05.01.2009

SGB to pull out of powered Access in UK

Following a week or so of rumours, SGB has notified its employees that it plans to begin its exit from the self propelled powered access market during January. We understand that it will begin by not accepting orders for new business, current hires will be run until the equipment is off-hired, then the fleet will be ring fenced to be sold.

The business is most likley to be a sale of “assets only” rather than selling it as a goping concern.

We had requested a comment from Harsco/SGB to confirm the report which was received just after Christmas. Until today though we were unable to confirm the story through a second irrefutable base source. This morning employees received notification of a meeting and formal announcement for Friday. As soon as we receive a formal company statement we will publish it and update this report.

SGB was 12th in the Cranes&Access Top 30 powered access rental companies last year with 400 booms, 450 scissors and 120 push around lifts.

SGB remains a major participant in UK mast climbing market and in the Dutch powered access market both of which are unnaffected by this move.

Vertikal Comment

SGB is a powerhouse in the UK access market being the market leader in mastclimbers and possibly contract scaffolding. The company also has a significant business with alloy tower systems, decking and specialist access applications.

The company entered the powered access business in the late 1990s and built-up a significant fleet which it cut back in the 2001 to 2003 slow down. The fleet has seen little renewal over the past eight years and would have required a significant investment for the company to maintain its position at a time when the market is looking like softening.

The alternative was to merge powered access into its contract scaffold business and gradually wind it down, however this would most likely have been a negative distraction for its other businesses.
The company could still team up with one or more specialist powered access rental companies in order to provide a service to its customers without having to operate its own fleet.

Other rental companies will be pleased that in a year which is likely to be challenging, around 900 units are likely to come out of the market early in the year. SGB UK has not been a major purchaser of new equipment in recent years so manufacturers will not be hit either.

SGB has been a quality player in the market, so while competitors would certainly prefer a less well run company to leave the market, they will still appreciate the additional ‘air’ that this will bring.