14.12.2011

Riwal restructures in Spain

Dutch based international rental company Riwal is adjusting its operations in Spain as part of a long term strategy for the market.

In an announcement today the company states categorically that it is fully committed to the Spanish market in spite of the “very difficult market conditions.” The company operates locally under the Clem-Riwal brand, following its acquisition of the Clem business in 2008.

It goes on to say: “The Spanish rental market is affected by the on-going negative economic developments in the non-residential construction market. This has led to an overcapacity in the aerial work platform market and a strong pressure on rental rates.”

As a result the company says that it will introduce bigger, better and reinforced depots and a new service structure. While the changes will inevitably involve depot closures - the details of which have not been released - the company says that it will still cover more than 60 percent of the Spanish market in terms of value and 50 percent geographically, with three regions -Levante, Centre and Catalonia. The company currently operates from 14 locations.

As part of the change it will also reduce its fleet in sectors where the demand is lowest or it has excess capacity, and ship these units to markets where demand and growth prospects are better. It adds that this will help reduce the general overcapacity of aerial work platforms in the Spanish market and improve its Spanish fleet mix.

It says that as a result of this change Clem-Riwal will secure its current business and make the new structure and investments possible.

Javier Gomez Gonzalez, general manager said: “Clem-Riwal will achieve a new service and pricing policy for the next years which will ensure the quality of our fleet and service and will confirm our position as a key supplier for all our customers.”

Riwal president Dick Schalekamp, added: “Riwal has a very strong reputation in the market which is going to be supported by the measures of the Spanish operation. Furthermore, Riwal is very committed to the Spanish market as part of its European network and is confident that the company will come out stronger once economic developments turn more favourable over the longer term.”

Vertikal Comment

This move follows close on the heels of Lavendon’s withdrawal from the Spanish Market which has just about been completed. Riwal however, being privately owned, is able to take a much longer view and has a very stubborn and determined attitude to its investments.

The Spanish market is certainly bad but it is exasperated by the banks and other financial institutions continuing to fund one or perhaps two large rental companies that ran up massive debts shortly before the boom peaked in 2008.

The cavalier attitude to pricing that such companies have adopted is without question making the situation in the market worse than it need be.

Until normal commercial conditions are applied to the offenders, forcing them to shut their doors or reduce their fleets, taking advantage of rising used prices for aerial lifts. Rental rates will remain at uneconomic levels and the access rental market will remain far worse than the economic conditions warrant.