IRN JANUARY-FEBRUARY 2015
16
LATAM40
IRN
and its LatinAmerican
sister publication
Construcción
Latinoamericana
have compiled
the LATAM40 ranking of the
largest 40 rental companies
in this growth industry.
CLA
editor
CristiánPeters
reports.
Adeeper lookat
LatinAmerica
It isa far fromexhaustive list, andwillbecomemore
representative in subsequent surveys, but certainly
provides a valuable snapshot of this market that
we plan to build on to create a truly comprehensive
ranking like the annual IRN
100
ranking of the
largest 100 rental companies in theworld –published
in theJune issueof
IRN
everyyear.
Brazil
The rental industry is gaining ground in Latin
America, with Brazil emerging as a clear example. A
few decades ago, it was common that construction
companies owned 100% of their equipment fleets,
but today – according to estimates from rental
association the Associação dos Locadores de
Equipamentos para a Construção Civil (ALEC) – 30%
of themachines are rented.
And it is expect that this proportionwill reach 70%
in the future, according toFernandoForjaz, president
of the organisation. The executive was optimistic
about the performance of the rental market in 2014,
and said he expected to see growth of between 20%
and30%.
In fact, according to a recent study ran by ALEC,
48.6% of the companies surveyed experienced an
increase in revenue during the first half of 2014
compared to the secondhalf of 2013, andonly 22.9%
scored knockdowns.
Oneof the interesting aspects of the rentalmarket
is that the industry continues to grow whether
the construction sector is depressed or not. Latin
American construction companies are migrating
towards rental and this is a trend that appears to be
irreversible, as they are noticing the advantages of
nothavinga fixedassetorworryaboutmaintenance.
Mexico
An example of the above is Mexico, whose
construction industry showed declines during 2013,
but even then the three rental companies from this
country that supplied data for the LATAM40 showed
year-on-year increases in rental revenues.
Máquinas Diesel (Madisa) had revenues totalling
US$74million (€64million) thanks to a 6% increase;
Entergi had an increase of 9% and revenues of over
US$12 million (€10million) while GTC Construcciones
yEquiposexceededUS$3.5million (€3million) thanks
toa2% increase in sales.
But there isaneed tobecautious. Even if thevision
in relation to themarket is optimistic, it varies from
country to country. Colombia has been reactivating
infrastructure, coal mining and fuels projects, for
instance, while Chile and Peru on the other hand,
have felt the impactof lowerminingactivity recently.
Results
Latin American companies are generally reluctant
to provide financial information and therefore it
has proven difficult to provide a table that truly
represents the industry.
According to ALEC, it could be projected that the
rentalmarket inBrazil generates revenues of around
US$8 billion (€6.9 billion). Extrapolating this figure,
considering that Brazil represents about 40% of
the construction market in the region, it might be
estimated that the Latin America rental industry
moves about US$20billion (€17billion) annually.
However, it must be taken into consideration that
there are countries with very immature markets
such as Argentina. According to Biscayne Rent, this
country’s rental market could reach US$305 million
(€263million) by2017.
The 40 companies listed in the ranking produced
revenues totalling US$2.29 billion (€1.98 billion)
during 2013, therefore become a representative
sample of about 11% of the estimated industry
total. These 40 companies handle 430 warehouses
in the continent and employ over 15330 people. We
hope this gives some broad clarity in relation to the
market situation.
Notesand thanks
■
CLA
and
IRN
are grateful to all those
companies and individualswho contributed
information for this study, particularly
Caterpillar. If youhave any comments or
would like tobe includednext year, please
contact
CLA
editor, CristianPeters at cristian.
or
IRN
editor, HelenWright
at
.
■
The ranking is basedon rental revenues in
2013.
■
Entriesmarked (Est) have been estimatedby
CLA
and
IRN
.
■
* For international businesses, revenues in
the table relate to activities in LatinAmerica
only.
■
** Estimate basedon average statistical
relationshipbetween 'Crane Index' from
IC
50
survey in
International Cranes and Specialized
Transport
- a sister publication to
CLA
and
IRN
- aswell as and rental revenue data
collected from
IRN
's 2014 IRN100 survey
(where crane companies appear inboth
surveys)
.
■
Revenues have been convertedusing the
average value of the currency in 2013.
T
he Latin American rental market is growing
steadily. The region is still far from the levels
that can be found in markets such as Europe
orNorthAmerica, but certainly theequipment rental
concept is becoming increasingly common in the
region.
IRN
teamed up with its Latin American sister
publication
Construcción Latinoamericana
(
CLA
-
which is published in Spanish aswell as Portuguese)
to take adeeper look at this fast-movingmarket and
compile a ranking of the largest rental companies in
the region, basedon rental revenues for 2013.
Getting quality data and responses from this
fledgling market proved challenging, so this first
versionof the rankinghasbeendubbed theLATAM40
– data gathered on the 40 largest rental companies
in LatinAmerica.
