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It’s safe to say Bell Equipment [JSE:BEL] CE Gary Bell has had an easier time composing his letter to shareholders in the company’s 2010 annual report than the previous one. The past year marked a turnaround for the industrial equipment supplier, which was particularly hard hit in its European operations but lacked the sheer mass in its balance sheet of goliath Barloworld [JSE:BAW] to face the storm head on. However, Bell management’s prudence during the recession is admirable – as is Gary Bell’s choice on the subject of the abovementioned letter.
Bell has opted out of a two-page self-glorification exercise and instead tackled the delicate topic of manufacturing viability in South Africa and the impact on vertical industries, such as component manufacturers. Bell writes the company is “proud to manufacture many of our products here” but refers to the difficulties faced by his component suppliers. Many were forced to downsize drastically during the recession and are now battling to meet new and higher levels of demand. On the other side of the rink you have Asian suppliers raring to go.
Bell manufactures heavy machinery, but the problem it faces as it attempts to localise its content to meet the requirements of SA’s imminent industrial strategy for the automotive sector – the Automotive Production and Development Plan – is one extremely familiar to the local automotive sector. It’s also a problem when little is evident of strides made to resolve problems. SA’s component sector is declining in competitiveness, plagued by a politicised labour policy, skills shortages and uncompetitive pricing against imports due to a strong rand.
Bell’s references to supplier development and localisation are especially relevant when you consider the numbers of jobs and job possibilities in related manufacturing industries.
Bell has opted out of a two-page self-glorification exercise and instead tackled the delicate topic of manufacturing viability in South Africa and the impact on vertical industries, such as component manufacturers. Bell writes the company is “proud to manufacture many of our products here” but refers to the difficulties faced by his component suppliers. Many were forced to downsize drastically during the recession and are now battling to meet new and higher levels of demand. On the other side of the rink you have Asian suppliers raring to go.
Bell manufactures heavy machinery, but the problem it faces as it attempts to localise its content to meet the requirements of SA’s imminent industrial strategy for the automotive sector – the Automotive Production and Development Plan – is one extremely familiar to the local automotive sector. It’s also a problem when little is evident of strides made to resolve problems. SA’s component sector is declining in competitiveness, plagued by a politicised labour policy, skills shortages and uncompetitive pricing against imports due to a strong rand.
Bell’s references to supplier development and localisation are especially relevant when you consider the numbers of jobs and job possibilities in related manufacturing industries.
