Ruthmann emphasises price/performance and changes its fortune.

Maria Hadlow talks to Rolf Kulawik and Uwe Strotman of Ruthmann about the changes in emphasis towards price/performance, which has changed the company's fortune.

At Intermat in April this year, German truck-mount specialist, Ruthmann will launch the first in a new line of machines that the company has designated Height Performance. Although the company is saving many of the details of the new machine for the exhibition Ruthmann has revealed that the first model available is the 46m working height Steiger T460.

The T460 uses the company's multibend boom construction technology and a high tensile steel which creates a high strength boom with a light weight. The T460 will be mounted on an 18t GVW, 2-axle chassis or customers have the option of an all-wheel drive. Chassis can be chosen from a number of manufacturers including Volvo, Scania and Mercedes.

Ruthmann is only gradually releasing details of the new model but Access International knows that it has a telescopic boom with a "longer than ever," jib to provide good up-and-over access.

The new range builds on the success of the Steiger TB270, 27m machine, which is mounted on a 3.5t chassis and the Steiger T330, 33m machine mounted on a 7.5t GVW chassis, which were a step change for Ruthmann in several ways.

Ruthmann, a family business founded in 1901 has a history of innovation. The company created its first access platform in 1954 and, says managing director Rolf Kulawik, "could be said to have been responsible for the development of the truck mounted [access] business."

In 1956 the company developed its first telescopic boom and in 1975 the first truck mount, according to Ruthmann, to go over 30m, "Ruthmann was a pioneer," says Uwe Strotman head of sales, "not every manufacturer thought there was a market for 30m+machines."

In 1983 the booms went to 60m, in 1996 to 70m and in 2001 Ruthmann built the first truck mounted access platform to take operators to 100m, the TTS100.

The current management team agree that the development of the 100m machine was a pivotal point for the company. "It was a mile stone in engineering but an economic disaster," says Mr Strotman. "It is a brilliant machine, there is nothing as stable nor that can cope with windspeed 7, but the product development, engineering and production cost meant the machine was more expensive than customers wanted to pay at the time. In addition it was 2001 and a time of economic downturn."

New ownership

Over the next few years some important changes took place, Ruthmann came under the new ownership and management of Heinrich Winklemann and Heinz-Jurgan Buss . In 2003 the economic environment was beginning to improve and by 2006 the Ruthmann family no longer held shares in the business.

Development did not stagnate in those years - far from it. In 2002 Ruthmann introduced high performance machines into the 3.5t GVW (gross vehicle weight) class - the TB180 and TB220. In 2007 the new Innova-Orbital Boom Technology was developed: a boom with a curved profile made from high tensile steel, minimised weight and featured wide gliders for a stable and quiet operation. The technology was employed on the Steiger T470 and T580, 47m and 58m working height machines.

In 2010, following the death of his father, Mr Winkelmann went back to take over his family business as chief executive officer and took Mr Buss with him to be chief financial officer They remain 100% shareholders at Ruthmann, but appointed a new management team of Rolf Kulawik as managing director Uwe Strapper as head of commercial operations and Uwe Strotman as head of sales.

The pivotal point

The pivotal point marked by the TTS1000 has been a move to the development of more affordable machines that Ruthmann describe as offering a good price/performance ratio.

Mr Strotman says, "Since the TTS1000 we have concentrated on bread and butter machines, we did the innovation on the round profile, T580 and T470. These are brilliant but expensive - I'm not sure how many we will sell."

Mr Strotman is at pains to make it clear that the new ranges of machines, which began with the Steiger TB270 and T330 are still of very high quality and technical excellence but now in a more competitive price range.

"For example," he explains, " the variable turret developed in 2006 and used on the Steiger T275 meant that the overall length of the truck mount was shortened by 1m. This was achieved through innovative hydraulic development and cylinder technology it also meant that the T275 was 20% more expensive than the Wumag WT260.

"Customers will pay 5% more for performance but 20% is too big a step."

The Steiger TB270 and T330 have a regular turret, "it saves production costs," says Mr Strotman. "Palfinger's aluminium boom P260 is a comparable price with TB270 - since its launch at Bauma 2010 we've sold 200 we've never experienced such high volumes before.

"What have done with these [TB270 and T330] we need to do with the bigger units."

The other big success for Ruthmann in the last couple of years has been with the Steiger T330 - 33m working height boom on a 7.5t GVW chassis - and one that few other businesses predicted.

"We were alone when we started our 7.5t programme," says MD Rolf Kulawik. "Others had the 3.5t class and the bigger machines so we expected a very big piece of the cake.

The reason many manufacturers had downsized development and manufacture of booms for the 7.5t class is that newer driving licenses require additional training to drive a vehicle of that weight. The general consensus was that the market for self-drive 7.5t machines was declining as holders of the old style driving licenses became fewer.

Already Ruthmann has sold more than 100 machines 85% in Germany some into Austria and the UK, seven out of ten of the sales are replacement machines.

"We have found a lucrative niche market with the 7.5t machines," says Mr Kulawik. "The last development in the 7.5t area was 10 years ago by other manufacturers. It is currently a sustainable for probably the next 10 to 15 years."

Ruthmann does offer a T285 model without the jib but finds that customers prefer the T330 because for less than 10% extra cost they can command a more than 10% rental rate.

So how have Ruthmann's technical and marketing developments been reflected in the bottom line? Turnover in 2003 was €25million and this stayed relatively static during 2004 and 2005 as the company developed the TB machines. From 2006 to 08 the company experienced a large growth alongside good market conditions with turnover expanding from €30 to €50million.

Continued growth

During the recession 2009 and 2010 Ruthmann experienced very little fall in turnover, in fact there was a growth in new machine sales as the figures for the sale of used equipment were transferred to the Financials Division. The balance of the market also changed with more municipal sales and less export.

In 2010 there was private sector growth with municipal sales falling off and in 2011 turnover grew to €60 million with the inclusion of the T330 machine. Ruthmann anticicipates similar levels of sales in 2012 with a healthy order book

Although the management team were unwilling to put a figure on the backlog - it depends upon the type of machine - they would say that the production facility is very flexible and not yet at full capacity

In the past, the Ruthmann family invested extensively in production - at one time carrying out almost all processes in house - now there is a combination of subcontracted and in-house work, "We have developed a good relationship with suppliers and staff and we have an excellent plant manager," said Mr Kulawik.

The Ruthmann Group is comprised of five divisions. Ruthmann Ltd (most machine sales) had a €62million turnover last year with the other divisions - Financial, Austria, Versalift (Time Deucheland) and Service - bringing revenue up to €75.7 million.

Ruthmann Austria has two subsidiaries and 11 people work there on sales and service. Originally Ruthmann had a partner in Austria but that came to an end in 2004 and, as there was a good base of machines Ruthmann decided to take over the business. "It is not a strategy for rest of world or Europe jit ust worked in this particular case," said Mr Kulawik.

Having bought Versalift Deutsland Ruthmann is now officially the distributor for Germany Austria and Switzerland, "The two product ranges are fully complementary, said Mr Strotman. "After six months we not competing [with each other] and we have sold machines, which would otherwise not have been sold."

The Finance Division was started in 2008 and consists of two profit centres: long term rental and used equipment.

The rental business operates with the goal of a sale at the end: typically running over a 36 month period and primarily targeting end users, municipalities and ulitities. "It helps build bridges when they don't have the money up front," said Mr Strotman.

The used equipment business was separated from new machine sales for transparency. It manages trade-ins, but also buys other used equipment - not just the Ruthmann brand or exclusively truck mounts although these are in the majority.

The machines are reconditioned so they look good and are technically sound Mr Kulawik says, "We do what is necessary to present the perfect used machine even with self propelled models: replacing components such as hoses, cable and batteries and painting."

The used equipment has become an important part of the business with over 100 machines per year being sold across the board. Ruthmann's biggest problem at the moment is the lack of available good quality used equipment and the increased prices.

Reconditioning used equipment dovetails with the Service and Support Department, which generated a turnover of €12 million 2011.

Ruthmann doesn't just service and repair equipment of its own manufacture but that of competitors too. Sometimes it might be because competitors don't have coverage in the required region and sometimes because the machines belong to customers of Ruthmann. At the time of Access International's visit there were Bison, Wumag, and Bronto machines in the workshop as well as the 100m TTS1000 Ruthmann belonging to Gardemann, The Lavendon Group's German rental division.

Export

Ruthmann is also trying to increase export in an effort begun in 2000 when it started pushing into world markets. It sells both directly - into Germany, Austria and France, Belgium and Luxumberg and through dealers. "It is still a people business," says Mr Strotman, "we've got to have trust in the relationship. Culture is important in different world markets."

Currently exports stand at €10million a year and Ruthmann wants this to grow without neglecting home markets.

Ruthmann is following the market in China and has had a 37m machine working in Shanghai every day since 2006. The company has recently shipped another 37m machine to "test the water."

In Russia Ruthmann is working with LTECH, which has sold its first 37m machine. They don't believe that Eastern Europe is fully recovered yet, although Poland is improving, where Ruthmann has a good partner .

In Latin America Ruthmann has sold a machine in the free trade zone of Manaus in the State of Amazonas. It is 70m machine with a water hose and tank, a semi fire-fighting platform sold via a new dealer in San Paolo called Pheonix. Ruthmann thinks that there are big possibilities from the infrastructure development in that part of the world.

Ruthmann's results indicate a company making the right decisions about product and business development. It will be interesting to observe the market's reaction to the Height Performance range at Intermat where not only can you see the new T460 but find out more about the 50m+ and 70m+ machines that will follow and are anticipated for Bauma 2013.AI