"While our European markets have not totally shrugged off the ill effects and constraints of the last couple of years, with one market peaking as another goes through a trough, we have restructured our European Operations to better deal with these fluctuations as well as improve our product and service offering to our customers," reports Marc Schürmann, Managing Director of Bell Equipment European Operations.
"Evidence of this is that our most recent EU Stage IV/EPA Tier 4F [Tier 4 Final] E Series range still remains the most fuel efficient Articulated Dump Truck (ADT) in the market today without any of the diesel particulate filter (DPF) constraints as seen with many of our competitors – a true commitment to our 'lowest cost per ton' assurance," he continues.
"Our Eisenach factory, now in its 11th year of operation, continues to confirm Bell ADTs as quality products, built in Germany to the highest possible standards. Our re-entry to North American and Canadian markets coupled with strong growth in the UK market sees the factory running at 80% of its capacity; a level similar to the pre-crisis 2007 levels.
"Another positive development, and an indicator of our commitment to our markets and customers, is our greenfield development of a new, ultramodern European Logistics Center (ELC). Located close to our Eisenach factory, our ELC will be another milestone in the development of our supply and support infrastructure development aimed at serving the global demand in a more comprehensive fashion.
"We have become more agile in growing our business during these times of uncertainty by offering our customers an improved product and support package in all our regions, as detailed below," says Schürmann.
Bell Equipment France celebrates its 20th anniversary in 2015 and might be regarded as the nucleus of Bell Equipment’s European activities. Bell France was founded in 1995 by Managing Director, Claude Boulet, who will retire this year having worked tirelessly during his career to continuously develop a strong organization. Today, Bell France has 19 independent French distributors as well as an international sales and service network in 12 countries in Western Continental Europe, on the Iberian Peninsula and around the Mediterranean Sea, including the Maghreb states.
Boulet’s succession is well planned with Céline Gutierrez poised to take over the reins as Managing Director during 2015 to become one of a few women to occupy a top management position in the European construction machinery sector. Gutierrez, a civil engineer and commercial business graduate, joined Bell France in 2007 and worked as a regional sales representative and in distributor support before being officially appointed as Vice Director of Bell France in mid-2014.
Commenting on the French ADT market, Boulet says, "After a very dynamic period, with a peak in overall sales in 2012, the French ADT market has been suffering from a continuous decline in its traditional core sectors since 2013. Major infrastructure projects like Highspeed Railway-connections ended without substantial follow-up perspectives. Additionally, the raw material and construction material producers were affected by recessive tendencies in the French construction market. This had a significant impact on the 30 ton market segment, which is generally the best-selling model class on the French ADT market.”
The market is expected to further shrink in 2015, creating challenging conditions for Bell Equipment France in its home market. Adds Boulet, "In spite of a dwindling market we successfully maintained our market share of 20 to 25% and firmly established ourselves as the only pure 6x6-specialist within the top three ADT suppliers, who control more than 75% of the French ADT market."
With the slight recovery in the main continental markets and the results of Bell France's continued efforts to develop distribution networks in countries with strong ADT potential, the company anticipates future growth through export. "We are receiving good signals from Benelux – particularly the Dutch and Belgian markets, which have been more than quiet in recent years. Major quarry projects and a noticeable better climate within the construction industry will certainly re-launch business in those countries,” comments Boulet. Another important step is the appointment of a new nationwide distributor for the Spanish market, following the restructure of Bell Spain in 2014. "We’re more than convinced that our distributor, with his strong sales and service network, will quickly re-consolidate Bell Equipment’s position and participate in the Spanish recovery, which is currently reflected by positive growth rates in all segments," he says.
The importance of strong national partnerships is also evident in Turkey and Algeria where Bell France has strengthened its efforts. "Our Turkish activities are developing very positively. Earthmovers and material producers are just discovering the benefits of ADT technology for their applications, which are still dominated by heavy four-axle trucks. This is beginning to open substantial opportunities for the used machinery businesses and new key machinery contracts too. The outlook is positive for Algeria as well, where we have been active for the past three years. Although several important national infrastructure projects were unfortunately put on hold because of public expenditures cuts in response to the lower national oil income, we are quite optimistic that we should be able to participate in these programmes once the situation normalizes and they are revived," ends Boulet.
Bell United Kingdom
Commenting on the United Kingdom, Managing Director of Bell Equipment UK, Nick Learoyd, says, "The total UK ADT market is almost certain to increase further in 2015, given renewed confidence and a number of major infrastructure projects such as High Speed 2 (HS2), a high-speed railway between London Euston and the Midlands, and Hinkley Point C, a nuclear power station. Bell Equipment UK enjoyed great market share in 2014, and is targeting at least 25% of the market for 2015.
"Key sectors are: infrastructure, construction and quarrying; the latter is growing as operators turn to overburden stripping to open up new reserves. The coal sector, in contrast, is performing less well, due to a drop in the price of coal and the closure of open cast mines, although there is potential in ports where ADTs are required to support coal import activity.
"The key challenges facing the industry are how to pay for machines (with purchasing complicated by the caution of financial companies) and how to operate them, given an industry-wide skills shortage. Overall, though, the short- to long-term forecast is strong, with major players committed to investing in plant, especially ahead of HS2.
"Bell Equipment UK is already proving well placed to meet this demand and had a strong order book by mid-March, which is expected to more than double as the year unfolds. We're buoyed by the reasons cited by customers for choosing Bell, which include ADT reliability and performance, especially in terms of fuel-efficiency, and exceptional customer service and support."
In mid-2014 Andreas Heinrich was appointed as the Sales and Distribution Director of Bell Equipment Germany. Together with André Krings, Production Director of the company's European ADT Assembly in Eisenach, he leads the Bell Germany operation, which also incorporates the European Logistic Centre (ELC) in Alsfeld. Bell Germany’s sales and service activities cover the German market with nine independent distributors and some smaller direct-sales regions and 17 national markets in North, Central and South Europe.
"While experiencing unpredictable fluctuations as we have during the past few years, the German ADT market has consolidated since 2013. We are still waiting for crucial drive from the public infrastructure sector, but at least our domestic raw material producers are able to draw on a subdued, but still sustainable growth in the general construction sector,” explains Heinrich. “Our market share continuously grows and we also now run machines in our own rental fleet. A number of machines of all classes work in medium term customer projects before we sell them, mostly within a year, as classical lease-purchases or as young used ex works.
"Our international activities are characterized by a steady growth in business in the Nordic regions and upcoming dynamic developments in the Central European markets. Poland is expected to generate sales with its forecasted construction industry growth. New partnerships are also starting to contribute meaningfully, as for example with the Austrian Terra Group, which started to pay off successfully after only a short time. This partnership has improved our positioning among our direct neighbours with the different Terra-branches also professionally representing Bell Equipment in five other countries in the Danube and Black Sea region."
Political sanctions and the downgrading of Russia's credit rating from BBB to BBB-, by agencies such as S&P, Fitch and Moody's, have discouraged new investments to Russian markets and negatively impacted the country's economy. Many new projects have been postponed due to challenges with financing and leasing. Finance has increased substantially and financial companies experience problems with receiving money from international financial institutions, which has caused delays to projects.
The cumulative effect has been decreased economic activity with other countries, which has led to an increase of prices locally and a decrease in demand. Additionally Russia is sensitive to the decrease in world commodity prices, such as oil, and has decreased its reserves.
Accordingly, Bell Equipment's dealers in Russia anticipate difficult trading conditions and a reduced Articulated Dump Truck market in 2015 with very few projects that will result in sales. Comments Bell Russia's General Director, Alexey Chukavin, "In line with the decreased economic activity the majority of our customers are cutting expenses. Some customers have cancelled all capital investments planned for 2015 because their projects have been deferred.
"In response Bell Russia has decreased our company expenses and we are working to improve cooperation with our dealers so that we are in the best position to provide products and service when the market improves. Our focus is on developing our dealer network so that they meet our Bell requirements of having fully trained service staff, properly equipped facilities, the motivation and capacity to develop their region and support our brand and customers to our exacting standards.
"Fortunately every dark cloud has a silver lining and, as gloomy as the Russia forecast for 2015 sounds, we are capitalizing of the BRICS (Brazil, Russia, India, China and South Africa) initiatives so as to identify some niche opportunities."
Bell Equipment North America
Bell Equipment North America (BENA) President, Neville Paynter, says, "The timing of 2014 for Bell Equipment’s re-entrance to the North American market could not have been better since the year-on-year First in Dirt (FID) ADT market volumes increased significantly.
"Although we expect the overall market for ADTs in North America to see a ‘normalizing,’ BENA will again be looking to increase its market penetration and share. There are some concerns for continued growth in Canada due to a depressed mining sector and the low oil price, which is already contributing to a slowdown in all construction equipment sales to date. However, strong opportunities should be forthcoming in the USA, particularly in the road building and construction sectors. There are some major bypass construction projects being followed and this generally stimulates the aggregate sectors too.
"As a relative newcomer to the market, our plan is to expand our geographical footprint in 2015 by appointing another 10 dealers to bring our network to a total of 27 dealers in the USA. The target is to have strong coverage in all territories which have shown continued volume sales and rental activity over the past four years.
"Our strategic alliance with Bell Trucks America in the USA and Wajax Equipment in Canada is an ever-developing business model, and we are very excited by the positive results thus far. Both partners have strong inventory levels in both trucks and spare parts and our continued support in the product sales and technical training of distributor and dealer representatives is definitely a contributor to the confidence we are seeing in the Bell ADT product in this region," he adds.