Analysis

The Show Goes On

CMME sits with the organisers of InterMat to see how the Middle East fits in with the global event

While InterMat Middle East has yet to fully establish itself in the region’s calendar of events, the Paris show remains a great opportunity for buyers and dealers to get one-on-one contact with manufacturers. We will soon get a preview of what the big names will be serving as a main course for the Middle East at the Pre-Intermat starter in January, and exhibition director Maryvonne Lanoë and key accounts manager Asmaa Cherraf tell CMME that the show returns with its biggest ever focus on the region.

“I would like you to understand why the Middle East is a signature of InterMat,” begins Lanoë.

“The world of construction is changing a lot. If we consider the forecast for the construction market, analysts say between today and 2017, 35% of the construction market will be in China. It means the manufacturers need to sell to the Chinese construction companies; India will be around 18%; Europe will be around 13%; the United States around 10%; and the rest of the world between 8-9%.”

The Chinese domination of both the sales and strategy of the manufacturing sector means that shifts in that one market can cause ripples globally. Analyst briefings the world over have been reporting on the disruption to sales the slowdown in the Chinese market has caused; approaching the mid-way point of the decade, the industry is now dependent on its fortunes. Conversely shipping equipment to markets beyond China which are not fully recovered from the global economic crisis continues to cause a number of headaches for the Chinese companies themselves.

“With the world changing so quickly: the strategy of companies is also changing quickly,” surmises Lanoë. “When I was in China, I visited LiuGong and they said that the government wants them to stop trying to race [the competition for domestic and international market share]. The domestic or international is not yet mature [for them]. We know in 12 months that the construction market will grow again. They are back in the starting blocks waiting for the market to recover.”

When CMME spoke to LiuGong earlier in the year, it was explained that the Chinese manufacturing sector is losing much of its diversity as companies struggle to stay competitive. Those that remain are trying to make their product ranges more and more diverse. It is a trend being replicated globally and as we head towards 2020, successful large companies are likely to be swallowing smaller niche manufacturers to stay relevant.

Ironically this could mean a greater selection of equipment in the region as the large players look to develop their existing dealer partnerships. The all-terrain cranes of Sany or the compacts of Bobcat are being sold or rented in unprecedented volumes because of dealers taking on new types and finding applications for them. With dealers increasingly looking to secure regional distribution deals as they expand, it is questionable whether smaller niche manufacturers can still break into the market. Especially if they are tied to a smaller distributor.

“It is the same thing for the dealers and their strategy is changing,” Lanoë remarks.

Her colleague Asmaa Cherraf explains that their preparation for the show has seen them meet a series of local dealers with ambitions of growing their businesses. Shifts in the supply and demand of one market can mean profound changes in another, says Cherraf.

When she says that often means keeping an eye on what is happening to their Chinese company partners or their global partners that are active in the Chinese market, you realise why they are keen to stress the inter-related nature of the supply of construction market.

“We have met dealers here that want to expand into many different sectors,” she says. “They are starting from zero (in those sectors) but they are focusing on the Chinese market. It’s really interesting.”

(“As you know there is no manufacturing in the Gulf and the nearest to there is based in India, Korea or China. There is also Turkey but it is still expensive,” Cherraf remarks.)

“Because their position is changing with their mother brands and all their markets, they need to be updated on what good brands are available,” interjects Lanoë. “They said to us that they want InterMat to be a platform with a specific programme to help them to do that.”

Traditionally dealers and buyers were able to identify their next purchase in the western markets and bring them over via the used channels at lower prices. Effectively the Middle East played a vital role in the flow of machines in global terms.

European contractors could buy new and see a return on that investment by selling on to markets where the supply was low but demand was high. That equipment could then serve a role here before likewise being sold on to markets lower in the food chain such as Africa. The emission regulation changes has altered this dynamic creating a purchasing gap. De-tiering programmes may narrow the gap but capital expenditure is clearly a more complicated exercise than ever before.

InterMat’s organisers are keen to continue to help clear the confusion and the planning for a programme dedicated to the region is well underway.

The last Intermat did feature a Middle East day but was very UAE-focused. This time they are promising a programme with a broader appeal and approach.

“At InterMat we are looking to honour three countries. Of course the UAE, because of the history between them and us, the Kingdom of Saudi Arabia and Qatar,” says Cherraf. “It’s really the beginning, the premise of our event and we want to associate with the government, the dealers and the media.”

The plans are still being firmed up but it is likely to feature a seminar series of three separate half-days dedicated to the main markets as well as stand visits and networking opportunities that bring together manufacturers, dealers and buyers.

Many manufacturers will already be working with their dealers to get their clients to the event but InterMat hopes to then be able to open their eyes to other products that could be appropriate for the region.

“We want to use InterMat Paris to show the international offering and to let them share their knowhow.”

A concrete event

The organisers of the InterMat construction equipment event in Paris are further developing the 2015 exhibition following an agreement with World of Concrete. As a result InterMat 2015 will cohost World of Concrete Europe, a show covering all stages of the concrete construction process. World of Concrete is recognised as the leading event for the concrete industry in North America. For its first occurrence in Europe, World of Concrete aims to develop the same prominence for the European,

African and Middle Eastern concrete industry. This new addition will host producers, contractors and suppliers from Europe, French – speaking African countries and the Middle East.

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