Despite the financial and sovereign debt crisis, German mining equipment manufacturers stay on course for success. After posting record sales growth of 27% last year, companies expect turnover to grow by a further 20% to EUR 5.8 billion ($7.6 billion) in 2012. This means the German mining equipment manufacturers are among the few industries in Germany that have posted growth throughout the entire crisis, said Dr. Paul Rheinländer, chairman of the Mining Equipment Federation within the German Engineering Federation (VDMA), at its annual press conference.
Rheinländer sees the reasons for this in the high quality of products and the rise in demand for raw materials. Despite industry structure with many small and medium-sized companies the sector has succeeded in rising up to the challenges associated with exports. Since 2007, the turnover of the approximately 130 German-based mining equipment manufacturers has risen by an average of 13% annually.
For the coming year, however, the outlook is more circumspect. The financial and sovereign debt crisis is now also being increasingly felt on markets outside of Europe. According to Rheinländer, insecurity prevails. Both private and institutional investors are acting more cautiously. Some projects are being put on hold, he said. He does assume the sector will at least retain its turnover and may even increase it. In the medium and long term the sector is poised for further growth.
On the domestic market, revenue will go up by some 15% to EUR 470 million ($615 million) this year. Manufacturers also look to 2013 with optimism despite the German government’s decision to phase out domestic hard coal mining. According to Rheinländer, Germany would be exclusively dependent on imported coal after the closure of the three last mines. But “someday” mining hard coal will pay off again, he added, but then substantial efforts would have to be undertaken to exploit those domestic resources again.
Mining equipment manufacturers expect export business to rise by 21% to EUR 5.33 billion ($7 billion) in 2012; with 92% of the total turnover generated abroad. The almost 50% drop in sales in China was more than compensated by growth in other countries. For Australia alone, revenue is expected to grow by a factor of four. Accounting for 15% of total sales abroad, this country has soared up from ranking fifth to being the No. 1 export destination. But Rheinländer expects the increase in mining fees for coal to negatively impact the business next year. With the slowdown of the world economy, sales generated abroad would only go up slightly if at all, in 2012, he said.
Rheinländer explicitly welcomed the raw material partnerships concluded with Mongolia and Kazakhstan. These could not only make an important contribution to domestic raw material supply in the medium and long term but also positively impact sales for the industry. The capital goods trade fair “Future Mongolia”—endorsed by the VDMA as a conceptual sponsor and to be held in the Mongolian capital Ulan Bator for the second time now in June next year—provides an “outstanding platform” for raising awareness for the industry’s companies and products in the region. Mongolia, he said, is among the world’s richest countries in raw materials and promises excellent business opportunities, especially in the medium and long haul.