Mining machinery manufacturers reverse trend

Mining machinery manufacturers producing in Germany
have achieved a turnaround. After falling earnings for four years in a row, the industry now anticipates a black zero for the trend in sales in 2017.

As Dr. Michael Schulte Strathaus, chairman of the Specialist Mining Association within the German Engineering Federation (VDMA), has stated, the manufacturers of mining machinery are expecting, on the basis of the figures for the first 9 months of the year, to at least maintain the previous year’s sales level of 2.95 billion €. Foreign earnings are expected to rise by 1 %, to 2.84 billion €, while a decline of 15 %, to 110 million €, is forecast for domestic sales.

Schulte Strathaus cited rising levels of foreign orders since the 4th quarter of last year as grounds for optimism. Compared to the previous year, orders from abroad increased by 38 % during the first 9 months of the current year alone. A whole year or more can pass between receipt of order and payment of invoice in this industry, with the result that increasing sales levels are also expected for 2018 and 2019. As Schulte Strathaus noted, their presence on virtually all markets of the world increasingly enables these companies to balance out even large market fluctuations. Around 96 % of turnover is currently achieved abroad. The industry employs around 11 600 persons.

Schulte Strathaus attributed the downturn in domestic business, to only 110 million €, to a “generalised uncertainty” in the German mineral-resources industry. The closure of the last two hard-coal mines is looming, while lignite suffers from an “uncertain future”. Political demands for a rapid withdrawal from coal-based power generation encumber the industry. Germany operates a fragmented, unpredictable and, in energy-industry terms, not always comprehensible energy policy, he observed. Energy supplies assured by means of lignite are being undermined, despite the fact that no substitute is yet available. Schulte Strathaus drew attention to the statements of experts who have long warned of incalculable risks for grid stability, and thus power supplies, within the country. The industry was nonetheless hoping to be able to maintain its sales in Germany during the coming year. Continuously diminishing earnings are anticipated in the mid- and also the long term, however.

The largest export market for mining machinery is the EU, which accounted for around 28 % of exports in the first 9 months of 2017. This was 7 % more than in the previous year. Sales consist, in particular, of conveying technology, safety equipment and accessories. Business in the tunnel-engineering sector is also going well, and undiminished, possibly even rising, sales are expected in 2018. The USA, the second largest export destination, accounted for some 15 % of exports, an increase of 5 % compared to the previous year. Schulte Strathaus affirmed that US President Donald Trump had largely fulfilled his declared intention of not running coal production down and of not closing mines. The corresponding jobs had also been saved. The industry is anticipating further increases in exports to the USA in the coming year.

Exports to China and Russia have also increased. Mining technology “Made in Germany” continues to be in demand in China, as the chairman of the VDMA specialist association emphasised. Concentration on high-productivity mines continues. Small, unsafe and inefficient mines are being closed and replaced by larger production units. In Russia, an investment backlog has arisen and was partially made good during this year. The manufacturers are expecting further improvements in their business with both countries.

https://mining.vdma.org

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