Cycle or saturation ?

Experts analyze the possible reasons for the sudden braking of the area and establish perspectives for Brazilian market in the next years

After a period of solid increase—that placed the country as one of the main international hot spots for this family of equipment—this is the first time that the market of aerial platforms (PTA) does not grow in Brazil. Just on the contrary. In 2014, 5950 machines were sold, what means a reduction of 25 percent in relation to 2013 (7900 machines) according to the Sobratema Study of the Brazilian Equipment Market. As occurred always, all machines were imported.

In the former years the market was growing in an average rate of 30 percent per year. These figures were being maintained at least since 2006, when platforms started to become popular in the Brazilian market. Such recent history made this sudden reduction more alarming than in other niches, even with the performance of some areas of the equipment industry remaining behind the expectations in 2014. This article from M&T lists some arguments to help to understand what reduced the pace of growth in the area, projecting players’ expectations for the next years.

AN ATYPICAL YEAR

At first, there is no reason for desperation. In fact, according to Paulo Esteves, director of Solaris, “looking to the future, there is no concern with the potential of this business”. According to him, 2014 was actually an atypical year for this market and the reduction was caused—at least partially—by the World Cup and the elections, two events that paralyzed the productive areas. In the case of the elections, a considerable politic uncertainty was added, to increase the blocking of programmed investments. “Then came the complaints of corruption in Petrobras, company that received a good part of the investments. “And some projects of Vale—other anchor of the market—were also paralyzed.”

In addition, the economic situation also stopped other areas that were important for the demand of aerial platforms, such as malls, logistic sheds and commercial buildings. According to Esteves, only in the section of malls, several new projects were postponed due to the non-compliance of the expected occupation rates in other works recently opened. “Linking that to the increase of exchange rate (remembering that all platforms sold in Brazil are imported) it is easy to understand why the economic scenario was not so good”, ends him.

But in the point of view of Esteves, the most considerable factor could be some fear about with the possibility of change in import taxes by ex-tariff in 2013, what did not occur.  But many manufacturers—alarmed with a possible increase of costs—imported more machines than the necessary, inflating artificially the numbers of that year and relieving a little the terrible scenario of 2014.

In the side of consumers such as rental companies—that are responsible by more than 90 percent of this market—there was also a representative increase of competitiveness, with the entrance of smaller companies for regional attendance.

But these companies work with distinct interest rates, what allows them to offer differentiated prices of rental. According to Esteves, this factor interfered deeply in the market.

In the analysis of Esteves, these facts had a deep effect in the market, reducing rental prices in approximately 15 percent. “Current values do not ensure a healthy operation. We know that the market will accommodate itself but till this happens, there will be a punctual excess of machines”, states him. “In other words, in 2012 and 2013 companies bought more machines than the necessary and part of this fleet remained to be used in 2014, what also explains the lower volume of new machine sales”.

The executive believes that the market will be more stable in 2015, with a volume of importations similar to that of 2014, rising again in the sequent years. “For the next years, there is a trend of increase, even because we have an entire market to be developed in Brazil, what just enhances the positive projections for the companies that are professionalized in that business”, says Esteves.