New competitors introduce themselves to the market
Searching for new markets, manufacturers such as John Deere, LBX and Kobelco participate for the first time in M&T Expo which will display over one thousand brands and is expected to receive 45 thousand visitors
Two months before opening its doors to visitors, M&T Expo 2012 – the 8th International Exhibition of Construction Equipment and 6th International Exhibition of Mining Equipment is already stirring activity in the market. Consolidated as the venue of choice for companies that wish to do business in the increasingly attractive Latin-American market, the largest trade show of equipment for construction and mining in the region has already sold all of the spaces reserved for exhibitors.
In addition to gathering practically all of the main manufacturers that operate in Brazil and Latin America, the event also serves as a showcase for new brands that seek to enter the market. That’s the case of North American manufacturers LBX, John Deere and Japan’s Kobelco, among others, who will capitalize on the opportunity provided by M&T Expo to introduce their internationally consolidated brands to Brazilian users.
The interest of both companies that are already established in the market and new competitors is justified. After all, with its last edition M&T Expo generated a volume of some R $3 billion (U.S. $1.71 billion) in business from the opening of the trade show in 2009 to the upcoming edition. The expectations of Sobratema - the organizer of the event - are that the show will draw 45,000 visitors from the sectors of construction and mining who will move along the aisles of the Centro de Exposições Imigrantes in São Paulo-SP, Brazil, from May 29 to June 2, attracted by the innovations presented by around 480 exhibiting companies and over 1,000 brands, on nothing less than 66,000 square meters of exhibition area.
Even though they may be ‘new’ to Brazilian users of equipment, some of the new brands that will be on exhibit at the show have actually been around for over one hundred years and are very well known on the international market. The LBX Company - a U.S. subsidiary of the Sumitomo Group, for instance, arrives in Brazil to compete in the market for hydraulic excavators with its Link-Belt equipment line; a traditional brand which dates far back to the year 1874.
In 2011, the company established a branch office in Brazil and it expects to begin selling its equipment here as of this year, reaching the mark of over 500 units sold by 2015. In order to accomplish this, LBX wants to take advantage of the visibility provided by M&T Expo to introduce itself to local customers. The company will have two stands assembled at the show; one indoors with 737 m2 in area, and another outdoors with 56 m2.
“We are anxious to participate in M&T Expo for the very first time,” says Amy Lindon Maddox, Corporate Communications Manager at LBX. “Our intention is to put our sales representatives in direct contact with potential customers as well as introduce our brand of excavators to the Brazilian market.”
To do so, LBX will bring to Brazil several products in the 8 to 80 ton operating weight class, such as the company’s 225 Spin Ace excavator (with a reduced turning radius that allows it to be used in limited spaces), 350 X2’s, 210 X2’s and the 130 X2 excavators that will be available for test drives by the visiting public in the outdoor exhibit area. “With over 160 years of tradition, we will be able to show Brazilian and Latin-American consumers that Link-Belt excavators are arriving on the scene as prime products with all the assurance afforded by effective post-sales support,” adds Jair Rosa, General Manager of LBX Brasil.
Deere Manufacturing Plant
Another heavyweight with its sights set on the Latin American market is another U.S. company: John Deere - a company with a history of leadership in the sector and which has been in business for 174 years. Known and acknowledged in the country for its line of farming machines, the company announced last October that it was entering the Brazilian market for construction equipment with the establishment of two manufacturing plants scheduled to go into operation by late 2013.
With its eye on the growing demand in the Brazilian market and in the markets of other countries in South America, the company will directly invest U.S. $124 million of a total U.S. $180 million foreseen for the operation. The two plants will be built in the city of Indaiatuba (SP), one of which will belong exclusively to Deere, for the production of backhoes and bucket loaders.
The other industrial facility will be devoted to the production of hydraulic excavators in cooperation with Hitachi, under a jointly-owned partnership, similar to manner in which both companies already operate in the United States. According to Deere, the line of products manufactured in Brazil will be complemented by importations of other models. The company also intends to establish a distribution network to offer services in parts and technical assistance to its customers with a structure that is similar to what has been maintained for decades in the country by the dealerships that handle the brand’s farming equipment lines.
“We want to take advantage of the excellent showcase afforded by M&T Expo to present our line-up of construction equipment firsthand to the South American public,” states Emilio Sabetta, in charge of the area of forestry at Deere. “Our goal is to demonstrate the strength and tradition of the company which has been a reference for over two centuries in the segment of agricultural equipment and is also prepared to serve emerging markets in the Southern hemisphere in the area of construction."
Another organization that is making its debut at the upcoming edition of M&T Expo is Kobelco, which has been operating in the Brazilian market for lattice-boom crawler cranes through Rimac - a company specialized in the representation of equipment for the moving of cargoes in seaport operations, in steel mills, shipyards and special transports. With an offering of eight different models, with operating capacities ranging from 80 tons to 600 tons, the company expects to sell at least 20 units this year.
In order to do so, Rimac enlarged its operational structure and prepared a specific commercial initiative to successfully handle the strong demand for such equipment. According to Rimac General Manager Richard Reinhardt, participation in M&T Expo is an important part of this strategy - so much so that the company has brought the recently-introduced CKS 1100 to exhibit at the show. “Besides the participation of our own team, we will also receive members of the staff of the Kobelco plant at our stand where we will present the latest innovations in the segment of cranes to our customers,” he concludes.