Egypt has seen market volatility since the revolution in 2011 and devaluation of the Egyptian pound in 2016. The following rise in import prices, high interest rates and inflation caused heavy equipment buyers to opt for used equipment, a trend that began to reverse with the government announcing several new city projects, namely the New Administrative Capital and New Alamein cities, to relieve congestion in Cairo. The resulting boom in construction activity has made long-term investments more feasible for contractors and revived demand for new equipment.
Nadim Soliman, business development manager, International Development Programmes (IDP), a prominent dealer of construction and industrial equipment in Egypt, elaborates on the market trends from the perspective of IDP’s concrete equipment business.
“The new mega projects have given the needed boost to the construction sector, which has given confidence to EPC contractors and ready-mix companies to invest in new concrete equipment. IDP recorded exceptional growth during 2018–2020. For obvious reasons, 2020 was a difficult year, but we bounced back in the first quarter of 2021. Since then, market sentiment has been strong and our business, on the upswing,” says Nadim.
IDP has found success converting used equipment customers to buyers of new equipment. One such customer is EPC contractor Gharably Integrated Engineering Company (GIECO), which has invested in two Putzmeister stationary pumps and two 42m truck-mounted pumps. All four machines are due for handover this year.
“GEICO has been using Putzmeister equipment for several years and has dealt with IDP for maintenance and spare parts. We have been in talks with them for two years, convincing them to invest in new equipment and benefit from the support provided by IDP to keep up with the pace of their projects,” says Nadim.
New investments in concrete pumps also indicate of a growing demand for more vertical and horizontal reach. Putzmeister’s 56m truck-mounted pump has been the popular model for years, and there’s interest in the 60m model which IDP plans to launch in 2022.
“We see more demand for longer booms on truck-mounted pumps and stationary pumps with higher capacities for high-rise and long-distance applications. Putzmeister’s 60m truck-mounted pump was approved for the Egypt market last year, and we are waiting for the first units to be delivered to our yard. We’ve been promoting the pump, and from initial market reaction, we expect to sign up our first customer this year,” says Nadim.
In 2021, IDP sold 20 Putzmeister stationary pumps and truck-mounted pumps, establishing itself and Putzmeister as the leading suppliers of concrete equipment in Egypt with over 40% market share.
“2021 was a rebound year for us, and we see that continue into 2022. We have a good sales pipeline for this year because there’s increase in demand. However, we are unable to guarantee delivery of equipment on time because of the global supply chain crisis. The global production and shipping delays, among other factors, make it difficult to estimate deliveries for 2022.
“We are working closely with Putzmeister and all other partners to plan ahead and meet customer demand with as few delays as possible. The ideal strategy would be to expand our inventory temporarily and stock additional units to meet orders on time; however, that decision would depend on our cash flow situation this year,” says Nadim.
Equipment financing is another constraint in Egypt, made more severe by the high interest rates.
“Customers are always seeking attractive financing terms, either directly from Putzmeister or through our banking partners in Egypt. We need to bring confidence back into the market as high interest rates discourage potential buyers of equipment. Having been partners for over 40 years, IDP and Putzmeister often collaborate to offer tailormade financing solutions to reduce the burden on our customers. What we can guarantee though is 24/7 customer support and availability of spart parts,” says Nadim.
With the resurgence in infrastructure spending this year, IDP will focus more on the construction, mining and energy sectors. The company will also use the opportunity to revive its shotcrete equipment and industrial pump businesses.
“We represent the entire range of Putzmeister pumps, which have applications in various industries. Shotcreting, for example, is a recent technology in Egypt and has enormous potential for growth in construction and mining. We want to increase the market share for all categories of Putzmeister equipment, and therefore, we will be marketing shotcreting and industrial applications a lot more this year,” says Nadim.