FORKLIFT ACTION NEWSLETTER - #15
Materials Handling Online -- FEBRUARY 02, 2001
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SPECIAL REPORT: TRENDS IN THE WORLD FORKLIFT MARKET
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The forklift industry is undergoing radical change, as the once simple materials handling landscape turns into a global battlefield, according to a report prepared by Dresner Investment Services' vice president Joe Kacergis and managing director Joe Lunkes.
Mr Lunkes and Mr Kacergis say that, with large acquisitions being announced regularly across the globe, the corporate world of forklifts is "boiling".
Purchases by investors and current market players seeking to expand are prompting manufacturers, concerned over perceived losses of control over their distributors and all-important market share, to fight back, the report said.
Manufacturers "have selectively encouraged some dealers to grow, persuaded others to sell, and selectively blocked the transfers of others".
Investors were looking to consolidate the industry through aggressive acquisitions and merging local dealers into larger enterprises.
"The era of the mega-dealers is fast approaching," the report said, with the formation of large, regional dealerships offering one-stop shops -- sales, service, fleet management and equipment rentals.
Operating in an industry estimated at more than US$15 billion annually in new and used truck sales, parts and service revenues, industrial truck companies offer investors attractive options, despite the industry heading into a cyclical downturn, Mr Lunkes told forkliftaction.com.
The industry's attractions were the fact that it was consolidating, the number of privately held companies with owners coming to retirement age, its low-tech exposure, and the industry trends towards outsourcing and rental rather than purchase.
Mr Lunkes said the only negatives currently affecting the market were the approaching downturn and "recalcitrant manufacturers thwarting efforts of dealers to consolidate".
Forklift distributors have diversified customer bases, but are seeing an increasing trend for customers to rent and lease to offset servicing and maintenance costs, the report said.
A competitive advantage for forklift companies is their extensive servicing capabilities. They have teams of in-house and road mechanics, and are putting more mechanics full-time into customers' sites.
"Although sales are an important part of a forklift business, profits are generated primarily from service, parts, fleet management, and rentals," the report said.
Mr Kacergis and Mr Lunkes said forklift business owners, like rental company owners, had only four strategic options:
1. Compete. Aggressively expand by acquiring other distributors or opening new locations. By growing product lines and geographic presence, owners can maintain a competitive position.
2. Get out. Achieve liquidity and diversification by selling the business.
3. Sell, but stay in. Sell, for cash, a controlling interest in the business but retain a minority equity stake in the acquiring firm.
4. Ride the storm. Maintain the status quo, and wait to see how things shake out in the industry.
"The forklift sector is at a crossroads and is beginning to face the consolidation challenges that rental company owners have been experiencing for the past three years," the report said.
Dresner is a global investment and financial company offering corporate services including mergers and acquisitions, capital-raising and launching new public companies. www.dresnerco.com
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RAPID 2001 EXPANSION FOR KALMAR INDUSTRIES
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LJUNGBY, Sweden -- Kalmar Industries will acquire Dutch company NHC Holding BV, including Nelcon BV, which manufactures equipment including ship-to-shore cranes, mobile harbour cranes, rail-mounted gantry (RMG) cranes and straddles.
The acquisition also includes Nelcon's sister company Groot-Hensen, a servicing company.
NHC's annual turnover is about US$72 million, but neither company will disclose the price of the acquisition. The deal is subject to approval from competition authorities.
Kalmar says it will now be able to offer more comprehensive container handling solutions. And it expects improved in servicing capabilities.
Nelcon markets an innovative range of diesel-electric straddles worldwide.
Kalmar, which manufactures equipment in Sweden, Finland, and the US, specialises in rubber-tyred yard gantry cranes, reach stackers, lift trucks, terminal tractors and diesel-hydraulic straddles.
The companies' product ranges are a perfect fit, says Kalmar Industries president and CEO Christer Granskog.
"There is very little overlap between the products. Nelcon's RMG and SSC cranes fill gaps in the Kalmar range, while Nelcon's diesel-electric straddle sits comfortably alongside Kalmar's diesel-hydraulic machines," he said.
"In the case of straddle carriers, some terminal operators prefer diesel-hydraulic machines and others diesel-electric. Now, Kalmar will be the first supplier offering (both options), in the same way as we offer a choice between reach stackers and lift trucks."
Mr Granskog said Kalmar placed great emphasis on service, and saw Groot-Hensen, based in Rotterdam, one of the world's largest ports, as an excellent addition.
"Kalmar has won several major maintenance contracts recently, including a 34-machine deal in Marseille. We now have a substantial servicing and maintenance capability in the North German ports of Hamburg and Bremerhaven. Groot-Hensen, with its Rotterdam operation, completes our infrastructure along the North European coastline," Mr Granskog said.
Nelcon managing director Tom Kocken said there was a growing concentration in the container handling equipment market worldwide.
"We know Kalmar is determined to develop Nelcon. By giving Nelcon access to Kalmar's global sales and servicing network, we expect our Rotterdam-based operation to be clearly more competitive than before, especially in the straddle carrier and RMG sectors," Mr Kocken said.
Mr Granskog becomes chairman of the Nelcon supervisory board, while Mr Kocken continues as managing director of Nelcon BV.
Meanwhile, Kalmar has expanded its terminal automation range with the addition of Smartpath, an automation package for straddle carriers and reach stackers.
Smartpath is a real-time container positioning system which can be used in conjunction with yard planning and equipment systems in container parks.
It is a multi-sensor positioning unit, with an inbuilt Global Positioning System, augmented by vehicle-mounted sensors and a large colour display.
In normal operation, no data input is required. Container positions are automatically relayed to a central database when container twistlocks are released.
Kalmar says Smartpath will increase terminal productivity by being able to pinpoint containers at all times. Smartpath also provides real-time positioning of handling equipment.
The first Kalmar customer to introduce straddle carriers fitted with Smartpath will be the Port Authority of Jamaica, at its terminal in Kingston. Twelve new Kalmar straddles are being built with the system - fully integrated and installed during the manufacturing process.
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RAYMOND WINS FIVE-YEAR HOME DEPOT CONTRACT
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GREENE, USA -- New York-based Raymond Corporation has signed a five-year agreement to supply US company The Home Depot with the majority of its electric lift trucks.
The agreement includes comprehensive maintenance contracts for all Raymond Reach-Fork trucks, Orderpickers and Walkie Pallet Truck models, national short-term rental rates and fleet management services.
The value of the deal has not been released by either company.
Raymond president and chief executive officer Jim Malvaso said The Home Depot planned to expand to more than 2300 retail outlets across the US by 2005, so the agreement would ensure a large number of lift truck orders.
"The Home Depot has been a significant part of our business since 1994. This agreement, unprecedented in our industry, is a result of the quality and reliability of our products, people and services," he said.
Raymond is a global supplier of warehouse trucks. The company says its products travel more than 400 million warehouse miles a year, and are in use by nine out of 10 Fortune 100 companies.
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HYSTER TAKES OVER BGM EQUIPMENT
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LEXINGTON, USA -- Hyster MidEast has completed the acquisition of BGM Equipment Company's Lexington, Kentucky, operation.
General manager Bob Risheill said the acquisition confirmed Hyster MidEast would continue to invest in the forklift industry and "expand our operations to provide the highest levels of service possible to our expanding customer base".
Hyster MidEast was formed from the merger of the former Bode-Finn Company and Quimbyh Material Handling, both in Ohio. The Kentucky acquisition is aimed at reinforcing Hyster's presence in the region.
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BRIEFLY...
SUPER GLUE MISHAP SETTLED
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DUBLIN, Ireland -- A forklift driver who claimed he suffered respiratory injuries after becoming stuck in spilt quick-drying super glue has settled a damages claim with his employer.
The Irish Times said Paul Douglas was trapped when he went help a woman who was stuck on all fours in the glue, after a drum of the adhesive spilled onto the footpath outside his employer's factory.
The woman had walked in the glue and become stuck, and, when Mr Douglas went to her aid, he also got stuck. He claimed he suffered injuries from inhaling the glue fumes.
JEALOUS EX LANDS IN JAIL AFTER FORKLIFT INCIDENT
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MALTBY, USA -- A man has been sentenced to 14 years' jail after ramming a co-worker's truck with a forklift and shooting him in the shoulder last October.
The Seattle Times said Brian Walter McGuire, 40, pleaded guilty to first-degree assault after the attack, which occurred outside an Everett cabinet shop.
As reported in November by forkliftaction.com, McGuire was upset that his ex-girlfriend had started dating his co-worker. Following an argument, McGuire rammed into the man's truck in a forklift and fired six shots at him.
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