Johannesburg, South Africa — 11 June 2013 – Barloworld “’ a South African distributor of Caterpillar Incorporated equipment “’ expects spending by mining companies and governments on infrastructure to boost African sales of the machinery by more than 10%pa.
“We are still in the infancy of growth of Caterpillar products in Africa,” Barloworld CEO Clive Thomson said in an interview with Bloomberg News here.
“Anything that is going to require infrastructure build “’ roads, dams, bridges, ports, harbours, airports, railway networks, new power grids “’ requires our construction equipment in one way or another.”
Sales of the machinery will probably grow by a percentage in the “strong double digits” over the next five years, Thomson said.
Barloworld sales of Caterpillar equipment rose 30% to US$2.5 billion in the year through September, compared with an 18% increase in total revenue, according to the company’s annual report. Barloworld has exclusive distribution rights with the Illinois-based manufacturer of heavy machinery in Russia and eight African countries, including Zambia and Mozambique.
Barloworld, which also operates car dealerships and a logistics unit, seeks to take advantage of new mining projects in commodity-rich African countries to sell equipment. The company has won a R1.1 billion deal from Vancouver-based First Quantum Minerals Limited for its Zambia copper projects and a R1.2 billion contract from Swakop Uranium to supply drilling and loading equipment in Namibia.
Net income for the six months through March rose 50% to R643 million rand, the company said in a statement. Revenue increased 11% to R31.3 billion rand.
Barloworld is countering the impact of a weaker rand as its international operations trade in U.S. dollars, Thomson said at the time of the first-half earnings announcement. The rand has fallen 17% against the dollar this year, making it the worst performer of 16 major currencies tracked by Bloomberg.
Source: Bloomberg News. For more information, click here.