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SA French - Second hand makes sense
Warwick van Breda
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Although the mining industry's market for cranes is relatively small, the sector remains highly competitive. For this reason, SA French continues to enhance its strategy to fulfil a niche material handling service that makes it the attractive crane supplier of choice to the mining sector, Warwick van Breda,SA French operations director, tells Laura Cornish.
Sole distributor of cranes in sub-equatorial Africa for France-based Potain, SA French's distribution strategy has been so successful for the group that it has achieved exponential growth over the past five years, its workforce increasing from 70 in 2004 to a current 120.
Unlike its competitors within the industry, SA French sells cranes to mining firms - which it is able to source new, or, if the cost benefit ratio dictates, from construction sites, when the company refurbishes the equipment and supplies and installs it.
Van Breda explains that should a mining house not want to spend money on a new crane the functionality of a second-hand crane (between 10 and 20 years) serves as well in the 'fit-for-purpose' function on the mine, and is usually a permanent installation.
Having done the cost to benefit exercise a mine may decide to use a second-hand crane, in which case Potain heavy-duty cranes are durable, robust, substantially cheaper (between 50% and 75%), less likely to break down, and also have a quick spare parts lead time, he adds.
As the company strives to expand further into sub-equatorial Africa, its intention is to increase turnover generated from its rental fleet from 8% to between 10% and 12%, says Van Breda.
In November last year, SA French made an initial public offering on the AltX, and is currently trading with a market cap of just under R210m.The capital raised was used to increase the inventory, as well as the rental fleet, from 25 to 40 machines.
While the company has already positioned itself successfully in some African countries like Ghana, Mali and Botswana, it aims to realise substantial growth by targeting all sub-equatorial African countries, where language barriers will not pose a restriction to business.
The company headquarters is positioned in close proximity to Johannesburg's major international airport, which, Van Breda believes, is a great advantage in terms of material transportation.
"To ensure, or strengthen the possibility of tender awards, we intend to follow the mining houses' movements and expansions into Africa, thereby establishing synergies and solid working relationships simultaneously," Van Breda adds.
While the use of cranes is dominated largely by the construction industry, SA French owes about 10% of its overall revenue to the mining industry, a contribution of that stemming from its niche second-hand market service.
Another strategy implementation which places SA French at the forefront of its business is its spare parts "stockpile" - which is worth approximately R5m, and which is constantly maintained.
The same method is applied to new machines, reducing delivery time on a new crane or spare parts from the industry standard of eight to nine months, to a week at most.
When the mining industry entered its boom phase, the group remained and continues to remain relatively unaffected by the unexpected increase in demand for equipment as new mining projects continue to be brought forward.
While the large cranes, with jib lengths ranging between 65m and 75m, are supplied largely to the gold mining industry, SA French also distributes multi-purpose tele-handlers, a popular lifting solution in the platinum industry.
Some of the firm's more recently awarded tenders to supply cranes and tele-handlers include mining clients - Xstrata, Impala Platinum, Northam, Gold Fields' South Deep project, as well as Bateman.
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