Thierry Pimi – Managing Director, Southern Africa Region, Cummins
Thierry Pimi, managing director of Cummins Southern Africa, highlights the opportunities and challenges that exist in the region and how they can assist Africa in meeting its energy demands. Additionally, he discusses the importance of South Africa for operations and the groundbreaking innovation Cummins is bringing to the market.
Could you please introduce yourself to our international audience and what exactly your role entails?
“South Africa is our base and the most stable market. We have been here for the longest period and the nation adds great value in terms of resources and expertise.”
I started in my home country, Cameroon, as a field engineer in the oil and gas sector, before moving to Canada as a consultant and then to Cummins HQ in Indiana. After seven years, as part of the African strategic development group, my first assignment was to lead the mining business and build our overall capabilities and support for OEMs. Three years later I took up the position as head of north and west Africa in Dakar, Senegal and in January 2016 I was appointed as regional manager of Southern Africa.
Within the Southern African region our main markets are Angola, Zambia, Botswana, Namibia, Madagascar, Mozambique, Zimbabwe and South Africa, as well as satellite nations such as Lesotho, Swaziland and Mali.
What is your initial diagnosis of the Southern African market?
It is the most economically integrated regional area in Africa an, compared to other parts of Africa, there is a relatively free movement of goods. Additionally, the region is more advanced in terms of infrastructure, such as roads and rail, and South Africa is the most diversified economy on the continent, with this spilling over into neighboring countries.
Furthermore, Southern Africa is very resource rich, with large deposits of uranium, diamonds, iron core, coal, copper and crude oil. This plays in favor of the heart of our business, such as in our areas of mineral extraction, oil and gas and power generation.
What are the key markets you are focused on at the moment?
South Africa is our base and the most stable market. We have been here for the longest period and the nation adds great value in terms of resources and expertise.Angola is another market we see great potential, despite it being a challenging place to operate in for a number of reasons, such as economy fluctuations. Unfortunately, we have experienced the impact of governmental concerns and currency devaluations in recent years. Furthermore, with the crude oil price still recovering, the need for our products is not the same as it used to be. Equally, the markets of Mozambique and Zambia offer great opportunities.
Within South Africa our opportunities are expanding with the government situation being handled and the mining sector being managed more diligently. Both these factors will attract greater foreign investment, and we are preparing for this by investing 25 million USD into our new HQ in Waterfall, Johannesburg. We also see potential in the automotive, rail and maritime markets.
How does the oil and gas sector fit into what you do?
Despite Southern Africa being rich in natural resources, the north and west regions of Africa have greater supply of oil and gas. Saying that, Angola is the third largest crude oil exporter on the continent and we are active in powering offshore operations as well as powering support vehicles that work in heavy duty processes, such as carrying large equipment.
Finally, South Africa is at the crossroads of two oceans, and transportation from east to west is possible. Therefore, we have set up larger operations within the marine sector in Durban.
With the great potential in the region, how well prepared is Cummins to take on the surge in demand?
Cummins is the world’s largest independent engine manufacturer, but at this point we do not build any engines on the continent. Therefore, the value we offer is after-market support, which is crucial as the majority of our engines last 12 to 15 years.
We can enter markets in two ways; either set-up the services before we have our products in the country or wait until we have products in the market before setting up our services. We do both. When the density of the operations is minimal, we train a local dealer to assist our customers, and once we reach a certain point, we either buy-out the dealer and take over the service, or set-up our own office.
In Botswana we just recently started full scale operations due to the largest diamond discoveries in the world, and in Mozambique I will cut the ribbon for our office next week.
Africa is in need of energy. How does Cummins contribute to the help Southern Africa meet its energy targets?
Power generation is one of our four global segments, from small generators for power telecom providers to full turnkey power plants. This is either work done by Cummins, or through partners who require our power generators and technical support to assist them.
In South Africa there is enough power for the next 25 years, with the grid mostly based around coal power, though in many neighboring countries such as Zambia, Angola and Mozambique this is not the case. Within the latter we are partnering with the national utility company to provide back-up generators if their hydropower production has issues.
Africa is still used as a distribution region. What capacity exists to extend these operations into areas such as production?
In order to construct a diesel engine, it entails 3000 different components; therefore, you need a good base of suppliers and manufacturers, something that Africa still lacks. Nevertheless, I do believe this is not far off, and South Africa does have the potential for production in the future.
Equally, within our new flagship Johannesburg site which will open in January 2019, we will have a rebuild center, allowing us to strip down high-horse powered engines and completely refurbish them, even giving our customers warranty as if the engine was brand new. This puts us, from a technology and process perspective, very close to the levels required for a manufacturing facility. Another point, even if you have a plant, you need enough OEMs to take on this demand, and Africa still does not have the numbers compared to other parts of the world.
What innovation is Cummins bringing to the party, and how well prepared is Africa to take on this new technology?
For the past century, we have been the world’s largest diesel manufacturer and have been at the forefront of leading technology. We spend more on R&D compared to our competitors, and now we are focusing on alternative sources of power. In August, last year we launched our first electric truck, as we see that this as the future, and we want to position ourselves there – in fact – electric high-power business unit is now our fifth business pillar.
In regard to how Africa is embracing this shift, we still lag behind in adopting this innovative technology and carbon emissions are still an issue. However, when Africa is ready to take on-board these changes, the technology would have been tried and tested in other markets. Saying all this, within the African mining sector we are testing new digital tools that analyze engines in real-time. This allows us to understand when an engine will fail, and where, so we can fix the problem before it causes further widespread damage.
How do you ensure success as you build towards your goals?
We cannot paint Africa with the same brush, as some countries are relatively new while others are mature. We must as a company move into African markets with key projects that will allows us to ride the wave of African development. And really the aspirations of the continent’s development hinge on the heart of what Cummins offers, and we see huge potential in the power industry. In fact, Africa is the only continent where the world energy gap is expected to grow by 2035.
Furthermore, we see potential in the infrastructure space as this is the basis of development, and also the area of extraction as local markets are large doors for opportunity in this area. Nevertheless, all this cannot happen with instability and currency devaluation, so success does not just depend on us but changes at the governmental level. Cummins must continue to build its capabilities and expertise so we are in the best position to take advantage of these great opportunities.