The masts of success: Alimak Hek on the rise
05 August 2008
Alimak Hek has dramatically increased its sales revenue since 2004. Maria Hadlow met some of the management team to discover what has driven the company to such heights.
From 1st July contractors in Fujian Province, China, must use rack and pinion based machines to transport people and materials over a height of 20 m on new buildings. From 2010 this ruling will apply to vertical access on all buildings in the Province.
"There is a strong underlying market growth in China," says Fredrik Wiking, executive vice president and head of business area construction equipment at Alimak Hek, "Safety and productivity issues are becoming more important and, if the new regulations in Fujian province roll out across China, we can expect even more growth."
Alimak Hek's production facility in China produces 450 and 650 mast climbing products, designated 450CN and 650CN which indicates that these models - with a slightly different specification and components sourced locally - are intended for the Chinese, SE Asian and Indian markets.
According to Petter Arvidson, president and CEO of Alimak Hek, Alimak is global company which operates locally. By this, he means that the company sells its products worldwide but understands that each region has its own characteristics and is best served by having a facility on the spot if possible. Commitment to this policy is borne out by the recent opening of two new offices: one in India and one in the Middle East.
The Indian operation comes on the back of very high growth in demand for construction equipment in India, Mr Wiking, said, "There is a now a 15% growth in demand for construction equipment year on year and the demand for hoists is growing at an even faster rate. Our business in India is really taking off."
Much of the growth is due to the increasing size of the middle classes in India and their demand for higher quality housing which tends to come in the form of high rise developments. There are also a number of European construction companies working in the market who already understand the productivity benefits of using hoists, mast climbers and transport platforms.
The Alimak 450 and 650 hoist ranges and Alimak industrial lifts will be available in India, alongside the Hek work and transport platform ranges all supported with appropriate aftermarket services.
The Indian operation will be led by Shankar Rao who has recently been appointed as managing director for Alimak Hek India.
The Middle East sales support office, which is located in Dubai's Jebel Free Zone, is in line with Alimak Hek's strategy to expand into additional geographic markets. The Dubai office will serve the fast growing Middle East and Northern African markets.
Terek Adel Al Gazar is the new managing director of the Dubai office, "The scale of the construction boom in the Gulf region is staggering," he said, "The 12 million square mile Al Zorah Development project and other building projects are worth more than $2.4 trillion. The United Arab Emirates alone currently has $35.6 billion invested in residential, commercial and refinery construction projects that are underway"
Alimak Hek will maintain its agreements with existing partners in the region, adding new partners in areas not currently served. The Middle East office will focus on supporting Alimak Hek's partners with training, marketing and technical support.
Alimak Hek has 1000 employees worldwide, it has its own sales and service companies in 16 countries, distributors covering 50 countries and rental operations across Europe with approximately 1600 rental units.
As well as manufacturing in China, Alimak Hek has production facilities in Sweden and the Netherlands and manufactures the Champion heavy duty hoist in the US.
Last year Alimak Hek's sales revenue was $350 million, 2007 was a good year for many access equipment suppliers but Alimak Hek's strategies are designed to engender growth even in these more uncertain times.
Keeping close to its markets has enabled Alimak Hek to develop the sort of products that its customers require. After the merger of the Alimak and Hek businesses the company found it had a very extensive product range. Along the way regulations had changed and, although machines had been upgraded to match new requirements, it was not an easy process. A large range of products can also have the knock-on effect of longer delivery times.
Alimak Hek analysed its product range and, with considerable input from its own rental companies and customers, set about streamlining and designing a new range. Alimak discovered that most customers prefer to carry just one size of mast and need their mast climbing units to be suitable for a wide range of jobs> The response was the Hek MCM modular work platforms, launched in the second half of 2007.
The modular system will come in three sizes: light L350 (for use on masts with 350 mm by 350 mm cross section; medium M-450 (450 mm by 450 mm) and; heavy H650 (650 mm by 650 mm). The light and medium systems are already available and Alimak Hek expects to launch the H650 at the end of this year
The modular System has been designed so with relatively few basic components, it is possible to assemble a number of different mast climbing machines. Using the same drive unit, mast and three adapters, a wide range of mast climbing work platforms and transport platforms can be configured. (see linked article).
The third strand to Alimak Hek's growth is manufacturing quality and efficiency. When Access International visited Alimak Hek in Middelbeers, Netherlands in May, the last eight machines from the old mast climber range were in the production line although; Alimak Hek will continue to manufacture spare parts for the old model equipment.
With the help of outside consultants Alimak Hek started to streamline its production facility at the end of last year. Ernst van Hek, president of Hek Manufacturing said that before the summer breakdown the new work flow system would be completely in place.
New manufacturing equipment - including some robotic welders - the work flow system and the strategic use of subcontractors have contributed to efficient production. "More machinery and less operators have increased the capacity," said Mr van Hek, "I don't want to use fewer people but we have trouble recruiting skilled labour......I can now produce here more cheaply that in China."
Because of the modularity of the MCM work platforms they can easily be assembled to order. The combination of a modular product and highly responsive manufacturing is that customers can receive products in just six weeks. This is important as, says Mr van Hek "Most customers buy to order although others do have investment plans. Delivery is in just six weeks, - delivery has always been good but now with fewer components and subcontracting non-key skills we have flexibility without carrying high inventory."
"Our customer base requires delivery in six weeks any longer than that and their job may already be finished." Mr van Hek gives an example, "Today I had a call from customer needing equipment in a week and the price in an hour. That's an extreme case but it does happen."
Having grown revenues 100% between 2004 and 2007, Alimak Hek is confident that its strategies of close and long term relationships with customers, pro-active product development and efficient manufacturing practices will provide continued success in the future despite the threat of low cost competition.
Frederik Wiking says, "Competition is always positive. New companies selling products with a low upfront price requires us to be continuously proactive in product development and better in communicating the benefits of investing in Alimak Hek equipment.
"We are a low cost supplier considering the total economies at the work site and the life time cost of the products, but we are more expensive upfront. We are convinced that our products are safe, more developed and offer benefits such as higher reliability, lower energy consumption, smoother ride and higher up-time, as well as higher second hand value."