Scramble for Kenya’s heavy equipment market

Two of China’s biggest construction equipment manufacturers are eyeing big dollar infrastructure projects in the Kenyan counties as they seek to grow their overseas sales of heavy machinery such as cranes, excavators and graders.  

The companies, XCMG Construction Machinery Co. Limited and Sany Group – which recently expanded into the country – have unveiled a raft of measures aimed to net more sales from contractors working in various counties across the country.

XCMG, which opened its Africa office in Nairobi in July 2011, has signed deals with several commercial banks to extend up to 100 per cent financing for contractors seeking to acquire construction equipment from the Chinese firm.

To sweeten the deal, buyers will be allowed a grace period of between six and 12 months to cushion them against defaults in case of delayed payments by county governments.

“We have partnered with (several) banks including SBM, Stanbic and NIC Bank where clients can work with the institutions for between six months and a year without paying,” XCMG Kenya’s general manager Emmanuel Masika said.

On its part, Sany, which recently opened a showroom in Nairobi, has partnered with local building firm – Rhombus Construction Company– to try and capitalise on the growing popularity of its products in Kenya.

The two associates are targeting to sell 650 dump trucks and 200 concrete machines locally in the next three years in a deal valued at about Sh5 billion.

Headquartered in Changsha, China, SANY is one of the world’s largest heavy equipment makers. It is the first in its industry in China to enter the FT Global 500 and 2000 rankings.

The company is renowned locally for its range of ‘green mamba’ excavators that featured prominently in the 2018 demolition drive to rid the country of illegal structures.

The entry of Chinese giants in the Kenyan heavy equipment marketplace is expected to spark a new battle for customers with the dominant traders such as Caterpillar, Hyundai, and Komatsu.

However, the Chinese dealers are hoping to win the battle by adopting their global strategy of “quality equipment and (lower) pricing”.

“We are seeing more business in the counties on the rising infrastructure and building activities and we are going big for this market,” Mr Masika said.

The setting up of roads and large buildings in counties has created a new market for heavy machinery such as excavators, dump trucks, and loaders and this marketing is attracting a host of equipment dealers.

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