South American Rental Company Focuses on Leadership

The two biggest countries in Latin America are Argentina and Brazil and if you look at construction or industrial sites in those countries, you're likely to see equipment belonging to the region's largest rental company, known as Sullair in Argentina and Solaris in Brazil.

This company is on track to produce total volume of more than $225 million in 2008, with more than $100 million coming from pure rental. About 30 percent of the company's volume comes from distribution and about 25 percent from energy services.

Sullair was founded as Sullair Argentina in 1979 and began its Brazilian operations 10 years ago, delving into earthmoving rentals in Brazil this year and 10 years ago in Argentina. The company sells and rents air compressors, which it manufactures in Argentina under license from Sullair Corp.; Cummins power generation sets, Terex light towers, JLG aerial work platforms and telehandlers, and has become a major player in the earthmoving market with products from Deere, Komatsu, Bomag and others.

Both Argentina and Brazil cover wide geographic areas and Sullair/Solaris does its best to cover the far-flung regions. In addition to its Buenos Aires headquarters, Sullair has branches in Bahía Blanca, Córdoba, Neuquén, San Luis, Comodoro Rivadavia, Cuyo, Rosario and Northwest Argentina, with additional sales and aftersales offices in Cipolletti, Mar del Plata, Misiones and Olavarría. In Brazil, the company also covers a wide territory with branches in Belo Horizonte, Curitiba, Macapá, Porto Alegre, Salvador, San Paulo, Vitoria, Rio de Janeiro, Recife, Goaiania and San Luis.

Despite the sometimes dramatic ups and downs of the economies of Argentina and Brazil, the company has taken full advantage of the past few years of growth to consolidate its leadership in the region. While the current problems in the North American economy gives U.S. rental companies much cause for concern, the annual inflation rate of about 30 percent Argentina is facing has not stopped this company, accustomed to dramatic changes of fortune. Nevertheless, expectations for the next years are conservative.

A number of other challenges make Sullair's growth remarkable. “In these emerging markets, the penetration of rental is less than in developed countries,” says Sullair marketing director Anahi Traba. “Therefore when the macroeonomy is good, growth is a bit better. On the other hand, labor costs less and the cost of capital is greater than in the developed countries, and that holds back the growth rate.”

Still, competition is stiff with a lot of rental companies that specialize in particular geographic areas or families of products.

The president and principal owner is Alejandro Oxenford who founded the company almost 30 years ago to distribute and rent Sullair air compressors. Oxenford has effectively led the company's product diversification turning Sullair Argentina into a multi-product company, achieving sustainability and recognition in all its product lines.