The wide geographic spread of Barloworld Equipment, the South African distributor of US-based construction equipment manufacturer Caterpillar’s products, insulates it from the effects of mining cycles that may challenge the sustainability of some of its competitors.
Its footprint has enabled it to continue expanding in areas where there are regular upticks and downturns, subsequently also enabling it to survive the recent downturn by focusing on supplying the mining markets that are experiencing growth.
Zambia is predominantly focused on mining copper and whenever there is a boost in the copper price or demand, there is growth for Barloworld Equipment in that country, as is the case with diamonds in Botswana, and coal and iron-ore in South Africa, notes Barloworld Equipment mining divisional executive director Shane Fitzpatrick.
To help keep the reach of Caterpillar machines widespread throughout Southern Africa, the company has been taking over some of the Caterpillar branches located in the region over the last few years.
“Originally, we were just a South Africa-based operation; however, over the years, we managed to expand our presence by acquiring dealerships . . . owned by other people. These distributors gave up and Caterpillar passed their dealerships on to us. Essentially, we have a dealership from the north of Angola straight across the African continent to the ocean,” explains Fitzpatrick.
The company is also involved in joint ventures (JVs) with other African dealer- ships. Fitzpatrick highlights that, in the Katanga region of the Democratic Republic of Congo, Barloworld Equipment is in a JV with equipment supplier Tractafric, one of the oldest suppliers of Caterpillar equipment in Africa.
He points out that Barloworld Equipment is the second-oldest African dealership, becoming a Caterpillar dealership in 1927, with August marking 90 years in partnership.
Turning to Training
During the 2015/16 downturn in the mining industry, Barloworld Equipment invested in the construction of training facilities, which speaks to the need for the earthmoving equipment industry to supply the mining industry with greater customer support.
Fitzpatrick explains that the industry is filled with equipment suppliers that can supply the same equipment as Barloworld Equipment, but lack suitably trained technicians to ensure the effective upkeep of equipment.
To help Barloworld Equipment rise above its competitors and meet its need for a greater number of suitably qualified technicians to service its product base, the company built several training facilities capable of training hundreds of people every year.
The facilities, located near Middelburg, in Mpumalanga, and in Isando, Johannesburg, among other locations, provide skills education and training authorities-accredited training.
For technicians based outside South Africa, Barloworld Equipment offers online training called Technicians for Africa, with more than 11 countries having access to this resource in Southern Africa, owing to Barloworld Equipment’s branches across the region.
“So, along with the Caterpillar product, you’re getting support in the form of technical expertise and knowledge on the proper upkeep of the machines supplied by Barloworld Equipment,” Fitzpatrick highlights.
He explains that the training is affecting the earthmoving and surface mining equipment industry positively, as not all technicians who are trained by Barloworld Equipment are in its employ.
“Since the early 1990s, many companies haven’t been investing in training at all. A lot of our trainees go on to work for our customers or even our competitors, and once you’ve been Caterpillar trained, it stands you in good stead for the rest of your life.”
Second-Oldest African Dealership
Founded by Major Ernest Barlow in 1902, Barloworld started in Durban, KwaZulu-Natal, by selling blankets, says Fitzpatrick.
“Barlow’s oldest son, Charles Barlow, went to the US and secured the Caterpillar distributorship in 1927, just after Caterpillar had started,” he highlights, adding that the company was a private entity for several years until it listed on the JSE in 1941.
Following several expansions into the automotive industry, Barloworld grew at a rapid pace, expanding to be larger than Caterpillar in the 1980s, ranking seventy-fifth on the Fortune 500. During this time, Barloworld owned several companies, such as cement supplier PPC and a paint manufacturer, Fitzpatrick adds.
“In the 1990s, the unbundling of the companies took place and when Clive Thompson was appointed CEO in 2006, the company’s focus turned to its three core divisions – equipment (earthmoving and power systems), automotive and logistics (car rental, motor retail, fleet services, used vehicles and disposal solutions, logistics management and supply chain optimisation).
Last year, Thompson stepped down as Barloworld CEO and was succeeded by Dominic Sewela.
Fitzpatrick concludes that recent events involving Caterpillar in the US have had no effect on the dealership in Africa.