AFRICANGLOBE – Prospective investment in infrastructure and mining developments in East Africa is attracting heavy machinery makers into the region.
US machinery maker Case Construction is the latest entrant into the region through Cooper Motors Corporation Ltd as its dealer in Uganda and Tanzania for sale of backhoes, excavators, wheel loaders, crawler dozers, and skid steer.
Last year, Case Construction entered the Kenyan market to tap into infrastructural developments including roads, port and the construction of the standard gauge railway, the firm’s officials said.
“Our coming to Uganda and the rest of East Africa is timely because we have road expansion in the country, planned construction of a railway network from Mombasa through Kampala to Kigali, where most of the machines will be used to clear the bush and prepare the path for the construction of the railway,” Case Construction business manager Randhir Haripersad said.
Also, India’s Tata Motors, with a presence in 13 African countries including Kenya and Tanzania, opened shop in Kampala last week through Tata Africa Holdings Uganda Ltd, which will sell its Tata trucks, targeting construction and logistics industry.
Tata Motors head of international business R.T. Wasan said they expect the launch of Tata trucks on the Ugandan market and the East African region to shape the commercial vehicle industry across the region “with the latest global technologies.”
Tata Motors is one of India’s largest automobile companies, with consolidated revenues of $38.9 billion in 2013-14. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, South Africa and Indonesia.
The development, expected to tighten competition in the region’s commercial vehicle industry, comes barely a fortnight after Chinese machinery maker Sany widened its presence in East Africa with the appointment of Bemuga Forwarders as a dealer in Uganda, Rwanda and Burundi markets.
By entering the region, these firms intend to tap into infrastructural developments as well as oil and gas exploration across Uganda, which plans to start oil production in 2017.
In 2013, US machinery manufacturer Caterpillar Company signed an agreement with Mantrac Group to act as dealer for its heavy construction machinery in the Uganda, Kenya and Tanzania.
Currently, the East African countries, whose economies are projected to grow at an average of six per cent, are investing in numerous mega projects to boost trade. For example, Kenya, Uganda, and Rwanda are investing close to $14 billion in the standard gauge railway, which will be extended to neighbouring South Sudan, slashing journey time and transport costs.
Uganda plans to spend Ush2.7 trillion ($890 million) out of its Ush18 trillion ($5.9 billion) national budget towards improving road infrastructure in the new financial year starting July, while Kenya plans to spend Ksh675 billion ($7.03 billion) from its Ksh1.9 trillion ($19.8 billion) proposed national budget.
However, Tanzania’s development expenditure is expected to decline 26 per cent from Tsh6.47 trillion ($3.23 billion) to Tsh4.78 trillion ($2.39 billion) out of its Tsh19.853 trillion ($9.911 billion) proposed national budget.
By: Isaac Khisa