Construction machinery manufacturer Liebherr has a strong association with the UK and has operated here for more than 50 years. Liebherr Great Britain was first introduced as a refrigeration distributor but quickly moved into the heavy machinery and plant sector with its range of high-quality excavators, dozers, wheeled loaders and materials handlers.
In contrast to other companies, who sell their machines through a network of independent resellers, Liebherr Great Britain is solely owned by Liebherr. This enables it to take an overarching view in terms of sales and customer support. It also has the advantage of manufacturing a significant proportion of its own components.
Today, the UK earth-moving and material handling business employs 168 people across eight depots. This includes 65 field engineers, who have all been trained at a purpose-built facility. The nine-acre Biggleswade HQ is testament to the importance of the UK market. An adjoining 15-acre site has recently been acquired for a new pre-delivery inspection centre, among other functions, to support the wider business.
Last year was a strong year in terms of sales of wheeled material handling machines and a market share of approximately 50%.
The company’s growth in the UK waste and recycling sector depends on the commercial success of its customers. The most obvious factor that could help support this is a stable economy, which will help the delivery of major infrastructure and housebuilding projects.
While Liebherr says it recognises the scale of the economic challenges, it believes the Government could provide a more solid environment for businesses through a consistent approach to policy and legislation. In the mid-to long-term, the decision to leave the EU will provide the opportunity to review policy in a more holistic manner and to develop a legislative framework that is designed to give confidence and support growth.
Although Liebherr works hard to ensure that its products are priced competitively across all markets, the shift in the exchange rate since the referendum has had an impact because it directly affects the price at which it purchases machines from the parent company.
“Most customers have traded as normal since the Brexit vote, and have taken the view that putting off decisions and failing to invest can only have a negative outcome.”
Like everyone in the sector, the company has been affected by the volatile scrap and materials markets. This uncertainty understandably makes it harder for customers to make investment decisions. But most have traded as normal, and take the view that putting off decisions and failing to invest in their company can only have a negative outcome.
As with any stable business, a skilled and motivated workforce is essential. But Liebherr says it continues to experience a technical skills gap in the UK, which often makes it hard to recruit enough of the right people. This is especially true when it comes to engineers, who are relied on for equipment aftercare.
The firm addresses this directly with its apprenticeship schemes, which operate across a range of technical and business roles. But more could be done to ‘sell’ the benefits of apprenticeships across the UK and position them as viable alternatives to higher education.
The company also maintains a strong focus on its ability to deliver bespoke machines designed specifically for a customer’s site, application and process – and that is a significant challenge in terms of market-based pricing.
Current economic conditions tend to make purchase price king. While quality is inevitably reflected in that price, it also brings benefits that help to reduce the total cost of ownership during the life of the machine. This includes a significant reduction in fuel costs and lower maintenance and associated downtime costs.
Despite such challenges, the UK is an exciting market for many reasons, not least its genuine appetite to work towards a circular economy. There is an obvious desire to become more resource-efficient and to make better commercial and environmental use of the valuable secondary resources that were previously regarded as waste. For Liebherr, this means that there is likely to be an increased and sustained need for technology and machinery to move and handle these materials in an efficient and cost-effective manner.
The business works hard to support growth through the education and support of customers. It recognises the need to shift the pur-chaser’s focus towards understanding the whole life cost of a machine. Too many tenders focus solely on the cost of purchase. This needs to be balanced with designing a machine specification that meets the application of the machine and also takes in to account on- going costs such as fuel, reliability and aftersales support.
As the waste and recycling market continues its rapid evolution, the ability to innovate is becoming increasingly important. This is especially true when you think that to develop a new machine from concept to market takes around five years. As a family-owned business, a significant proportion of Liebherr group profits are reinvested into R&D: last year this figure was in excess of £620m.
One area that has seen significant investment in recent years is the development of electric machines. The company says it expects to see a marked increase in these sales as businesses become equipped for their use. Indeed, it is more the operational environment that will inhibit the uptake of these machines rather than the technology and equipment itself.
The UK will continue to be an important growth market for Liebherr. It believes that, if it can develop an increasingly supportive economic and legislative environment, then there is no reason why the UK will not remain at the forefront of creating a more sustainable and resource-efficient planet for years to come.
Lee Palmer is managing director of Liebherr- Great Britain