Southern Africa Construction Equipment Rental Market is expected to reach a revenue of over USD 3.5 billion by 2024 can be attributed to rapid urbanization and increasing government initiatives. Emerging economies in the region such as Mozambique and Zambia have shown sustained economic growth in sectors including manufacturing over the past few years contributing towards the Southern Africa construction equipment rental market. The Government of Mozambique is investing in large scale infrastructure projects. For instance, in 2016, the government announced a new project, with Japan investing USD 255 million in renovation of ports and railway capacity to facilitate mineral resources exports in the growing economies.
In addition, continued privatization, rise in health & safety regulation and growing labor is providing an impetus to the Southern Africa construction equipment rental market growth. The growing preference of renting these equipment in industry verticals such as mining, and transportation will provide growth opportunities to the rental companies in the Southern Africa Construction Equipment Rental Market.
High investment and maintenance costs for the equipment is a critical driving force for the Southern Africa construction equipment rental market growth. The cost of material handling equipment is relatively high, that restricts manufacturers, businesses, and OEMs from implementing and procuring high-end automated systems. Rental companies are seizing the opportunity and are procuring high-end equipment to rent or lease them to SMBs.
The practice of renting construction equipment instead of purchasing is proving to be beneficial for SMBs and large enterprises across several industries, leading to robust Southern Africa construction equipment rental market growth. Major growth is being witnessed in sectors such as transportation, and oil & gas, which have large scale investments. With such high level of investments, several construction companies are preferring to lease or rent heavy equipment, which will help them lower project costs. This approach is assisting construction companies to save maintenance costs and incur lesser technical charges. The reduced transportation, operation and maintenance requirements are also major driving forces for the industry revenue.
The development of advanced construction equipment with eco-friendly features and low maintenance will provide an alternative to legacy machinery in the coming years, thereby driving the Southern Africa construction equipment rental market. Purchasing machinery requires heavy down payments which avert a huge capital from key operating expenses and add extra expenditure in the form of insurance, licensing, interest on loan amount, storage cost, and tax, among others. By renting the equipment, companies are able to avoid the costs associated with inflation and depreciation, which would otherwise be factored in during replacement. Rental companies upgrade their equipment fleets on a regular basis, thereby providing access to advanced and new equipment and making it easier for the leasing party to act in accordance with the international and regional rules and standards.
The major companies operating in the Southern Africa construction equipment rental market include Altec Inc., Atlas Crane Hire, Babcock International Group PLC, Barloworld, Kanu Equipment and Kemach Equipment among others. Rental companies are appointing experts to ensure that all services provided are of superior quality to facilitate service excellence, precision, and customer retention & satisfaction.