Report Coverage
This report focuses on the rental of construction equipment, with or without operator, in South Africa, including comprehensive information on the state and size of the sector and the performance and corporate actions of the sector’s notable players. There are profiles of 29 companies including major players such as Barloworld and Raubex. There are profiles of franchise companies such as Talisman, which has launched franchises in Builders stores, and companies such as enX group, whose rental trucking fleet and logistics business was bought in a R3.1bn deal.
Introduction
This report focuses on the rental of construction equipment, with or without operator, in South Africa. Equipment rental, also known as the plant hire industry, generated income of over R21bn in South Africa in 2017. There are a handful of relatively large plant hire companies, and many more small players, and the industry employs nearly 25,000 people. Plant hire, like the wider equipment sector, is under increasing pressure due to economic headwinds and the ongoing decline in the construction sector. While equipment rental has proven more resilient than direct sales, and is enjoying relatively stable demand from mining contractors, plant hire companies are waiting on an economic recovery and an improvement in state and private sector infrastructure spending. The fragile situation has been exacerbated by the coronavirus pandemic and consequent economic lockdown, which represent a potentially significant longer-term threat to companies, employment, and overall activity in the construction sector.
Strengths
• Good local machinery manufacturing capacity and very close linkages with international manufacturers.
• Relatively stable demand for rental as many clients prefer to minimise their capital expenditure and equipment maintenance budget.
• Reputation for high quality products and after sales support.
• South Africa is the leading continental distributor of machinery into the rest of Africa.
• Strong government support for localisation.
• Well-established consumer markets in the mining and construction sectors.
Weaknesses
• Capital and fuel intensive.
• Dependence on imports for machinery and parts leaves players exposed to exchange rate volatility and growing competition with Chinese suppliers.
• Dependent on economic growth, construction and building activity, government infrastructure spending, and commodity prices.
• Shortage of skills and declining quality of certain qualifications.
• The construction labour market is one of the most fragile, and strikes frequently delay projects.
Opportunities
• Construction and mining charter may drive more demand for BEE-compliant firms.
• Expansion into Africa. African Continental Free Trade Agreement to potentially boost competitiveness relative to Chinese suppliers.
• Growing proportional market share relative to new and second-hand machinery sales.
• State commitment to increased infrastructure spending and support for private-public investment.
• Technological innovations driving operational efficiency and potentially broadening scope of the market (e.g. expansion into drone rental).
Threats
• Construction and mining charters increasing compliance costs and potentially undermining industry’s efficiency.
• Continued contraction of construction sector and company failures.
• Continued falling competitiveness relative to international manufacturers and Chinese suppliers.
• Coronavirus pandemic. Both the immediate impact on construction companies’ cash flow during the lockdown and longer-term impact on economy, employment, and state and private sector expenditure.
• Exchange rate volatility driving up cost of imported machinery and parts.
• Ongoing economic headwinds.
• Poor governance and financial position of state-owned enterprises and growing incidence of late- or non-payment.
• Rising electricity, fuel and labour prices.
• Strikes, corruption, intimidation and violent disruptions of construction sites.
Outlook
Equipment suppliers have been negatively affected by South Africa’s prolonged economic stagnation and the ongoing crisis in the construction sector, which is exacerbated by a lack of state infrastructure spending, widespread mismanagement and corruption and, more recently, the coronavirus outbreak. Calvin Fennel, chairman of the Construction and Mining Equipment Suppliers Association, notes that there has been a general decline in sales of construction machinery since 2013. Equipment distributors have however seen a widespread shift in demand towards aftermarket services, maintenance, and rental as clients attempt to extract maximum value from existing assets. The Master Builders Association expects that demand for rented construction equipment will be relatively stable as cash-strapped construction contractors, facing declining or uncertain order books, will look to minimise their costs in terms of owning and maintaining machinery. Some analysts also note that the revised construction and mining sector charters may present opportunities for plant hire companies as clients focus on local procurement of goods and services in an attempt to maximise their BEE scorecards. However, players and associations also note that competition is increasing throughout the equipment industry and margins are under severe pressure. Most players do not expect an improvement in conditions in the foreseeable future, and there are widespread concerns that the longer-term impact of the coronavirus pandemic could lead to further devastation in the construction industry. Fennel states that “all equipment suppliers are feeling the pinch of the prolonged downturn and there is no silver bullet for the economy … until such time as large infrastructure projects are awarded the reducing equipment market, with increasing competition, is going to be tough”.
Renting of Construction Equipment industry With or Without Operator in South Africa
2020
Full Report
R 1 900.00(ZAR) estimated $100.84 (USD)*
Industry Landscape
R 1 330.00(ZAR) estimated $ 70.59 (USD)*
Historical Reports
Renting of Construction Equipment industry With or Without Operator in South Africa 2017-03-13
R 1 900.00(ZAR) estimated $100.84 (USD)*
View Report Add to CartRenting of Construction Equipment industry With or Without Operator in South Africa 2014-07-31
R 1 900.00(ZAR) estimated $100.84 (USD)*
View Report Add to CartTable of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Industry Value Chain | 3 |
| 2.2. | Geographic Position | 4 |
| 3. | SIZE OF THE INDUSTRY | 5 |
| 4. | STATE OF THE INDUSTRY | 7 |
| 4.1. | Local | 7 |
| 4.1.1. | Coronavirus | 12 |
| 4.1.2. | Corporate Actions | 14 |
| 4.1.3. | Regulations | 15 |
| 4.1.4. | Enterprise Development and Socio-Economic Development | 16 |
| 4.2. | Continental | 19 |
| 4.3. | International | 22 |
| 5. | INFLUENCING FACTORS | 23 |
| 5.1. | Economic Environment | 23 |
| 5.2. | Infrastructure Spending | 25 |
| 5.3. | Input Costs | 26 |
| 5.4. | Technology, Research and Development (R&D) and Innovation | 27 |
| 5.5. | Labour | 29 |
| 5.6. | Environmental Concerns | 31 |
| 6. | COMPETITION | 32 |
| 6.1. | Barriers to Entry | 33 |
| 7. | SWOT ANALYSIS | 34 |
| 8. | OUTLOOK | 35 |
| 9. | INDUSTRY ASSOCIATIONS | 36 |
| 10. | REFERENCES | 36 |
| 10.1. | Publications | 36 |
| 10.2. | Websites | 37 |
| APPENDIX 1 | 39 | |
| Summary of Notable players | 39 | |
| COMPANY PROFILES | 44 | |
| A L S PLANT HIRE (RF) (PTY) LTD | 44 | |
| ALISTAIR JAMES COMPANY LTD | 47 | |
| ALLIED CRANE HIRE (PTY) LTD | 49 | |
| AQUA TRANSPORT AND PLANT HIRE (PTY) LTD | 51 | |
| BABCOCK PLANT SERVICES (PTY) LTD | 53 | |
| BARLOWORLD SOUTH AFRICA (PTY) LTD | 55 | |
| BUD GROUP (PTY) LTD | 62 | |
| CASE HIRE CC | 65 | |
| DELTA CRANE AND PLANT HIRE (PTY) LTD | 67 | |
| ECO PLANT HIRE (PTY) LTD | 68 | |
| ENX GROUP LTD | 69 | |
| HDMI INVESTMENTS (PTY) LTD | 73 | |
| HIRE ALL (PTY) LTD | 74 | |
| HIRE SOLUTION (PTY) LTD (THE) | 77 | |
| JOHNSON CRANE HIRE (PTY) LTD | 79 | |
| MANITOU SOUTHERN AFRICA (PTY) LTD | 81 | |
| MASHOVA PLANT (PTY) LTD | 83 | |
| PERFORMANCE PLANT HIRE (PTY) LTD | 85 | |
| PHAKAMA MARLBORO CRANE HIRE (PTY) LTD | 87 | |
| RAUBEX GROUP LTD | 88 | |
| RENICO PLANT HIRE (PTY) LTD | 93 | |
| RENTTECH SOUTH AFRICA (PTY) LTD | 96 | |
| RENTWORKS AFRICA (PTY) LTD | 98 | |
| STERLING ACCESS CC | 100 | |
| TALISMAN FRANCHISE OPERATIONS (PTY) LTD | 101 | |
| TEICHMANN SOUTH AFRICA (PTY) LTD | 104 | |
| TORRE HOLDINGS (PTY) LTD | 106 | |
| TURNER MORRIS (PTY) LTD | 109 | |
| XMOOR TRANSPORT (PTY) LTD | 111 |
