In preparation for our January issue, RER interviewed a number of rental company executives. In this exclusive conversation, Benno Jurgemeyer, CEO of Sunstate Equipment Co., talks about the company’s diversification, growth in the energy sector, the return of many contractors to the marketplace, hiring back former employees, and future growth plans.
RER: How did 2013 turned out for you business-wise?
Jurgemeyer: 2013 has been another excellent year for Sunstate Equipment Co. We have achieved strong double-digit growth in most of our markets. Most importantly, we have also achieved strong improvement in our margins and economic returns for the company.
What segments have been strongest for you in the past year?
The non-residential construction market has historically been the backbone of Sunstate’s business and success, along with the small- to medium-sized contractors. In recent years we have been very successful in expanding our customer base to include many larger contractors. We have also made material gains in other sectors of the rental industry, including the energy markets and industrial businesses.
Do you expect to target a different customer base in 2014 than in the past, or emphasize a different segment than in the past?
We have been achieving a nice diversification of our revenue base in the past two years with increased emphasis on the larger customer, energy sector and industrial opportunities. We are still early in these expanded strategies and believe there is tremendous opportunity for growth in the coming years.
What kind of results do you expect for 2014 based on what you know or sense at this point?
Expectations for 2014 are very high at this point. Based on the trends we have been experiencing in all of our markets, and from what we know of construction projects already underway, or about to begin or bid, the opportunity for strong growth in 2014 should be excellent.
How are your customers looking at the year ahead?
I would say there has been a noticeable transition during 2013. Much of our customer base does have more work in the pipeline, and the optimism continues to improve. While there is still a lot work being bid with very tight margins, we are very encouraged with a surge in the number of small- to medium-sized contractors returning to the market place, and the optimism many are displaying.
What kinds of changes did you make to your business in 2013 and what kinds of changes do you plan for 2014?
As a company, we are all about continuous improvement so there are many things we do every year, both large and small, to enhance our performance and efficiencies. Of course technology is at the forefront of most improvements. During 2013 one of the more significant was an upgrade of our sales CRM system. Our sales team now has real time information at their fingertips via the iPad in the field or the office. In 2014, we will be rolling out a greatly enhanced parts ordering and work order system, along with continued enhancements to our dispatch system.
Are you planning any kind of expansion or growth in 2014?
Yes, we are planning for some geographic expansion during 2014, most likely via green starts, although we never rule out an acquisition. Notwithstanding some new market expansion, most of our growth will be generated within our existing footprint.
A few years back during the recession most rental companies reduced their fleet size, and reduced personnel. Have you in the past year grown your fleet or added back personnel and do you expect to do so in 2014?
In order to accommodate the strong growth we have experienced the past two years, we have added a significant amount of fleet, as well as adding many people to our Sunstate team. There are many examples where we have been able to rehire some of the people we lost during the recession, which has been both rewarding and provided us with well-qualified employees.
What issues most concern you going into the next year?
There certainly remains some uncertainty surrounding the overall U.S. economic outlook, which could potentially project itself into the construction and rental sector. Lingering impacts of the recent government shutdown and probable economic impacts resulting from the new health care law, etc. However, as I stated earlier, we remain very optimistic about the prospects for 2014 based on the visibility we have to upcoming projects and the very positive trends experienced in 2013.