Africa is one of Metso’s 13 market areas. Africa and the Middle East currently contribute about 10% of Metso’s global business. Barely four months into his new role as CEO and president of Metso, Pekka Vauramo made a strategic decision in February this year to declare Africa an independent market area within the Metso organisation.
It was previously managed from the Middle East office as part of Metso’s Middle East and Africa market area. Vauramo says the continent is a very important market with massive growth potential, hence the strategic decision to have it run locally by a dedicated team of people who understand the local operational conditions.
“One of the key decisions we made in the first few months of my tenure was to declare Africa an independent market area within the Metso organisation. I felt so strongly about it when I joined the company. I discussed it with the management team and everyone was more or less aligned to the idea. We had a well-run market area when Africa was still combined with the Middle East, but the management team was based in Dubai and we felt that the distance was not favourable for quick turnaround on key decisions,” explains Vauramo.
In February this year, Metso appointed Qasim Abrahams the senior vice president for Africa to head up the business on the continent. He was previously the company’s vice president for sales and service in southern Africa. His new role entails the end-to-end management of the business, including sales and operations across both the mining and aggregates segments.
Commenting on the decision to appoint Abrahams, Vauramo says the people factor is very important in every company. “We make equipment and cutting-edge technologies but people are behind everything that happens in the company. It’s important to have the right person with the right profile and personality to head up such an important market area. We have seen that Abrahams has those qualities to lead the team here and has what it takes to drive the Metso business to the next level. We have already seen better interaction between the business units operating on the continent in the few months he has been in this position,” says Vauramo.
South African-born Abrahams was definitely the perfect candidate to lead the business in Africa; having extensively worked on the continent, he understands the intricacies of doing business in Africa. Doing business in Africa is different to anywhere else in the world, and can prove to be backbreaking for the uninitiated.
So, what does Metso’s strategy in Africa entail? Abrahams explains that it’s all about making decisions closer to home. For the company to deliver value to its African customers, there is a need to understand the local African challenges. “To understand local challenges, we need to be part of the local environment,” says Abrahams.
Metso’s narrative in Africa is driven by the company’s quest for further growth on the continent. Abrahams and his team have ambitious growth targets for the years 2019-2022. “We have set a three-year growth target, aiming for double-digit growth year-on-year between 2019 and 2022 – both on orders and net sales, while maintaining consistent profitability,” he says.
“We are going through a phase of execution, making sure that we deliver on all our objectives. Last year was about getting the concepts right. We have laid down the strategy and for the next two years it’s all about execution, while the third year will be about stabilisation,” he says.
To achieve these ambitious growth targets, the team has clearly defined objectives. “The first objective that the senior leadership of Africa and myself have is creating a shared vision and strategy that we can communicate across the market area. Things have changed quite dramatically within the industry across the region in recent years, and our strategy and vision need to be aligned accordingly,” says Abrahams.
Another key focus area in the short term is to drive a customer-centric approach to the business. That includes migrating from a general sales approach to a key account manager approach. Abrahams considers the company’s key accounts as a ‘marriage’ between the customer and Metso.
The next focus area will be operational efficiency, followed by developing Metso’s presence on the continent. The company wants to develop an optimum footprint across the continent to better service its customers and products.
“In the long term, we want Africa to be the leader within the Metso group when it comes to customer-centricity and innovation. It is a major focus for us because we want to grow together with our customers,” says Abrahams. “We are already on the right track. To give an idea, during a recent review of Metso’s Lifecycle Contracts, we came out tops across the Metso group in terms of positive customer feedback.”
“We have spent a lot of time reorganising ourselves to further improve and become more professional. The goal – in the long term – is to grow the numbers, the people and our customers’ business,” he adds.
Over the past 18 months, Metso has been redeveloping its business in Africa. Abrahams has been part of a team that started the process under the previous vice president. He says results of these efforts are demonstrated by a marked increase in customer satisfaction between 2017 and 2018. A key part of the efforts has been the expansion of Metso’s indirect or strategic partner channels across the continent.
“We have spent time on developing our dealer and agent footprint in the past 12 months in countries like Zambia, DRC, Zimbabwe, Ghana, Mauritania, Ivory Coast, Senegal, Burkina Faso and Morocco, among others,” says Abrahams. “The strategic partner network allows us to be closer to the customer.”
The dealer development programme has primarily focused on the aggregates side of the business, with a few agents appointed to support the mining business. Metso’s aggregates business in Africa has grown in recent years to constitute about 40% of the total business on the continent. Appointing capable dealers such as Pilot Crushtec International has been one of the major drivers. Metso has enjoyed a successful relationship with Pilot Crushtec, which has become the third-largest distributor in the world in three years.
To further drive growth across other regions on the continent, Abrahams says during the past six months Metso has added three new dealers to its network in West Africa. They are already existing dealers of other brands in the region – with an established customer base – but mainly supplying yellow metal equipment.
“As we further seek to develop our aggregates business on the continent, in October this year we will be launching some new products which will primarily service the needs of this market. In 2018, we also introduced a mid-tier, Chinese-made crusher range called Sharoui, which comes at a considerably lower price than our premium offering and speaks directly to the needs of our aggregates customers, especially in West and North Africa,” says Abrahams.
Commenting on current market conditions, Abrahams says the sentiment remains positive in Africa despite a slow start in 2019. “We had few enquiries in the first quarter of this year on the capital side of both the aggregates and mining businesses. This is projected to change during the second half of the year. We expect an increase in enquiries and orders in the third and fourth quarter of this year. We are positive that we will see a marked increase in capital sales for our aggregates and mining businesses,” concludes Abrahams.