Beyond BAUMA
For months, the reports kept coming in – machines were taking over Munich. Over the Internet, we would read chatter on the latest compact curiosities arriving in Bavaria, fitted with buckets, forks, augers and every attachment in between. Fuzzy images coming from the German industrial capital showed giant metal excavators like mastodons with longs arms and big teeth. We had even heard rumors of robotic systems, with polished steel parts, automating human operations for accuracy.
Every three years this big equipment buzz comes to a crescendo at a place called BAUMA. In Munich for seven days (April 23-29), equipment from all over the world came together to create the largest trade fair on earth. Machine manufacturers from Caterpillar to Komatsu, engine makers from Perkins to John Deere Power Systems and OEMs from Michelin to McLaughlin were all exhibiting their latest construction equipment and technologies at the new Munich Trade Fair Centre.
This year’s iron swarm was the largest on record. BAUMA achieved its largest results ever with approximately 500,000 visitors (an increase of around 20 percent) with 190 countries represented (an increase of more than 11 percent). This sea of humanity (pictured above) crossed mountains and oceans to be a part of the most unique experience in the construction business.
Contractors, engineers, manufacturers, journalists, industry professionals, gear heads and even curious kids and families toured 16 enormous halls and hundreds of acres of outdoor exhibit areas promoting equipment, engines, parts, services, associations and trade commissions.
“We were already delighted with the last BAUMA in 2004. This time, it’s even better,” said Dr. Christ of Kemmann, chairman of the exhibitors’ Advisory Board of BAUMA. “The number of contacts, the quality of the talks and the broad international spread among the visitors was just overwhelming.”
Overwhelming is the perfect descriptor for the trade fair. With its pure girth and its chaotic scheduling, you’re lucky to catch half of it in seven days. There are so many people in town, it’s impossible to even find a room (unless you booked two years in advance). Munich Airport registered 120,000 passengers passing through the airport on Thursday, April 26 — an amazing new record (unless you were trying to get a cab that day).
At the show, a spectacle on par with the carnival pageantry of Las Vegas ran from 9:30 a.m. To 6:30 p.m. The next closest construction event in size would be World of Concrete, which simply pales in comparison to BAUMA. Take the Caterpillar booth for example, which nearly took up an entire hall (one of 16 giant halls went specifically to Cat). Surrounded by titanic, yellow mining trucks, a four-story stage was set up in the middle for a jaw-dropping acrobatics show, while hundreds of product managers and professionals mingled and talked machines below.
In this giant ocean of kitschy carnival acts, equipment of every sort sat sparkling for attendees to touch, kick and admire. There were no ride and drives at BAUMA, but almost every machine of importance (made around the world) could be found somewhere on the show floor, with a product specialist ready to talk about it. This year’s size, attendance and pomp and circumstance was bigger than ever, probably because the construction industry is still experiencing such strong growth around the world.
“Contributing significantly to the success [of the show] was the global boom in construction — above all in the emerging countries of Asia, Latin America and Africa — and also the pick up in the construction sector in Europe,” said Manfred Wutzlhofer, chairman and CEO of Messe München (the host of the BAUMA show). “Thanks to the joint efforts of the exhibitors, the Exhibitors Advisory Board and the global network of Munich International Trade Fairs, BAUMA was able to further expand its leading position as a worldwide platform.”
A record-breaking 3,041 exhibitors presented their products and services to the construction populace, which was 7 percent more than at the last event in 2004. Germany, Italy and Great Britain were the three strongest contingents of exhibitors at BAUMA 2007. This was easily the world’s biggest trade fair in terms of exhibition space (540,000 sq meters), which was fully booked. In this ocean of equipment, big things were happening on the compact machine sector.
An Uncertain Future for Bobcat
Ingersoll Rand Considers Big Changes for Its Construction Related Businesses
The BAUMA rumor mill generated a deafening buzz early in the show last April — that Bobcat Co. had been sold. The report wasn’t true, at least not yet. A few weeks later, Ingersoll Rand announced it was exploring “strategic alternatives” for its Bobcat and “construction-related businesses,” including its Utility Equipment and Attachments businesses.
Ingersoll Rand has been an extremely busy company over the last 15 years. Ingersoll Rand purchased Clark Equipment Co, in 1995; Clark Equipment Co. was the holding company for Bobcat as well as Club Car. In 2001, the company expanded into the compact backhoe loader realm, acquiring stock of Superstav, spol. s.r.o., a manufacturer of compact tractor loader backhoes based in Dobríš, Czech Republic. Over the last few years, the company became interested in working with companies that made attachments. Ingersoll Rand announced it had acquired U.S. Distribution rights for Tramac branded hydraulic breakers in June 2005. In the fourth quarter of 2006, Ingersoll Rand acquired Geith International, an Irish attachment manufacturer in the construction, excavation, demolition and scrap business.
“Our Bobcat, Utility Equipment and Attachments businesses represent world-class operations with exceptional people, products and brands; however, these businesses no longer fit Ingersoll Rand’s long-term strategy,” explained Herbert L. Henkel, chairman, president and CEO. “The eventual outcome of our process to explore strategic alternatives for these businesses will be the strategic repositioning of Ingersoll Rand away from the capital-intense, heavy-machinery profile of the company’s past and toward a true diversified industrial company with powerful growth platforms consisting of climate control, industrial and security businesses. These businesses are well positioned to deliver consistent growth throughout the business cycle.”
In other BAUMA news, Bobcat Europe, a business unit of the Ingersoll Rand Compact Vehicle Technologies Sector in the European-Served Area (ESA), and Wacker Construction Equipment AG, Germany, announced that their long-standing strategic partnership in Germany, Austria and Switzerland will cease at the end of 2007. Background to this decision is the desire of both partners to focus on their future strategy, which can be best done outside of the current partnership arrangements. In this context, both companies will continue their constructive partnership throughout the remainder of 2007.
Compact Equipment Q&A with Wolfgang Immel
Komatsu Deutschland Sales and Product Marketing Utility
CE: Are skid steers and compact track loaders big in the European market?
Wolfgang: Bobcat started it and since then, everybody started to bring them into the market. In Germany, skid steers and track loaders are very much in decline. Bobcat, Gehl, everyone in the market is seeing a decline — only 300 or 350 units are sold a year. Germans still use them for demolition — inside buildings because they are small, low and narrow. But to use them as load and carry machines, no. I did a demonstration with such a machine and the driver came out of the machine and said,“I hate these jerky skid steers.” He hated the shaking all the time. In Germany, we have a lot of small articulated shovels, and even though the performance is lower than these [skid steers], they are far more comfortable to drive. The operator is not shaking all the time. That’s one reason this market is on a decline and is getting smaller.
CE: Will the skid steer and track loader markets ever develop in Europe?
Wolfgang: No. I don’t think it will develop in a positive sense. Of course, these products here [the skid steers and track loaders] are made in Italy, and Italy, for instance, still has a massive skid steer market.
CE: Which of your compact machines are big in Europe?
Wolfgang: It’s extremely different. You have a lot of different markets. Germany has a big mini excavator market. Italy has a big skid steer market. All of Europe, except for the German market, is really good for backhoe loaders. But in Germany there’s only 80 units sold into that market.
CE: Who are the biggest players in the backhoe market in Europe?
Wolfgang: JCB in Europe is 40 to 50 percent of the backhoe market. Komatsu has about 15 percent. We came to the market late. What we have now is great, but there were lots of details about reliability that we had to work out.
Two Compact Equipment Magnates Merge
Wacker Construction Equipment and Neuson Kramer Baumaschinen Announce Union
Two of Europe’s small equipment icons — Wacker Construction Equipment AG, Munich, and Neuson Kramer Baumaschinen AG, Linz, Austria — plan to merge during the course of 2007. The shareholders of both companies and management of Wacker have signed a Memorandum of Understanding to this effect. The new company is to be called Wacker Neuson AG.
“We are convinced that the high-quality portfolios of both companies provide a perfect springboard to capitalize on growth opportunities in the compact equipment segment in the mainstream construction, gardening and landscaping markets in Europe, the United States and Asia,” explained Georg Sick, president and CEO of Wacker.
The planned merger brings together two profitable, family-run quality and technology leaders to create a major global manufacturer of light and compact equipment. The joint venture will hopefully leverage both companies growth opportunities in Europe, Asia and the United States. Both companies are convinced that their product portfolios are mutually complementary. The user base, target markets and sales channels are practically identical.
“Both companies were on the path to success and would have continued to thrive irrespective of the merger. However, the merger does open up a new dimension, paving the way for a strong position in the global compact and light equipment market,” explained Dr. Ulrich Wacker, president of the Supervisory Board of Wacker.
Both companies say they are united in their commitment to continue serving their existing customer bases and building a successful future through a long-term strategy focused on local market requirements. Wacker’s global sales and service network, coupled with its rental business, offer significant synergy potential and the state that Neuson Kramer’s high-quality compact equipment such as excavators and wheel loaders is the ideal complement for Wacker’s rental pool. Wacker’s distribution partnership for Bobcat products in Germany, Austria, and Switzerland was terminated at the end of 2006. It was due to expire in 2007.
Discussing Compact Wheel Loaders with Christopher Lee
Caterpillar Marketing Communications Manager
CE: In Europe, the compact wheel loader is a huge market, but in America, it’s very small because of the skid steer.
Lee: For the compact wheel loader market, we find that 50 to 60 percent is in Germany. The volume in the States is becoming more significant. What I think will happen is that that growth will steadily grow over the years. I think some of that will be a substitution for the skid steer in particular applications. How much it will grow in the states, I don’t know, but it’s steadily creeping up. But the main market is still Germany.
CE: What types of applications are popular?
Lee: Light industrial applications and recycling materials are big. In applications where a skid steer loader is too low to the ground, you can gain additional clearance and height with a compact wheel loader. The reach is higher and of course access in and out of the cab is much better.
CE: What are the biggest markets for compact wheel loaders in Europe?
Lee: The German market is small construction sites. In the U.K., we have a backhoe loader that goes onto the site first. In Germany, it’s almost always a wheeled excavator and a compact wheel loader. You go around Germany and there’s a compact wheel loader on almost every site. We sell most here with just forks and buckets, but in the States, it’s marketed much more as a skid steer loader. You’ve got a standard skid steer coupler on it in the States with a lot more hydro-mechanical tools. What we’ve done with these new compact wheel loaders is that we’re offering a high-flow option, so can run attachments like a cold planer and landscape rakes.
CE: What do compact wheel loaders offer that’s missing from American machines?
Lee: Visibility and operator comfort. You’ve got a full cab, space around you and you’re much, much higher. If you put a cold planer on the front of a skid steer, you really can’t see a great deal of what you’re doing. On this unit, you’re looking down when working. And there’s just better all around visibility — especially to the rear and to the fork tips.
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