Feature: Byrne ahead

Headquartered in Dubai, UAE, Byrne Equipment Rental was established more than 20 years ago and has grown to one of the largest general rental companies in the Middle East. It has 450 employees and 13 offices and rental depots in UAE, Qatar, Oman, and the Kingdom of Saudi Arabia.

The company offers a wide range of equipment for rental from temporary multi-use buildings to generators, compressors, lighting towers, welding machines, material handling equipment, power washers, pumps, air dryers and much more.

In March last year, the company was 75% acquired by Saudi Arabian car leasing and rental company Hanco from Havenvest Private Equity Middle East and HSBC Bank Middle East for US$163 million (€144 million).

The Venture Capital Bank acquired the remaining 25% of the company. The deal included Byrne’s sister division, Spacemaker, a portable accommodation manufacturing and sales business.

For his part, Patrick Fallon has been associated with Byrne since 1990, and officially joined Byrne in 1994, shortly after the company formation, as a business development manager.

In 1997, he was appointed general manager and then went on to become group general manager in 2000, and then in 2008 became chief operating officer (COO), shortly after the company’s ownership changed to private equity.

Mr Fallon said that when he first joined the company, the original plan was to expand outside of the UAE in what were then emerging markets in Asia. But the company then decided to develop the brand in strategic locations in the closer gulf region.

Diverse fleet

“We have arguably the most diverse and largest fleet in the Gulf Cooperation Council region, with over 8000 items of equipment. We will be investing over US$25 million (€22 million) alone in 2015 just replacing and updating our fleet and support functions.

“In addition to this we have a firm objective to not only replace existing equipment, but also increase our fleet size by investing in new products and services.

“Significantly we have already started introducing heavy plant equipment and cranes along with blast resistant buildings and other industry specific products to better serve the oil and gas sector,” he explained.

Mr Fallon said 2014 had been a year of growth and change for the company, with many of its country teams relocating into much larger operational facilities around the region.

“Our new Dubai Head Office and primary operational facility at the new Dubai Industrial City, enables us to prepare, refurbish and rebuild equipment all in one location.

“This not only improves our response times, but our efficiency overall, allowing us to continue delivering cost-effective rental solutions to our customers. We also moved into larger premises all across the GCC.”

And Byrne expects to further expand in 2015, opening in new areas such as Kuwait and new regions of Saudi Arabia, where Mr Fallon said the company would be “aggressively expanding”.

“With the support of the Hanco Group, whose objective is to be the leader in the rental and lease market in the GCC, we are committed to the region and we will be determinedly growing our footprint,” he explained.

Mr Fallon added that while the company’s focus remained on its four main markets – construction and infrastructure, marine, oil and gas, and events – it was also looking at expanding into new sectors and markets.

“The objective now is that collectively we become the largest equipment rental and leasing organisation in the Middle East,” he said. “We are not specific or limited by sectors – we are looking to go beyond current profile offering, e.g. into healthcare and technology.”

“Rental continues to grow, even in the face of increasing competition – notably suppliers renting as well as selling,” Mr Fallon said. “Rental prospects remain strong in the Middle East with Saudi Arabia and Qatar featuring the strongest growth potential. The UAE is a more mature market, and it fits in to the most developed market category in the region.”

He said rental growth was being driven by the dominant Middle Eastern oil and gas industry, both upstream and downstream, while infrastructure and construction projects were also driving momentum together with industrial projects.

Events

But other, newer sectors are making an impact in the rental industry – not least the events sector, according to Mr Fallon. “In more developed markets (such as the UAE), we are seeing a large increase in the events market as these countries become attractive destinations for businesses, tourism, concerts, sporting events, etc.” Mr Fallon said.

“We signed a five-year deal with golf in Dubai, (supplying equipment and services at the recent Dubai Desert Classic).

"We’ve also have supported a great number of high profile events, like the Volvo Ocean Boat Race and the Dubai Rugby Sevens – these have really cemented Byrne as the only equipment rental company that can provide the complete of range of events equipment, be that temporary buildings and facilities, power or logistics.”

Byrne also has a foothold in the portable buildings rental industry supported by its sister company Spacemaker.

“The key benefit of modular building systems is flexibility,” Mr Fallon said. “Units are available in a wide range of sizes and can be configured to meet just about any requirement - whether it’s a multi-department office, accommodation for several hundred people, a new school, a single washroom, or medical centre, Byrne and Spacemaker have a building solution.

“With Spacemaker, essentially we have our own manufacturing company which really gives us a real market advantage. We can respond to customer demands more efficiently and are able to offer a more bespoke product to suit their needs.

“With the support of Spacemaker we now have a fleet of temporary buildings that uses unique modular systems with prefabricated modules that can be deployed very quickly, whether the requirement is a single modular building for any application to larger multi-story structures.

“Our earlier rental distributor agreement with Algeco Scotsman was discontinued as part of our overall strategy for rental of portable buildings, backed by Spacemaker's development of new product lines that were more aligned with our focus markets, especially in the oil and gas sector.”

Challenges

Meanwhile, Mr Fallon said that some of the biggest challenges facing the rental industry in the Middle East also came from its dominant economic sectors – oil and gas.

He said that falling oil prices and general uncertainty in the oil and gas sector posed a risk, together with the slow pace of infrastructure and civil construction projects for development coming on stream – projects are announced, but not coming quickly enough.

Another challenge of operating in the Middle East was the issue of original equipment manufacturer (OEM) distributor support, which Mr Fallon said remained poor at best – albeit with some notable exceptions.

“Many suppliers don’t stock product and parts to support the product to the same degree as in other markets,” he said.

In addition, he said the challenge of educating end-users of equipment as to the benefits of renting as opposed to owning equipment was another ongoing process. “There is a preference or tradition to own equipment, especially in the more emerging markets,” Mr Fallon explained. “Contractors carrying their own fleet is also presents a challenge” he added.

Nevertheless, Byrne seems well-placed to ride out these challenges, and is already well-establishded in the market. It is clearly diversifying its rental portfolio and spreading the risk throughout the region within many different sectors.

As well as its its increasingly diversified rental portfolio­, the company has also highlighted an ambition to target more new industries and geographies in this fast-growing region.

These ambitions are clearly shared by the company's new owner Hanco. When it acquired Byrne last year, Hamad S Al Sulaiman, CEO of Hanco, said, “The acquisition gives a strong impetus to Hanco’s aspirations to be the leader in the MENA [Middle East and North Africa] region’s asset rental and lease market.”

Indeed, Mr Al Sulaiman outlined the combined companies’ ambition to become the leader in the Gulf Cooperation Council region for rental and lease of mechanical assets, with a combined asset base of close to 30000 units.

“We hope to take Byrne into a new growth trajectory and build on its exceptional track record,” he said.

It will certainly be interesting to see how the next moves in the company’s expansion strategy play out, particularly at this very interesting time for Middle Eastern countries which are also looking to diversify their economies away from dependence on oil and gas.

This is a feature from the March issue of IRN. For the full feature, including extra images, or to see other features from the issue, please subscribe to the magazine: http://www.khl.com/subscriptions