Welcome to part two of Forkliftaction.com's focus on materials handling in the UK. In this final article, Forkliftaction.com has interviewed the UK's industry heavyweights and concentrated on the big news that has shaped the industry in 2003.

Unlike other world materials handling industries, 75% of the 30,000 forklifts sold in the UK this year were contract-hire purchases. That meant only a small percentage of manufacturers' customers were individuals; companies dealt mostly with large corporate customers.

Of the forklift manufacturers present in the country, Toyota and Linde command the lion's share of the market.

Stephen Moule, Linde Material Handling (UK) Ltd sales and marketing director, said the market had become a battle of service providers. Linde's weapons were its 25 customer support centres and 1,000 field service engineers.

"We all make pretty good trucks here. The real competition is to package products with excellent customer service and support," he said. "Most contract-hire arrangements are 58 months, so customers have a long time to be either dissatisfied or impressed with your service."

This year was one of consolidation for Linde UK, with no acquisitions. The biggest development was its re-branding from Lansing Linde to Linde UK, launched on December 1.

The move was a shedding of old ties. Linde acquired Lansing in 1989, and, until this month, had badged its products with both the Lansing and Linde logos. While that meant continuity for Lansing customers, after 13 years, it was time to move on, Mr Moule said.

"We believed there was room for confusion among new customers who may not have been familiar with the Lansing name, and we're doing more and more Europe-wide supply deals with UK companies, so it was good for branding and stability," he said.

Linde UK manufactures tow tractors, reach trucks and counterbalance forklifts at its plant and headquarters in Basingstoke, and makes its larger forklifts and reachstackers in Merthyr Tydfil, Wales. About 85% of its UK production is exported.

The company employs 2,500 and achieved GBP339.5 million (USD598 million) in sales last year, 42% from reach trucks, 36% from electric counterbalance forklifts, and 22% from electric tow tractors.

Looking ahead, Mr Moule, also a director of the British Industrial Truck Association (BITA), said the positive upswing in the market in 2003 should continue next year. Linde will launch one update and one new counterbalance forklift at IMHX 2004 in March.

"This year has seen a massive increase in short-term rental forklifts sold, more than double that of previous years, and this is a good indicator of the market's direction," he said. "We've had a very successful year, and all indications are for similar success in 2004."

Steve Hodkinson, managing director of Toyota Industrial Equipment (UK) Ltd, said 2003 had seen Toyota "continue to establish itself as one of the undisputed industry leaders in the UK".

"The largest independent survey of materials handling users in the UK showed Toyota and its dealers excelling in all areas, and 96% of Toyota forklift owners said they would recommend our trucks," he said.

"This sort of response reflects our core values: customer focus and quality of product, service and support. It also demonstrates how important it is to deliver on promises."

Mr Hodkinson said Toyota had launched the new 7FBEF range of three-wheel electric forklifts, which had been well received by the market and existing customers.

"The market has been stronger than we had originally expected, given the economic situation, but extremely competitive. The economy should pick up again in 2004 and we hope this will feed into the materials handling market," he said.

"Customers are looking for a product and back-up service they can rely on, and which can deliver real benefit to their businesses. Toyota will continue to prosper in this environment."

Mr Hodkinson did not provide sales or financial figures.

With contract-hire taking precedence in the UK, possibly the biggest development this year was Finning (UK) Ltd's April acquisition of Lex Harvey Ltd, the UK's largest independent materials handling company.

The CAD220 million (USD166 million) acquisition was "the most significant change in the market in five years", and a major turning point for Finning and its parent, Finning International Inc, divisional director Tom McCloy said.

He said Finning International had faced some tough decisions at the end of 2002.

"We launched a progressive growth strategy for the UK in 1999, and we'd grown organically by 50% through its implementation. After three years, we found the rate of growth could not be maintained without further investment in the UK."

So management was a crossroads, Mr McCloy said. "The conundrum was whether to sell the UK business or make acquisitions to ramp up Finning's investment. We approached the RAC, which was considering divesting its materials handling interests, and we were able to come to an arrangement which boosted us straight to the top of the market in one step."

The acquisition of Lex Harvey, which posted pre-tax losses of GBP4.3 million (USD7.5 million) in 2002, boosted Finning's materials handling business to 16,000 machines, more than 1,300 employees and a pro-forma annual revenue of GBP213.7 million (USD376.5 million).

Finning UK now has two prongs to its materials handling solutions attack: its materials handling division, supplying forklifts and materials handling machinery; and Hewden-Stuart, acquired in 2000, which supplies cranes, tools and lifting equipment on short-term rental.

Mr McCloy would not provide financial or sales data, but said the integration of Lex Harvey was ahead of schedule, and he expected it to be completed by the end of 2004.

"This year has been about consolidating existing businesses and gearing towards being the best service provider in the UK," he said. "Supply outweighs demand here, creating a competitive business environment. We may not be number one in terms of machines sold, but we're very happy with our progress."

This concludes Forkliftaction.com's coverage of the UK materials handling market. Forkliftaction.com thanks the professionals who contributed to this month's feature articles, and all the companies which advertised during "UK Month".