MEETING DIVERSE NEEDS

The simple truth is that since the term Plant Hire was coined in 1947, the edges have become more and more blurred. It started as a method of ensuring contractors had access to machines that were unavailable on the open market, and since then has grown in status far beyond the original concept to an industry that can cope with everything from a power drill to a walking dragline.

The myth that plant hire companies can never lose out, regardless of the cyclical boom-bust nature of the industry it serves, has been well and truly exploded.

The fact, then, that the 1990-1993 recession decimated more plant hire companies than at any other period during its history is worth looking at, if only to lay down markers and suggestions for the future. Sideline experts, who include accountants, banks, finance houses, salesmen and of course journalists, all tend to sing from the same hymn sheet with words that state the plant hire industry is its own worst enemy.

The reason for such a general, and grossly oversimple statement is that rates are too low and the industry seems incapable of raising them to more economic levels. Every hire director and desk manager in the land knows this and agrees with it and spends endless hours trying to correct the problem.

Another problem is that anyone with a modicum of business sense and little capital can start a plant hire company. The UK has more one man companies than any other country within the EEC, mainly because the laws and regulations governing the formation of companies is so much easier here than elsewhere.

Operating from the front room with just one second hand machine is a sure fire way of keeping operating costs low - and at the same time cutting the going rate and still making a handsome profit. It is worth remembering that this is exactly how many of today's big hire companies started anyway and that some of the same companies are the most vocal in condemning rate cutting by the one man bands.

Over the past 30 years, hire companies have both diversified and specialised away from the gutty day-to-day hire in a positive attempt at niche marketing to raise profitability. Some have been spectacularly successful, but as with every niche market, as time passes and it is seen to be more profitable, other companies pick up on the idea and very soon it is no longer a niche market.

Those of a certain age will remember Abelson of Birmingham which in the late 1960s steadily built on a new concept to become the world's largest hire fleet owner of articulated dumptrucks, and all but cornered that sector of the market. The company may have been ahead of its time, but assiduous marketing and sales training got the message home that there was now another muckshifting system besides the traditional scraper.

Look at the results. It is now possible to hire an artic dumptruck from any one of a thousand hire companies and there are eight different manufacturers in the business. An artic dumptruck is useless without some form of loading vehicle and while there were the traditional four-wheel-drive loaders and crawler loaders, the then new all-hydraulic excavator was the tool to use.

The powered access sector, like scaffolding, is another example of specialisation. Safety legislation has virtually guaranteed the exclusion of cowboys in the traditional scaffolding business. Gone are the days of erecting a few poles with loosely laid overlapping planks.

New build, refurbishment and demolition contractors now demand full method drawings and systems before undertaking any agreement with scaffold contractors and the latter willingly supply the necessary drawings and documentation. 'On one hand and in a negative sense, it is a form of self protection against liability, but that is not how we see it,' says a company director.

'There is another benefit that should not be overlooked. The cost of installing computers and then having the necessary engineers to run the programme is not cheap. Each of our depots now has direct access to the mainframe programme and the here today, gone tomorrow suppliers simply cannot compete. That means that as long as no site personnel have changed the design, when inspectors visit the site there will be no unpleasant surprises over either design standards or safety.'

Interestingly, when the powered access manufacturers entered the hire arena, many thought the days of scaffolding were numbered. In fact there is very little crossover between the two sectors with scaffolding being regarded as the long-term solution for a particular application, while powered access is looked upon as a temporary, high speed, fast fix piece of equipment.

If recognition is needed, then the man who did more to promote powered access in the very early days is Paul Adorian. As the then md of EPL, the company took every high profile opportunity to promote the sector. Since then hundreds of companies have followed suit and the range of equipment is legion.

Because the construction market place has become saturated over the years, many companies have turned their machines to other totally unrelated markets such as industrial and chemical sectors. One of the first things they had to learn was that what may have been acceptable safety wise in construction was certainly not so in either new industry.

For the chemical sector, especially, a whole new range of mechanical modifications such as flameproofing, safe load indicators, isolation protection and exhaust scrubbers were needed. Safety legislation, normally regarded by many as a lip service in construction, is strictly regulated and performance monitored and if the machine does not comply, the company does not get the contract.

There is the additional incentive to meet the requirements first time round because there is the danger of maybe being struck off the list altogether if you do not. The upside of all the complication is that there is an economic going rate for the equipment that provides acceptable return on capital, and those companies that have the machines and personnel to build confidence with customers have never looked back financially.

Some pretty fancy titles have sprung up over the past few years in the industry which are plant hire by a different name. Manufacturers, and some heavy weight dealers servicing the mining, quarrying and open cast sectors, became aware that one way of shifting metal was not to sell it outright, but to offer a package deal.

The package could be tailored to suit virtually any customer or application, and could include any of a number of options such as full repair and maintenance, on-site fitter and a guaranteed buy back figure at the end of an agreed number of hours. Some big production machine contracts for face shovels and dumptrucks also contained sliding scale utilisation figures ranging from 98% in year one to 85% in year five.

In essence, the user never owned the machine and although lawyers could argue differently, that means the machines are on long term hire. The concept has now been extended and refined to the point where some of the biggest machinery in the country is 'sold' to customers on an hourly rate basis and, in the main, there is no conflict of interest between manufacturer and plant hire company.

Where conflict has arisen is much lower down the scale into areas where plant hirers are active.

The edges between traditional plant hire and these latest forms of covert hire have become blurred to the point of open antagonism in some companies. Regardless of the moral rights or wrongs, it is here to stay.