SUCCESS INTO AFRICA MORE LIKELY WITH OBSTACLES FACTORED IN
From a marketing perspective, Africa is often viewed as an entity: a cohesive whole to be targeted with a single, generalised approach.
The reality is different. Africa is the world’s second biggest continent after Asia, containing 48 countries and six island nations. Spanning both hemispheres, its people speak an estimated one thousand languages with a further one thousand dialects. Climate and topography range from desert to equatorial rainforest, while economies include failed states as well as success stories similar to those in the developed world. It follows that any marketing approach would need to include segmentation by language, economic model, level of industrialisation, GDP per head of population and other key variables.
One company notably successful throughout Africa south of the Sahara is crane and hoist manufacturer Condra. Headquartered in South Africa, the company is recognised as the leader in high-lift installations across the continent’s west, central and southern regions.
Managing director Marc Kleiner predicts that African sales for his company’s products will continue in parallel with cyclical, Chinese-driven demand for minerals and other commodities. However, he points out that the risk facing exporters into Africa is the temptation to nationalise.
“There is an understandable desire for any government to assert dominance over foreign-owned interests, especially a productive mine. But government ownership of assets can result in inefficiencies, and they risk moral hazard. Generally, I would say that any company investigating an African country as a potential market should factor into that consideration the likelihood of nationalisation.”
Kleiner added that he would like to see improved access to remote mines. He pointed to a recent crane order from Cameroon, where the road giving access cannot be negotiated by abnormal-load vehicles. The only way to deliver this crane will be to design it for containerisation, splicing girders almost 30 metres in length for bolting together on site at the mine.
“It’s quite common for us to do this, but it does increase the price,” he observed.
In South Africa, Condra’s two factories are busy with local contracts as well as orders from beyond the country’s borders. Eight coil-handling cranes for a new vehicle plant are under manufacture, together with a ninth and tenth for an automotive rubber factory.
Asked what Africa could do better within its lifting equipment industry, Kleiner answered:
“Africa could do better by taking more pride in the fact that it is Africa and not Europe. By this I mean that customers requesting the latest electronic refinements in use abroad should recognise that these are often poorly suited to the power outages and fluctuations that are typically African. That said, we continue to give the customer the machine performance that he wants, while engineering the crane to be as immune to these problems as possible.”
Kleiner also noted that Africa’s sporadic armed insurgencies remain problematic:
“Beyond the tragedy and fear, unpredictable attacks make business difficult,” he said. “Witness the recent attack by ISIS in Palma, northern Mozambique. One of the oil companies there declared force majeure because of that attack, so now we have the crane that they ordered stored here at our factory until the situation can be normalised.”
Kleiner went on to comment on pricing, explaining that Condra does not try to win contracts through price-cutting because the company has invested too much in its products for this to be a viable approach.
“We don’t outbid,” he explained. “We have realised over time that we don’t want to compete against cheap products. Our success bears out the fact that if a customer knows what he wants and has experience of other manufacturers, he will eventually come to Condra. The natural flow of professional engineers around the world has led to many re-contacting us to become repeat customers, and this has gradually given us more of the world market. Our growth into Canada and Australia has been largely based on people who have previously experienced the reliability of our products and insisted on Condra.”
Looking to the future of the African lifting equipment market, Kleiner predicted a continuation of present circumstances.
“I think that it will be more of the same,” he said. “It will remain possible to succeed, but it will remain difficult. However, Condra was born African and remains African. We understand Africa, so our success is likely to continue.”
The reality is different. Africa is the world’s second biggest continent after Asia, containing 48 countries and six island nations. Spanning both hemispheres, its people speak an estimated one thousand languages with a further one thousand dialects. Climate and topography range from desert to equatorial rainforest, while economies include failed states as well as success stories similar to those in the developed world. It follows that any marketing approach would need to include segmentation by language, economic model, level of industrialisation, GDP per head of population and other key variables.
One company notably successful throughout Africa south of the Sahara is crane and hoist manufacturer Condra. Headquartered in South Africa, the company is recognised as the leader in high-lift installations across the continent’s west, central and southern regions.
Sophisticated circuitry monitoring and controlling a Condra overhead crane, the yellow girders of which can be seen on the right, with the hoist (also yellow), above them.
Managing director Marc Kleiner predicts that African sales for his company’s products will continue in parallel with cyclical, Chinese-driven demand for minerals and other commodities. However, he points out that the risk facing exporters into Africa is the temptation to nationalise.
“There is an understandable desire for any government to assert dominance over foreign-owned interests, especially a productive mine. But government ownership of assets can result in inefficiencies, and they risk moral hazard. Generally, I would say that any company investigating an African country as a potential market should factor into that consideration the likelihood of nationalisation.”
Kleiner added that he would like to see improved access to remote mines. He pointed to a recent crane order from Cameroon, where the road giving access cannot be negotiated by abnormal-load vehicles. The only way to deliver this crane will be to design it for containerisation, splicing girders almost 30 metres in length for bolting together on site at the mine.
“It’s quite common for us to do this, but it does increase the price,” he observed.
In South Africa, Condra’s two factories are busy with local contracts as well as orders from beyond the country’s borders. Eight coil-handling cranes for a new vehicle plant are under manufacture, together with a ninth and tenth for an automotive rubber factory.
Typical Condra overhead crane under test.
Asked what Africa could do better within its lifting equipment industry, Kleiner answered:
“Africa could do better by taking more pride in the fact that it is Africa and not Europe. By this I mean that customers requesting the latest electronic refinements in use abroad should recognise that these are often poorly suited to the power outages and fluctuations that are typically African. That said, we continue to give the customer the machine performance that he wants, while engineering the crane to be as immune to these problems as possible.”
Kleiner also noted that Africa’s sporadic armed insurgencies remain problematic:
“Beyond the tragedy and fear, unpredictable attacks make business difficult,” he said. “Witness the recent attack by ISIS in Palma, northern Mozambique. One of the oil companies there declared force majeure because of that attack, so now we have the crane that they ordered stored here at our factory until the situation can be normalised.”
Kleiner went on to comment on pricing, explaining that Condra does not try to win contracts through price-cutting because the company has invested too much in its products for this to be a viable approach.
“We don’t outbid,” he explained. “We have realised over time that we don’t want to compete against cheap products. Our success bears out the fact that if a customer knows what he wants and has experience of other manufacturers, he will eventually come to Condra. The natural flow of professional engineers around the world has led to many re-contacting us to become repeat customers, and this has gradually given us more of the world market. Our growth into Canada and Australia has been largely based on people who have previously experienced the reliability of our products and insisted on Condra.”
Looking to the future of the African lifting equipment market, Kleiner predicted a continuation of present circumstances.
“I think that it will be more of the same,” he said. “It will remain possible to succeed, but it will remain difficult. However, Condra was born African and remains African. We understand Africa, so our success is likely to continue.”
Condra’s managing director Marc Kleiner.
