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WORLD RENTAL REPORT
IRN SEPTEMBER-OCTOBER 2013
BRAZIL
If there is a common assumption that it is World Cup
and Olympic projects that dominate the workloads
of Brazil’s contractors and rental companies, then
that view is quickly dispelled by Estaf Equipamentos,
one of the country’s top five rental companies.
Gustavo Lima, Estaf CEO, tells
IRN
that less that
5% of its R$55 million (€17.1 million) annual revenues
are World Cup or Olympics related; “World Cup
and Olympic projects are the tip of the iceberg for
infrastructure in Brazil.”
Continued investment in infrastructure, housing
and commercial buildings like shopping malls -
around 75-80 malls are currently under construction
in Brazil – have helped the rental market grow by
15-20% annually over the past few years. Can that
level of growth be sustained?
“Right now, we’re not sure about that”, says Mr
Lima, “Brazil has some problems. I’m not confident
in terms of 2013 and 2014, and it’s an election year
[next year], so we are not sure about government
plans.”
Still, the overall growth prospects and investment
plans for Brazil convince Esaf that rental – and its
three chosen sectors of scaffolding/formwork, aerial
platforms and power rental – offer good prospects
in the longer term.
The company, based in the coastal town of Olinda,
north of Recife in Pernambuco province, received
inward investment from private equity firm Rio
Bravo in early 2011, and has since invested R$100
million (€31 million) in its fleet, including this year,
with spending next year likely to be around R$30
million (€10 million). Estaf says it has invested more
Caterpillar machine’s in Madisa’s rental fleet
working in Puebla, Mexico.
Gustavo Lima, CEO of Estaf Equipamentos,
one of Brazil’s biggest rental companies.
Estaf rents aerial platforms, power and scaffolding. This is its
head office depot in Pernambuco.
MEXICO
A recent slowing of Mexico’s economy – GDP growth this year is likely to be under 2% following good years
in 2011 and 2012 – is leading to a cooling off in the rental sector.
“It’s a difficult market”, says Alfonso Gutiérrez, rental sales manager at Madisa, the largest Caterpillar
dealer in Mexico, “We have two kinds of clients, those that want good products, and those that want a low
price. Competitors use old equipment. At least the bigger contractors are informed about products, and
that’s where we make our business.”
The company operates a large rental fleet run from around 40 of Madisa’s 51 locations around Mexico,
with its two major rental locations at Mexico City and Monterrey. Something like half of the 3000 unit,
US$160 million fleet comprises Caterpillar machines (from mini excavators up to massive 777 trucks), but
in the last few years it has also added other products including compressors, lighting towers, generators,
forklifts, portable accommodation and cranes.
Mr Gutiérrez says its main customer base is Mexico’s major contractors – the best payers – followed by
companies in the mining sector and then the steel industry. Competitors in the Mexican market include
OEM dealers who are renting – such as John Deere and JCB dealers – as well as regional independents.
Madisa continues to invest in its fleet, having added Cat machines, aerial platforms and temporary
accommodation to its fleet earlier this year. These three product groups are currently the key investment
areas for Madisa’s rental fleet.
However, Mr Gutiérrez reiterates that Mexico is not enjoying a golden period; “At the moment it is a
very difficult time to invest”, he says, “The government takes a long time to pay contractors, and the
contractors then take time to pay us. It’s a difficult situation.”
Around half of Madisa’s
fleet is Cat equipment,
but it also rents lighting
towers, aerial platforms
and power.
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