"Normet is more focused on growing organically and creating hubs. We will convert and migrate from a dealer-operated model to a go-direct model once there are scale economies and it is economically viable."

Johan Strydom

MANAGING DIRECTOR, NORMET AFRICA

January 12, 2024

Can you give an overview of Normet’s performance in Africa over the past months?

We have experienced significant growth since I joined in 2017, with a compound annual growth rate of close to 40%. This has catapulted us from a market share of approximately 10%, to a position where one out of every three machines that go on the market in Africa is sold by Normet. 

How does Normet add value to underground operations? 

Normet has machines in various underground mines, especially copper mines, including Ivanhoe’s Kamoa-Kakula mine in the DRC where we have a substantial fleet of equipment. This fleet is supported by a service contract and a vendor-managed inventory spares model, where we have the spares on site to support the machines. We have a similar operation in South Africa with another major mining company. Our business model is that where we deliver our machines, we enter into some service agreement to support the technology and ensure that we have a supply chain. This can be challenging in Africa as our central distribution warehouse is in the Netherlands and the time to get a spare part from the Netherlands to an operation in the DRC, for example, could be anything between three to six weeks. It is thus extremely important for us to ensure that we stay close to our customers geographically, especially in areas where it is difficult to operate such as Mali, Burkina Faso, Sierra Leone, and Eritrea. 

What is Normet’s approach to organic or M&A-supported growth in Africa? 

Normet is more focused on growing organically and creating hubs. We will convert and migrate from a dealer-operated model to a go-direct model once there are scale economies and it is economically viable. Two years ago, we established a legal entity in the DRC. This involved having a local partner due to localization requirements, and we are currently in the process of identifying warehousing and office facilities in Lubumbashi to be closer to our customer in the DRC, where we have now migrated from a partner-operated model to a go-direct model.

What are the risks of operating in the DRC? 

It is no secret that corruption is rife in the DRC and governance is a major risk. Your internal controls of operating your business and company need to be 100% focused to ensure that you or your employees do not fall into the trap of corruption. 

There is also a great security risk. In certain parts of the DRC, there are rebels, and when traveling, you need to do your risk assessments and plan accordingly. We are fortunate that the Kolwezi area is relatively safe. 

Can you present how Normet SmartDrive is being used throughout Africa and give your take on innovation adoption? 

Our customers are increasingly looking towards battery electric vehicle technology for efficiency and the decarbonization drive. Generally, Africa has been a late adopter of new technologies, largely due to a lack of skills in many countries. However, the need for improved efficiency and safety has increased interest in adoption, and it is extremely exciting that Normet recently signed a project which will kick off in Q4 2023 with our first battery electric vehicle (BEV). We are in the process of preparing to make this first introduction of Normet BEV technology a success.  

Technology adoption goes hand in hand with jurisdiction maturity and I believe that over the next five years, underground electric equipment is going to be more normalized in the most advanced jurisdiction of Africa. Having tier-one mining houses implementing our BEV technology into their operations in Africa will probably give its adoption rate great momentum. 

What is Normet’s strategy to attract and retain talent? 

Normet has recently invested in a 5,000 m2 custom-built facility in Johannesburg which we are moving into mid-October 2023. This facility will be a service center where we will be refurbishing machines, and we will also have a state-of-the-art training facility with virtual reality capability to train operators and do maintenance training of artisans on the customer end. This is a fantastic example of how the company is gearing up to support the significant growth we have already experienced, as well as the next growth curve to come with our BEV technology. Normet has recently acquired two Finnish companies, Rambooms and Marakon, and this technology will also be supported out of our new facility.

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