Howden Africa hits the heights
At the end of October 2011, Howden Africa was listed amongst the top five companies on the Johannesburg Stock Exchange in terms of value to shareholders.
The prestigious list compiled by the Business Times newspaper includes the top 100 companies on the basis of their earnings for shareholders over the previous five years, and while Howden Africa has been included in the top 20 places for the past four years, in 2011 it rose to the number four position.
Following a dip in 2008–09 due to the global financial situation, the company’s impressively consistent rise in share price reflects its commitment to long-term thinking. As Thomas Bärwald, CEO of Howden Africa, pointed out, Howden does not deal in fast-moving commodities. ‘We can count our customers, and we have known them for a lifetime’. he said. ‘So it is important for us to supply very good customer service and very good technology’. He pointed to the continuing robustness of the local power and mining industries, and indeed mining activities throughout Africa, as being key drivers of Howden’s success.
As well as a thriving coal mining industry, there are many African countries with valuable mineral reserves and these are all either existing or potential customers for Howden products. The South African power company Eskom is also a major customer, and Howden Africa has supplied equipment for its new power generating stations in Limpopo and Mpumalanga. Maintenance work for existing power plants provides a valuable source of aftermarket income.
The Business Times listings are calculated on the basis of a both the share price and income for shareholders, and is taken over five years to provide a good indication of the general health of each company. With a compound growth averaging more than 40% over the five years, Howden is delivering exceptional results.
Mr Bärwald was optimistic about the future for Howden Africa, particularly in the light of the environmental controls that are becoming increasingly important. ‘We have very good products in that industry that have not really had a chance to sell, but we are positive that the new environmental legislation in South Africa will bring in more work for us.’