Breaking into the market
By Lindsay Gale25 March 2008
Piter Bigwood joined Atlas Copco Construction Tools LLC in 1990 as national sales manager, becoming president in 1992. At that time, the U.S. sales company only offered its small gasoline–powered rock drills and breakers, such as the FB 60, which have now evolved into the Cobra Combi and the Cobra Mk 2. “We still have those products, but we have brought in so many more things. Probably the biggest change was our division's acquisition of Krupp Berco Bautechnik in 2002. This really put us on the map – worldwide, we are now the number one manufacturer of both pneumatic breakers and hydraulic construction attachments. A nice double hit,” says Mr Bigwood.
He continued: “The Krupp acquisition was one of those serendipitous things. Atlas Copco had developed a strong reputation worldwide for its small solid body breakers. Krupp was arguably the world leader in heavy to medium breakers. So the merging of the two was one of those rare hand–and–glove occasions. We complemented each other perfectly. Since then, we have had to substantially expand the former Krupp plant in Essen, north Germany, several times as the full impact of Atlas Copco's global sales network has come into play.”
The company has seen growth of the hydraulic attachments business in the USA on a much steeper curve than that for the pneumatic tools. But what lies behind this? Mr Bigwood says: “There is an undeniable trend, which started in Europe, to use the machine/breaker combination, which is more productive, especially when the heaviest hand–held pneumatic breaker that can be used is 60 lb (27.2 kg), as against 90 lb (40.9 kg) in North America. This trend is also now operating on this side of the Atlantic, but to a smaller extent–you see a lot of these mini loaders that are starting to become popular, but nevertheless labour willing and legally able to operate 90 lb pneumatic breakers is still available.”
“However, the rumours of the latter's demise are some what exaggerated. I think pneumatic tools are here to stay. You will always have situations where the best solution would be an operator with a pneumatic tool. As a result, Atlas Copco is happy to be able to cover both bases.”
And it is here that one potential difficulty in distributing largely European–developed products into the USA comes to the fore. “We in the USA had to ensure that Atlas Copco continued to develop and produce 90 lb models despite the fact that Europe no longer allowed their use.”
In the USA, Atlas Copco's hydraulic breaker sales in 2006 were up 20% on 2005, a year that itself saw 20% growth following the introduction of the Atlas Copco branded Krupp breakers in 2004. According to Mr Bigwood: “We have identified a softening of the US market for hydraulic breakers as a whole in 2006, so our increased sales mean we are also growing our market share.”
Demolition is a big area for the company. “We are very happy with the progress we have made in this market segment. We are finding that some of the major players who have taken on our line are being used as a benchmark by medium and smaller sized contractors. Today we can safely say that four of the top five demolition contractors in the US are buying our breakers,” says Mr Bigwood.
Atlas Copco's entry into the heavy breaker category is relatively new and there initially was a degree of uncertainty concerning the brand. According to Mr Bigwood: “There was a period of time when people had to be convinced we would be able to support the product properly, that there was going to be an efficient distribution network close by, that parts and steel accessories were going to be readily available. Addressing these concerns was one of our main challenges in the early days, and of course, the broader challenge was, and in fact still is, conveying to the greater population out there that Atlas Copco is the largest hydraulic breaker manufacturer in the world.”
One thing is certain however, and that is Atlas Copco will continue to develop its breaker line up. Mr Bigwood says: “Our most recent introduction is the HB 2500, which we felt filled the gap between the 2200 and 3000. The nomenclature we use is the weight of the breaker in kilos. The 2500 has proved extremely popular in Europe, but we have only really just introduced it into the USA. I think it will probably take over from the 2200 here–it gives a bit more power, fits on similar sized carriers and has all our latest features and benefits. All our breakers are silenced – we have no need to manufacture 'silenced' versions, something in which we take a great deal of pride - and they are among the quietest breakers on the market.”
“In addition, we a see a global trend towards bigger breakers where the more traditional drilling and blasting is problematic, so you will see further developments from Atlas Copco in the large breaker side.” He would not be drawn into disclosing any further information; “Just keep your eyes on Atlas Copco,” was all he would say. And something big has come along that will be seen at Bauma–see the Bauma showguide, page 27, and of course, the cover.
But of course Atlas Copco does not just produce breakers. It offers a number of crusher attachments that are also available in the USA, but Mr Bigwood was candid; “I give due credit to Genesis and Stanley LaBounty. These are both very strong companies and between them they enjoy the lion's share of the US market for those products.”
“Because we came late to the party, it is going to be an up–hill struggle for us. A lot of effort has been put into our newest designs of what we call our silent demolition tools (SDTs) and I would be happy to put our latest generation CC3300 and CC1700 up against anybody's products. They are very competitive and have some very interesting features.”
So what expectations does Mr Bigwood have for the American side of Atlas Copco's business? “We are very bullish. We gained market share in 2006, and we are looking to continue that trend. We are seeing particular strength at the heavy end where I think the quality of the breakers, the features that we offer and the performance of the products, both in terms of how hard the breaker hits but also how long it lasts between services, are strong selling points.”
He goes on: “2007 will see the opening of our third dedicated service centre for hydraulic attachments and hand–held tools in Denver, Colorado [the first is in Cleveland, Ohio, and the second is in Austin, Texas]. We see that model will be part of our strategy going forward, with more locations established over time, dedicated to hydraulic breakers.”
Even the very best distributors, as well as they do for Atlas Copco, have divided loyalties, he believes, since they typically have a heavy equipment line and other lines. When a service centre is established, dedicated purely to hydraulic breakers, it can do things that even the best dealers simply cannot. “In our service centres, we repair all major brands of breakers, not just our own,” says Mr Bigwood. “In many cases, contractors buy breakers at trade shows or auctions, or from dealers who subsequently have changed brands, and they are left with orphan breakers.”
Even the better dealers are not actually repairing large numbers of breakers over the course of a year, believes Mr Bigwood, and the people who are carrying out those repairs are working on a wide range of equipment. “We can bring in people dedicated to working on breakers, with the correct equipment in place in a dedicated facility, with access to the correct OEM parts,” he says. “It's all about building relationships.”
Locating these centres has to be carried out very carefully, as Atlas Copco obviously does not want any potential conflict with its current distributors, but there are places where it makes sense, says Mr Bigwood.
Some customers have now begun to ask the company to maintain their entire breaker fleets, irrespective of manufacturer, and it is obviously Atlas Copco's hope that over time they will replace these fleets with its line of breakers.
For the future
Where new products are concerned, the fact that Atlas Copco is a European manufacturer has no impact on availability in North America. A new product launched at Bauma, for example, could be sold immediately in the USA, subject to availability. The nature of the two markets is such that there is no requirement for different versions of these products to suit each. “I cannot think of anything where breakers are concerned that would prevent a global product launch. The new product that will appear at Bauma has been under test in Sweden and Ireland for about a year – Atlas Copco is pretty excited about the results and thinks it will be quite an eye–opener for the industry.”