South Africa-based locomotives manufacturer and supplier Grindrod Locomotives aims to increase its annuity locomotive maintenance, repair and leasing to 50% of its total services by 2015, Grindrod Locomotives CEO Robert Spoon tells Engineering News.
About five years ago, Grindrod Locomotives’ business consisted of about 80% maintenance and repair services and 30% new build services, while a significant amount of maintenance work was generated from the new build contracts.
However, this changed in the past three years with new build contracts comprising 70% and maintenance and repair services comprising 30% of the company’s business – a situation that will become unsustainable, Spoon says, on account of the cyclical nature of the commodities and capital rail business.
“Although the company experienced a fivefold growth increase in recent years, as a sustainable strategy, Grindrod Locomotives has to achieve a 50:50 ratio in what the company provides as new build and what it provides in terms of maintenance and repairs,” he says.
As part of the company’s strategy to increase maintenance services and for the maintenance and repair business to achieve parity with new build services, Grindrod Locomotives has and is actively developing maintenance and repair hubs in various African countries, Spoon notes.
Established and operating hubs include those in Sierra Leone, the Democratic Republic of the Congo, Mozambique and Zimbabwe, while the company is establishing a new hub in Zambia, which is expected to be operational by mid-2015.
The standalone hubs comprise a local partner, including a general manager, the required support services, such as SHEQ, human resources and ERP information technology, technical planning as well as employing 80% local staff. These hubs also offer value added services such as wheel and wagon maintenance and repairs, Spoon explains.
Although Grindrod Locomotives initially planned for its main hub for maintenance and repair facilities to be established in Beira, in the Sofala province of Mozambique, the company has decided to move the facility closer to the coalfields near Tete, in the Tete province.
“While this is a new direction for Grindrod Locomotives, the project will still comprise the same scope of maintenance of about 50 locomotives, a workforce of about 120 people, as well as the same capital costs. However, the company will be able to complete phases 1 and 2 of the project simultaneously, as the workshop building already exists,” Spoon says.
Grindrod Locomotives will lease the workshop from Mozambique’s port and railways authority Portos e Caminhos de Ferro de Mocambique.
Locomotive workshop development and heavy maintenance will move to Tete, and are due for completion in the second half of next year, while light maintenance and wagon maintenance will be performed at the facility in Beira.
The Tete facility will service rail utility, construction and mining company fleets consisting of locomotives and wagons running on the Sena line, and in future service the fleets that will be introduced on the Nacala line to run from Nacala to Tete.
“Strategically, this also enables Grindrod Locomotives to investigate further servicing opportunities in northern Zimbabwe, Malawi, and the Nacala Corridor,” he says.
He adds that, while the company has a current turnover of R150-million in Beira, having access to an entire new railway line will double the long-term potential volume in terms of turnover and the number of locomotives the company currently services and maintains.
For the next year, Grindrod Locomotives will service 34 locomotives but also aims to service the eight locomotives currently used in the construction projects on the Nacala and Sena lines.
The Nacala line will also introduce 80 new locomotives that will be delivered from the end of 2015, which will require service, Spoon adds.
Spoon estimates that more than 60% of the locomotive fleets in Africa, excluding South Africa, are nonoperational, and in some countries the nonoperation amounts to nearly 100%.
Moreover, although locomotives have an average life span of 22 years before a major
recapitalisation intervention is required, the fleets in Africa are on average about 40 years old, or even older, Spoon says, noting that in light of this, rebuilds are significantly extensive, compared to the maintenance services and rebuilds performed on a locomotive that is 12 to 15 years old.
Botswana Rail Upgrades
Grindrod Locomotives was contracted to rebuild and upgrade the Botswana Rail locomotive fleet over the next two years, says Grindrod Locomotives rebuild manager Klasie de Klerk.
The company will rebuild half the fleet next year and half in 2016.
The upgrades will include increasing engine horsepower, from 1 500 hp to 1 800 hp, changing the entire locomotive electrical system to install an alternator for alternating current, installing electrical compressors, as well as installing a power control system called G-Track, which includes the G-Log data logging system, he explains.
He adds that a similar project was performed for a locomotive fleet in Zimbabwe.
In rebuilding and maintaining the locomotives, the company can, in most instances, ensure operation of a previously nonoperational locomotive, as well as extend the life cycle of the locomotive by another 12 years, while the new control system eliminates unnecessary failures, De Klerk points out.
A rebuild can also reduce or enhance fuel consumption by about 30% to 40%, as well as reduce oil consumption by about 99%, Spoon highlights.
Moreover, the rebuild projects and new build contracts all create demand for maintenance contracts, he notes.
Spoon estimates that the company is currently experiencing growth of 50% a year, in terms of fleet size, concluding that he predicts this to continue for at least another five years.