Stephen Smithyman, CEO, Kanu Equipment

MACIG Connect Series

Kanu Equipment has identified after sales support and customer engagement to be their main competitive advantages.

Can you provide us with a brief overview on Kanu Equipment and its operations?

The business started four years ago. We started in the Republic of Congo, renting machinery for the construction sector. Our first exposure with the mining sector was through one of the mines of Exxaro. Since then we have expanded into Ghana, where we are very strong in the artisanal gold sector. We represent Bell and Liebherr in many west African countries. Although there has certainly been a downturn in mining, this has not affected us greatly. In fact, we have seen growth in Ghana, Ivory Coast and Liberia. We are also expanding into Sierra Leone with two mining projects for which we will provide the earthmoving equipment. In southern Africa, we are very strong in Botswana, with Debswana being our largest customer. BCL was also one of our largest clients prior to its liquidation. The reason why we have not suffered greatly from the mining slump is because we perform very well in after sales support and spare parts delivery. We believe we have the right business model to survive the slump.

What are the particularities of the African regions where you operate in in terms of logistics and import duties?

Every country has a different regime. We are one of the few dealers to operate in both anglo and francophone countries in west Africa. Obviously, in certain countries it is more difficult to operate. In Sierra Leone, the system is quite relaxed, but in Ivory Coast and Congo it can be very expensive to operate in. In Ivory Coast, for example, the government is supporting us by granting us customs tax exemptions over our investments. We are opening a central spares hub for West Africa in Ghana and we hope that the ECOWAS conventions get approved to open up all the regional markets. This would be remarkable in terms of the free flow of goods and opportunities.

How can technical support teams operate efficiently in these regions?

In every country we have mechanics on site. We usually have workshops outside the capitals or main cities and a team on the site of operations. To operate, we build containerized spare parts centres in these locations. We have a large training centre in Botswana, which has been qualified by Liebherr for training locals. We also employ expats to cooperate in the training of locals in these countries. Given that work permits can be tricky in many of the countries where we operate, we focus on training of the local population.

Have governments been supportive in the establishment of training centres for the local population?

We have had a few initiatives. One of our shareholders are actively involved in offshore development programs and funds for Africa. At Kanu, we want to attract funds to develop the skills and develop the areas where we operate, this is beneficial for both sides since it stimulates the business and communities.

What share of your clients is from the mining sector?

I would say that about 45 per cent of our sales are directed to the mining sector, but indirectly, this percentage could reach 60 per cent of our clients. Other important sectors for us are construction and agriculture.

How have the demands and needs of your clients in the mining sector evolved following the downturn?

Within Africa, there is a lack of liquidity, so a lot of our customers opt for equipment rentals. This is specially common in the artisanal gold mining sector, where our clients literally pay for the equipment as they get their gold. We offer finance solutions through a fund in Mauritius. We support our customers throughout their operations, ensure they work optimally, and then pay us.

Do you find the equipment sector overcrowded?

Our main competitor is Caterpillar and its dealerships. In many markets the sector is very competitive, with the possible exception of Sierra Leone and Liberia. Therefore, we have found that our competitive advantage is to support our clients in the best possible way through after sales services and spares provision. Service is the key differentiator. When you support your clients by ensuring that your machines are always operating, then you lower their costs and this is very important for them.

How would you describe your cooperation with Liebherr and Bell?

We get very good support from them. Generally, the spares availability is very good and they support us by keeping stock on the ground. Liebherr has reduced costs and made their machines easier to operate and repair, benefitting our African customers. Both companies spend a lot on R&D and they assess us every six months on new developments. We also have feedback sessions every four months.

What is the driving force behind the business?

For me, it is all about the opportunities that we have created in the markets where we operate. The fact that you develop skills for people and provide them with jobs is very satisfactory. This is what I am proud of.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s