"As long as governments continue to provide stable policy frameworks with a long-term view, we should see Africa thrive on the mining front."

Stephen Smithyman

CEO, KANU EQUIPMENT

December 17, 2020

How has Kanu Equipment navigated the challenges brought by the pandemic?

Without the ability to travel, local partners have become key in overcoming the crisis. Unlike some of our competitors, Kanu Equipment benefits from experienced people and local, on-the-ground infrastructure, which has proved to be a core competitive advantage and the reason why we could be trusted to lend our support consistently. During these months, we strengthened our relationships with our stakeholders, clients, suppliers and our own people.

How do you think the pandemic will speed digitalization and innovation?

Key supply chain links, especially from Europe, have been affected by the pandemic; airfreight became very expensive and international travelling has been either halted or disrupted. Within this panoramic, companies need to adapt by increasing the use of technologies. The use of digital platforms for international communication was already commonplace before Covid-19. Since the pandemic, however, we have made greater use of technology- for example, when one of our clients faced a technical problem at a crane in Ghana, our crane specialist in South Africa intervened and resolved the problem remotely. Additionally, whereas we would normally send people for training in Europe, our suppliers are now developing online courses, effectively allowing us to train more people at a lesser cost. The pandemic taught us that people can work productively from home, and we can support customers and build strong relationships remotely.

Could you briefly tell us about Kanu Equipment’s reach and market position in Africa?

Our mission is to be the most supportive mining and construction dealership on the continent, and we see Africa as a place that enables multi-directional growth. Our immediate focus will be to expand in Eastern Africa, specifically in Rwanda and Uganda, but we are also evaluating opportunities in Zambia. The main principle underpinning our growth strategy is that we will grow where our customers and our suppliers need to grow.

What are your views on current opportunities in the mining sector in West Africa and the Copperbelt?

In West Africa, and particularly in Ghana and Ivory Coast, there is incremental growth spurred by the gold sector, and governments have done well in attracting and looking after investors. The Copperbelt remains volatile, while opportunities to the south, in Botswana and Tanzania, look encouraging. In the long-term, I see mining going more underground, and we are already securing the partnerships to make that transition possible and easy for our clients. As long as governments continue to provide stable policy frameworks with a long-term view, we should see Africa thrive on the mining front.

What are your views on the effectiveness of local content policies to realize skills transfer?

Local content policies are important in mining from both an industry-building perspective, and a skills development perspective. This is what we have been trying to achieve at Kanu Equipment by developing local expertise, ensuring optimal health and safety, and strengthening our position in the host countries. Our objective has been to provide economic freedom to all of our staff, whether this is by putting the children of our employees through school, or through equity ownership. Kanu Equipment is already incorporated as a local company in the DRC and Tanzania, and we are also assessing Ghana.

How is Kanu Equipment helping clients from a cost optimization perspective?

As a relatively small business, we monitor costs closely and have a tight control on expenses, which allows us to pass on the reduced costs to our customers. Importantly though, our machines are very cost-effective- the Liebherr machines are the cheapest to run, and the Bell products are also on the lower side of the cost curve. Cost reduction also comes down to our collaboration with customers, matched with our own experience in mining; we can sit down together and look at how both machinery use and production can be optimized. Our success hinges on theirs, so it is a very symbiotic relationship.

What are the challenges and opportunities of operating across borders, particularly in the West and Central African regions?

West and Central Africa are challenging places to operate in, yet Kanu Equipment has very experienced managers who have lived in these regions for many years and gained a very intimate grasp of the environment. However, operating in different countries incontestably offers us advantages: if we are missing a part in Ivory Coast, let us say, this can be delivered from Ghana which is only three hours’ drive. Kanu Equipment’s regional footprint is also essential in cases of technical breakdowns when again, we can mobilize mechanics from one country to another and leverage the resources in each. The membership to structures like ECOWAS permits easy movement of people so that a Sierra Leone mechanic can travel to Ghana and develop new skills. In recent years, national governments have also convened towards greater regional integration, and the upcoming AfCFTA agreement, to be enacted in 2021, will be a game-changer in the facilitation of trade and unlocking the potential of already existing resources; this should propel Africa’s rapid growth.

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