsidiary of Puma Energy, Trafigura’s global fuel storage and distribution departement. In 2012, I was about to leave the country when I received a very tempting challenge from SMT that I ended up taking. SMT DRC is part of the SMT Group, SMT Group has the exclusive dealership for Volvo in 13 African countries across Central Africa and West Africa and we offer products for three main segments: Volvo Construction Equipment for construction, infrastructure works and mining, Volvo Trucks, and Volvo Penta’s industrial engines. Volvo Equipment has a product offering of wheel-loaders, excavators, graders and articulated dump trucks (ADTs), which account for the bulk of our business in Katanga. Meanwhile, Volvo Trucks is now the world’s leading company in terms of volume in its market segment, after acquiring MACK TRUCKS (US), UD (Japan), Renault Trucks (France), and Eicher (India). Finally, Volvo Penta’s main strategic products in the DRC are its gensets, which beneficiate from enormous demand in the DRC, given the country’s power supply issues.
Could you provide us with an overview of SMT’s presence and network in the DRC and could you elaborate on the major mining projects that you are involved with?
AL: SMT DRC has two branches: the headquarters are in Kinshasa, where we have a well-developed truck market, while the second office is in Lubumbashi. In Katanga we have the opposite situation to that of Kinshasa in the sense that here our equipment market is established and mature. SMT DRC started selling here six years ago, before the company had an established footprint in the country and we have built trusting relationships with mining companies such as Mutanda Mining, Bazano Group and Boss Mining; it was in fact the critical mass of equipment that we had in Katanga that drove SMT to invest more in the DRC. Our main customers in Katanga are the mining contractors and we work with the majority of them. Our biggest customer is Congo Cobalt Corporation (CCC), which has more than 160 Volvo machines, followed by Mutanda/Bazano for Glencore and then MCK Trucks (for MMG at Kinsevere and for Chemaf at Etoile). Rulco also operates more than 100 Volvo products, the majority of which are trucks however, while CMCK is our fifth key account customer.
SMT Group operates in 13 countries across Africa, acting as the exclusive dealer for Volvo. In this context, how important is SMT DRC for the group and what is the strategic focus of the company in the country?
AL: For SMT Group, the DRC is a highly strategically country together with Nigeria and Ghana, proof of that is the fact that we were selling Volvo equipment here before the group was even called SMT. Even though a young business, we have grown very well over the past three years and that is largely due to the brand recognition that Volvo benefits from. Furthermore, Volvo’s products are very well adapted to the harsh conditions of Africa, and the line of Volvo FMX trucks is specifically designed for extreme conditions, while the articulated dump trucks are perfect for the very muddy or dusty conditions in the DRC.
Our current strategy is to follow the global trends that Volvo is pursuing and to that end SMT Group & SMT DRC is also devoting increased attention to Volvo’s strategic Asian partner SDLG, which has several products relevant to the mining and construction business. Volvo Penta’s gensets are also in high demand given the constant need for extra power supply in the DRC but here, the number of competitors is rapidly increasing, and there are about 15 players in the field active today in Katanga.
Logistics, delivery times and stock management are issues that many equipment providers face in the DRC. How is SMT Group dealing with the problems?
AL: The logistics of getting new Volvo machinery & trucks in the country are very well managed by SMT Group, which has its centralized stock in Antwerp, from where it then sends out the necessary products to all the African countries that the group manages. However, for the Asian partners based in China and in India, the situation is more complicated: the ships can go either to Dar es Salaam, which is quite saturated already or to Durban, but then the distance to DRC becomes bigger; it is a trade-off between the two and the bottom line is that there is room for improvement for Asian deliveries. There is an obvious improvement of road infrastructure in the DRC, but our view is obviously restricted to the big cities, and we do not know what the situation looks like in the more remote areas of the country. The major issue that still remains problematic is power supply and some mining companies, such as Ruashi Mining and MMG have decided to gain independence from the grind and invest in their own power plants, which is an important move on the market.
What is the importance of after-sale services to SMT and how are you managing the lack of sufficiently skilled technicians and engineers in the DRC?
AL: Services are a very important part for SMT’s activity in the DRC and we are constantly making efforts to improve them. SMT DRC had a staff of only 28 people in 2011 and we are now 80, with 18 people hired in 2013 alone. We are trying to attract technical talent and get closer to our customer by providing specialized teams on site that can solve any issues that might arrive; that is the way we can develop trust with our clients and build a long-term good working business relationship. Since we were the ones that first brought Volvo products here, we did not find any local base of technicians specialized on our equipment. One of SMT’s goals is to try and develop more training capabilities in the DRC, so that we can feed the demand for skilled engineers that we currently have.
How do you see the mining industry evolving in Katanga and what are SMT’s main goals for its future presence and activity in the DRC?
AL: As long as copper and cobalt prices will not see a dramatic decrease, the mining industry as well as its associated sectors will be fine in Katanga. SMT DRC is seeing now new opportunities with companies that are trying to develop production of coltan and cassiterite in the north of Katanga; consequently, these operations will require some equipment and trucks to transport the materials to Lubumbashi and SMT Group can help with that. Just a few years ago, these developments would not have been possible since the majority of mining in the north of Katanga was artisanal. SMT Group’s main goals for the future are to develop its machinery market in Kinshasa, improve its road truck business here in Katanga and further expand the training capabilities that we have across the DRC. We are an important player here and we plan to remain a major actor in the industry for the years to come. Also, we have plan to open offices and maintenance capabilities in Goma and Kisangani before the end of next year.