MACIG Connect Series
John Fleetwood (JF): Bell’s Zambia operation grew out of humble beginnings, selling agricultural equipment out of our Zambia founder’s house in the south of the country. As the mining industry began to pick up after several years of low activity, we realized that it was important to set up a base in the Copperbelt. Today we have five branches: Solwezi, Kitwe, Mazabuka, Lusaka, and Mkushi.
Bell aims to maintain a diverse client base across different industries so as to mitigate the risk of a downturn in one area. If mining is down we still have clients in agriculture and construction, and vice versa. Solwezi and Kitwe are obviously focused on mining but our other offices cater to different industries. While Kitwe has traditionally been the mining hub, we believe that in the future the mines will be pushing further northwest and Solwezi will become increasingly important. Mazabuka is home to the second largest sugarcane mill in Africa. We have a substantial amount of equipment on the site and our office there provides support services for that fleet. By contrast, our main interest in Lusaka lies in the construction industry. There is a lot of infrastructure being developed in the city and several cement plants are currently under construction.
As the hub for the mining sector, could you give us some more details on the capabilities you have at your Kitwe operation?
JF: Bell employs approximately 100 people across Zambia, of which 60 are based out of Kitwe. In the past, we carried out most of our maintenance operations on the clients’ sites but realized that it was necessary to have a dedicated workshop of our own. We recently invested $9 million in building our facility here. The service area comprises 11 bays, which are serviced by a 10-metric ton overhead crane. This allows us to service, maintain and rebuild any of the equipment we sell. This capability is backed up by Bell’s central remanufacturing facility in South Africa, which specializes in larger components such as transmissions and engines. Of course, this takes longer than rebuilding in country but we are able to offset the delay by maintaining an inventory of major parts. When a client needs a new engine, we simply substitute in a remanufactured one while the rebuild takes place in South Africa. Bell also maintains a strong presence out at the mines. Each operation has a dedicated service manager overseeing the fleet and in some cases we have a full team and a parts depot, which we manage. This is the same model that we use in the DRC and it has proven to be extremely successful.
Ensuring that you have well-trained technicians is always a challenge when operating in Africa. As such, what kind of training programs does Bell have in place?
JF: Bell’s apprenticeship program is probably one of the most comprehensive in Africa and Zambia houses one of our most advanced training centers, which only opened in January. Besides our own technical team, all the apprentices from the DRC Mozambique, and Zimbabwe are sent here for the theoretical part of their training. During the three-year course, they spend three months out of each year with us. Previously, they were all sent to South Africa but the program has become so popular that we had to open this new facility.
The level of education in Zambia is of a high standard and the government-run technical colleges train their students to an international level.
What kind of lifespan do you expect from a typical Bell ADT working a standard shift at a mine site?
JF: The operational lifespan of our equipment depends heavily on how well it is maintained. In the DRC they are pushing for machines to run for 25,000 hours before its first major overhaul. In Zambia, our target is around 20,000 hours with a major mid-life overhaul at 12,000 hours. We also have some machines that have been operating for far longer. When they do come to the end of their lifespan we have three options available to us: ship the machine down to South Africa and sell it on second-hand, rebuild it and sell it on to a user with a lighter application, or we can strip it down and sell the components on as remanufactured parts.
Excessively high rates on bank loans are a real barrier for contractors looking to buy machinery in Zambia. Is Bell able to offer financing arrangements to its clients here?
JF: There are two options for financing in Zambia: you can either lend in Kwacha or U.S. dollars, and the rates are different depending on the currency. Bell offers terms on new machine purchases and has partnered with certain banks in the country to help deliver better rates for clients. We have a memorandum of understanding with the Road Development Authority and Stanbic Bank to help local road contractors that are involved with major infrastructure construction. With other clients we are able to offer a full package, providing all the financing, site delivery and then the supply of consumables and maintenance.
Do you have a final message for the investment community regarding Bell’s operations in Zambia?
JF: Bell Zambia is fully committed to supplying high quality machines and an exceptional service to all our customers. In tune with our long-term commitment to the country we have established a world-class facility here in Kitwe where we have the ability to repair our full model range.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. A pre-release report on the Central African Copperbelt was released in May 2015 and can be accessed here. To participate in this report, please contact Molly Concannon at firstname.lastname@example.org or +244 940 514 806.