14
HERTZ INTERVIEW
IRN JANUARY 2014
which has helped give HERC national coverage in
pumps. “We will look and see if it makes sense to put
it into other markets”, says Ms Boyd.
The North American fleet has changed along
with the customer base, and HERC continues
to investigate new products, such as portable
accommodation, a market dominated in the US by
companies like Williams Scotsman, Mobile Mini and
Modspace.
“The bungalows seem to be working pretty well
in Europe so we will do a test in a small way in
North America”, she says, “We are also looking at
partnering; sharing deals with new partners.” These
trials are being conducted in Central US.
As an aside, it is notable that aerial platforms
continue to occupy an important place in the fleet
– aerials have increased as a proportion of the fleet
from 22% in 2006 to 24% in 2012. This reflects the
ubiquity of scissors and booms in the expanding
industrial sector as well as in niche markets like
entertainment and film rentals. That contrasts
markedly with the fall in the size of the earthmoving
fleet, down from 30% of the total in 2006 to 22%
now, reflecting the reduced exposure to pure
construction.
International strategy
Given the size of the company and its parent,
there are some who wonder why it has been
relatively modest in its international expansion.
These businesses still represent only 10% of total
revenues, and are dominated by the well-established
operations in France and Spain.
Ms Boyd acknowledges that a lot of focus in the
past few years has been on exploiting the North
American upturn; “I would like it [the international
operations] to be a larger percentage of a larger
whole, but after the downturn we have invested a
lot in North America, which started to come back
sooner and had less risks – we are cognisant of
our shareholders and the need to make smart
investments. So that’s why there was more going on
there.”
Despite this domestic focus, HERC has continued to
invest in its Chinese operation – where it currently
has around five locations – as well as in Saudi Arabia,
with local partner Dayim Holdings, where it recently
opened a second location.
However, it is Europe where the main international
business is, and where HERC has been weathering a
long downturn, which led the company to scale back
its Spanish operation and focus on power rentals.
In France it operates a more conventional general
rentals operation with more than 60 locations.
Ms Boyd says the European operation “is coming
out of a downturn. We have stabilised that business
“There’s a positive explosion
of energy going on in Europe.
Once we get our business
to the level we set in the
plan, which I think is coming
soon, we’ll look at other
opportunities”.
A HERC aerial platform being used at the Chongqing
International Expo Center in China.
the end of 2014”, she tells
IRN
, “We have started the
process on the East Coast and some in the West.”
Hubs have been created in New York/New Jersey,
Toronto, Atlanta and also Houston, while there are
others in the San Francisco Bay Area as well as Puget
Sound, the region in the North West that takes in
Seattle. There is also one in the Oil Sands area of
Canada.
This process will not see a reduction in the number
of overall sites, rather “more spokes, more smaller
stores.” Acquisitions play a part in this geographical
shift, with Ms Boyd citing the example of a 2011
acquisition in North Dakota (WGI Rentals), which has
become a mini-hub, with two ‘spoke’ depots added.
Also filling the gap left by the construction
downturn has been niche or specialty rentals,
including pumps, power and entertainment/film
rentals, the latter boosted by the 2012 acquisition
of Cinelease. This kind of equipment now represents
around 15% of the fleet, double what it was in 2006,
and is presenting further growth opportunities.
“Cinelease is expanding throughout North
America, into New York, Miami etc.”, she says, “There
is state funding for the entertainment sector…We’re
expanding that and will continue to expand off the
North American continent.” Cinelease has recently
been working on a project in Iceland.
The model for these specialty businesses, which
further diversify the business, is to “take a capable
acquisition and grow it naturally”, she says, “They
balance us and we will continue to invest in them.”
Another example is DW Pumps, bought in 2011,
