Stewart's trying to regain traction in industrial equipment market
Avia Collinder, Business Writer
Sales of industrial equipment have tanked in the past two years, with zero units sold in some segments, but Stewart's Industrial is trying to revive its market through an image remake and a redefined, more customer-focussed relationship with clients.
Sales are down 60 per cent on average since 2008, falling alongside the downturn in the mining and construction sectors where much of the market for industrial equipment is concentrated.
"Since March, our single greatest achievement has been rebranding and the marketing effort which has made us more visible to clients," said Sales Manager Brian Blair.
"In this regard, we are also working on changing the culture of the business and changing the staff culture as well."
The owners of Stewart's Industrial Division are new to the market, but the company itself is not.
It began as Jamaica Industrial Equipment Company Limited (JIE) but had a name change in July after Stewart's Auto Sales Limited acquired the assets of the Issa Transport Group four months earlier in March 2010.
Business was close to rock bottom at the time of the acquisition.
Blair produced data this week which showed that sales in some segments of the industrial equipment segment fell to zero between January 2008 to date, while other equipment lines saw changes of between 60 and 90 per cent in reduced sales.
No mining equipment was sold in the period — the bauxite sector was then in retreat, but is now slowly rebuilding capacity — while sale of forklifts fell from eight in 2008 to seven in 2009 and one in 2010.
The sale of trucks fell from 23 in 2008 to 22 in 2009 and 13 so far this year.
Overall, sales hit 82 units of equipment in 2008, but dropped 56 units in 2009 and then to 27 this period.
Stewart's not only had to contend with reduced orders, but its suppliers also discontinued some models as a cost saving measure, but which ended up costing the local company business, according to Blair.
The company was also affected by high financing costs compounded by the devaluation in the Jamaican dollar and banks tightening up on credit.
To save money, the company decided to cut staff by 20 per cent in December 2009 and January 2010, while management and staff agreed during the same period to take a pay cut.
However, the company ended up losing some of its valuable talent in the process, especially on the product support side, said Blair.
In the period before JIE changed ownership, the company was frequently out of stock of commonly purchased parts, and was facing cash flow problems - unable to pay overseas and local suppliers on time - resulting in loss of credit.
The company, Blair said, was operating on a 'hand-to-mouth-basis'.
Blair indicates that a major plank of reviving the industrial equipment and parts supplier fortunes will lie in restoring client and creditor confidence using the Stewart's name as leverage.
Since the March acquisition, an aggressive advertising campaign has been ongoing to increase market/brand awareness, said Blair.
As Stewart's Industrial, the company is refocusing on the availability of parts and service support.
And, it is also positioning to compete on price.
"We are negotiating for the best pricing from our suppliers," said Sales Manager Brian Blair.
"We have been looking at our competitors' prices both locally and overseas to make sure that what we are providing is something that clients will find competitive and attractive."
The rebranded company is also retooling the service department; and is focussed on 'training and retraining' of service technicians and paying its bills on time "in order to maintain trust and support of our overseas and local suppliers," Blair said.
While there have been no further staff cuts since the ownership change, the company is still in cost cutting mode, but said it is limited to areas where waste is identified.
Stewart's Industrial Division adds trucks, mining, security, and heavy duty equipment to the automotive group's business lines.