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Getting better at being bigger
Page 20
Page 21
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II Here's a bit of cheerful news: following the recent demise of Utility Trailers in the
Montracon boss John Bryant reckons there will be more casuaities in the JK trailer market: "I don't think any of us are making the right kind of returns-4 wouldn't be surprised over the next two years, depending on any downturn, if we don't see more go out. It's probably down to who has the greatest amount of cash behind them."
The first signs of a downturn could already be here. We noticed rental customers were very late picking up for the Christmas rush," Bryant reports. "We also noticed it in second-hand sales as well as rental—it's all happening a month later."
it must be reassuring to Bryant, then, that Montracon has the backing of Bailyvesey Holdings and Harold Montgomery. Out of Ballyvesey's £250m turnover, Bryant says that between 7580% comes from 'GB business", and that includes some £60m from Montracon. So how profitable is Montracon itself?
"It's getting there," says Bryant guardedly. "We're still trying to get the right return, though it's no good being £1 in the black. If Ballyvesey hadn't been strong I don't think Montracon would have been here anyway. The profitability of Ballyvesey is OK."
Some cynics have claimed that Northern Ireland trailer manufacturers like Montracon and SDC have benefited from favourable grants over recent years. Bryant is quick to respond: "We don't; I assume they do! We're in the wrong part of Ireland, would you believe it?" However, he adds; "We respect SDC as a competitor." The one thing Bryant doesn't dispute is that there is still too much capacity in the UK trailer making business: "Absolutely!"
Definitive measure
And even though we're still a long way away having the definitive measure of "from-new" trailer registrations, Montracon is probably at the top of the heap. "There are one or two others [claiming market leadership] but in terms of volume we reckon we're number one," says Bryant. "We're currently producing 3,000 units a year including trailer sis to other bodybuilders—but we measure market share, we me profitability. Is that a bad thing to do' But if Montracon is leading the where does that leave the onc conquering Fruehauf? Bryant cer doesn't dismiss Fruehauf as a cor tor, especially as he notes: "They se have got cheaper..."
When it comes to the current mi register trailers from new, Bryant "I've no problem with it." Howevi insists the issue is not about provin is, or isn't, on top: "It brings a discip the industry." Bryant started at Montracon in October 2001, having been invited to "come and have a cup of tea at Doncaster. I knew Harold Montgomery] as a customer as he used to buy Volvos. He called me up and said, I'd just like you to help.' He was commuting and trying to run the company himself."
By his own admission Bryant has a "very relaxed
contractual relationship—
we basically said, We'll see Ne like each other and, if we don't, an always walk away." So far they to be rubbing along fine.
liar problems
it's acknowledged skill at making Action lines hum is clearly a bonus for racon, although he insists the issues io different from those of a truck lecturer: "It's similar problems—it's t bringing common sense into it."
wouldn't it be common sense to )1idate Montracon's four separate s into one and really enjoy the omies of scale? "That would cost us ibucks!" retorts Bryant. "Harold's and it's one I support, is to have , than one facility."
rically, one of Montracon's recent ems had nothing to do with actually ng trailers, as Bryant explains: :omers, even loyal ones, told us racon was a very difficult company business with. That's been a real t to change—and we're probably iere yet. In particular ft took far too time to draw up contracts and purng agreements."
ere is a now a new management in place which has been "very keen to i—we didn't have to drag them kickd screaming into it," says Bryant.
/ its own admission Montracon is clearly a "volume" player. So are its customers "volume" product buyers? Not if they're running refrigerated trailers, Bryant maintains: 'The typical reefer buyer gets flexibility: you should see one of our three-compartment trailers with a moveable bulkhead." What about curtainsiders—surely the archetypal nofrills "standard" product? "You'd think SO, wouldn't you?" muses Bryant. "But there are still opportunities to sell 'customised' curtainsiders. And we're very strong on vans."
Significantly, Montracon's biggest customer for platforms is Lawrence David. "And they make products we don't," says Bryant.
Talk to Bryant and the phrase "value engineering" tends to pop up. That phrase is exemplified by Montracon's decision to ft EBS as standard on all new trailers, both on discs or drums. However, he says: "it's also about getting rid of mistakes—whether it's on a product, or a sales clerk who puts down the wrong wheelbase."
"We had a problem with a previous skeletal which we've redesigned to get us back into the marketplace.
"We compromised on the overall original design: that was an expensive way to build a trailer. We redesigned it so it was right first time!"
Transport costs
Montracon has also taken some weight out of its curtainsider too, as it was a bit on the heavy side. Yet despite advances in trailer design and spec, Bryant admits: "The way we build trailers today is still relatively labour intensive. Well look at bringing more components and Sub assemblies built up. We assemble an awful lot and we need to get the right breakdown between assembly and transport costs."
Walking around the Doncaster plant it certainty looks busy, with its 242 workforce producing a wide variety of trailers as well as carrying out repairs. But is Montracon ever tempted to expand into mainstream "straight" bodybuilding and compete lower down the weight range, say at 7.5 tonnes?
"No!" says Bryant emphatically. "In my view there's no money to be made in it. The only rigids we do are with fridge bodies, and even the reefer market is depressed at the moment—it's too easy to buy a kit!"
The current pound vs euro exchange rate is something that clearly irritates Bryant, especially when it helps rival manufacturers' pricing.
"One of the problems is we can't justify what other people get," he says. 'That's where SDC were helped by a modern new facility. We're in there against Schmitz and Chereau on reefers andwe're also up against Gray 8i, Adams, although at least they've got the same cost base as us!"
In spite of all this, Bryant insists: "We believe we have a ptace in this marketplace because we have customers. All the while we do then we'll stay in it. We believe well be in the market for a long time..."