Heavyweight contender

15 April 2008

Australia's Emeco has done much to alert the rental world to the possibilities offered by the world's mining and quarrying sectors.

The Australian company's business may be dominated by its Australian and Indonesian operations – which together accounted for 85% of its revenues in its 2006 financial year – but recent acquisitions in the US and Europe (see News) mean that 2007 will see revenues from the ‘rest of the world’ doubling to a forecast A$117 million (€71 million).

The company is banking on a greater demand for rentals of heavy earthmoving equipment from both the global mining sector and in major construction projects. It sees the rental penetration rate for this type of equipment increasing from the relatively low levels. For example, in Australia, it estimates penetration at just 15%, and in Indonesia 3%.

The company, writing last year, said these low rates were the result of a “limited rental offering in these markets.” It added, “[we] believe that rental penetration will be driven primarily by the benefits that Emeco's rental service offering provides to customers who are seeking flexibility, fast delivery times, have short-term earthmoving needs or choose to allocate their capital resources to other priorities.” That's as good a definition of the benefits of rental as you could wish to find.

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