Tunisian rental leader plans for growth
30 April 2014
Parenin, Caterpillar’s dealer in Tunisia, has been formally renting machines for 15 years, and expects its fleet to break the 100 machine-mark within the next two years. This may not sound like many by European, Japanese or US standards, but it is believed to be Tunisia’s biggest rental fleet.
And that is not the only difference in the way the company operates its Cat Rental Store franchise compared to other parts of the world. For one thing, all the machines it rents go out with an operator trained under a Cat-certified programme. According to Mustapha Farjallah, Parenin’s manager for rental and used equipment, this helps ensure machines are used safely, maintained and not abused. It also helps to ensure payment and prevent theft.
As a company Parenin can trace its roots back to 1902, and it has been a Cat dealer since 1926. It established its rental fleet in 1999 with ten machines and today has 70 assorted backhoe loaders, dozers, excavators, graders and wheeled loaders available for hire with an operator.
"We will continue with operators for a few years at least. Now we have Vision Link (Cat’s telematics system), we might be able to change things and use that to follow the machine and track maintenance. But for now we have 70 machines and 70 operators," said Mr Farjallah.
The need to rent machines with operators is one of the reasons that Parenin doesn’t go in for the renal of anything much smaller than a backhoe loader.
"The problem is that if we rented those machines with operators it would be very expensive, and if we rented the machine without the operator we would never see it again," he said.
Nevertheless Mr Farjallah said the fleet is set to grow. "We have lots of new business opportunities. There are highways being built as well as a gas pipeline and we need to be ready for that. I will reach 100 machines within two years. We have a lot of business because Tunisia is a permanent job site these days,” he said.
But as in any embryonic rental markets, one of the big challenges is to overcome the ownership mentality among contractors. "The culture in Tunisia is to own machines, so it has been hard work to change that. We have focussed on foreign companies because they prefer to rent."
This is an issue across Africa, according to Michael Lilljequist, Caterpillar’s finance & marketing manager for rental and used equipment in the Europe, Africa & Middle East (EAME) region. "Africa as a continent is a major growth area for rental, especially the Middle East and Southern Africa. A lot is driven by large multi-nationals coming in for major projects. They don't want to invest in huge fleets and they're familiar with the concept of rental."
He said that Parenin’s approach of renting larger machines was also common in Africa, describing the bulk of the market as, "The 20 tonne plus type of equipment."
According to Mr Lilljequist, there are some 75 Cat Rental Store franchises across Africa. "Pretty much all of our dealers in Africa have some sort of rental offering, even if they don't have dedicated people. Traditionally dealers have always rented things, but the Cat Rental Store brand is spreading,” he said.
And Mr Farjallah said all the completion Parenin faced in the rental sector was of a more ‘informal’ kind. "We are the only structured rental company (in Tunisia). The competition we have are 'taxi stand' people, who buy a machine like a backhoe loader and rent their services."
However, he said that more serious competition was on the horizon. "We are a pioneer for rental in Tunisia. I think there will be a more structured competition in the future. I believe Volvo is looking and Loxam has made a study of the market,” he concluded.