Josh Foster, General Manager, Bell Equipment (DRC)

Bell provides 112 different machines for agriculture, infrastructure, and mining.

Josh-Foster-BLOGCould you provide us with an introduction to Bell Equipment and your operations in the DRC?

Josh Foster (JF): Bell DRC is a wholly owned subsidiary of the South African company, Bell Equipment. Established in 1954, we are Africa’s only manufacturer of mining equipment. We market 112 different machines for use in agriculture, infrastructure and mining, but our flagship product is the articulated dump truck (ADT). Bell’s main factory is in Richard’s Bay, and we have a large logistics center in Johannesburg as well as a second production plant in Germany.

Bell arrived in the DRC in 2007 through a large infrastructure deal. Since that time we have seen rapid growth. Once we have completed our current recruitment drive, we should have approximately 375 em-ployees. Aside from our main site in Lubumbashi, we have depots in Kolwezi and Bukavu, although we plan on moving the latter site to Kibali in the near future. We have machines running in the gold mine at Kibali and various agricultural projects in the Bas-Congo and are currently locating a site in Kinshasa to service these operations.

Most of the major OEMs are well represented in the DRC today. In this crowded market, how does Bell seek to stand out from the crowd?

JF: When it comes to equipment supply, the product is not the only differential. We are prepared to admit that our competitors also make good machines. However, when you are in the business of throwing rocks at steel, something is going to break. The key is how long it takes you to resolve these issues. As such, we have spent the past four years investing heavily in our support staff. It takes a minimum of five years to train a high quality technician, so initially it was necessary to bring over expatriates from South Africa. However, at the same time, we created what is probably the most rigorous apprenticeship program in the country. This is no watered-down scheme to claim corporate social investment (CSI); we are committed to building a strong technical army of local talent. Beyond contributing to the country’s development, this initiative makes good business sense.

Given the fairly low levels of education in the DRC, how do you ensure that you hire the best candidates on to your apprenticeship program?

JF: We start off with basic IQ and aptitude tests to establish who are the most trainable candidates. They start on a six-month contract as a mechanic’s assistant, after which the most promising recruits are offered a permanent contract as an unqualified local mechanic. Once a year, the best performing members of this group are put forward to officially join the apprenticeship program. They then spend around nine months working with a qualified mechanic and then move to South Africa for a three-month hydraulics training course. This is followed by a range of tests, further training courses, and another two years of on-the-job training. We invest around $8,000 to $10,000 per year in training these people. At present we have around 90 people enrolled. The first group of fully qualified apprentices graduated in 2014, and we are looking forward to seeing the next batch of 15 come through in 2015.

How do you evaluate the importance of a manufacturing industry to economic growth in Africa?

JF: In the aftermath of the 2008 financial crisis it became apparent that a strong manufacturing base is vitally important for maintaining a robust economy. This is of particular relevance in Africa where there is a need to diversify away from an overreliance on extractive industries. In South Africa, we play a pivotal role in job creation. According to a study, if Bell were to produce one truck per week, it would generate 42 direct jobs in the factory. However, for every direct employee we generate 18 indirect jobs through our supply chain, so the number begins to multiply exponentially. In reality, Bell currently produces around 35 trucks per week so the total number of direct and indirect employment opportunities created in South Africa stands at 38,000.

As the banking sector has become increasingly crowded over the past years, how has access to finance developed for Bell’s clients?

JF: Many buyers here complain of banks charging extortionate interest rates for equipment acquisition, but the reality is not so bad. You can find more favorable rates in the DRC than in many other places in Africa. A large, well established company in the DRC should be able to secure rates of around 9%, which compares favorably to Zambia.

At the same time, the market is becoming much more competitive for equipment providers and we are increasingly expected to offer financing programs. Bell is well placed in this regard. We have relationships with all the major banks as well as arrangements with specialist African funders. We have never lost a major deal because we could not source funding.

The government is trying to incentivize foreign investment in agriculture as part of its long-term growth plan. Do you see much potential for agribusiness to develop in Katanga?

JF: For agriculture to thrive, cheap inputs and good access to markets are needed. Farmers in the Bas Congo benefit from their proximity to the port of Matadi, which can deliver both of these. While there is huge potential for agriculture in Katanga, projects in the Bas-Congo are probably better placed for success in the short-term.

GDP growth in 2015 is predicted to hit 8.6% but the country is facing numerous challenges. Do you believe that the DRC has the potential to capitalize on its natural wealth and unleash its true potential?

JF: The common portrayal of the DRC is of a country with huge potential that is incapable of translating its vast mineral wealth into economic growth. This is simply not true. We are already outperforming Zambia across a range of key indicators including total GDP, GDP growth and copper production. Investors who are waiting on the sidelines for the right moment to enter the country have already missed the boat. There is a much-quoted statistic that claims that DRC’s total untapped resources could be worth $24 trillion. Without scale, this number is meaningless. To put it into context, the estimated value of all the gold ever mined throughout history is around $5.9 trillion. Furthermore, most of the success stories in Africa are based around the exploitation of a single commodity: gold in South Africa and oil in Angola and Nigeria. In contrast, the DRC’s wealth is based on a wide range of different minerals. This is before you even consider the potential for hydroelectric generation along the Congo River or agricultural development through the country’s colossal green belt. In short, we are very optimistic about the DRC’s future and the DRC’s present.

This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at mconcannon@gbreports.com or +243(0)826300684.

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