Capital Equipment News December 2020

STATE OF MARKET – INDUSTRIAL EQUIPMENT

The Toyota Forklift business constitutes almost 80% of EIE Group’s overall business.

New realities in the industrial equipment sector

Amid the COVID-19 pandemic, the industrial equipment sector has had to adjust to a quickly shifting business landscape. In a one-on-one with Capital Equipment News , EIE Group CEO Gary Neubert unpacks some of the new trends and new realities of doing business in the sector, writes Munesu Shoko .

T hat the COVID-19 pandemic has compelled companies to rethink their businesses is no overstatement. Despite having to negotiate the uncertainties around the pandemic, EIE Group CEO Gary Neubert believes that the pandemic has had several spin-offs for the industrial equipment sec- tor, but has changed the “way we think about and conduct business”. With representation across southern Africa, the United Kingdom and Ireland, the EIE Group, part of the larger JSE- listed enX Group, offers a total industrial equipment solution through a wide range of materials handling and industrial equipment solutions from globally renowned brands. The EIE Group is split into three divisions: Toyota Industrial Equipment, Heavy Lift and 600SA. Commenting on the state of the business, Neubert says operating in the COVID-19 environment has been incredibly tough, but the EIE Group had a contingency plan from the onset. “Within a few hours of President Cyril Ramaphosa’s announcement of the lockdown in March, we had already put up a business continuity plan. Part of this plan was to set up

our staff to work remotely, as well as registering the business as an essential service provider because we supported a lot of essential services businesses,” he says. The business operated throughout the lockdown and performed really well from a cash flow point of view, despite a squeeze on the revenue and profits. Commenting on some of the current scenarios in the market, Neubert says new equipment sales are obviously under severe pressure with an overall drop of 40% compared to last year, but the operations side of the business – rental, pre-owened, service, maintenance and parts – is doing “exceptionally well” under the circumstances. EIE Group uses a business model termed the ‘four links in the chain’, where it distributes, rents out the product, adds value through parts, service, maintenance and pre- owned. “We classify the value add and rental side of the business as aftermarket, and this has always been 60% of our business. However, in the current environment, aftermarket now constitutes between 75% and 80% of our business. That’s what has made us strong amid the current COVID-19 influenced challenges,” he says.

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CAPITAL EQUIPMENT NEWS DECEMBER 2020