Spain's Ausa is diversifying its product range and boosting export business. IRN reports
By Murray Pollok11 November 2011
Spanish manufacturer Ausa plans to more than treble its sales over the next five years by expanding its product range, diversifying away from construction and selling a lot more outside Spain. Murray Pollok spoke to the company's commercial director, Josep Soler.
Ausa will not be the only manufacturer in the world that has reinvented itself over the past three years, but few can have had quite the same challenges as the Spanish supplier. While it wasn't alone in facing global recession, the Barcelona-based company was confronted with a prolonged and severe recession in its domestic market - where it generated around 60% of its peak €150 million revenues in 2007 - and was highly reliant on the rental sector for its sales, and everyone knows what rental companies did with their spending.
The end result was revenues dropping to just over €40 million last year.
Josep Soler, Ausa's commercial director, speaking to IRN at the Ausa stand during the Smopyc exhibition in Zaragoza, tells IRN that it had no choice but to change, and do it quickly. The workforce has halved to around 250 people and the manufacturing operation in Spain has shifted largely to an assembly model.
More fundamentally, there was too great a reliance on construction equipment and too great a focus on its domestic market, says Mr Soler.
The answer was a further widening of the product range to include non-construction ‘urban' equipment - industrial sweepers and cleaning machines - and a strengthening and widening of its construction related products to protect its distribution networks and to help it win more export business.
"We have doubled our exports and also expanded the range", says Mr Soler. Exports will represent around 80-90% of sales this year, although that is as much a reflection of the continued weakness of the Spanish market.
The urban equipment range of cleaning equipment and utility vehicles - a market that Ausa first entered in 1982 - is targeted at local authorities and municipalities, and currently represents around 15% of sales.
The company has ambitions for that to be a much bigger business. "Our goal is to become one of the three main players in Europe for the urban range", says Ausa's general manager, Juan Aixendri.
But it is the construction field where IRN readers will be most interested. Over the past five years Ausa has expanded its dumper range to encompass articulated loaders up to 10 t capacity to add to the rigid models it already made. It now claims to be the largest producer of site dumpers in the world.
Just as important has been the move into telehandlers, starting in 2008 with the launched of the 2 t capacity T 205 H, and now encompassing six models in the 3 t or smaller class.
"We want to be a big player in the smaller range of machines", explains Mr Soler, "The dynamics of the bigger models - and the logistics - are very different. You need a big volume. We want to focus on a part of the market that is fast growing - up to 6 m."
These machines will have wider benefits than simply diversifying the product range. As Mr Soler says, they will help Ausa keep hold of its range of rough terrain forklift dealers. (For more details on the telehandlers, including the two new machines launched at the Smopyc show in April, see the telehandler feature in this issue.)
Mr Soler says that in terms of products, the focus now is on further attachments and options for the urban range - including a Lithium Ion battery powered utility vehicle now being developed - and improvements to the ‘industrial', or construction, products.
"The machines are very reliable. It's about making them more attractive, eye-catching, and ease of maintenance, but not really launching new products. Product wise we are happy - the range is almost complete, having launched five new models every year since 2002.
"It's offering a wide range, but on niche products. We will never go into excavators or backhoes. The barriers to entry are too high", he says. The company does, however, have an agreement with Chinese supplier Sunward to sell its excavators in Spain and parts of France, and general manager Juan Aixendri tells IRN that could be expanded at some time.
Hand in hand with the product expansion has been an export push. The global slowdown saw Ausa cut back or close some of its international subsidiaries.
"The US business was not profitable and was closed in early 2009", says Josep Soler, "Then we have also scaled down the UK office in terms of people - it's now a representative office, with service centralised in Spain and sales people in the UK."
Parts in North America are now stocked by its master dealer, Edmonton-based Liftboss, and in the UK by master dealer Plant & Engineering Services (PES) in Devon.
"We have rationalised the subsidiaries", says Mr Soler, "Now we are in green numbers for the first time in two years, so we are hiring people again."
Mr Soler says Ausa is now focused on winning business in the world's developing areas, particularly the BRIC countries; "We see Europe offering some opportunities [as it recovers] - but the bigger opportunities are available outside."
The company is hiring Ausa-dedicated area sales managers for territories including Benelux, South America, South East Asia and Russia. There will de dedicated representatives for Brazil and Mexico. It is also looking for potential partners in India.
Having come through the worst, the company now has a growth strategy once more. According to Juan Aixendri, the five year plan for 2011-2016 sees turnover reaching €160 million, with export sales remaining at the high current proportions and the urban line doubling to around 30% of total sales.
In this respect, Ausa is an exemplar for what many Spanish manufacturers, in particular, have been forced to do over the past three years.
While exports outside of Europe are a key target, Ausa will also be ready for the European upturn. Mr Aixendri tells IRN that rental companies in the rest of Europe are gradually starting to spend again, most notably in France and Germany.
Recovery in Spain, however, remains a longer term project; "2011 and 2012 will see a cleaning up of the distortion of the market [regarding the banking sector and indebted companies]. We think that 2013 will be the year that Spain will start to grow slowly, and we think it will be sustainable growth in 2015."
By then, of course, Ausa will be hoping that domestic recovery will be more of an academic matter, given its export growth targets.
The Ausa story remains a work in progress, but a very positive one for the beleaguered Spanish construction industry. As Josep Soler says; "We have done all that work. More products; more countries; less dependence on construction...It has been successful."
Alongside the operational changes at Ausa the company has recently seen a significant change to its management structure, completing the shift to the second generation of the founding families.
Manuel Perramón takes over as chairman of the board from his father, Maurici Perramón, who was one of the four original founders of the company in 1956 along with Antoni and Guillem Tachó and Josep Vila. Maurici spent 54 years with the company and has been named honorary president.
Three of Manuel's brothers are also in the business - Jordi, deputy chairman, and Xavier and Enric, who are all members of the board. Antoni Tachó, also a second generation member of one of the original founders, joins them on the board.
"This step ensures the future continuity of the company and the fulfilment of its values", said Mr Perramón, speaking to the press at the Smopyc exhibition, "We are convinced that with hard work and common sense we will know how to direct the course of our company in line with market developments."
Ausa was founded in 1956 and initially manufactured a mini-car, the PTV. It started making dumpers in 1961 and then rough terrain handlers in 1967, adding its first multipurpose utility vehicle in 1982. The company also makes a small range of concrete mixers.