IMIESA speaks to Barry Fang, business manager for Barloworld SEM, about the success of the SEM brand in South Africa and expansion plans for 2019. These will be backed by a progressively expanding dealer network, comprehensive after-sales support and flexible financing solutions.

The recent bauma CHINA 2018 expo in Shanghai served as an ideal platform for SEM to launch three new models to a broad spectrum of local and international delegates. The models comprise the SEM 8 tonne 680D wheel loader, the SEM 822D track-type tractor, and the SEM 918 motor grader. These will join the growing SEM machine population in South Africa during 2019, where the 60-year-old Chinese OEM is represented by Barloworld SEM.

“When SEM launched in South Africa back in 2008, it was a virtually unknown brand, but one with a long and proud history in its home market. Today, SEM remains one of the market leaders for wheel loaders in China,” Fang explains.

“Following Caterpillar Inc.’s acquisition of a 100% stake in the OEM during 2008, SEM has also been on an international expansion drive, with a niche focus on developing regions like Africa and Asia, where value for money is a prime consideration. However, given the premium quality of the brand, strong interest and uptake is also anticipated from more developed markets.”

During 2017, Barloworld SEM was established as a stand-alone division forming part of Barloworld Equipment, the Cat earthmoving and power systems dealer for Southern Africa. SEM market segments targeted include agriculture, municipal services, construction, materials handling, quarrying, mining and general industry.

“Construction and mining have been two of the hardest hit sectors in South Africa during the current economic downturn,” says Fang. “The increased competition for work has inevitably resulted in price cutting and narrow margins, and this has had a knock-on effect when it comes to procurement. Customers looking for alternative earthmoving brands have found SEM to be a quality and affordably priced product that delivers.”

Sustained growth

Fang explains: “This is underscored by the fact that, since 2008, we’ve seen sustained year-on-year growth in machine sales in South Africa. First-time SEM customers are repeat buyers. We’ve also broadened our customer base thanks to SEM’s ongoing R&D programmes, which are constantly adding new models and machine classes to the line-up. The new product roll-outs announced at bauma CHINA 2018 are a case in point. So, customers with mixed fleet requirements have more options and reasons to invest in SEM.”

SEM, which originally started out as a wheel loader manufacturer, now also produces the 918 and the latest-generation 919 motor graders, track-type tractors, and the 510 (10 tonne) and 518 (18 tonne) soil compactors. A comprehensive range of work tools is also available. A quick coupler pallet fork is available on all wheel loader models.

BarlowSEM’s Qingzhou factory complex is a high-tech facility and the largest Caterpillar manufacturing centre in China in terms of land size. Qingzhou is fully equipped to manufacture and assemble all machines in-house, end-to-end, which – along with SEM products – include the Cat 950 GC wheel loader. Qingzhou also supplies components, like wheel loader buckets and axles, to other Caterpillar factories based in China.

During 2019, Qingzhou plans to produce approximately 12 000 SEM units, of which around 2 000 will be exported, in addition to some 6 000 Cat 950 GC units – a number of which will be shipped to countries that include South Africa and the USA.

Best-in-class owning experience

Within South Africa, SEM dealer parts inventories are supported by Caterpillar’s Johannesburg Distribution Centre, which also caters for Cat dealers within the broader African region. Barloworld SEM currently has 17 dedicated SEM dealers.

“We continue to refine our after-sales model to ensure that our expanding dealer network is equipped to provide class-leading service. This includes our own dealerships in main centres, the head office branch being Barloworld SEM Isando, as well as second-level dealers in towns across South Africa,” says Fang.

“Parts sales to end-users at all SEM branches are supported by an overnight courier service. This is supported by an e-commerce parts ordering system. Customer satisfaction is a critical part of our success and central to all Barloworld SEM operations.”

Going into 2019, one of Barloworld SEM’s strategies is to support the growth of niche multi-brand dealerships in response to customer demand. This will include the sale and servicing of allied Cat machinery, such as the Cat 320GC excavator, small compactors like the Cat CB14, backhoe loaders, skid steers and generators. An agreement has also been concluded to supply FAW trucks via Barloworld SEM dealerships.

“Our 2019 offering will include a mix of new, used and rental machines. We will also be offering highly competitive financing via Caterpillar Financial Inc., as well as through Standard Bank, with a key focus on SMMEs. Major markets we plan to support include road construction, which is a pressing priority,” adds Fang.

“Alongside product excellence, we understand how important service delivery is and that remains our primary objective during 2019. We want every SEM owner to become a repeat buyer, so we’re committed to ensuring this through the ongoing technical training of our dealer and customer personnel, plus refinements to our sales and service systems,” he continues.

“At the beginning of 2018, we set a new industry benchmark when we introduced a three-year or 6 000-hour warranty on our SEM 919 grader, which underscores our confidence in SEM machine availability,” he expands.

“During 2019, we plan to add further value through initiatives that include extended, one-year, unlimited-hour warranties on all models. “With SEM, customers have a value proposition that helps them win and stay in business,” Fang concludes.

About SEM

A leading Chinese OEM since 1958, SEM has a well-established presence in the global earthmoving segment and was acquired by Caterpillar Inc. as a wholly owned subsidiary in 2008. Prior to this acquisition, SEM traded as Shandong Engineering Machinery Co. Ltd. The company was subsequently renamed Caterpillar (Qingzhou) Ltd (CQL) in 2014. To further enhance the brand, Caterpillar approved the endorsement ‘SEM – A Caterpillar Brand’ in 2016. All units are manufactured at the Qingzhou facility in China.

Globally, SEM now has an extensive distribution network and products are sold and supported via Cat dealer principal-owned SEM channels. This operates separately from Cat earthmoving and power systems dealers, which, in the case of Southern Africa, is Barloworld Equipment, Barloworld SEM’s
sister company.