Heart for manufacturing industry

Toine Brock - Director-owner of Tobroco-Giant

Overall, equipment manufacturers are seeing production numbers down from last year. That's the first time in a long time, because despite corona - or perhaps thanks to the pandemic - more has been bought and also negotiated in recent years. That stretch seems to be out now. Especially for large machines, sales numbers are falling sharply. Besides rising commodity prices, this also has to do with financing. As soon as interest rates go towards 9%, it becomes a lot less attractive to finance such an investment by borrowing or leasing. Our business is still going well, but the brakes are noticeably being applied to compact equipment as well. Margins are smaller in this segment, so larger volumes have to be sold to keep the same. A growth of 15 to 30% is not in the cards right now. The important thing is to stabilize. With that, it is not immediately bad, but not as good as before.

When I look at the auto industry with a slanted eye, I think machine builders should also brace themselves for competition from China. While we continue to fight hard to keep the manufacturing industry in the Netherlands, we cannot compete with a 5 euro hourly wage paid there. I applaud Europe's desire to create a fairer playing field by introducing import taxes. You would say that the Dutch are chauvinistic enough to always want to choose a European machine builder, but price is sometimes the deciding factor for 95% when buying a machine. You see this not only with mini shovels but also with mini excavators, where Hitachi and Kubota - with factories in Amsterdam and Saarbrücken, Germany - are up against the overproduction of some of the big Chinese manufacturers. Eventually, however, a few offers are on the table, on the basis of which a customer has to make the decision.

Keep innovating

The strength of Dutch entrepreneurs is still the urge to innovate, we should not cut back on that. Tobroco-Giant will always continue to innovate, even in times of "adversity. Only in this way will we maintain a technological lead in the market, which in turn will benefit customers. Innovation and electrification are important pillars underpinning the success of our articulated loaders. The aim is to launch an emission-free version of every model within a few years. The strict rules around nitrogen play into our hands in this regard, but it does not solve our problems. Because of objectors, a large portion of all projects have been postponed or halted. That also means less new construction and so the housing market remains depressed, especially for first-time buyers. When I see that in Hungary a dirt road leading to our new factory is transformed into an asphalt road within six months, I am left scratching my head. So it can be done.  

The fact that the extreme growth is out and we can slow down a bit, I personally don't mind. We all seem to have become addicted to double-digit growth, while there is nothing wrong with taking a break and paying more attention to improving quality and efficiency. You will reap the benefits in the longer term. We must be careful not to get into a negative spiral, like the bicycle industry, where manufacturers are falling over by the bushes. To maintain our position in the market, we are trying to reach agreements with suppliers to keep the prices the same for next year. Preferably for two years, but that is difficult in times of inflation and rising labor costs. On the other hand, prices for steel, oil and tires have come down significantly and have been stable for a while. All in all, I see the future with confidence. Right now, the Netherlands and Germany are the strongest markets in Europe.