Caterpillar equipment is marking 100 years of presence in Kenya this year.
First introduced in 1925, the American-made Caterpillar excavators, graders, bulldozers, power generators, forklifts and loaders are one of the most recognisable equipment in Kenya’s construction, agriculture, energy, manufacturing and mining sectors.
The equipment was introduced in Kenya by Gailey and Roberts, which held the exclusive dealership rights for about 77 years before transferring them to Mantrac Kenya, a unit of Egyptian-owned Mantrac Group, in 2002.
Mantrac is owned by Mansour Group, a family owned conglomerate. Mantrac Kenya Managing Director Mohamed Ibrahim spoke to Business Daily.
Maintaining a brand presence for 100 years is no mean feat. What has kept the Caterpillar brand strong for that long?
This brand has been built on a rock solid foundation of integrity, team work and service excellence. These values have guided how we [Mantrac Group] treat our customers, collaborate internally and build long-standing relationships.
What has kept you the sole dealer of Caterpillar equipment for more than two decades in Kenya?
The main cornerstone of our operations is investing in people, building customer relationship, providing tangible value for money to our customers and giving back to the community. It is about diversity and innovation.
That is why you can find a Caterpillar on top of a hill doing a mining job, you can find a Caterpillar marine engine pushing a vessel to bring goods, in farming and paving a road, , can power that factory and also handle the materials that the factory is producing to the supermarket.
Caterpillar equipment and power systems are largely considered premium products, and out of reach for majority of businesses in Kenya, which are micro- and small-sized enterprises. What options do they have?
We believe in different value propositions where we can give the best product for your business.
It is not about the best product you can buy in the market. No. It is for what you do regardless of the size of your business. We are offering a multi-tier mix which include different products with different offering. The offering could start from used equipment or rent to own later, depending on your project outlook.
How does your rent-to-own option work?
You take a brand new equipment today, go to work and pay a rental fee for 12, 24 , 36 months or up to five years. We will agree on purchase price first, before you get the equipment. We will then keep a portion of the rental payments to help you own the equipment.
Let’s say you have $100,000 and you don’t want to invest all of it in the equipment. I will ask you for $5,000 rental fee, then allow you to keep $95,000 for other business management costs. You then choose a product and go to the site.
We will agree that in 24 months, this machine will cost you $10,000. So you rent for the rest of the period and at the end of 24 months, you pay $10,000 and it’s your own asset.
What asset financing options do buyers of Caterpillar in Kenya have?
We collaborate with most of big financial institutions and banks in Kenya. We also have our sister company Almasi Financial -a separate entity incorporated by Mansour Group in 2021, which is working on tailored products for customers on arrangements which are not handled by banks.
This is because for a start-up, it will be difficult to get loans from banks. This is where Almasi will come in, assess what you are going to do, see your feasibility study, check your business activities and tailor a solution for you.
What are interest charges for funding arrangements under Almasi?
They are within the range which you can rent a second-hand equipment in the market.
But remember you are getting new equipment. The rate is very close to normal bank rate. Sometimes, it is a difference of two or three percent, and the turnaround time for our sister company is 48 to 72 hours.
We are trying to have a wider reach to customers, and so we will agree on a metric that fits your business and make it competitive.
Businesses last year complained of cash flow challenges, amidst elevated interest rates. How did this affect repayments?
We have noticed issues with cash flow in general which resulted in slowdown in repayments in recent years. But I would say when you have the right assets and that asset work in your project, you will get paid eventually.
We witnessed a better repayment rate last year than the prior year, because we get closer to customer and ensure the products are working.
How did the contraction in construction sector impact your revenue last year as a result of budget cuts for projects in public sector?
The slowdown has certainly created some headwinds. We mitigated this by pivoting to private sector players more. We went down to counties looking to give solutions.
At some point, we offered Almasi financial solutions and even rent-to-own solutions for our equipment, to ensure the job gets done. Generally, we had a drop of about 15 percent in revenue.
As you mark 100 years of Caterpillar presence in Kenya, what can we expect from Mantrac in the next century?
We are reinstating our commitment on what we are able to do. We are investing in innovation, in customer success. Mantrac is not just part of Kenya’s history, we are ready to help build and empower the future of Kenya for the next century.
We are looking at diversifying our offering of goods and services. We will do multi-tier offering so that our products will be accessible to more customers. We are closer to customers, but we want to get even very close because we can only succeed together.
