Ortner explains Wumag strategy
By Patrick Hill01 July 2008
Palfinger will sell its newly acquired Wumag platforms as a separately branded range alongside the Bison Palfinger line, and existing Bison and Wumag dealers will be able to sell both ranges. The company said it had no plans to close any of the three Wumag manufacturing facilities and that reducing lead times for the larger Wumag machines was one of its priorities for the newly acquired business.
The deal to acquire Wumag was announced on 20 June and is scheduled to complete later this summer, following regulator approvals. The Austrian loader crane manufacturer entered the truck mounted access market in 2004 when it acquired Bison stematec of Germany.
Herbert Ortner, the long-time Palfinger executive recently appointed as its chief executive officer, told Access International that the Bison and Wumag businesses were a good mix; "The combination is a perfect fit. Our distributors can now offer a complete, wide package from 20 to 102 m [of working height]. Nobody else has such a big product profile.
"Wumag has concentrated on high-scale platforms; Bison has concentrated on 3.5 t machines. Both companies have products in the 20-40 m [working height] range, but both ranges are different. Bison has short machines with maximum lateral outreach. Wumag has standard length machines with high reach.
Both the access brand names will be kept, said Mr Ortner; "We don't know how we will combine them yet, but as we did with Bison Palfinger, we might do with Wumag Palfinger."
Wumag's management team, meanwhile, will remain in place. "The current management made Wumag a success in the past, and they will be part of the future. We made an announcement yesterday in all three plants that we will keep all employees of Wumag," said Mr Ortner.
He said priority would be given to reduce lead times for Wumag's larger machines. "Lead times for the larger machines are more than one year. For sure, reducing lead times will be one of our first priorities. We will see if Palfinger resources can help Wumag bring down lead times."
There don't appear to be many immediate manufacturing changes planned. "It is important for us to keep to keep Wumag's resources", said Mr Ortner, "We took over Wumag's three plants and all its employees and will keep all of them...We will probably combine painting activities in one location. We expect the main synergies to come from bigger volumes and new markets."
Technical synergies will take longer, said Mr Ortner; "we will not try to integrate products in the short term; we will do that only in the longer term".
The acquisition will see existing dealers for both brands maintained; "Customers will not see a difference in support. They will see a difference in product offerings. Our distribution networks will offer both product ranges. In those areas with Bison Palfinger dealers only, the Wumag range will now be offered. In areas with only Wumag dealers, Bison Palfinger products will now be available. In any area with both, we will find a win-win solution for both [dealers] and offer both ranges."
The Wumag acquisition will boost Palfinger's truck mounted platform revenues to around €80 million, which Mr Ortner said was equivalent to a market share of around 15% of the total €450-500 European market, as estimated by Palfinger. It will raise Palfinger's annual revenues by around 5%.
"When Palfinger enters a market, we want to be in the top three worldwide," said Mr Ortner, ""That was true four years ago with Bison. We want to grow the business, to be the top brand, to be number one in Europe."
Palfinger will still be considerably smaller than Bronto Skylift, whose 2007 revenues were €130 million. However, Bronto's revenues include a large component for fire fighting machines. It will now be comparable in size - although bigger - to European manufacturers such as OP Pagliero, Oil & Steel and Anton Ruthmann. It will still be dwarfed in global terms by US manufacturers Altec, Terex Utilities and Time Manufacturing.
With its bigger scale in vehicle mounted access, is Mr Ortner tempted to try and enter the North America access market? "Not from the beginning, but for sure there is a market for us", he said, "Wumag is not active there, but the US will be our focus sometime in the future. We must analyse more, decide how we will do it. It is something we need to do. North America is the logical next step."