Hyster - The Interview
Strong Partners. Tough Trucks.
Hyster began life as a pioneering local company in Portland, Oregon in the 1920s and started mass-producing IC trucks in 1935. It made its first container handling truck in 1959 and its first electric trucks in the 1960s, entering the warehouse truck market in 1997, since when this part of its business has grown rapidly.
Now a major part of the NACCO group, which is the world's third largest lift truck manufacturer, Hyster is the only global full-line player in the materials handling market with a strong worldwide network of independent partners, offering tough trucks for demanding operations everywhere. Warehouse & Logistics News went to Hyster Europe's offices in Fleet, Hants, to meet Hans Seijger, Hyster's recently appointed Managing Director for Europe, Middle East and Africa (EMEA.)
 Dutch-born Hans (short for Johannes) joined Hyster Europe as MD, EMEA in May 2007. He previously spent nine years working for DAF, first as export manager, then in marketing then four years as MD-Germany. Intriguingly he's never worked in consumer goods or in a domestic market: "My father was in airlines and we moved around a lot, so I suppose I grew up with an international perspective."
Hans' role as Hyster's MD, EMEA is sales-oriented and externally focused: "My job is about building distribution and market share, and finding business partners. My first priority is developing and driving the strategy to take the Hyster brand forward."
Hans is in direct contact with all Hyster's dealers in EMEA: "Everything lands on my desk. I get involved as required, especially with the bigger accounts: people want to hear my vision for the business, and I'm always happy to make a contribution. I enjoy the sales process, talking to customers and tackling problems. This interaction helps us find solutions: there's too much talking, not enough listening."
Hans lives in the UK and is here sixty percent of the time: "I try to control my diary myself, and not be dictated to by events!"
Reporting to Hans are various territory directors and managers, in a flat organisational structure. Allan Blyth is the Northern Europe Area Business director, and also head of UK operations. His Southern Europe equivalent is Frederic Martinez. There are other business directors responsible for the Middle East and Africa, and Central and Eastern Europe.
NACCO in the world top three
Hyster's parent company NACCO is an NYSE-listed public company with a $3.3bn turnover in 2006 and other interests including coal mining (NACCO stands for North American Coal Corporation), consumer electrical goods and kitchenware. NACCO Materials Handling remains a core business, and one of the biggest revenue contributors.
NACCO is currently the world's third biggest lift truck manufacturer and the overall market leader in the US: "The leading lift truck companies' geographic strengths are quite distinct," says Hans. "We're number one in the US, Linde is in Europe and Toyota is in Asia-Pacific. Our ambitions are to replicate our US position in Europe, but we're realistic that we can't do it overnight."
 Hyster's global manufacturing and procurement policy is about achieving maximum effectiveness, as Hans explains: "We rely on global sourcing from subcontract suppliers in different countries, including China. We're changing many of our manufacturing processes to maximise efficiency and margins, and we're increasingly about assembly, rather than manufacturing from scratch."
"Hyster and its sister brand, Yale, share manufacturing and sourcing and have other synergies, but otherwise operate independently," Hans explains. "The two brands are two distinct entities, and will remain so."
Hyster owns a factory in China, but this plant doesn't currently make trucks for sale in EMEA, says Hans: "Our products' success in EMEA isn't due to being cheaper; it comes from working with our distribution partners and giving the customer added value."
EMEA - the place to be
The lift truck market in Europe, Middle East and Africa saw very strong growth in 2006/7, with over 380,000 trucks sold. The overall growth rate was 16-18% "but it's not an even picture," says Hans: "Western Europe is a mature market, but individual countries like Germany showed remarkable growth."
The EMEA region's 75% growth in lift truck sales since 1999 follows average annual growth rates of 6-10%, in line with overall economic growth: "That tells you about the quantities of goods being produced and handled in this part of the world. The frequency of product handling in the supply chain is also increasing, and service levels are getting better and better."
Northern Europe is Hyster Europe's largest sales region, and Fleet is the EMEA HQ. Hans explains: "When US companies want to do business in Europe, they generally feel most confident starting in the UK, like we did."
Fleet is the centre of gravity for Hyster's distribution operation, along with support functions like marketing. Fleet handles logistics and orders for the whole of EMEA: "Today's IT systems enable dealers to order direct from the factory through our interconnected network."
Hyster's dealers act as its sales offices in each country: "We're unique in this industry in working with independent distributors, each with the best ability to maximise the result. Unlike OEMs and their distributor networks in many other industry sectors, we have no financial interest in our distributors. We have commercial arrangements with them, but don't subsidise our dealers at all: they have their own profit and loss responsibilities.
"Our distributor partners buy our trucks, and sell them to their customers and provide a service. On bigger accounts, it's often a joint effort. The major accounts department in Fleet works with the various dealers in EMEA to develop turnkey solutions for cross-border customers with UK headquarters."
Big-name customers attracted by Hyster's global reach include glass manufacturer St Gobain: "We deal with them in several countries, and have preferred supplier status: it's about helping them achieve advantage as a company." Other large cross-border clients include Coca-Cola and Colgate: "Our major accounts are long-term strategic relationships; independent of market highs or lows, we're always there alongside them."
Hyster - first for products
"For me," says Hans, "a big attraction about working for Hyster is its strong product range, which stretches from powered pallet trucks to reach stackers. They are very advanced, modern machines, offering plenty of scope for increased sales."
Hyster have become 'full-liners' in product terms since acquiring their warehouse trucks business in 1997: "Our heritage is in IC-engine forklifts and diesel, which still represents two thirds of our business, but we're growing significantly in electric-powered trucks and warehouse trucks. Traditionally we're strong in heavy industry, manufacturing, bottling and bricks and blocks, as well as in the automotive sector. Our fastest growing vertical sectors in EMEA are third party logistics and warehousing.
Hyster's warehouse range covers hand pallets to stackers, order pickers, Very Narrow Aisle trucks and reach trucks. They have a similarly comprehensive portfolio of IC engine trucks, led by the technologically advanced FORTENSª range. The first FORTENS series was launched in 2005, with 2-3.5 tonnes lifting capacity. The FORTENS' introduction marked a major development in the relationship between cost of ownership and performance, as the new trucks cost more but are much more productive and dependable. The result has been a shift in customer perception and added value for the market.
Since 2005 Hyster has introduced various other FORTENS models with different lifting capacities, including a new 6-7 tonne capacity truck launched in May 2007, and the range continues to provide a solid base for future growth.
Hyster and Barloworld - a history of successful partnership
Hyster's partnership with Barloworld, which in Europe is its distributor partner in the UK and Benelux, goes back a long way: "We've worked with Barloworld in Britain for over fifty years, and over seventy-five years in South Africa. It comes down to achieving market coverage and advantage, having a financially strong, independent partner, staying closely aligned and each doing what we do best. Barloworld handles our national distribution and provides our sales and service support, and we supply the trucks. Ideally it's seamless; the customer can't see the transition from manufacturer to dealer and vice versa."
Barloworld provides nationwide coverage with a national response centre supported by 23 regional service centres and over 500 mobile technicians. They have recently invested in tracking call outs with web-based systems and PDA's for their service engineers: "The philosophy is more important than the numbers," says Hans: "The new IT makes sales, service and despatch much easier, and streamlines and concentrates the processes."
Contract rentals represent over half Hyster's UK business revenue. As well as Hyster's UK distributor, Barloworld is also its biggest contract rental customer and has a huge rental fleet, another reason dealing with Barloworld is a huge advantage for customers: "Outright capital purchases of trucks are reducing over time, with increasing customer numbers moving to 'pay as you go.'
Well over 90% of Hyster trucks supplied through Barloworld are standard models, often delivered within a day of the order: "There's more to it than furnishing lift trucks: whether outright sales or short or long term rental, what we and our dealers really provide is handling capacity and efficiency.
"With Barloworld managing their truck fleet, customers are free to concentrate on their core business. Barloworld gives truck availability twenty-four hours a day, and is transparent about the cost."
Worldwide representation
Hyster is represented in all significant territories worldwide, but the UK is special," says Hans. "We have a very strong heritage here, and there's plenty of scope to develop our UK business further. It's one of the reasons I'm here. That said, we stand by our mission statement 'Tough trucks for demanding operations everywhere."
Hans is equally clear about why customers throughout EMEA should choose Hyster: "Together with our partners we offer a total package; availability of products, certainty over the cost and assurance of back-up and quality. We're strong in matching customer needs with a range of models, rather than producing the one truck. We immerse ourselves in our local markets and understanding customers' requirements: meanwhile, being global gives us a competitive advantage, with economies of scale."
Some 95% of Hyster trucks sold in EMEA are European-made. IC engine trucks are produced in Craigavon, Northern Ireland; electric counterbalance trucks are built in Irvine, Scotland. Nijmegen, Holland is home to heavy forklifts and container handling; warehouse equipment is made in Italy at Masate, near Milan, and Modena (also home to Ferrari, premium quality olive oils, and the late Luciano Pavarotti!) The only non-European-made Hyster products are certain low volume models, made in the US.
Since 2000, some 96% of Hyster products have been redesigned or upgraded in a continuous product development cycle, with more planned for 2008 across the product categories. "We've developed a product family with common componentry, including engines, which are standard for all our trucks."
Hyster's development process involves rigorous testing and research, involving customer feedback and 'stage gates.' Much of this work is done in the US, in Portland, Oregon, but there's an increasing move to specify EMEA-made trucks tailored to European customers' demands. Hyster has a UK group working on projects based on local customer wishes. Worldwide engineering for warehouse products and projects is in Italy; application engineering, including attachments, is also in Europe.
The way forward
Six months into his job as MD - EMEA, Hans is very confident the forklift market will remain strong in this region: "There's still a strong demand for quality mechanical handling equipment, so we will continue to work to increase Hyster's share and improve our distribution."
Part of this process involves keeping up with customer requirements such as eco-friendly trucks. For forklifts, the short term solution for customers wanting to go 'green' is to switch to electric: the other option is greener IC engines. "Our current diesel engines' employ the latest diesel technology with very low emission levels, "says Hans. "We can also offer hydrogen fuel cell trucks as specials if required.
"We're seeing lift truck manufacturer consolidation, but from our point of view it's business as usual: Hyster is a public company with a strong history of success, and one of the biggest and strongest survivors. We're implementing synergies, not just talking about it. It's the right basis for a successful long-term future. In terms of consolidating distribution, the answer lies in securing financial viability. Everyone's struggling with distribution costs; part of the answer is a strong service brand, hence in the UK and Benelux, we offer 'Hyster by Barloworld.'
"I want to make 'Hyster by Barloworld' the top choice for customers, in all market segments. We're strong in IC engine forklifts and big trucks: now we need to build our position in battery-driven products in general. The targets we're setting for the next year are as much Barloworld's as ours; they're pretty ambitious, but are based on steady growth, and above all they're achievable."
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For further information about this company's activities in the warehouse and logistics industry please contact:
Hyster Europe
Tel: 01252 810261
www.nmhg.com |
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