Approved by the Competitions Commission, the completion of the takeover of Warman Africa by the Weir group was finalised in April 2008. The companies competed in the slurry pumps market in Africa and, while their combination provides consolidation, this is more than the merger of two groups with the same line of business.
Before the merger, Warman held a significant share in the African mining market for slurry pumps, and with the takeover Weir International not only gains that market position, but will use Warman’s footprint in Africa as a platform to expand the group’s range of products to the mining sector. For the moment slurry pumps contribute 90% of Weir Warman Africa’s business, but the five-year plan is to grow by increasing the range, to include water pumps, cyclones, mill liners and valves. All of these will be superior products at the upper end technologically. “In three years time we plan to double the size of our business in Africa,” Dave Athey, Africa region CEO of Weir Warman says. “We will be looking at the milling circuit as a whole.”
Both of the now merged entities have operations that continue as stand-alone units until the end of this year, but one area that was immediately combined was the sales and marketing function. “We want to capitalise on the footprint created by the merger to present a single entity to the customer base,” Dr Jan Lourens, Weir Warman Africa sales and marketing director says.
Prior to the merger, Warman had expanded across the continent and had even established a presence in North Africa, including an office in Morocco, which reports into the company’s Dubai office and is managed along with West and Central Africa.
From an African regional perspective, Southern Africa remains an important market for the merged group, with the DRC in particular showing growth and potential to be a bigger market than Zambia, particularly when considering the capital expenditure taking place there. The merged company has two sites in Kitwe, Zambia, and serves the DRC market from across the border, though it has a representative in Lubumbashi. West Africa, with Ghana as the traditional mining centre, is also showing growth in countries such as Mali and Guinea where significant development of projects is taking place. Service centres exist in Accra and Obuasi in Ghana and Nairobi in Kenya.
“Taken to its extreme, our approach means having a service centre on a mine site,” Lourens says. “If the mine is willing to be there, so are we. We can piggyback on the mine’s infrastructure and put a team in place.” It means having technicians based on the site of large clients. An example of this is a team on site at the QIT project in Madagascar. “In some cases, a two person team with a fully equipped workshop is the only way to guarantee the required levels of service.”
The combined entity, Weir Warman Africa, is responsible for the African continent and supports global mining companies operating on the continent.
This decentralised service approach already sees the group having customer service centres in Steelpoort, Phalaborwa, Rustenburg and Witbank. “These are not just sales centres, with Rustenburg, Wadeville and Witbank each having some 30 to 35 people, not to mention the group’s Isando facility. If we are to grow our market in real terms as we plan, the service elements and aftermarket feature strongly,” Lourens says.
Athey says the approach planned for the group mirrors the Weir Chile service centre for operating in remote areas. It is a lean, automated supply chain management system to provide the 24/7 parts availability that customers expect from an efficient supplier, and includes having the necessary inventory once shipping and customs issues are taken into account.
However, the single biggest difference post the takeover of Warman by Weir remains the larger footprint of the business to support a customer-centric model.
With some 1,000 mining projects underway across Africa, ranging from prospecting to actual mining, the merged Weir Warman Africa group sees huge potential. Corporate social responsibility and supplier development will require new increased focus.
Athey does not see a fall-off in the growth in mining activity on the continent. “While some junior projects may be shelved, many of the existing mining companies will be expanding existing installed capacity.”
The Weir Warman merger with a combined 1,000 employees in Africa has resulted in a sizeable organisation, one that has invested in R&D for the product lines from Weir’s side. Weir brings innovation, particularly providing a quantum leap in materials technology to the Warman products.
“The end result is a group at the cutting edge in terms of new materials in its products.” Overall, Athey says the target is to substantially grow the merged group. This will come through new products, the service and aftermarket expansion, and to some degree through the expansion of the mining industry itself. The company is adding additional manufacturing capacity and is ensuring more reliable relationships with its suppliers. It will increase production from between four and 10 tonnes a day to 20 tonnes a day, and while Athey says it will take time to catch up, “We are fixing it and should have the backlog reduced by the end of 2008.”
Weir Warman Africa has also demonstrated its confidence in South Africa and the group decided, despite the oftenmentioned skills shortage, that it will invest aggressively in the country and export from its base here. The company will be investing significantly in growing its technical skills capacity through the introduction of engineering development and artisan training programs.