Tanfield forecasts 50% market decline in 2009

13 November 2008

Darren Kell, Tanfield Group chief executive.

Darren Kell, Tanfield Group chief executive.

Tanfield Group has rejected speculation that it may close or sell its Snorkel subsidiary and said it was well-positioned to weather the downturn in aerial platform markets worldwide. Tanfield also revealed plans for a Chinese manufacturing joint venture that will be producing small machines by the end of 2009.

Darren Kell, Tanfield's chief executive, told Access International there was no reason for Tanfield to even consider selling or closing Snorkel; "We need a bridgehead in the US; we need the US market; and North American customers like the brand and the products...it's a cornerstone brand and cornerstone part of our business."

Speculation about Snorkel's future arose after Tanfield temporarily closed the facility for a week at the end of October. Mr Kell said it had to adjust production capacity to meet market demand, with Snorkel now working three weeks in every four with no overtime, and production running at around 35 units a week, half of what it was doing this time last year.

The same downsizing had taken place at UpRight Powered Access in the UK, where production at the Vigo facility is running at 60 units a week, down from a peak of around 250 a week.

Mr Kell said Tanfield was prepared for a severe slowdown in 2009 and was ready to resize the businesses again if necessary; "Globally, we anticipate a 50% reduction in demand. It's going to be a difficult year." He said customers were still having problems in obtaining credit, and even those that could were being cautious about investment.

The group had reacted to the downturn earlier than many of its competitors, said Mr Kell, and was now well positioned to take advantage of the upturn when it comes; "We've got no debt. We can spend this next period consolidating and globalizing the business...It gives us breathing space."

The company has cash reserves of £13.1 million and Mr Kell said inventory levels in the US were not excessive and in Europe were at 500 units; "That's about where we need to keep it", he said.

Part of the globalisation effort will be a new joint venture with a Chinese manufacturer based in the Wuhan area. The joint venture partner, which Tanfield would not name, is not currently manufacturing access equipment but is already partnering with another western construction equipment manufacturer. The venture will have a dedicated 20000 m2 facility that will initially manufacture vertical mast machines and small electric scissors.

"It's not a huge investment for us, it's not a big facility - we are not reaching for the stars here: it's a moderate investment", said Mr Kell.

Meanwhile, after introducing five new products at the APEX show in September, UpRight is now preparing to introduce two new ranges of heavy duty, RT, double-deck scissor lifts. There will be two series: 12, 15 and 18 m models that will be standard heavy duty models - competing with the equivalents from suppliers including Skyjack and Genie; and 15, 18 and 22.5 m working height HX models that will be higher specification, higher capacity scissors.

The first to be introduced is the 22.5 m HX67RT, with 800 kg carrying capacity, automatic leveling jacks and oscillating axles as standard and a platform size of 7.5 m by 2.4 m. The rest of the models in the range will be launched in 2009.

See the January-February issue of Access International for the full interview with Darren Kell.

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