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Kalmar sees equipment rentals business taking off

Kalmar sees equipment rentals business taking off
“Rental is really the way forward,” he declared Kalmar Asia Pacific senior vp Peter McLean, noting that ports in the developing world especially in the Asia Pacific are particularly ripe for the rental model.

The rental model would be attractive for mobile equipment in particular and predicted that over the next five to ten years there would be a “reasonable number” of ports taking this up.“I think there’s a big future for that because it helps them with their capital expenditure programme,” he said.

“We’ve tested that in the bigger equipment and we’ve had some bigger pieces of equipment rented out for over two years and it’s been very successful,” McLean told Seatrade Maritime News.

“In the port crane business this is new, and we’re talking to a lot of customers about it,” he said. However there have been concerns about the losing of control and some reluctance to relinquish these functions, he admitted. “They’re letting some of that go but there is the need for a lot of trust in the provider,” McLean said.

He cited for example a customer in China that had tried rentals before with another supplier and had been let down. As a result, while they were still prepared to talk to Kalmar, they needed reassurance that the company they worked with in future was reliable and prepared and able to fulfill their requirements. “It’s a matter of building that trust over the long term,” he said and this is where a globally known brand such as Kalmar has an advantage.

McLean said while the market is potentially limitless, it is also a matter of assessing the risks from Kalmar’s point of view since they need to maintain inventory and staff to provide adequate service. The opportunities need to be balanced against the risks if political or economic conditions change dramatically.

However the model is also set to benefit from the continuing excess liquidity in the capital markets, McLean noted. He cited an example where Kalmar went to investors looking to raise $15m and easily got it, setting an encouraging basis for future deals.