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VDMA sees brighter years ahead

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World Coal,

Germany’s mining equipment sector have “come out of recession”, according to the German engineering association, the VDMA, with an improving market forecast through 2018.

Turnover was 21% down in 2016 to EUR2.8 billion, said the VDMA, with domestic turnover down 36% and international revenue down 21%. International sales comprised the bulk of business, representing EUR2.6 billion of the sector’s total revenue of EUR2.8 billion.

“However, mining equipment manufacturers believe that this will bring an end to the days of sometimes two0figure declines in turnover,” said Dr Michael Schulte Strahaus, President of the Mining Association of the VDMA.

In recent months, prices for mined commodities have been trending upwards, resulting in a new willingness to invest in the sector, Schulte Strathaus said. In 3Q16, German mining equipment manufacturers registered a 12% increase in orders compared to the same period in 2015.

This uptick in orders will impact revenues in early 2018, said Schulte Strathaus, noting the lag time between the receipt of an order to its payment can be as much as 15 months.

The EU remains the largest export market for German mining equipment, taking a 20% share of the export mix. However, sales into Turkey are also robust as the country seeks to develop its mining sector to reduce dependence on imports, particularly of energy.

Schulte Strathause also saw a positive effect from the election of Donald Trump to the US Presidency in November, noting that Trump had promised to boost jobs in the US mining industry. The VDMA is forecasting the share of exports to the US will grow as a result.

The US currently accounts for 20% of German mining equipment exports, the third largest market after the EU and Africa, which accounts for 11% of exports and where Egypt and Algeria are the largest buyers.

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