Industry hopes for growth

News Story
- 31 Dec 2014 ( #699 ) - Australia
11 min read
A highlight for Lencrow in 2014 was becoming the Dieci dealer for Victoria and Queensland.
A highlight for Lencrow in 2014 was becoming the Dieci dealer for Victoria and Queensland.
Global uncertainty, the fluctuating local currency, rising unemployment and budget deficits dampened confidence and growth in Australia in 2014. The latest government economic outlook forecasts real GDP growing at 2.5% in 2014/15, before increasing to near-trend growth of 3% in 2015/16. It's a prediction mirrored by most players in the materials handling industry who see a slow start for business in 2015, but remain cautiously optimistic about growth prospects going forward. Forkliftaction.com News spoke to industry leaders about their successes in 2014 and what lies ahead for them in the new year.

Lencrow MD Ross Grassick says 2014 saw the company double in size by taking over the retail sales service and spare parts for the Nissan forklift range for all eastern state capital cities and South Australia.

"This year, we also became the Dieci dealer for Victoria and Queensland," he tells Forkliftaction.com News.

Looking ahead to 2015, Grassick says the company will focus on consolidation and "ensuring that we offer the continuity in service and value that Lencrow has offered for over 35 years".

He believes the market will be hire-oriented, "so we (are investing) in that as well as increasing our services to regional areas with units aimed towards their requirements".

Grassick predicts more customers will return to known brands after being flooded with products that have little or no support.

Another issue which must be addressed in 2015, according to Grassick, is the need for a government-endorsed program to inspect equipment every 10 years for compliance and safety.

Hystandard managing director John Flinn is also concerned. He says government needs to look at legislation for the inspection of forklifts in order to raise the standard of equipment in the marketplace.

"Cars are required to undergo a roadworthy inspection annually after three years and access equipment is required to undergo a 10-yearly overhaul, but there are currently no requirements for any inspections - annually or otherwise - on forklifts.

"Many people are injured, or worse, each year and there are often issues raised about the condition of the machines involved."

Hystandard opened a new building for its Melbourne branch in 2014.
Hystandard opened a new building for its Melbourne branch in 2014.
He tells Forkliftaction.com News the highlight in 2014 was the opening of a new building for Hystandard's Melbourne branch.

Steve Takacs, executive vice president and COO of Toyota Material Handling Australia, says the company's growth in 2014 was due to the fact that all branches are company-owned, "giving TMHA unprecedented coverage to support our customers".

Looking ahead to 2015, Takacs says the company will focus on satisfying customers' needs. "Our various factories are dedicated to designing cutting-edge equipment that meets the needs of our customers and, locally, all our people's energy is directed into providing pristine customer service, delivered as economically as possible."

Commenting on the industry in general, Takacs tells Forkliftaction.com News Australian business has inherently under-invested in capital equipment. "We believe this trend is likely to continue into 2015."

Steve Takacs, executive vice president and COO of Toyota Material Handling Australia.
Steve Takacs, executive vice president and COO of Toyota Material Handling Australia.
"Trading conditions in Australia remain tough, although the devaluation of the Australian dollar against the US dollar will ease export pain. Interest rates should remain stable, which should improve consumer confidence. We will continue to deal with the reduction of local manufacturing, in particular the automotive industry."

He says Australia needs good policy from government that stimulates manufacturing, using raw materials to produce goods rather than exporting them to emerging economies.

NTP Forklifts Australia capped off a successful year in 2014, which not only saw the first full year of trading of its Perth branch, but also the addition of Kalmar mobile equipment to its product range in November.

CEO Damien Garvey tells Forkliftaction.com News that next year, the company will focus on opening up the market further for its new Kalmar range as well as increasing marketshare for its existing TCM-Unicarrier, Jungheinrich and Manitou brands.

"We will be also looking at fine tuning our internal systems and processes, to make sure we are providing the highest standards in aftersales support to our large and loyal customer base," he adds.

Garvey believes the industry will get off to a slow start in 2015. "2014 was a challenging year for our industry, with the booked order intake already down by over 20%. There is a chance of some slow growth in the later stages of the second quarter which should continue later in the year. However, a lot depends on creating business confidence and the current government getting some traction with its difficult policies."

NTP Forklifts added Kalmar mobile equipment to its product range in November 2014.
NTP Forklifts added Kalmar mobile equipment to its product range in November 2014.
He says there is no doubt the perturbed global economy is having an unsettling effect on Australian businesses and their willingness to invest long term. "This has changed the buying patterns of industry for us in the materials handling environment. Customers are demanding more contractual flexibility, improved pricing options and equipment that can improve their efficiencies in order to satisfy their own customer demands. This has created additional challenges for the industry in general."

Garvey says state and federal governments need to be more business-friendly in order to create confidence. "They need to be more competitive in the global markets to attract new business opportunities into Australia. Cutting corporate tax rates for new entrants for a period of time, or offering government-held land at a reduced rate to entice overseas companies to invest are ways other countries compete. Why can't we?"

The biggest highlight for Kalmar Australia in 2014 was the introduction of its new Gloria reachstacker to the market, says brand manager Sonia Heinrich.

She tells Forkliftaction.com News another highlight was the strengthening of the company's dealer network, as well as expanding its technical resources through additions to the product team.

Kalmar Australia introduced its new Gloria reachstacker to the Australian market in 2014.
Kalmar Australia introduced its new Gloria reachstacker to the Australian market in 2014.
Looking ahead to 2015, Heinrich says the company will focus on strengthening its after-sales support. She predicts the Australasian materials handling industry will continue to be below trend, with a possible improvement during the third quarter of the year.

Ben Samarzia, general manager, Powerlift Material Handling, says the biggest development for the company in 2014 was its decision to revert to wholesale operations and to adding independent dealers in the retail network. "Both Lencrow and Allied were appointed as dealers and began servicing Powerlift's existing retail branch network."

He says the company's focus in 2015 will be as a wholesaler - to support its dealer network with industry-leading products from a world-class manufacturer in Unicarrier at a competitive price.

Commenting on the Australian market, Samarzia says overall market conditions are quite subdued and impacted by the slowdown in the mining sector.

"Customer relationships will be key, with a requirement to offer solutions to meet the customer's present and future needs," he tells Forkliftaction.com News.

He says the overall state of the economy is of concern, with customers experiencing their own market challenges. "All customers are looking for cost-effective solutions and are now expecting and demanding that best practice safety and fuel efficiency are included in the standard designs of forklifts. We are expecting the trend to continue with replacement of IC forklifts (with) the battery electric forklift.

"The Australian dollar volatility is an issue moving forward."

He believes that in order to stimulate activity in the sector, the government should look at some investment allowances for small to medium-sized companies to help with the decision to upgrade their materials handling equipment. "Given the important role a forklift plays in most businesses, it is an essential piece of equipment for many companies. Keeping fleets up to date with the most productive machines will assist forklift users in maintaining competitiveness in their markets."

James Maclean-Horton, marketing specialist with Baseplan Software, tells Forkliftaction.com News that the company's biggest highlight in 2014 was the development of its Field Service Mobility application for the rental and equipment management industries, which provides field service technicians with the ability to process all aspects of service and repairs, giving them full access to parts availability, upcoming service requests and back-to-base service communications, all over the air, allowing them to remain completely mobile and maximising their productivity while on the road.

Baseplan's Field Service Mobility application for the rental and equipment management industries was a highlight of 2014.
Baseplan's Field Service Mobility application for the rental and equipment management industries was a highlight of 2014.
He says the company will focus on additional mobility products in 2015 as well as expansion into the US and South Africa. Looking ahead, Maclean-Horton says the materials handling industry is still on the slow bounce-back from the GFC and general economic uncertainty. "Confidence is improving with return on investment (ROI) getting increased scrutiny. Business is now better placed to invest wisely in technology with tangible ROIs."

Commenting on the role government can play in improving industry conditions, he says that government spending on infrastructure is having a positive impact offsetting the decline of the mining sector. However, he believes reduction in costs to business would also help.

"The major issues are wages and availability of skilled staff at reasonable rates. A more flexible wages system would help. We are optimistic for the near and short term in terms of growth and stability but business should learn from the previous boom and bust cycle and be prudent in any future scale-up of business such that they (should) not have to suffer the pain of downsizing."

Pacific Material Handling MD David Hetherington tells Forkliftaction.com News that the highlight of 2014 was the company's marketshare growth within the timber sector in Australia and New Zealand. "We are currently assembling a new Sennebogen 880EQ equilibrium crane in Rotorua, New Zealand."

Pacific Materials Handling increased its marketshare growth within the timber sector in Australia and New Zealand in 2014.
Pacific Materials Handling increased its marketshare growth within the timber sector in Australia and New Zealand in 2014.
He adds that the company is also completing the acquisition of the Freightquip service business and formally bringing sideloader container handling trailers into the group.

He says the goal for 2015 will be "to continue to drive for efficiencies within our business now that we are at our premium size and turnover, while making sure we are listening to our customers".

Clayton Koch of KM Industrial Parts & Accessories tells Forkliftaction.com News that the highlight of 2014 was the company's opening in March. He says the focus next year will be on establishing KM Industrial as a respected supply option.

He says 2015 will be a slow grind for the materials handling industry with gradual cautious growth, adding that the battle to pass the budget will stall general public confidence, which will, in turn, have a lingering effect on the industry. Currency fluctuations will also have an impact.

For David Huisman, MD of Orbit Communications, the major highlight for 2014 was the release of the 'i-Tag" proximity detection and warning system, which provides major improvements in performance within warehouse environments, where drivers need to be aware of people that might be located behind pallets of goods or storage racks. The "i-Tag" system can detect people through solid objects in a 360 degree radius around the vehicle.

He says the company's main challenge for 2015 is how to help organisations bring about positive changes in worker behaviour around moving vehicles.

Also, the company will look at training staff and management for acceptance of new technologies and how they can best implement these technologies within their own specific business processes.

"In addition to this, Orbit will be extending the system to include extensive information gathering from the system to provide management with analysis and trend reporting features to help manage changes to the safety culture," says Huisman.

He predicts 2015 will see an increased emphasis on smart connected systems providing real-time analytics and efficiency information to improve logistics management for competitive advantage.

He tells Forkliftaction.com News there will be increased pressure from Workcover and insurance companies for business to utilise available technological solutions for improved workplace safety.

Also, new free trade agreements will increase pressure for efficiency due to further competition, while at the same time providing more opportunity for export.

He says issues affecting the industry include high transportation costs due to fuel costs, fuel taxes and high wages as well as the relatively high Australian dollar. "Recently, the Australian dollar has been falling and is at a much healthier position now than it was earlier in 2014. If the dollar was to settle around 80 to 82 cents, I would expect to see increased export opportunity in addition to increased purchases of domestic goods."

He adds that uncertainty concerning the government's policy on addressing climate change makes it difficult for business to plan ahead. He says the issue is also holding back major investment for development of green resource technologies.

According to Huisman, the government's strategy for economic improvement has focused on cost- and service-cutting in addition to increased revenue from taxes. "To me, this appears to be slowing the economy at the wrong part of the business cycle. Businesses across Australia appear to be struggling somewhat at this time and it may be more appropriate to stimulate the economy.

"Large transport infrastructure projects could offer both stimulation of the economy (as a result of government spending) as well as the benefit of being able to move goods from place to place more effectively with better roads and high speed transport options. Separating goods transport from private vehicles where possible may be worth looking at."

He lists connectivity as another significant issue. "The current system is unfairly distributed and offers poor performance across the board.

"Just like transport, I believe there should be a super-highway available for users that have critical business or health requirements and another network for casual domestic users."
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