Writer Ian Armitage
Project manager Debbie Clark
Swedish mining and construction equipment manufacturer Atlas Copco has had a presence in Eastern Africa since 1938 and over the last few years has literally "struck gold". However falling gold prices have forced the company to adapt, says Henry Ngugi, Regional General Manager - Mining & Rock Excavation.
Mr Ngugi was kind enough to answer our questions all the way from Tanzania...
Atlas Copco has spent the past few years consistently capitalising on the opportunities afforded to it by Africa's burgeoning mining industry, especially in regards to gold. But the gold price has been plummeting. How has that affected things?
As you say, our mining and exploration activities are mainly focused on gold and therefore negatively affected by the drop in world gold prices during the last six months. However, the construction and industrial businesses, though smaller in absolute terms, are performing well. Overall, we have adapted our organisation and focus and as a result have been able achieve satisfactory growth targets in most our business segments.
Where has Atlas Copco been most successful in the last year then? Is there anything you would like to improve?
We have been most successful in 'use of products' - that means service, spare parts and consumables business. Delivering good service is not an event, it is a continual process, improvement comes in form of small steps, and we would like to be more consistent in the service we deliver to mining customers across the countries we cover.
How would you sum up the current state of the industry? Are there lots of opportunities for you?
Looking at reduced world gold prices, the cheese has moved, and only those players who adapt quickly will be successful. There are opportunities however. We are strongest in Tanzania, but have room for improvement in emerging mining markets such as Ethiopia, Eritrea, Sudan and Kenya.
What are some of the recent trends you've witnessed?
Mine owners are focused on productivity, are more cost conscious, and prefer to subcontract most of the specialised activities. One sector that excites us is mineral exploration, focusing on gold, coal, copper, cement and to a smaller extent diamonds and uranium. We also see that new technologies are being applied in the region. Potash 'solution mining' is under development in Ethiopia and Eritrea, and for several decades Kenya has been at the forefront of 'geothermal steam' mining in Africa. In a broader sense, Oil & Gas is a new segment in the region, especially in Uganda, Kenya and southern part of Tanzania. Tanzania has the largest and most developed mining sector in Eastern Africa and has an investor friendly legislation, but we are seeing strong development in Ethiopia, Sudan, Eritrea and Kenya. Most of these activities are relatively new, and require skills and technologies that are not well developed in the region. It will take time.
Please tell me about your aims, targets and projections for 2013 and beyond?
Our vision is to be the preferred supplier and partner for investors in the mining industry. We have quite a well developed infrastructure in the region, both in terms human resources, as well as workshops, warehouses and at the moment our focus is to make better utilisation of these resources. We are customer focused, agile and will invest in locations and segments that position us to serve our customers optimally.
How long has Atlas Copco been present in Africa?
Atlas Copco has been in East Africa since 1938, at that time it was called Craelius, and was one of the companies that pioneered mineral exploration in the region. We have been expanding in Africa and will continue to do so, and in the last five years have established customer centres in Mali, Burkina Faso, Cameroon, Mozambique, Nigeria in addition to long term presence in South Africa, Namibia, Botswana, Zambia, Zimbabwe, Ghana, Morocco, Egypt, Tanzania and Kenya among other countries. We have been in Africa for a long time, and will continue to invest and be present in Africa. This is time for Africa
Atlas Copco has signed equipment-maintenance contracts with many of the major players in Africa. What does that tell us about the company? Why are you so popular?
We believe we are a customer focused organisation, and pay more attention to increasing our customers' long term productivity. All our actions are geared in this direction and it resonate well with our customers. We are a global organisation with a culture that has evolved since the Group was founded in 1873 and this culture unites us, and enables us to work with common aim - "To be first in mind and first in choice' for our customers, by delivering sustainable productivity in whatever we do".
Are you a company that understands that people are your biggest asset?
We are continually investing in our people... in their development, in their training; in diversity, we give them long term careers and provide an environment that allows them to develop their potential. We believe that there is always a better way, and continuous improvement is part of our culture, and a philosophy that all employees embrace. We believe that each and every employee has the ability to contribute to the growth of their business unit by continually improving the processes for which they are responsible. We offer products and application training; we have been selected by Forbes as one of the world's top 100 most innovative companies, we believe that our employees should be experts in the industry segments we operate. This way we can help our customers improve their productivity.
Operating sustainably is something that is becoming more important, especially in the mining industry. Do you subscribe to this?
Yes, we strive to be a good and reliable corporate citizen and operate with a long-term commitment to the customers in each country and market served, and we develop close relationships with customers in order to be able to meet and exceed their expectations. We conduct business in a manner that preserves the environment for future generations and we respect fundamental human and labour rights. We recognize that environmental or social considerations at times might override purely commercial aspects.
In what ways are you operating more sustainably?
We have long term investments in people, production, distribution and customer service facilities in the markets where we operate. We utilise innovation and latest technology to produce equipment that have least possible impact on the environment.
Are you optimistic about the future?
Yes, Atlas Copco has consistently scored high as one of the most sustainable and innovative companies, and we have performed well even during challenging economic times. We believe that we are well organised to adapt to the future and deliver long term value to all our stake holders, including employees and shareholders.
To learn more about Atlas Copco visit www.atlascopco.com.
Image: © Supplied
Copyright is owned by Africa Outlook and/or Outlook Publishing. All rights reserved.