Production outlook

24 April 2008

Jim Otley, managing director of Genie Europe, Middle East and Africa.

Jim Otley, managing director of Genie Europe, Middle East and Africa.

“Lead times speak for themselves - we know we need to manufacture in Europe”, says Jim Otley. European production has been on the Genie agenda for several years, but the time has finally come - with international sales, mainly Europe, representing over a third of all revenues - for the company to actually make a move.

It will start by manufacturing Z-45 and Z-51 articulated booms at Terex’s telehandler plant in Perugia, Italy, in the first quarter of 2007. Mr Otley, managing director of Genie Europe, speaking to AI at Genie’s Grantham head office in the UK, says he is also investigating European production of electric scissors by the middle of next year, with Terex’s Coventry factory in the UK one possible location.

The operations will be more than assembly of imported US components, with booms sourced in Europe and very little material coming from the US. Ron Barnhart, an experienced production engineer from Genie’s Redmond plant in the US, has been in Italy for the past year working on the telehandlers and also preparing for boom manufacturing.

“The Perugia facility will probably supply 60% of our Z-45 requirements, and all the Z-51s”, says Mr Otley, who took over from Jacques Catinot late in 2005, “I’m hopeful that by the end of 2007 we will have nominal lead times.” There are no current plans to produce rough terrain scissors or bigger booms in Europe.

The move to manufacture in Europe is just one symptom of the growth of Genie’s business in Europe over the past two years, in line with the market. A 30% growth in sales this year has seen the company reach bursting point at its Grantham facility, and the company is leasing other sites nearby to make way for a larger parts department - 360 parts were mailed the day before AI’s visit - with the pre-delivery inspection area being moved off-site. (The parts business has doubled in the past two years and now accounts of between 5 and 7% of Genie’s revenues in Europe, Africa and the Middle East. “I think a sensible goal for parts revenue is 10%”, says Mr Otley.)

With Genie’s big European markets performing well - Mr Otley thinks next year will see 30% growth, with 2008 perhaps seeing a further 15% rise - the company is also preparing for the developing markets in Eastern Europe and the Middle East.

Genie is taking a lead within Terex’s construction businesses in establishing a Middle East business in Dubai, called Terex Equipment Middle East, that will be up and running before the end of 2006. This will be run by Australian Brad Abrahams, a recently appointed Middle East sales manager.

“He’s been there for three months and we’ve seen immense interest”, says Mr Otley. “We’ve found that handling the Middle East from the UK was not the right way.” He says there is evidence that a lot of businesses are interested in entering the aerials rental market, which is currently dominated by Lavendon’s Rapid Access and Johnson Arabia.

Mr Otley says the Middle East will represent around 5% of Genie’s business in Europe, the Middle East and Africa next year, up from 2% this year. “We will have eight people there by the end of 2007 - we have two now.”

Easter Europe also promises much, but it will take longer to develop, says Mr Otley; “In terms of growth it will not be exciting in the next 12 months, [it will be] in five years time, but we have to put in the groundwork now.”

The company is establishing two sales people dedicated for this area; one focusing on ‘Middle Europe’ countries like Poland and the Czech Republic, and another based in St Petersburg to cover Russia and the Baltic States (Lithuania, Estonia and Latvia). There will be a Terex subsidiary in St Petersburg.

In addition to these developments, Genie is also now responsible for European sales of the Terex telehandlers built in Italy. Machine branding will depend on the market - Terexlift will still be used in Italy, and will be split in other markets. The overall strategy is to harness the Genie AWP sales team to grow handler sales, although in some markets Terex sales people will still be involved: In the UK, for example, Genie staff will target major rental accounts, and in Germany, sales will be split between Genie and local Terex construction sales people. In France and Spain it will be Genie that assumes handler sales responsibilities.

Jim Otley says Genie’s goal is to reach a 10% share of the total 30000 unit European handler market (construction and agriculture). Current market share is very modest, acknowledges Mr Otley; “I think we can get to 10% by the end of 2008.” Crucial here will be an expanded Genie sales force in Europe, with the current 20 strong team boosted to 25 next year. The appointment in May this year of Laurent Pons, an eight-year veteran of Genie France, as European telehandler sales coordinator, is described as “very important” by Mr Otley.

In terms of the handler range, Genie’s knowledge of the rental market will be reflected by the introduction of rental-friendly ‘SX’ models, with less electronics and fewer accessories. The first of these will be the 4013 model, but others are planned.

But aerial platforms remain the core business and here we can expect to see several new machines at the Bauma show next Spring, including a new lightweight electric articulating boom, the Z-40/23, and the electric GS3232DC scissor, with outriggers (see News). Of course, by the time Bauma comes around there could well be Italian-built Z-45 and Z-51 booms to look at. Now that will be interesting.

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