How’s the market?
By Hugh Patterson
The fourth in freelance writer/editor Hugh Patterson’s series in which he discusses the state of the materials handling business with the leaders of New Zealand forklift companies.
 Ross Easton
Clark Equipment New Zealand’s director, Ross Easton, has a long view on change in the industry. The company he runs supplies heavy equipment to freight handling, construction and agriculture, and promotes major brands.
Ross began with agricultural machinery in Oamaru in the late ‘70s then moved to Dunedin and began selling Clark forklifts. The company manufactured SKD (semi knocked down) Clark forklifts with capacities from one to 25 tonnes. These days, the Clark distributor has different commercial associations with machines of up to 50 tonnes capability, imported whole or as SKD, coming from Europe, Korea and the US.
Locally owned Clark Equipment New Zealand is a major player in port equipment, construction and agriculture as well as in materials handling. “It has changed in a big way since the late ‘80s with an end to licensing and duty,” Ross says. “That and better lines of communication have allowed us to merchandise more. We are serving several sectors, bringing in all sizes of machine, and dealing in international brands.”
Ross believes that the important consideration for anyone buying, leasing or hiring equipment is to be certain about backup. “Every supply company needs to show it can deliver parts, service and technical support. “
Accepting a cheap machine can have bad consequences down the line. That is why clients need to be wary of new brands. “It would seem some are imported by people who think basically they can come and make a quick flick!” Ross says. He ties that into the large number of Chinese companies making ‘me too’ products. But “with a few exceptions, what is coming from China at present won’t have the support,” he adds. “It is unfortunate, but their suppliers don’t have the infrastructure in place.”
However, Clark also went through Asian changes. The company began in Battle Creek, Michigan, as a manufacturer of materials handlers, including in 1920 the first with a hydraulic lift mechanism. By 1939 it was making around 500 forklifts a year.
In the early ‘40s the company says it accelerated production to about 23,500 trucks a year, running three shifts during the Second World War. Some heavy Clarks from the post-war period can be seen at MOTAT in Auckland.
In the ‘60s came the involvement of Japan in forklift manufacture, a lowering of prices, and a strong awareness of quality. By 1997 Clark had manufactured a million machines and was building in Korea. Since 2003, Clark Material Handling has been owned in Korea and has closed then reopened its Kentucky plant.
A change of ownership also took place in Australia and New Zealand. Australian managers bought out the Australia-New Zealand business in 1988 and built up their Omega heavy truck manufacturing plant in Sydney. “Japanese, Korean, European and US equipment is now all very much the same, even if some ‘specs up’ a little better than others,” Ross says.
The Clark forklift ranges are made under ISO 9001 QA designation which gives them credibility. In the sub-7.5 tonne range Clark offers gas, diesel and electric forklifts, powered pallet handlers and narrow aisle trucks.
Like its Australian parent, Clark Equipment NZ is agent for Noell and Terberg and the industrial contracting brands Bobcat, Terex, LeeBoy, Dynapak, Doosan Portable Power and Champion. Clark NZ’s port offering includes Australian Omega empty- and laden-container handlers and reach stackers, Dutch Terberg terminal tractors, and German Noell straddle carriers.
For those in the supply business, Ross recommends more care with requests for proposal (RFPs) and awareness of what is being bought. He says that clients have to ask those selling less well-supported brands about after-market support rather than just looking at features and benefits. “We’ve sold to all the port companies and we’ve always had to bid. Ports of Auckland has purchased 35 Noell straddles and also CentrePort in Wellington recently purchased 12 Noells.
“Some [bids] are more time-consuming and detailed than others – you just can’t do them in five minutes. We have a couple of guys working pretty closely on complex RFPs and there is always a technical person from the Clark factory in Sydney. It’s a team thing.
“They [the bids] come back and bite you fair square if you don’t get it right. A lot of our successes are built upon the relationships we have formed with customers.
 Steve Mackay
With the biggest Chinese brand, and significant European, American and Japanese brands, the Wellington-based Cesco Hire group is in a position to comment on likely future trends.
Managing director Steve Mackay runs Cesco and Heli Forklifts NZ from the Wellington wharves, utilising the well-accepted Cargo Equipment Service Company name. It is a success story for Steve and his fellow directors since the former Cable Price staff made a foray into the market after Hitachi’s purchase of Cable Price in 1996.
They began with Komatsu and Lansing, prospered as Central Forklift Group and, having investigated the Chinese market in 2005, established a separate Heli Forklifts NZ company.
In February 2007 the directors bought the Wellington Cesco operation which itself had absorbed the forklift rental business of Fleet Services and Wellington Forklift Hire. The directors now trade as Cesco Hire, selling Heli, Yale and other brands. National sales of the internationally best-selling Chinese materials handlers are coordinated through the Heli company.
“We’ve been in the forklift game for a long time and don’t bring [in] gear that we can’t back up,” Steve says. “We have set up strong relationships with like-minded forklift dealers throughout New Zealand, and their continued support shows that Heli stacks up.”
Steve recalls those who railed at “cheap Jap junk”. Some ex-soldiers would have nothing to do with it, but “many who vowed never to own Japanese gear took it up when they evaluated the gear without prejudging it … The Chinese product is in a similar position to the Japanese [back then].”
He says quality control is the key. “We believe that the experienced Chinese manufacturers are very much driven by market acceptance. They produce components and machinery for non-Chinese brands to sell here and elsewhere. Poor quality impacts their sales volume directly … If they get it wrong in a small market, they are not building a future.”
Steve thinks Heli getting to be the tenth-largest manufacturer of forklifts in the world (according to Modern Materials Handling) is not achieved without a strong quality focus “especially when exporting to Europe. I find it very interesting, the misinformation going around our market. Several of the companies [interviewed previously in this feature] have mentioned the Chinese – perhaps they are worried about their margins?”
In the financial bewilderment of late 2008 he predicts more modest machinery investment. For several years buyers have benefited from good exchange rates. Steve expects slower sales, even if some sectors buck the trend and export on a weakening New Zealand dollar.
He notes that the trend to electric in large warehouses and materials yards is also evident at smaller firms, even if uncertainty and fear about batteries limits conversion from IC. “Nobody likes diesel fumes in their food or clothing, and it saves money in the long term. Then there are the dangers of operating in an enclosed space when there is low supervision.
“Carbon monoxide makes you sleepy, you feel sick, and the next stage you are asleep. We had a hire forklift used in a chiller, even though electric forklifts were on site, where the operator had a mild stroke and was incapacitated. Sadly, the forklift kept running and the man died.”
Steve says staff demonstrate the capabilities of an electric forklift, but some business owners fear failure of systems. “You can turn off an IC machine and go home, but if a battery isn’t charged and ready in the morning, you have to wait eight hours to do anything.” Those that convert – around 25 percent – usually do their research and talk to other operators. The positive feedback allows them to make an informed decision and overcome habits.
What makes contract bidding satisfying for Steve? “It’s the repeat business … We have always had a ‘service first’ approach to our market. We like to think that it’s the salesman’s job to sell the first forklift, then it’s up to the service team to earn the next order.”
The ‘unwritten rule’ for service is that Cesco people stick to a job until completed. “Loyalty is important, but as suppliers we have to keep improving our performance and our products. We should not expect clients to accept less service, poor quality or inflated prices just because we have had a business relationship with them for years.”
Hugh Patterson can be contacted via email: hugh@writewords.co.nz.
To contact Ross Easton, email: ross.easton@clarkequipment.co.nz;
or for Steve Mackay, email: steve@cescowgtn.co.nz
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