Brad Boehler, president of Skyjack talks to Lindsey Anderson about the different challenges faced in markets around the world, and the company’s programme of expansion.
Skyjack is ending 2013 with a bang. The company reported strong growth and an overall positive first half of 2013; with revenues of US$320.3 million for the first six months, up 10.5% over the same period last year. Operating profits were US$39.3 million, up a healthy 82.8% due to strong sales of access equipment. The Canada-based company also celebrated its first year anniversary in Brazil; manufactured its 250000th machine; started a quest to find the oldest Skyjack working scissor lift; and opened two sales and service centres in Scandinavia and Germany. One would think Skyjack’s parent company, Linamar, would be satisfied with its progress – and it is – but it’s also anxiously awaiting 2014.
“The rental industry hasn’t backfilled all the non-activity they had for two and a half years, so there’s still aged fleet out there and there’s still fleet replacement to be had, let alone real growth,” says Brad Boehler, president, Skyjack. “We will have growth next year. There is traction for this idea that more and more companies in North America are looking at rental versus capitalising equipment, so that whole trend seems to be driving growth.”
Looking east
Mr Boehler sees a number of avenues for Skyjack to continue on its upward trend, including opportunities in Japan, Korea, China and Brazil. Skyjack has a “huge” fleet of used equipment in Korea, Mr Boehler says. “The used equipment market in Korea has traditionally been big and we know there’s a large number of Skyjack units that live and work in that marketplace today.”
Around Bauma 2013, Skyjack brought on Simon Cracknell as its new director of business development in Asia. Mr Cracknell previously worked with JLG Industries, Inc. as its senior director of sales and customer support for Northern Europe, but also lived in Singapore for a number of months on assignment from JLG. “We hired Simon there to help us in that marketplace and help us understand if we could and should be there,” Mr Boehler says. “We’re looking to see whether or not we’re going to open a company store there.”
Mr Boehler and his team want better representation in Korea while considering if they should sell new equipment into the country. Korea is rich with ship building, construction manufacturers, car manufacturers and other global entities; there’s a large manufacturing base established in the country. Skyjack has had contract representation in Korea for quite some time (Cracknell focuses more on other regions), but the market’s dominance with used equipment versus new equipment might not justify having boots on the ground.“When you look at the used market, though, we can funnel our equipment there and we can capture a lot of parts sales,” Mr Boehler says. “Those two things – parts and better representation – mean we will do something in Korea in the not-so-distant future.”
Also on the boiler for Skyjack is more activity in China and Japan. “China is a struggle,” Mr Boehler says. “It’s all about figuring out who can sell what in China.” Skyjack is looking at potential plans for its involvement in China, but they’re not on the cusp of opening a manufacturing facility there, despite synergies with parent company Linamar.
“Linamar has a manufacturing facility there today and they’re building another, which is going to open soon,” Mr Boehler says. “We have a foot in the door, meaning we have technical people on the ground and we have manufacturing on the ground. We are buying things from certain vendors in China today and I think as we continue that process, it’s a matter of doing the right things.
“We ensure our suppliers are meeting standards – supplying us with good products on time. As we develop, and once we have a local supply chain we can deepen there, that’s the first step into the manufacturing environment.”
And that’s not the only place Skyjack wants to put its toes; the company is also looking to grow in Japan. “We’re looking at new products, new markets and looking to expand the customer base that we’re already in,” Mr Boehler says. “In Europe and the UK, it’s the same thing – there’s potential for us to do even more there, we just have to focus our efforts on getting more people involved, building on our reputation and convincing people that when they have our product in their fleet, it’s price competitive to start with, but it’s very advantageous. It doesn’t cost you as much money to operate and it lasts a long time.”
South America
In September, Skyjack celebrated the first year in operation of its parts and service centre in Indaiatuba, Sao Paulo, Brazil. The company says its centre benefitted customers by eliminating traditionally long lead times associated with getting product into the country. Skyjack also assembled a team with extensive market experience to provide the best service to its customers.
“Our market share of scissors is very significant in Brazil,” Mr Boehler says. But, like most companies’ experience, it can be difficult to get parts into Brazil due to red tape and government regulations. Mr Boehler explains that dotting all the I’s and crossing all the T’s is one of the most important factors at not getting stopped in customs.
“We must be detail-oriented on getting things into the country properly because from what I can tell is that once you get flagged, you’re out to lunch,” he says. “But you also have to have a good flow-through of parts that are making it to the facility.”
Skyjack didn’t want to necessarily have to air freight items in at a regular basis, which would cost money (lots of it) and can take an extremely long time. But it also needed to be realistic as to what parts typically need replacing, so it aims to meet its customers’ goals without having stale inventory sitting around without use.
“We have accepted and we’re willing in some instances to air freight parts in because at some point, you’re always going to get an infrequent or ‘out of the blue’ request for a broken component,” Mr Boehler says, “but instead of having a $10,000 axle sitting in Brazil waiting or something that might never happen, we’ll air freight it in. The only issue with air freight, though, is the red tape. If we needed to send a large part to a customer in North America, we’d use UPS and it’d be there the next day and everyone would be happy. We just have to continue to work on these things.”
The company enlisted its worldwide parts division to analyse parts’ history. For instance, the team looked at wheel motors and how many Skyjack sells a year. “There’s no reason for us to think that for Brazil, there would be any difference in need than in North America, Europe or wherever else,” Mr Boehler says. “The demand should be relatively similar in all markets. In general, on part x, you should need x number on the shelf and that should be able to take you through our supply chain in order to refill your demand.”
Product development
With all the regional and world growth developments, Skyjack has put some of its product progress on hold. The company exceeded its goal for units sales of the new 63-foot SJ 63AJ boom, but despite this, the company is in no rush to flesh-out its boo line.
“This is going to take longer than I wanted it to,” Mr Boehler says of expanding its boom product line. “We’ve done a lot of refreshing of the boom product that we had produced previously and as we get more experienced in the boom product, we’ve found things we could do better.”
The company is developing its fifth boom product and implementing changes into its current offering. But Boehler says customers can expect – in the future – a new 80-foot telescopic boom and a 30-foot articulating boom, just not before Tier 4 changes are fulfilled and company resources (workforce and manufacturing space) are expanded.
Company plans
With so many projects and plans ahead, Skyjack’s parent company, Linamar, stands by it. “They are absolutely a committed owner,” Boehler says. “We’re an integral part of their business.”
When asked if Skyjack were ever to be on the selling block, Mr Boehler says everything in negotiable.
“If somebody were to come by and say, ‘Hey, here’s a bank-full of money for Skjyack,’ there is always that potential,” he says. “You can’t ever say ‘Nothing’s for sale,’ but there’s no desire on Linamar’s side to sell us. We’re going to grow quite aggressively over the next five to seven years so we fit in well with them.”
