Since its inception in 2000, the SA Capital Equipment Export Council (SACEEC) has played a key role in helping local manufacturers gain access to key international markets including mining markets.
Now, in the wake of the COVID-19 pandemic, SACEEC members are facing unprecedented challenges. CEO ERIC BRUGGEMAN explains to GERARD PETER why the organisation still has a vital role to play in boosting South Africa’s export market amid new market conditions.
SACEEC is a public/private partnership between the South African Department of Trade & Industry and the capital equipment and related services industries.
One of its main functions is to open doors for South African companies looking to export their products and services. Much of this is done by hosting national pavilions at events, trade missions and arranging individual exhibitions, all of which put its members directly in front of potential clients.
However, the onset of the coronavirus has curtailed international travel and most African and international mining shows have been postponed. In addition, the COVID-19 lockdown in the country has put significant pressure on its members’ revenue streams.
As a case in point: In March, South Africa exported R9 billion worth of goods to Zambia. As of July, this figures was down to R4 billion.
“The equipment that our companies sell can’t be found on online shopping platforms like Takealot where you can pay with a credit card and it will be delivered to you within two weeks,” states Bruggeman.
“Rather, the products our member supply are usually specifically designed for the end-user and the lockdown period and postponement of shows has made it difficult for our members to conduct business.”
Bruggeman foresees suppliers continuing to operate in survival mode for the next few months.
“When we went into a hard lockdown at the end of March, many of our members still had work in the pipeline. So when the regulations were eased in May and June, they were still able to generate some income. However, I believe that the knock-on effect is going to start impacting SACEEC members in the months to come,” he explains.
According to Bruggeman, the negative impact largely stems from the fact local manufacturing supply chain has been severely hampered because of access to material. Also, tougher border restrictions are making export into other African countries a logistical nightmare.
“Recently, there was a backlog of delivery trucks on the DRC/Zambian border that stretched 52 km,” he explains.
“We are talking to governments all the time about easing of border controls but this is not always easy because you are dealing with various departments and more importantly, you want to ensure that drivers are properly screened for COVID-19 before entering a country.”
Opportunities still exist
Despite not being able to put its members physically in front of potential customers, SACEEC is still promoting engagement through electronic means.
To this end, the organisation is in the process of updating its website to include a business directory which will link members directly with potential clients. As such, Bruggeman is urging SACEEC members to ensure that their details are up to date on its website.
In addition, SACEEC has already arranged virtual meetings between its members and key mining players in the DRC, China, Zambia and Ghana with more such meetings planned in the coming months.
Now, while local manufacturers take a knock, Bruggeman encourages companies to keep speaking to customers, both past and current as well as potential new ones.
“While we are battling the coronavirus, the ‘people’ aspect of doing business hasn’t gone away. Always remember, people buy from people – that’s why meeting with them, even in a digital format, is so important.”
To illustrate his point, Bruggeman cites the example of buying a new car. “Before you buy a car, you chat to the salesperson about the warranty, service plan, etc. You build a relationship with the person before you start spending money.
“And this is particularly important for those companies exporting to mines. It must be remembered that the local mining industry is facing a downturn, therefore it is imperative for South African companies to continue to seek export opportunities.”
While COVID-19 has severely impacted SACEEC members, one silver lining for the organisation is that 80% of members are BEE compliant, which speaks volumes for the great strides that SACEEC has made in promoting transformation and creating export opportunities for local companies.