Manitou's 'Festival': IRN reports from Manitou's recent customer event

Manitou showcased its latest technology and growth strategy at a massive customer event in Spain in May. Murray Pollok reports from Punta Umbria.

When you gather 1200 of your most important dealers and customers in one place you have to think carefully about the message you give them. Manitou had clearly done that for its ‘Festival' event at the southern Spanish resort of Punta Umbria at the end of May, with senior executives and staff putting on a well-rehearsed, upbeat show.

Jean-Christophe Giroux , the company's president and chief executive officer, wasted no time in reassuring his audience that Manitou's ownership was stable (with 65% of shares still owned by founding family members) and asserting that its future was bright, with an ambitious target to double sales within five years.

"The Manitou Group is not for sale", he said, "The company's shareholders have not asked me to dismantle it or butcher it, but to grow it and develop it." The central role of independent dealers - of which Manitou has 1400 worldwide - was also reinforced.

From Manitou's perspective the event was well timed, with the worst of the crisis period firmly behind it and taking place just weeks after its well-publicised decision not to attend Intermat. If that decision had given anyone the notion of a company in retreat or in hiding, then it will have been dispelled by Punta Umbria.

Mr Giroux was open about the challenges faced by Manitou during the financial crisis, challenges exacerbated by the decision to buy Gehl in September 2008."We did see some white water rapids during 2009/10...but we avoided the big rocks", said Mr Giroux. There had been just two problems with the Gehl deal, he told delegates, "the timing and the price."

As sales now climb back - €1.1 billion in 2011 and a likely €1.3 billion this year - the Compact Equipment division (comprising the Gehl and Mustang businesses) is now back on track, he said, with sales up 50% last year and another 30% increase forecast for this year.

The key message was Manitou's strategy to be "the reference" for the material handling sector, with a strong focus on the telehandler products that have made its name, allied to the newer access, compact equipment and forklift activities.

That focus is now being allied to an internationalisation strategy that aims to reduce its reliance on European and French markets, which together represented almost 75% of sales in 2001, with France alone accounting for almost a third.

Mr Giroux told IRN that the €2 billion target by 2017 was achievable because the vast majority of its sales were replacement sales, which are accelerating. He argued that rental companies - who currently account for just under 10% of total sales (remember that Manitou is strong in agriculture) - would start to buy more machines when markets improved; "we believe that in three or four years the ‘anticipation' market will be back."

He thinks also that Manitou would be successful in expanding the range of applications and customers for its machines, and will boost sales in emerging markets, where telehandlers and aerial platforms are still at relatively low levels of usage. "Sales to emerging markets are by and large doubling every three years", he said. Acquisitions, meanwhile, might add a few hundred million Euro revenues into the mix.

Manitou is best known for its telehandlers, but it has also been in the aerial platform market for a long time. Mr Giroux said the access equipment division will play an important role in Manitou's growth plan; "Access is definitely part of this, and maybe will play an even bigger part of it. We strongly believe that we have a jewel here in the access business."

It is understood that Manitou has set a goal of tripling access sales in the five year period. Manitou is cross selling several models with Genie - selling Genie electric scissors and Genie marketing some of Manitou's vertical mast machines - and also some Tanfield/Snorkel vertical mast units. IRN understands that there is no major expansion of the Genie partnership likely in the short term. The company also continues to develop its own range, with last year's new 28 m telescopic/articulated boom, the 280TJ, a key product.

Unlike its access competitors JLG, Genie and Haulotte, Manitou is not yet willing to commit to establishing production sites to serve developing markets such as China, but Mr Giroux said that time would come; "It will happen, one day, but at the right time. China, India, Indonesia, Brazil are still in their infancy for what we do."

It is nevertheless investing in these developing markets. It has regional hubs in Russia, Singapore, South Africa and Brazil, as well as what it calls ‘leverage centres' in markets including Chile, India, China and eastern Europe.

Antoine Chazelle, Manitou's vice president of sales for Asia Pacific and the Middle East, speaking at one of the many seminars held during the Festival, said; "The first priority is to reinforce the Brazilian operation. The place we have now is not sufficient for Brazil." A new regional hub will also open in the Middle East soon.

Promoting the use of telehandlers in new markets is also an important task. Mr Chazelle said telehandlers were becoming established in Brazil - with 700 sold in total last year - but were at a much earlier stage of development in India, where traditional pick-and-carry cranes are the still the popular choice. Likewise in China, where small truck cranes are numerous and telehandlers are virtually unknown.

Manitou is now using its own re-rental fleet in China - around 10 telehandlers located in Hangzhou, south west of Shanghai - to help introduce the product. "Since we have had the small rental fleet it has been fully utilised", said Mr Chazelle, "It's not our concept to rent machines, but it is a way to introduce them to the market."

The company also has an opportunity to greatly expand its sales of industrial forklift trucks. Sales of these have in past been dominated by France, where Manitou was in partnership with Toyota. That partnership is now being dissolved, with Manitou having developed its own range of forklifts, although for the rest of this year it will still be selling Toyota trucks in France.

Alliances with other manufacturers are obviously part of the strategy. The Genie arrangement was cemented not long after Mr Giroux's arrival in the summer of 2009, and in the US the joint venture with Wacker Neuson for excavators has now been replaced by an agreement with Yanmar (see box story).

As the business continues to recover, Mr Giroux's own imprint becomes more evident. At the time of his appointment, it was seen as a major departure to appoint someone who was neither a member of the founding family or a long-serving Manitou executive. Mr Giroux was a technocrat with little knowledge of agriculture or construction.

He acknowledged his ‘outsider' status to customers and dealers in Punta Umbria, but said his role was to add a rigorous and modern business approach to the company's traditional way of doing things.

As he put it; "Passion is a wonderful asset - I don't want to change that. I want to complement it with a more professional approach, to import Japanese and German efficiency and combine it with French passion."

BOX STORY
Concept machines

Manitou used the Festival event to present some new technology and ‘concept' machines, including a telehandler, articulated boom and industrial forklift.

The company was at pains to say that these machines were not prototypes, but some of the new technology showcased in the concept designs will find their way into production machines by 2015.

This technology included regenerative systems - for example, using power generated when booms and masts are retracted - to increase engine efficiencies, while RFID tags might be used to automatically identify attachments when they are connected to telehandlers.

Being launch as early as next year, however, is the new Stop & Go system that will automatically shut down the engine when it has been idling for a certain period. See our separate story.

BOX STORY
‘Stop & Go'

Manitou is to launch an automatic engine stop and start function on its construction telehandlers that will cut fuel consumption by 5% and reduce typical engine operating hours by a third.

The Stop & Go system - launched in concept at Manitou's ‘Festival' event in Spain - will automatically cut-off the engine after it has been idling for a certain period, say 30 seconds, and will then restart when one of the controls is activated by the operator.

The system incorporates a hydraulic starter and hydraulic accumulator, developed with Poclain Hydraulics, that can restart the engine in just 0.5 seconds. The hydraulic system has been chosen because of this rapid response and because it is robust enough to withstand the full life of the machine. The traditional electric start mechanism will still be used for normal starting.

Stop & Go will be fitted first to the MT 14 and MT 18 handlers in the first half of 2013, with the MRT models to follow. It could also be fitted to aerial platforms, although the priority for Manitou will be its telehandlers. It will be available as an option on models fitted with Stage IIIB /Tier 4i engines in Europe and North America.

Laurent Pons, Manitou's market development manager for construction products, says the system will stop the machine operating for the 30% of the time that the engine is typically idling, saving 5% on fuel and reducing significantly the maintenance requirements and the operating hours on the machine, thereby increase resale values.

Manitou thinks the system, which is being patented by Manitou, will have a one to two year return on investment. Stop & Go can be disabled when not required, for example in very hot or cold climates when the engine is needed to power heating or cooling systems in the cab.

BOX STORY
Gehl gets moving with Yanmar

The first container load of Japanese-built Yanmar compact excavators is soon to arrive in the US following the North American sales alliance agreed between Manitou and Yanmar earlier this year.

The Yanmar excavators will be sold by Manitou under the Gehl and Mustang brands in North America. Previously, Manitou/Gehl sold Wacker Neuson excavators in North America.

The Yanmar alliance is a two-way arrangement, with the first Gehl-built skid steers and compact tracked loaders also now on their way to Yanmar for sale in North America under the Yanmar brand, said Dan Miller, president of Manitou's Compact Equipment division.

Mr Miller, speaking to IRN at Manitou's ‘Festival' in Spain, said; "Orders [for the excavators] will start flowing in June and we'll be up to full flow by the fourth quarter."

Although the partnership covers only North America Mr Miller said a possible next step could see the alliance extended to Latin America.

In a separate development, production of Manitou's rough terrain forklifts is being shifted to the Gehl facility in Waco, Texas, US. Currently, these models are built both in France and the US.

Mr Miller said he could see annual volumes of around 700 units initially, rising to between 1000 and 2000 units.

He said Manitou North America could see a 30% increase in sales this year after a 50% rise last year, with rental company re-fleeting leading to robust demand; "Right now with telehandlers I can't build enough."