HD Hyundai targets African construction equipment market
HD Hyundai Construction Equipment's 22-ton excavator that it will supply to Sudan / Courtesy of HD Hyundai XiteSolution
HD Hyundai XiteSolution (HDX), a subsidiary of HD Hyundai that oversees several construction equipment manufacturing units, is expanding its presence in the rapidly growing African market. This move comes as part of the company's strategic response to declining demand in China, according to industry officials, Wednesday.
The company said HD Hyundai Construction Equipment (HCE), one of its subsidiaries, recently signed a contract in Sudan to supply 60 units of heavy equipment, including six 34-ton excavators and 36 22-ton excavators, to the Northeast African country.
The deal was signed as Sudan resumed international trade after a civil war that broke out last year. HD HCE said it surpassed its rivals in reentering the Sudanese market.
Although the Korean firm’s sales volume in Africa halved last year in the wake of the COVID-19 pandemic, its revenue from the continent has seen a gradual recovery this year. The company expects its first-quarter revenue from this market to rise 50 percent from a year earlier.
HD HCE has diversified its sales channel in Africa by signing a contract with a dealership that is in charge of selling construction equipment in seven Western African countries, including Mauritania. Earlier this year, it signed new dealership contracts in South Sudan and Ethiopia.
HD Hyundai Infracore, another HDX subsidiary, has also expanded its presence in Africa.
Last April, the company said it opened an office in the Ghanaian capital of Accra. With the new office, it signed a contract to supply 20 excavators and nine wheel loaders for Angola’s largest construction firm to build dams for hydroelectric power generation.
The Korean firm also held a conference last year in the Egyptian capital of Cairo for dealerships in the Middle East and Africa.
According to global research institute Mordor Intelligence, the combined size of Africa’s construction market is expected to grow to $74.8 billion in 2029 from $58.4 billion in 2024. Considering the rapid growth rate of growth, the Korean government has also strengthened its ties with African countries.
On Tuesday, President Yoon Suk Yeol met with ministerial- and vice-ministerial-level officials from The Gambia, Mozambique, Mauritius, Kenya and Botswana, who are in Seoul attending the Summit for Democracy.
The Ministry of Trade, Industry and Energy’s officials also met with the ambassadors of Morocco, Tanzania and Kenya on Wednesday and started preparations for a business summit and various events to be held on the sidelines of the Korea-Africa Summit in Seoul in June.