Market Analysis

TARGET MARKET

image The target market is identified as the supply of new and used conveyor belting - PVC, rubber and steel cord.

The target market is earmarked for the distribution of mainly used conveyor belts as well as providing technical backup in the field of conveyor structures, belt arrestors and related products in the conveyor system field.

The market for the new conveyor belt in South Africa is approximately R1.3 billion per annum. It is a fair estimate that in the case of one third of all belt, when replacement is required, second hand refurbished belt can be used. This market could therefore be estimated at R400 million per annum. The demand for second hand/ used belting is much higher than the supply thereof and for this reason the challenge lies in the sourcing of suitable second hand belts.

Procurement contracts with mining groups to purchase all their second hand belts are therefore essential to the success of this business. This aspect is well wound up through to personal contracts already in place which again is the main marketing thrust of the business, as the industry constantly buys back the reconditioned product.

This is a specialist industry in which success lies in knowing where to source, where immediate demand is, which depends on the expansion of existing plants, replacement of belts due to normal wear and tear or damage and the establishment of new plants.

 

COMPETITORS

 

A variety of service providers in this industry are operational. However, suppliers focus on wider areas of products and supplies and there is no supplier focusing so intensively on the second hand belting industry, due mainly to lack of knowledge in the field.

Smaller role players include conveyor idlers manufacturers, small conveyor structure erectors and in new belting, Dunlop and Goodyear are possibly the best recognized opposition.