View of the future: Europlatform delegates discover the future of rental.
By Maria Hadlow21 January 2009
Industry leaders gathered to speak, learn, and think about the future of access rental during the second Europlatform conference, held the day before APEX in Maastricht, The Netherlands. Sponsored by Haulotte Group Genie and Skyjack, the theme of the day-long event was the trends and issues shaping the future of access rental.
Tim Whiteman, managing director of IPAF (International Powered Access Federation) welcomed the delegates and later spoke about the research into access rental being carried out By IPAF and the European Rental Association (see box).
The first speaker Christoph Schneiderbauer, managing director of Palfinger Europe spoke on the growth potential and opportunities in the truck mounted sector highlighting their use in wind turbine construction and maintenance. (see below).
Stefano Giusto, marketing manager for rental company Nacanco, described the company's growth in Spain and Italy. While describing the differences in the two national markets, Mr Giusto cited financial, human resources, and information management as key factors of success.
IPAF's president John Ball took the conference up to lunch with a talk on the importance of training including his own experiences of completing his PAL (Powered Access License) Card, just weeks before.
Lunch was an opportunity for networking and discussion on the topics covered so far, from the animated conversations it was clear that delegates had plenty to share.
Access International's Managing Editor, Murray Pollok spoke enthusiastically about the developing markets for Access Rental Hotspots. He pointed out that access equipment use is lagging that of other construction equipment, of which approximately 50% goes to developing regions. He said that assessing the potential of access market is "very difficult", but that there are developing markets in non-Western Europe, the Middle East, Latin America, and South Asia/Asia Pacific, and Africa.
Peter Jones of Lavendon Access Services told the audience why there should be zero tolerance to accidents (see below).
Anders Collman, head of communications, Cramo Group, and Martin Freland, head of quality, environment and working environment department, Cramo Sweden, shared that company's experiences in Benefits of being an Ethical Rental Company. They said that "...forming a common framework for social responsibility", training, and implementing measures to reduce effects on the environment make a "likable company", which is good for business.
After a break Ian Keam-George, chief executive of telematics company Enigma Vehicle Systems, described the technology to link equipment in the field with owners and depots, but also framed the management context for selection and implemention.
With his usual high energy style Jeff Eisenberg gave the last presentation of the day: talking about financing a rental business the modern way.
The conference ended with a reception at which the delegates had a chance to further question the speakers and make valuable contacts with other attendees. If you couldn't make it to this year's Europlatform conference, look out for next year's dates and programme, early next year.
Europe's Access Market
Aerial platform rentals in Europe account for approximately 20% of Europe's €23.5 billion equipment rental industry, according to preliminary results from IPAF and European Rental Association (ERA) research.
Tim Whiteman, IPAF's managing director, said the preliminary results also revealed marked differences between countries, with the powered access representing 25% of the UK rental market compared to 20% in France , 19% in Germany and just 14% in the Netherlands.
The study - conducted by consultant Global Insight - reveals that around 43% of Europe's access rental market is generated by the construction sector and that the average age of the European access rental fleet is 4.8 years, with fleets having grown by 25% in 2006 and by 35% last year.
IPAF is also working with the American Rental Association on similar research for the North American market, and preliminary results indicate that access rental represents 35% of the total US$25.6 billion equipment rental market. North American fleets, according to the study, grew by 34% in each of the years 2006 and 2007, but will not grow at all this year.
Financing a Rental Company the Modern Way
You might think, listening to Jeff Eisenberg, director of acquisitions and investments for rental company Riwal, that financing an access rental company is changing as rapidly as the technology of the equipment. His points resounded in the light of the current credit crunch and other economic changes.
Mr Eisenberg's first point was that access rental companies evolve through stages, and that financing needs and opportunities change as well. Fulfilling those needs are banks, venture capitalists, other investors, and stock markets.
The finance expert stressed that banks work on 1 to 2% of interest differences and that hey are risk averse. Banks like to loan for thing that "...they've seen before." They will make "...a hundred small loans, not one big one". Things a bank likes to see: owners that have done it before and who have made a capital investment themselves, and business plans that look familiar.
When venture capital companies pick up a business plan, they read the last page first, according to Mr Eisenberg, because they first want to know "...how they will get their money out". That type of investor wants to know to whom and when the company will sell, and it is often the venture capitalist - not the industry professional - who makes those decisions.
One key point Mr Eisenberg made about stock markets is their volatility. Not only are they unpredictable in terms of price movements, but also the relationship between earnings and share prices changes. He predicted that several publicly-traded access companies will go private over the next few years.
Mr Eisenberg said that a new breed of investor is one who "...has made money in the industry and understand the pros and cons and the markets." He closed with the comment that the "party (occasioned by the current credit crunch) is not over."
Meeting the training challenge
IPAF president John Ball said there was the potential to train up to 1 million platform operators in Europe every year if the rest of the region matches the enormous adoption of PAL (powered access license) cards in the UK. IPAF will issue 80000 cards in the UK this year.
Mr Ball told delegates that operator training represented "a huge opportunity without capital risk, and promises some good returns."
The organisation started its operator training scheme in continental Europe in 2003/4 and it has risen rapidly since. However, the number issued still represents a small proportion of a growing demand. Mr Ball, who himself recently undertook PAL card training in Dublin, said there was the potential to train 110000 operators a year in Germany, 75000/year in Italy and 55000/year in Spain.
The IPAF president also predicted that demand for training in Eastern Europe would rise, triggered by the large number of multi-national companies investing in facilities there and which will require higher levels of safety awareness from contractors and suppliers. "They will change the rules, and increase the awareness of safety", said Mr Ball.
Even at 80000 cards a year, Mr Ball said there was the opportunity to expand training in the UK; "We believe the UK is not even close to saturation - in five years time 80000 people will need retraining [the PAL card licence needs renewed every five years]. As we penetrate the market, the statistics will increase dramatically for retraining, as well as for new trainees...it's easy to see how we can reach the figure of 1 million operators."
Mr Ball, who is managing director of Height for Hire/Easy UpLifts in Ireland, also urged senior managers and owners of rental companies to undertake training; "It is important to emphasise that every director and senior manager of aerial companies worldwide should do the programme...One thing the PAL training did for me was to focus [my attention] on the inherent dangers when somebody is using a machine untrained. I think it is very important to do this programme."
Growth potential and opportunities in the truck mounted sector
The market for truck mounted aerial platforms in eastern Europe will grow annually at 15% up to 2011, fuelled by construction growth and enormous expansion of wind power turbines, said Christoph Schneiderbauer, managing director of Palfinger Europe.
Mr Schneiderbauer said investment in large truck mounted platforms would follow the enormous planned expansion in wind turbines, particularly in Eastern Europe, with a 33% annual increase in wind power forecast up to 2015.
Mr Schneiderbauer said the western European market would see a much more modest annual growth rate of around 5% over the next few years. "The picture in eastern Europe is quite different. We expect annual growth of up to 15% within the next three or four years."
The market for larger machines - 40 m and over - would also benefit, he said, from increased construction activity in large buildings and major projects, such as the Ukraine/Poland Euro 2012 football tournament. "Due to the energy sector, it is expected that the market share of >65 m platforms will increase", he said.
Mr Schneiderbauer also said that the proportion of non-construction activity for truck mounted platforms has increased from around 30% in 2003-4 to over 50% now, with both wind power projects and telecomm work leading the diversification trend.
A zero tolerance approach to accidents
Borrowing a term from engineering - zero tolerance -- Peter Jones, head of UK technical services, Lavendon Group plc, said that the acceptable number of access equipment accidents must be zero. There is no allowable margin of error. "Any accident with a work platform is a failure of a ‘safe system of work'", he said.
Mr Jones pointed out that "real" total cost of accidents, like the ice below the waterline of an iceberg, can be ten times the evident costs. These include loss of production, threat of prosecution, claim settlements, and reluctance of outsiders to invest.
Against those costs, said Mr Jones, are the tangible benefits of a zero tolerance approach. These are: improved quality of work, higher productivity, better staff well-being and improved customer perception.
Implementing zero tolerance means "creating a positive safety culture," he said. Essential to that is an "absolute commitment from the top". Additionally, a commonly-held strategy must lead to feasible, yearly plans having milestones and requiring participation at all levels of the company.
Mr Jones admitted that applying zero tolerance was not a ‘quick fix'. He said resistance could span apathy to obstinacy, but he also offered guidelines for overcoming resistance. These include: ensure practicality of the plans, communicate their reasons, phase introduction of changes, expect and tolerate some failures, determine how to respond to deliberate non-compliance, and apparently most important of all - "stick with it, make it work".