13
NOVEMBER-DECEMBER 2013
ACCESS, LIFT & HANDLERS
“T
en years ago, the main reasons
people did business with a company
were availability, service and price,”
laments André Véronneau, president and CEO
of Simplex Equipment Rental. “Now it is: price,
price, price. ‘We don’t care about service.’”
Then again, 10 years ago, Montreal-based
Simplex Equipment Rental didn’t have nearly the
amount of competition as it does now.
Founded in 1907 by Louis Henry Véronneau,
Simplex Equipment Rental has remained a
family owned and operated business, and
now spreads across most of Quebec with 40
branches and 650 employees. In 2012, the
company pulled in $75 million in revenues and
it expects 2013 to be around the same figure.
The company owns a total of 55,000 pieces
of equipment, ranging from floor sanders to
aerial work platforms, and roughly 4,500 units
make up the “big equipment.” Véronneau says
Simplex’s three main types of rental equipment
are boom lifts, scissor lifts and lift trucks.
In 2012, Simplex spent $12 million on CapEx
and for 2013, it aims to buy $15 million worth
of equipment. Véronneau says the company has
$150 million worth of equipment, with booms
accounting for roughly $48 million, scissors at
$33 million and lift trucks at $30 million.
The company plans to invest more into its
core, “money-making” equipment – those
booms, scissors and lift trucks – and de-invest
in earth moving equipment.
“The [earth-moving] sector is not worth the
investment,” Véronneau says. “The money is
not there for us and it’s a slower sector that we
are looking at getting out of. We will use the
money from earth moving to invest into a more
profitable sector.”
While the company aims to increase its market
Despite facing an influx
of competition and stalled
construction work due to
organized crime, Simplex
Equipment Rental maintains
a strong foothold in the
Quebec equipment rental
market.
Lindsey Anderson
visited the company reports
on its initiatives.
Anything but simple
share of lift equipment in Quebec, it also is
looking to expand its footprint with goals of
opening 20 new depots in the next two years.
“We want to concentrate on the Montreal and
Quebec market,” Véronneau says. “We’re not
over the whole territory and we would like to do
that. There are some very important parts of the
region where we aren’t now and we feel we can
offer more to those markets. We want to be at
65 branches.”
A 44 percent increase in locations might seem
like a leap, but with aggressive competition from
mid-sized companies like Hewitt Equipment,
Lou-Tec and Komatsu pressing against Simplex,
the time is now.
“We want to grow,” Véronneau says. “We
need more locations, so now we are focusing on
improving our productivity and making sure our
processes are in line.”
Pricing
Over the last decade, Simplex has worked to
raise its rates by six percent, but Véronneau
admits prices have gone down across the board
and competition is “very, very high.”
In 1997, United Rentals came into Quebec.
“They bought our major competitor,” Véronneau
says. “But since then, we don’t feel any other
big rental company competition. They do what
they have to do and we do what we have to do.”
While competition might not be a big lion in
the grass for Simplex, it is instead in the form
of smaller and mid-sized players; companies
willing to play the game. While the number of
independent and smaller depots has increased
significantly across Québec, the demand for
equipment has remained the same resulting in
price wars.
“This is why pricing is off,” Véronneau says.
INTERVIEW
From left to right: Sylvain Damour,
vice president of finance; André
Véronneau, president and CEO; Euclide
Véronneau, assistant to president.
Simplex provides a range of refurbishment
and maintenance options. Pictured here is
one of the company’s maintenance facilities
in Montreal.
“People can ask for low, low prices” because if
they don’t get it from Simplex, they’ll get it from
somewhere else. People in this market right now
can pay lower rates than what they did 10 years
ago for the same equipment,” Véronneau says.
“The discount in pricing is 20 percent more than
10 years ago.”
But there’s an even bigger predator in the field
that’s affected pricing – the mafia.
Between 2006 and 2011, Quebec construction
companies and contractors took part in a
scheme to rig the bids on public work projects.
According to court papers and news reports, the
