Century-Old Barloworld of South Africa Eyes New Regions for Growth

Johannesburg, South Africa, Capital Markets in Africa: Barloworld Ltd., the South African industrial company founded114 years ago selling woollen goods, will consider opportunities for expansion in East and West Africa as the distributor of Caterpillar Inc. equipment seeks to double revenue by 2020.

Barloworld, which on Tuesday marked the 75th anniversary of its listing on the Johannesburg Stock Exchange, is seeking to grow annual sales to more than 120 billion rand ($9.1 billion) by 2020, Chief Executive Officer Clive Thomson said in an interview at the bourse.

“I think it’s a combination of organic growth in existing geographies, there will be some acquisitive growth and there will be some geographic expansion,’’ Thomson said. “We’ve made some early forays into Tanzania and into Ghana but I think East and West Africa will offer further opportunities for us.’’

Barloworld’s equipment division is the official dealer for Caterpillar’s construction, mining and industrial machine range in eleven southern African countries, as well as Spain, Portugal, Siberia and the Russian Far East. Its other businesses include new and used car dealerships, supply of farm and warehousing equipment and transportation services.

While the company projects a fourth consecutive decline in sales to the mining industry this year as producers grapple with lower commodity prices, Thomson said 2016 may the bottom for the sector. New contracts in the logistics business have helped offset weakness in the South African economy and demand for equipment from the construction industry has increased slightly compared with a year earlier, he said.

Barloworld has gained 40 percent this year compared with a 3.8 percent increase in the FTSE/JSE Africa All Shares Index. The stock fell 1.1 percent to 86.77 rand by 2:11 p.m. in Johannesburg.

While the Johannesburg-based company remains focused on emerging markets, it will consider opportunities in Europe beyond its operations in Spain, Portugal and the U.K., Thomson said.

Source: Bloomberg Business News