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Monthly Archives: February 2019

  • Case Studies

    Sourcing 25-Ton Excavator for Construction

    Client: Construction Company

    Location: Kenya
    Product: 25-ton excavator
    Key Points:

    1. Client wanted to purchase a low cost option excavator
    2. We presented 7 yellow equipment suppliers
    3. We sourced a 25-ton excavator and handled all logistics up to Client's port
    4. Achieved cost savings of 20% for our Client

     

    Client during site visit to manufacturer's factory.

     

  • Camal attends the china intenational import expo (CIIE)

    It is a significant move for the Chinese government to hold CIIE to give firm support to trade liberalization and economic globalization and actively open the Chinese market to the world. It facilitates countries and regions all over the world to strengthen economic cooperation and trade and to promote global trade and world economic growth in order to make the world economy more open.

    Countries around the globe have been pushing for Balance of Trade. CAMAL has been attending forums which are aimed at trade improvement with China. CAMAL is currently attending the first CIIE in Shanghai China with a goal to solve Export problems to China. President Xi Jingping opened the event and gave a keynote speech with main points being:

    • China will  ease barriers for the following industries

    Financial services, Agriculture, Mining and Education

    • China will Increase purchase of Imported goods by lowering the tariffs involved
    • China will create a better business environment with reasonable system of rules including punishing intellectual property violators. China would work to protect the interests of foreign companies.
    • China will import as much as $30 trillion in goods and $10 trillion in services within the next 15 years.
    • China intends to make Shanghai the world’s leading financial centers by the year 2020

    The event has had thousands of companies attending from various countries. Kenya being one of the countries, there is a national exhibition going on with an aim of winning more market for the Kenyan products i.e. coffee.

    From this event, CAMAL intends to assist more people to export to China. The firm has deep understanding of demand cycles in China. CAMAL will therefore find the right market for products in China. CAMAL will also add value to the exporters to China by doing the negotiation on the clients behalf.

  • China's mining sector an opportunity for africa

    Overview of China’s mining sector

    Although Africa is home to some of the largest mining deposits, China retains the title of the world’s largest mining sector. It is a leading producer of minerals such gold, lead, zinc, coal, tin, iron and silver and the world’s foremost producer of rare earth, accounting for over 90 percent of the global production. Ironically, China is also the world’s top consumer of the same minerals and often has to rely on imports to deal with the internal deficit. There is no doubt that the future success of the Chinese economy is dependent on the ability to secure long-term access to mineral and metal resources.

    Consolidating the mining sector

    According to China’s Ministry of Land and Resources, there are over 100,000 mining companies in China with more than half of these classified as small-sized enterprises. So many small companies have resulted in inefficient mining in many areas and high-risk operations as smaller mines tend to be the epicenters of mining accidents, particularly in the coal sector. To address these issues, the Chinese Government has been consolidating the mining sector. As consolidation takes place, the smaller companies face these options:

    • Increasing output to government-directed levels – Companies with enough capital and reserve levels can simply increase output and comply. However, considering high output requirements and restrictive capital expenditure costs, this option is not always feasible;

    • Partnering with bigger players or other companies to reach the required output – This is the favored approach of most companies. However, competition between companies, difference in their cultures, divergence in cooperation terms, etc. mean this route is not always feasible;

    • Exiting the market – If the above two options are not viable, smaller companies must exit the market either by shutting down or going overseas. This is an opportunity for African companies, especially those seeking partnerships.

    Opportunity for African companies

    In some provinces such as Hebei, smaller (and often private) companies are being pushed out of the iron and steel sector. Some of these companies’ technology and processes are inherently not problematic; the key issues driving consolidation are low output value and a drive to reduce high energy consumption and high polluting industries. African companies’ opportunities can be summarized as follows:

    1. Opportunity for technology transfer – The opportunity for technology and expertise transfer is real. Given the vast scale of China’s mining sector, what is considered small scale here may actually be large scale in parts of Africa. Smaller players that cannot meet the output are forced out of the industry. But where shall they go?

    2. Opportunity for capital investments – As the small companies are pushed out of the domestic sector, they will either put their capital into other domestic sectors or go abroad in search of viable projects.

    3. Opportunity for exports – As the smaller companies exit and the global mining slowdown continues, China’s mineral deficit will continue to drive commodity imports, especially of high-grade minerals.

    4. The “going out” drive – It is not only the smaller players that are seeking to move out of China. With a steel sector that has been producing over capacity for years and facing decreasing government subsidies, even larger players have been moving out of China. Sinosteel, one of China’s largest iron and steel companies, has signed a cooperation deal with the Kenyan Government to jointly develop a steel plant in the East African nation.

    African companies need strategic partners

    It would be naïve to think that all the companies that have been pushed out of China’s domestic sector are viable partners. In fact, there are many that are indeed problematic in terms of excessive energy consumption, environmental damage, inadequate technology and poor safety records. This is why African companies must be strategic in selecting their Chinese mining partners. They should understand the implications of the offered technology/processes, particularly in terms of the environment. One needs to only visit the polluted areas in Inner Mongolia to understand that sometimes the best lessons coming out of China for African companies may be what not to do.

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