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Renting Construction Equipment industry with without operator South Africa

Renting of Construction Equipment industry With or Without Operator in South Africa 2020

Duncan Bekker | South Africa | 20 May 2020

Renting of Construction Equipment industry With or Without Operator in South Africa 2017

Marc Bosman | South Africa | 13 March 2017

Renting of Construction Equipment industry With or Without Operator in South Africa 2014

Brenda Young | South Africa | 31 July 2014

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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”.

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Renting of Construction Equipment industry With or Without Operator in South Africa
Renting of Construction Equipment industry With or Without Operator in South Africa 2020

Full Report

R 1 900.00(ZAR) estimated $103.33 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.33 (USD)*

Historical Reports

Renting of Construction Equipment industry With or Without Operator in South Africa 2017-03-13

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Renting of Construction Equipment industry With or Without Operator in South Africa 2014-07-31

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Table 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

Introduction

This report focuses on the rental of construction equipment with or without operator. According to the latest official figures for 2014 released in late 2016 by Statistics South Africa (StatsSA), at current Rand prices the industry value then equated to R17.741bn, up from the finalised number for 2011 of R11.096bn. Industry growth was considerably slower than over the previously reported period from 2007 to 2011, due to prevailing economic and political conditions. The sector is also confronted by other issues including Broad-Based Black Economic Empowerment (BBBEE), new legislation and regulations, an ageing workforce and limited government spending on infrastructure projects.

Strengths

• Construction companies generally prefer to lease equipment.
• On-demand rental customer access to a broad range of latest available equipment.
• Rentals reduce or avoid initial customer investment.
• Renting allows expense control and capital conservation by renters.
• Technical expertise of rental providers.

Weaknesses

• Industry success dependent on the health of the construction sector.
• Poor health and safety management history.
• Skills shortages.

Opportunities

• Commodity price increases
• Construction equipment sales in developing countries currently at very low levels.
• Expansion into sub-Saharan Africa.
• Government’s R847bn infrastructure spend.
• Growth in affordable housing and building work.

Threats

• Dependency on government support for growth.
• Growth of OEM plant hire divisions.
• Payment default on rental agreements.
• Rising input costs.
• Slow roll-out of government strategic infrastructure projects.

Outlook

Similar operating conditions experienced in 2016 are expected in the period ahead with delays in infrastructure spending negatively affecting plant hire companies dependent upon large construction companies. As a result, larger plant hire companies are seeking opportunities in sub-Saharan Africa although this tactic is not without exchange rate, currency availability and payment risks. Although slow economic growth is forecast for 2017, respondents mentioned a variety of opportunities in renewable energy, improved mining activity on rising commodity pricing and the possibility of public?private partnerships for the construction of affordable housing and building work.

Renting of Construction Equipment industry With or Without Operator in South Africa
Renting of Construction Equipment industry With or Without Operator in South Africa 2017

Full Report

R 1 900.00(ZAR) estimated $103.33 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.33 (USD)*

Historical Reports

Renting of Construction Equipment industry With or Without Operator in South Africa 2020-05-20

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Renting of Construction Equipment industry With or Without Operator in South Africa 2014-07-31

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 10
4.1. Local 10
4.1.1. Corporate Actions 11
4.1.2. Regulations 13
4.1.3. Enterprise Development and Social Economic Development 14
4.2. Continental 15
4.3. International 16
5. INFLUENCING FACTORS 18
5.1. Economic Environment 18
5.2. Demand from Industry Sectors 18
5.3. Government Intervention 19
5.4. Rising Operating Costs 20
5.5. Technology, Research and Development (R&D) and Innovation 20
5.6. Labour 22
5.7. Cyclicality 24
5.8. Rental Agreement Payment Default 25
5.9. Environmental Concerns 25
6. COMPETITION 27
6.1. Barriers to Entry 27
7. SWOT ANALYSIS 28
8. OUTLOOK 28
9. INDUSTRY ASSOCIATIONS 29
10. REFERENCES 29
10.1. Publications 29
10.2. Websites 31
COMPANY PROFILES 33
A L S PLANT HIRE (RF) (PTY) LTD 33
ANGLO V3 CRANE HIRE (PTY) LTD 36
AQUA TRANSPORT AND PLANT HIRE (PTY) LTD 38
ATLAS COPCO SOUTH AFRICA (PTY) LTD 40
BABCOCK AFRICA SERVICES (PTY) LTD 43
BABCOCK PLANT SERVICES (PTY) LTD 46
BARLOWORLD SOUTH AFRICA (PTY) LTD 48
BOBCAT EQUIPMENT SOUTH AFRICA (PTY) LTD 54
BURMA PLANT HIRE (PTY) LTD 56
CASE HIRE CC 59
ENX GROUP LTD 61
GOSCOR LIFT TRUCK COMPANY (PTY) LTD 65
HIRE ALL (PTY) LTD 67
HIRE SOLUTION (PTY) LTD (THE) 70
JOHNSON CRANE HIRE (PTY) LTD 72
MASHOVA PLANT (PTY) LTD 75
PERFORMANCE PLANT HIRE (PTY) LTD 77
RAUBEX GROUP LTD 79
RENICO PLANT HIRE (PTY) LTD 83
RENTTECH SOUTH AFRICA (PTY) LTD 86
STERLING ACCESS CC 88
TALISMAN FRANCHISE OPERATIONS (PTY) LTD 90
TEICHMANN SOUTH AFRICA (PTY) LTD 93
TORRE HOLDINGS (PTY) LTD 95
TURNER MORRIS (PTY) LTD 98
XMOOR TRANSPORT (PTY) LTD 100

Introduction

This report focuses on the rental of construction equipment with or without operator. The Contractors Plant Hire Association’s (CPHA) estimation of the value of the construction industry including plant hire is R571bn per annum. This figure includes the value of all the machines introduced into the construction and plant hire market over the last ten years. Within the plant hire industry an estimated 28,000 operators are employed.

Strengths

• In general, construction companies prefer to lease equipment because of the many benefits leasing brings.
• The wide variety of construction projects means there is room for large, medium and small plant hire companies.

Weaknesses

• The industry is beset by poor health and safety management.
• The success of the industry is dependent on the health of the construction sector.

Opportunities

• Expansion into sub-Saharan Africa
• Government’s proposed R847bn infrastructure spending over the next three years.

Threats

• For traditional plant hire companies, the growth and success of OEM plant hire divisions.
• Impact of HIV/AIDS on the operator workforce
• Rising input costs.
• Slow roll out of the government strategic infrastructure projects.

Outlook

According to the FNB/BER building and civil construction confidence indexes, weaker economic growth will weigh on the construction sector and the slow roll-out of the government’s infrastructure programme has been identified as a potential risk to South Africa’s economy. Construction companies are operating under pressure because of delays in infrastructure spending and this negatively affects plant hire companies who depend on orders from construction companies. However, the passing of the Infrastructure Development Bill could alleviate some concerns as the legislation is designed to speed up and improve the implementation of infrastructure projects. In the meantime, larger plant hire companies are looking for opportunities in sub-Saharan Africa as rapid urbanisation and high growth mean the implementation of construction programmes, thus creating an increasing need for rental solutions.

Renting of Construction Equipment industry With or Without Operator in South Africa
Renting of Construction Equipment industry With or Without Operator in South Africa 2014

Full Report

R 1 900.00(ZAR) estimated $103.33 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.33 (USD)*

Historical Reports

Renting of Construction Equipment industry With or Without Operator in South Africa 2020-05-20

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Renting of Construction Equipment industry With or Without Operator in South Africa 2017-03-13

R 1 900.00(ZAR) estimated $103.33 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. 1. INTRODUCTION 1
2. DESCRIPTION OF INDUSTRY 1
2.1. The Industry Supply Chain 1
3. SIZE OF THE NDUSTRY 2
4. STATE OF THE INDUSTRY 6
4.1. Local 6
4.1.1. Corporate Actions 7
4.1.2. Regulations 8
4.1.3. Enterprise Development and Social Economic Development 9
4.2. Continental 9
4.3. International 10
5. INFLUENCING FACTORS 11
5.1. Economic Environment 11
5.2. Government Infrastructure Spend 11
5.3. Rising Input Costs 12
5.4. Labour 12
5.5. Information Technology 13
5.6. Innovation and R&D 14
5.7. Environmental Concerns 14
6. COMPETITION 15
6.1. Barriers to Entry 15
7. SWOT ANALYSIS 16
8. OUTLOOK 16
9. INDUSTRY ASSOCIATIONS 16
10. REFERENCES 17
10.1. Publications 17
10.2. Websites 17
ORGANOGRAM 19
COMPANY PROFILES 22
ATLAS COPCO SOUTH AFRICA (PTY) LTD 22
ALS PLANT HIRE (PTY) LTD 24
BABCOCK AFRICA (PTY) LTD 26
ANGLO V3 CRANE HIRE (PTY) LTD 29
AQUA TRANSPORT AND PLANT HIRE (PTY) LTD 31
BARLOWORLD SOUTH AFRICA (PTY) LTD 33
BILFINGER INTERVALVE AFRICA (PTY) LTD 38
BOBCAT EQUIPMENT SOUTH AFRICA (PTY) LTD 40
BURMA PLANT HIRE (PTY) LTD 42
CASE HIRE CC 44
CHHC TRADING (PTY) LTD 45
EQSTRA HOLDINGS LTD 47
GOSCOR RENTAL COMPANY (PTY) LTD 51
HIRE ALL (PTY) LTD 53
HIRE SOLUTION (PTY) LTD (THE) 55
JOHNSON CRANE HIRE (PTY) LTD 57
MASHOVA PLANT (PTY) LTD 59
MUTUAL CONSTRUCTION COMPANY (TRANSVAAL) (PTY) LTD 60
NIKILOG (PTY) LTD 62
PERFORMANCE PLANT HIRE (PTY) LTD 63
RAUBEX GROUP LTD 64
RENICO PLANT HIRE (PTY) LTD 67
RENTTECH SOUTH AFRICA (PTY) LTD 68
STERLING PLANT HIRE CC 70
TALISMAN FRANCHISE OPERATIONS (PTY) LTD 71
TEICHMANN PLANT HIRE (PTY) LTD 73
TORRE HOLDINGS (PTY) LTD 75
XMOOR TRANSPORT CC 77