Hewden will benefit from freedom says Parkes
By Murray Pollok06 May 2010
Hewden will benefit from its separation from the Finning UK Cat dealership, said Kevin Parkes, the Finning/Hewden manager who is now managing director of Hewden under its new private equity owners.
Mr Parkes, speaking to IRN the day after the announcement of the sale of Hewden to Sun European Partners, told IRN that the new owners would give Hewden the freedom and flexibility to make the "best possible decisions for our business...We have a supportive owner who wants to expand the business."
The business plan, said Mr Parkes, is to continue operating Hewden as a multi-product rental business, retaining specialist equipment such as aerial platforms and cranes; "The business plan is to grow the businesses areas that we've got, but nothing is off limits [in terms of expansion]."
Hewden has negotiated a loose strategic supplier alliance with Finning UK, although this falls short of a hard commitment to buy Cat equipment. Mr Parkes said he hoped that Hewden and Finning UK would continue to have close links, and that Finning had a big part to play in Hewden's business since around a third of its fleet is Cat; "There is a value in the equipment and we want to try to strengthen the relationships."
Finning UK will be targeting sales to other plant hire customers in the UK and Mr Parkes made it clear that Hewden will make purchasing decisions based on its own best interests, buying Cat equipment under the "right terms and the right lead times".
Hewden's existing management team will remain in place, and Mr Parkes said he never had any doubts about staying with the rental business. It is still to be determined whether any Sun executives would be on the management team at Hewden.
Hewden's new owner has a reputation for restructuring businesses that it buys. However, Mr Parkes said that it understood that Hewden had already undergone a significant turnaround in the past 12 months.
He said Sun understood the capital intensive nature of the rental market and that they would be prepared to support investment in the business when market conditions require it. Mr Parkes said he did not anticipate any major improvement this year.
As part of the Cat dealership network, Hewden was limited to the UK in expanding its business. Independence will theoretically allow Hewden to take a more adventurous approach to geographical expansion. However Mr Parkes told IRN that the focus would be on "regaining our position in the UK", although it would consider supporting its customers wherever they are.
An example of the type of greater flexibility that Mr Parkes talked about is its approach to the mobile crane market. In the past, Hewden has restricted itself to cranes under 100 t in size. Mr Parkes said there would be the possibility of expanding that offering if customers required it. However, he said the company currently had robust partnerships with other crane hire companies to supply larger cranes and that these partnerships would remain in place for the foreseeable future.