02 April 2008
If you want to know where the big potential access markets are, you could do worse than follow RIWAL. The Netherlands company, which has made a name for itself by pioneering undeveloped access areas such as Slovenia and Kazakhstan, is now targeting Brazil. At the vanguard of its new enterprise in Curitiba, Brazil, is Jim Röest, newly arrived in Brazil from his previous base in Europe.
“Obviously this is a growth market and it is very active for all kinds of construction equipment”, Mr Röest, a long-time RIWAL employee, tells AI, “other companies are also moving in, such as Genie and some European manufacturers.”
Mr Röest explains that in July 2007 the Brazilian authorities decided to tighten up health and safety regulations in an attempt to reduce the high number of accidents that occur in construction and especially as a result of working at height. Of particular relevance to the access industry is regulatory standard NR-18 (see box story on page 16). In its article 2 it states, “Lifting people using equipment not designed for such a purpose is not allowed.” Mr Röest expects this, together with rising labour costs, will help increase the use of powered access equipment.
RIWAL's rental operation in Brazil will open officially in early 2008. Mr Röest, who happens to have a Brazilian wife, is a little reticent in giving himself a job title, “I have managed the re-rental side, been involved in the international business and been a sort of ambassador for new projects,” he says. Similarly the RIWAL Brazilian operation is yet to be officially named due to legal and strategic issues, but Mr Röest refers to it as RIWAL Curitiba. Curitiba is the state capital of the Parana region. “The location is very modern,” says Mr Röest, “It is the heart of IT [Information Technology] in Latin America and very ecological with great public transport, it is very clean and has beautiful parks and outside spaces.”
An order for 20 JLG access units was placed some months ago for delivery early in 2008, these include: 45 and 60 ft articulated booms; 8/10/12 m scissors; 46 ft rough terrain units and 9 to 13 m, 3-4 tonne capacity telehandlers. The fleet will also include some suspended platforms and aluminium scaffolding.
Although starting with just 20 JLG units, Mr Röest expects to have grown his fleet to 100 in the first year; by the end of the second year RIWAL expects to have invested some €5 million. However, Mr Röest is quick to point out that, because of taxes and import duties, equipment is around 50% more expensive than in Europe. “There is also a great deal of waiting about and red tape to deal with,” he says.
Growing the market
Mr Röest believes that the rental and re-rental markets in Brazil are picking up: both contractors and subcontractors are starting to prefer the flexibility that renting provides, although re-rental is still not a common practice. “We expect to grow the business by our own efforts more than by commercial forces,” he said. “I want to grow and educate the market; elevating the whole market with a high quality of service based rental.”
In its favour is a very buoyant construction market. In January 2007, for example, Brazil's President Lula announced a BRL504 billion (US$257 billion) initiative to boost growth in the country. The PAC (Growth Acceleration Plan) aims to renew investment in the country's roads, ports, airports, housing, and sanitation sectors to accelerate economic growth from 2.6% to 5% by 2010.
Mr Röest aims to make RIWAL a one-stop shop for access rental. “I want to provide good value for money and equipment with high reliably, durability and efficiency. The business will provide operator training and be service based - I want to be able to service customers within two hours,” he says.
As to selling access equipment in Brazil Mr Röest does not rule it out, “We will be predominantly a rental and re-rental company, but I wouldn't walk away from a sale if customers' wanted to purchase equipment.” Mr Röest has a similarly flexible attitude to future expansion of the Brazilian rental business, “We are not planning to open at any other locations at the moment, but I wouldn't rule it out in the future.”
Mr Röest appears very confident. “With so many major construction projects being announced in the area,” he says, “it is just a case of choosing the first customer.”