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JCB's £27m A-Plant order offers cautious optimism of upturn

Plant giant JCB and leading hirer A-Plant have announced a massive £27m deal for more than 800 new JCB machines for the A-Plant fleet.

The order – the biggest by volume received by JCB so far this year – is for a mix of micro, mini and midi excavators and 240 Loadall telehandlers from JCB’s UK factories. It far exceeds another huge order, for 550 machines, which A-Plant placed with JCB last year.

A-Plant director of marketing and strategic accounts Asif Latief tells Construction News the investment is primarily intended to “reconfigure the fleet mix” as well as replace some of the older equipment.

“We are replacing some machines, but these are not like-for-like replacements,” he says. “We are investing in these particular machines in response to changes in demand.”

Downsized demand

Mr Latief explained that increasing activity in general construction and infrastructure work is shifting demand towards smaller excavators and materials-handling equipment, with a noticeable increase in demand from smaller regional contractors.

While agreeing that news of the order is likely to fuel speculation that the plant hire industry, and therefore construction in general, is on the road to recovery, Mr Latief would go no further than to say he was “cautiously optimistic”.

“The momentum has now picked up and quarters two and three are looking much more promising”

Alan Blake, JCB

“This is really about a change in demand,” he adds. “We have a wide base of customers and we’re seeing an increase in the areas of infrastructure work, in particular utilities and elements of commercial construction. This is where the micro, mini and midi excavators are most in demand.

“Our plan is straightforward: we are in a position to invest now and are buying new equipment so that we don’t have to waste time playing catch-up when demand is increasing.”

Market analysts welcome the announcement. “This is certainly good news for JCB and probably good news for the industry,” says Off-Highway Research senior consultant Colin Timms. “Here we have one of the top three plant hire companies placing a massive order and that’s got to be a positive sign.

“Whether it heralds a return to the glory days is another matter – we’re not anywhere near 2005 levels.”

Promising outlook

JCB chief executive Alan Blake says the manufacturer currently has “a very strong order book on the back of reported high utilisation rates from major hirers and positive sentiment in the housebuilding sector”.

“While the UK market got off to a slow start in the first quarter of 2013, largely due to the adverse weather, the momentum has now picked up and quarters two and three are looking much more promising.”

JCB dealer Greenshields JCB will start delivering the machines to A-Plant’s nationwide depot network later this month.

Among the machines will be some of the first of JCB’s new 1-tonne minis, the 8016 and 8018, which have just gone into production following their launch at Munich’s Bauma exhibition last month.

JCB says these machines boast more than 30 improvements over their predecessors, including an 11 per cent increase in dig depth.

The new Loadall telehandlers are powered by JCB’s latest Ecomax Tier 4i diesel engine, which is designed to meet the latest EU Stage IIIB (US Tier 4 Interim) emissions standards without the need for diesel particulate filters or exhaust after-treatment fluids.

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