In preparation for the upcoming World of Concrete, RER interviewed several manufacturers of concrete-related equipment. In this exclusive interview with RER’s Michael Roth, Frank Multerer, CEO of Slinger, Wis.-based MBW Inc., talks about the value of the World of Concrete to the rental industry, inventory management and supply-chain challenges, revenue growth and why life in the construction industry is an “extraordinary adventure.”
RER: What kinds of changes, developments and trends have you seen in the past year in concrete equipment and what do you expect to see in the coming year?
Multerer: Most manufacturers scaled back their R&D efforts over the past few years. We haven’t seen much recently in the way of meaningful new developments in concrete equipment. We don’t expect to see much in 2012, at least in terms of advancing the state-of-the-art. The most noteworthy trend we have noticed is that manufacturers have been absorbing significant increases in the cost of producing products of all kinds. Most manufacturers have reached their limit, and the industry will see significant price increases in 2012.
Talk about the World of Concrete and what it means for concrete manufacturers. A lot of our readers in the rental market have never attended that show, what are some of your thoughts about it?
WOC has been our most productive trade show for years. Attendance is good to excellent, even in down years, and attendance is weighted to end users. Manufacturers roll out the full dog and pony show complete with hands-on product demonstrations. Rental folks who have never attended WOC miss the chance to compare and evaluate a broad range of products and business opportunities. That’s a bad miss in today’s environment.
New advances in technology are of course affecting all kinds of equipment. What kind of technological advances do you see in the equipment you manufacture and concrete equipment in general?
While R&D has slowed appreciably over the past few years, considerable effort has been devoted to compliance with state and federal regulations, especially those associated with emissions.
Has 2011 been a strong year for you? What are your expectations for 2012?
2010 and 2011 have been years of strong recovery for MBW. If we maintain current growth rates, we should be flirting with record revenues in the next 12 to 18 months. Of course, there’s no guarantee that the economy is going to cooperate. That said, we recognize that a portion of MBW’s increasing revenues have come our way by default. When suppliers fall short of expectation in the support or delivery of product, the supplier able to satisfy expectations benefits.
As rental companies replenish their fleets and experience greater demand, are you seeing changes in the kinds of equipment they are looking for? Are they facing changing market needs?
While there are some changes in what the market is calling for, those changes vary market to market. The bigger issue facing rental operators goes to suppliers’ ability to respond to customer needs. Product delivery has proven to be a costly problem. Some suppliers have cut back on fundamental services (spare parts, service, engineering, and other technical staff) to a point where their ability to satisfy customer needs has been compromised. Perhaps the most significant change in 2011 had to do with the fluidity of relationships. Equipment dealers connected the dots between their own performance and that of their suppliers. Unfavorable linkages resulted in increasingly transient alliances.
Are concrete manufacturers facing any significant supply issues regarding obtaining raw materials and components?
All manufacturers are dealing with inventory-management issues. It seems everyone in the manufacturing chain has adopted lean and just-in-time methods. The problem is that “lean” and “just-in- time” are relative terms. Even a meager uptick in demand can convert these inventory management schemes into the practical equivalents of “too damn lean” and “not-nearly-in-time.” The distribution chain is rapidly developing a new appreciation for inventory-management capabilities.
What are the primary concerns you as a manufacturer are facing in going into 2012?
The global economy is, for lack of a better phrase, a mess. Europe defies prediction in the mid to long term. The US economy is treading water. Pressure continues to build in regard to China’s predatory trade policies, especially currency manipulation. Everything is interrelated but not necessarily understood. At current scale, globalization remains something of an experiment. Uncertainty, the inability to project into the future, even the short- to mid-term future, is the overreaching concern. Yet, we all have to deal with uncertainty … life in the construction industry will continue to be an extraordinary adventure for some time.