Slumped gold price dents MACORP; company hopes better excavator will widen market share

Last Updated on Saturday, 26 December 2015, 20:59 by GxMedia

The slump in gold prices in recent months is taking its toll on a number of companies including Machinery Corporation of Guyana (MACORP), the local agent for Caterpillar, but that company hopes that a new line of excavators suitable for conditions here will help it bounce back.

MACORP’s Marketing Manager, Lyndon Bentinck conceded that with the decline of gold from a high of US$1,800 per ounce to just about US$1,200 per ounce, his company is recording fewer excavator sales since 2013.

“The price of gold has affected us. It has affected us, it has affected some small miners… Gold price is now fluctuating between twelve and thirteen hundred (dollars), a lot of customers now cannot afford because their production is not that high for them to pay their workers, pay for a machine and pay for their operations,” he  told Demerara Waves Online News.

With the drop in the price of gold, he said MACORP has revised its hire purchase rules and has “started to be a bit more selective” by selling only to established gold miners and those with sufficient proof of production levels. “Our entire financing portfolio has decreased. Yes and no, it’s a good thing because we need the business but then again is it worth the risk,” he said, recalling that at times “it’s hell to get the balance of money to pay”.

Following a decline in MACORP’s market share from 33 percent at the end of 2012 and 22 percent by 2013 due partly to cheaper machines being offered by competitors, the company expects to rebound with  Caterpillar’s D2 series hydraulic excavators.

He says the new line of excavators with mechanical engines is better suited for Guyana’s terrain and they are more resistant to poor quality fuel. “It makes the maintenance, it makes the servicing and everything more friendly to the guys who are here,” he told Demerara Waves Online News. Burnett says that’s unlike the excavators with electrical engines that require computers and experts to assist with maintenance and repairs.

MACORP is hinging its fortunes “a lot on that machine” by year-end or by the end of 2015. “We put a lot on that machine to help us to recover that market share,” said Bentinck who has chalked up almost two decades of experience with Caterpillar.

MACORP says Guyana and several other countries have been complaining to Caterpillar that the excavators with electrical engines were unsuitable to conditions like those in Guyana, resulting in that manufacturer making the D2 series hydraulic excavators and testing them.

MACORP’s Parts Manager, Asif Sahid says the company plans to open parts warehouses in mining districts like Mahdia. The company has already opened warehouses in Bartica, Aroaima and more recently in Port Kaituma.

The Port Kaituma outlet, he said, is doing very well not only selling Caterpillar parts but other  spares because it is easier for miners and other customers to readily purchase items on the spot or by express shipment  via  air or sea/river.