Minerals and cement industry equipment and services supplier FLSmidth will be the exhibit hall title sponsor for the Investing in African Mining Indaba for the third consecutive year.
The yearly trade show and conference will be held in Cape Town at the Cape Town International Convention Centre (CTICC) from February 5 to 8 this year.
FLSmidth sub-Saharan Africa minerals commercial manager Terence Osborn notes that sponsoring the event, by way of the exhibition hall title sponsorship, has been a positive experience.
The company is only sponsoring the event – as opposed to exhibiting, as it did from 2012 to 2014 – because it is a more effective way of retaining brand presence. Being an exhibitor is sometimes limiting; with a booth you are fixed to that position and this reduces freedom to engage clients on their terms, he states.
“Every entrance to and from the exhibition hall contains FLSmidth’s branding. It’s visible where most of the networking and activity happens.”
Osborn adds that the exhibition booths are not ideal for customer or potential customer meetings, owing to the size and busy activity within the exhibition hall. Instead, the company has arranged a separate meeting room for prescheduled or impromptu meetings.
“The Mining Indaba draws mining industry decision-makers to Cape Town. Networking also takes place in the area around the CTICC simultaneously,” he explains. Therefore, FLSmidth’s sponsorship enables the company to be more flexible and to attend these alternative networking opportunities.
Osborn points out that it is good to see the event prioritising and reintroducing a focus on junior miners again. He says FLSmidth started attending the event more than ten years ago and has since noticed a distinct change in the type of exhibitors, with increasing numbers of product, solution and service providers and consultants, and fewer mining companies, especially juniors.
“This could be owing to the solution providers having bigger marketing budgets to afford the event’s exhibition space than the junior miners.”
Nonetheless, Osborn appreciates the renewed focus on behalf of the event organiser Mining Indaba. This ensures that junior miners will attend and participate, since that is the fundamental aspect on which the event is based – to match junior miners or exploration companies with investors.
It is essential that events in the mining industry focus on aiding investment, despite debt financing for projects changing fundamentally after the global financial crisis in 2008. Challenges remain in mining project investment, owing to reduced return-on-investment for shareholders, which is the result of the down cycle in commodity prices, political uncertainty and the poor continental economic climate, he explains.
When the commodity prices started softening, there was essentially an oversupply from 2014 when many new projects came on stream.
Additionally, another consequence of the commodity-cycle downturn over the past four to five years is stagnant industry growth, with few greenfield projects. “Those companies that support the mining industry from a capital equipment perspective or project perspective, such as FLSmidth, have fewer opportunity with increased competition during depressed economic times, making business conditions challenging,” notes Osborn.
He avers that the company is fortunate to have a large base of equipment installed in the mining industry that requires continued aftermarket components and servicing to function effectively, keeping FLSmidth healthy. However, new projects are essential in growing the company’s footprint, he adds.
FLSmidth is reaching out to Nigeria, Burkina Faso, Ethiopia, Tanzania, Kenya, Botswana, Mozambique, Madagascar, Angola and Cameroon to appoint agents and representatives to expand its footprint and service network. Osborn is leading the focus to increase sub-Saharan Africa agent networks for FLSmidth.
He says FLSmidth is seeking partners that have a record of working with multinational equipment providers and manufacturers that are customer and service focused.
Moreover, Osborn says the mining industry is all about “relationship selling”, as it takes time to build trust and confidence in a technology. This, he says, is why marketing spend does not necessarily equate to market share growth and higher revenue.
“Even though mining companies have large corporate procurement structures in place, comprising strict rules for tenders and requiring at least three tendering parties per project, with little engagement between the companies involved, technology is still sold person-to-person and not through a tender.”
Osborn highlights that, during the processes of concept level, prefeasibility and full feasibility study, there is time to influence a customer’s choice from a technology solution perspective, and this is where relationship selling takes place.
“That is why the Mining Indaba will remain important to FLSmidth, because it attracts these decision-makers and we plan to establish and build trusting relationships as their preferred productivity partner.”