Iceland's new dynamic: Jon Geir Sigurbjörnsson is building a business to serve the new needs of the access market in Iceland.
21 January 2009
Jon Geir Sigurbjörnsson believes that he was responsible for bringing the first new scissor lift into Iceland: his father had been importing second hand machines but Mr Sigurbjörnsson encouraged him to buy new.
More recently, Mr Sigurbjörnsson managed Mest's dealership's in Iceland until he left the company in early July to establish himself as a consultant providing advice for companies wishing to sell equipment in Iceland. He says that he guessed things weren't going well with Mest but still found himself one of the losers over an arrangement he had with the company when it went into bankruptcy.
Mest ehf ran a construction equipment rental business and imported a range of machines including Bomag, Liebher, Peri and Niftylift machines into Iceland
Mr Sigurbjörnsson explains that in Icelandic law if a machine appears on a company's books it considered part of the company's assets and it can be very difficult for the supplier to recover their property or money even if it has not been paid for . Mr Sigurbjörnsson says that he has been able to help some dealers with advice as to how to get their money back but nevertheless some companies have suffered considerable losses.
Last year the high demand for houses, offices and infrastructure gave Iceland's construction equipment rental sector a huge boost. Hjalti Mar Bjarnason, the chief executive officer of Mest said that he expected the demand for construction equipment rental to double within the next five years thanks to a growing population and a surging economy; "The construction market has really boomed in the last four years and the future looks good too. This is because [Iceland's] economy is solid, business confidence is high and the private sector is strong."
Since then however, Iceland has been a victim of the worldwide confidence crash, building has all but stopped and says Mr Sigurbjörnsson, "The Krona is down 40% and inflation is 13%. which could cripple the market particularly because of the boom Iceland has enjoyed for the last ten years"
Machine sales in Iceland are down 90% and now people are treating their equipment differently. "Last year if a machine broke down," said, Mr Sigurbjörnsson " it was replaced :now companies are repairing machines.
Post Mest, two big rental companies dominate the Icelandic access market: both of which are also machine dealers ."In the past," says Mr Sigurbjörnsson, "It has not been in access dealers interest to stock spare parts as they can rent companies a spare machine while they wait for repairs." But it appears that some customers are not satisfied with that approach anymore.
Mr Sigurbjörnsson sites a large construction company which has taken the decision to buy access platforms rather than rent locally. "Second hand machines and repair are the businesses to be in at the moment in Iceland," he says."
Mr Sigurbjörnsson's company, Tölvur og kerfi ehr, specialises in spare parts and service for MEWPs, a business he thinks is ideally positioned in the current Icelandic market. Besides himself the company has four employees and the company can supply parts for all the major aerial platform manufacturers. "We import parts via another spare parts specialist," says Mr Sigurbjörnsson, " We can deliver spares between 24 and 48 hours.
The spare parts business is the core of Jon Geir Sigurbjörnsson's company but he also wants to put his experience in the access industry to work by providing a consultancy service, "Company's will need advice on issues such as funding for access equipment, importing and other related business issues." he said. Mr Sigurbjörnsson's expereinece in the Icelanc access industry both past and present certainly make him a valuable resource.