PERSPECTIVE
TIME TO THINK SMART
By Ntsako Khosa
Since the downgrade in the economy, many industries have experienced a decline in production and
sales. This industry is no different; its survival will be determined by how professionals react to news
of a technical recession.
The plant and equipment industry has been hit by recent economic conditions in the country. This has caused some companies to re-strategise in
order to stay in the game.
J
ohan Louw, sales manager at
Renico Construction, encourages
the sector to “think smart”. The
result of the fallen rand has seen
escalating fuel costs and a lessening
demand for heavy-duty plant and
equipment. Louw explains how this has
a knock-on effect:
• Less demand from outside
companies for hired equipment leads
to machines standing idle — along
with their operators.
• A weak rand has meant that the
purchase of new equipment, and even
spare parts — all imported — has
become prohibitive.
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NOVEMBER 2018
• Fuel costs have escalated, making it
necessary to increase the ‘wet rate’
monthly.
Other challenges that have presented
themselves over the years include
infrastructure development and
government buy-in. “The demand for
property has slowed down considerably
lately. With the increased cost of living,
first-time home buyers are finding that
saving for a deposit and securing finance
is extremely difficult. The extensive
amount of time to move through all the
government red tape between securing
a site for development and actually
starting to build on it continues to hamper
development,” Louw says.
CEO of the Contractors Plant Hire
Association (CPHA), Clive Wicks, highlights
three industry activities, “Firstly, currency
fluctuations are always a problem in any
sector and the economy as a whole.
Prices are increased but they never seem
to come down. Secondly, job losses —
the hire industry is a service industry
and therefore relies on the sectors they
service to make their own companies
viable. Over the past few years, as the
economy has weakened, we have seen
both small and large plant hire companies
either ‘close shop’ or amalgamate with
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