17.07.2006

IPS to take on UpRight UK distribution

Independent Parts and Service, the Telford based parts and service business, has signed an agreement with the Tanfield Group to take over the UK sales and support function for UpRight Powered Access products.

The deal essentially makes IPS the UK master dealer for UpRight powered access, although UpRight will retain the right to sell its booms and scissor lifts directly to major rental companies and key accounts.

Darren Kell business development director at UpRight, said: “We see this as a perfect partnership. “UpRight is now the UK’s leading powered access manufacturer and IPS is the UK’s leading independent supplier of spare parts and product support.”

Tony Jennings, managing director of IPS, said: “This partnership represents a fantastic business opportunity for both parties. IPS has worked hard to develop superb relationships across the board in the UK aerial work platform industry.

“We know our clients want high quality machines and the UpRight range provides this. We feel that UpRight Powered Access is a strong brand that is really going places and we can work well with its management team.”

IPS was founded in January 2002 by Kevin Shadbolt, Rick Mustillo and Tony Jennings. All three have deep connections with the UpRight product range.

Mustillo had previously managed UpRight International’s European support centre in Rotterdam, before which he worked with the groups Australian affiliate for many years.

Tony Jennings was the financial director of Instant Zip-Up, when it was the UpRight owned sales and rental operation for the UK. He then joined Frank Huish, the IZU managing director, and venture capital group 3i, in an MBO of IZU from UpRight. (UpRight also retained a stake in the business becoming joint owners with the other three) the IZU rental division was later sold to Hewden Stuart in a £16 million deal.

Kevin Shadbolt was the service manager for UpRight UK, which is what the IZU sales and service business became known after the disposal of the rental arm.

Shadbolt left UpRight along with the company’s parts manager at the time, Steve Plant to found the independent parts and service business that became IPS when Mustillo joined them.

IPS has grown steadily in the four years since its inception, providing spare parts for most brands of aerial lifts, often at prices lower than the manufacturer offers. It also has an extensive mobile field service team covering the UK and recently moved into large new workshops in Telford, where it carries out major repairs and refurbishments.

Vertikal Comment

Many will see this as a highly risky move by the Tanfield team, the UK is essentially a direct sales market when it comes to self propelled aerial lifts. With over 80 percent of all units (a higher percentage in monetary terms), being sold to rental company’s who want to feel that they are obtaining the very best price possible.

However... the same buyers expect a high level of product support, which is not in keeping with direct-buy economics. As a result the leading manufacturers are obliged to establish large direct sales operations, effectively owning their own master dealerships. Genie Europe, JLG UK and Haulotte UK are prime examples of this.

UpRight retained its direct sales and service operation in the UK, based in Telford, which one assumes was/is still profitable. Much of the funding for this operation came from UpRight’s alloy scaffold business, end user sales of lifts and parts sales for the still extensive UK population of UpRight equipment.

Tanfield would have needed to invest significantly in that operation if it is to boost sales of the UpRight products as it wants to. It has clearly decided that it will be better off subcontracting that role to a third party, which at the very least has excellent parts and service coverage.

This leaves it free to concentrate its precious resources on transferring production of the UpRight products to its massive new UK plant, See UpRight production to move from the Irish plant as well as re introducing the UpRight boom lifts.

The risk is probably far greater for IPS, which has worked hard to develop a good reputation for fast parts deliveries and reliable service. If it fails to make any impact on the UK market for UpRight it could easily lose some of its hard won reputation.

In the meantime Tanfield would have just lost time, critical time yes, but it the venture fails it will is not likely to be so far off where it is today and assuming that in the meantime it has used its clear focus wisely, to develop highly efficient, high quality production, upgraded design features and an exemplary parts availability, it will be well placed to start selling direct.

If on the other hand, as I am sure it hopes, the deal is highly successful then that works too.

IPS will also need to consider its name, and its message that it is independent... taking on the UpRight distributorship is hardly independent.

Customers will be watching and judging.

All in all the Tanfield management may well have made a shrewd and mature decision here.