Sense in the market

The manager of a regional equipment rental firm sees an upside to the downturn.

The last time PMV looked at the regional equipment rental market, there were problems. For a start, actually getting hold of any equipment was a challenge, as the engines used to power generator sets were in perilously tight supply.

Now, things are very different. The problems with the supply line are not what they were a year ago, but the customers are not necessarily there either. However, a certain amount of lateral thinking would help the strongest companies survive according to Pat Fallon, the general manager of rental firm Byrne.

"Obviously people are going to focus on the construction industry at the moment, as that has been hit hardest by the downturn, but you must remember that areas like oil and gas continue to boom and the concerts and events sector is an enormous part of our business. All parts of the concerts and events business continue to progress. The marine world hasn't dried up, the dry dock is still there, the marine repairs continue as always."

Reaction

That isn't to say the firm isn't reacting to the construction market - far from it. Byrne recently acquired the regional version of UK-based Hire and Service Shops (HSS). Fallon explained "We have moved away from the HSS brand and moved closer to the more powerful brand as we see it being the Byrne name. It is better known in this part of the world for sure."

HSS in the UK mainly caters for people wishing to renovate their homes themselves, with a range of ladders, manual concrete mixers, compactor plates and other small equipment. The firm will still offer all of these under the new name, but Fallon plans to reposition the proposition to the way that the Middle East works; "HSS were very much geared towards DIY or a one man operator or it is a subcontractor type operation -.whereas [now] we are also have the bigger contractors who have requirements for the smaller equipment and tool hire" he said.

"The tool hire business is that it completes the range. It is that much-overused ‘one stop shop' idea where our small equipment hire gives us those bits that the main business of Byrne equipment rental doesn't do, the generators, compressors, portable buildings, welding machines and so on. The [tool hire division] does everything from a cordless drill to up to a double-drum roller, or a small air-conditioning unit suitable for a confined space," Fallon said.

Downturn

Good news stories are thin on the ground at the moment, but Fallon says the tool hire business is working well, and an area that the firm is working hard to get working in Abu Dhabi. Of course, the recession has had an affect on Byrne, resulting in some changes. Fallon said; "In certain areas [through] the downturn, like everybody else we got heavily weighted in the construction industry. That's where the business has been for the last number of years."

"Construction and related industries have been very buoyant for an extended period of time and of course we have been heavily focused in this area and the downturn hits suppliers - and we are one of them.

So yes, we've seen a downturn in the construction sectors specifically, there is a general nervousness in the market across the board, but who would make the mistake of saying the downturn has been so dramatic that there has been no work going on?" Fallon said, adding: "It isn't true. There is still work going on. There are still people out there hiring equipment. In fact many are renting equipment as opposed to purchasing the product because they don't have the overheads.

In some ways it has been bad because customers have had a downturn in their business and the knock on effect is that they don't rent as much as they used to, but equally there are other customers that say ‘look I don't want to spend money.' So they want to rent it."

He added; "Everybody wants the best price, we know that, but there are customers who respect long-standing relationships which is why we continue to do reasonably well overall, though there are pockets where the downturn is affecting us negatively - and in the UAE the northern Emirates specifically are feeling that."

"There are good opportunities coming up in terms of doing very close and well structured deals with specific customers who need stuff in the medium to long term in particular," he said.

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