However, a combination of good management and good timing has seen the company reborn as a leaner, broader-based business in an excellent position to ride out the current downturn and emerge in a very healthy position.Despite its name, Case Equipment Sales saw early on the need for a multiple franchise business – it was also the national distributor for Fiori dumpers and self-loading mixers and for Terex backhoes, and was the NSW Takeuchi distributor. The company also has some strong agricultural franchises and thus has a broader industry base to rely on for its turnover.There’s no doubt that losing Case construction equipment was a big blow to the turnover, but it forced Semco to tighten up its business and look at what it was good at, and how it could capitalise on those strengths.Equipment distribution was still a core strength, but the markets occupied by Takeuchi, Terex, Astec trenchers (Case sold its underground equipment lines to Astec in 2003) and Fiori did not have the breadth coverage of the Case construction range. However, relationships with customers and contacts in Australia and overseas meant that equipment repair and used equipment sales became increasingly important business activities, with low hour used equipment sales filling some of the gap in new equipment sales. Equipment distribution into niche areas requires a considerable investment up-front in learning the product, understanding the markets that it might suit, getting the specification right for the local market and educating the market in what the equipment can do. Fiori is a case in point: there was a market need for a compact dumper for rail maintenance work to replace the ageing Nikken machines in many fleets, but it took some time working with contractors and with the Fiori factory to develop a special model suited for rail work in Australia. Fiori also makes self-loading 4×4 concrete mixers that are ideal for remote sites, where the nearest batch plant is too far away to be a practical source for concrete needs, or sites where the “bits and pieces” nature of the work would tie up a concrete agitator onsite for too long in completing the discharge (this application does not require a remote site to be viable).Although self-loading, self-propelled mixers are common in Europe, and those who have bought these machines in Australia have been very pleased with their practicality and economics, it has been a long haul to convince contractors to consider this type of machine.However, the real master stroke in the company’s adjustments since relinquishing the dealership for Case construction equipment may have been getting into finance and insurance through Semco Financial. The products are tailored to suit the needs of the mobile equipment market, and marketed by people who understand that market. More importantly, virtually any business in the construction industry has a need for finance and insurance.Some of the insurance options include warranties on selected used equipment, agreed value coverage and breakdown cover that includes consequential loss and a rapid response time to the breakdown.To some it might seem like a move from left field. However, industry knowledge and a broad cross-section of industry contacts are often under-appreciated assets of a company that has been in the business for a number of years, and these open up opportunities outside of new equipment sales. The finance and insurance products are available to the general industry, not just those who buy equipment through Semco, and given the difficulties that some sound businesses have found in obtaining finance in recent months, Semco Financial may have come along at just the right time.The way that Semco has reinvented itself after what would normally be seen as a major setback is a good example for those who are taking a hit at present. A close look at the business might find that not all turnover areas provide the same return, and a better return on investment might be possible through exiting some of the lower return activities.An examination of the business might also identify hidden strengths that have not previously been fully appreciated, and there may be opportunities to exploit these strengths through new business activities. The best tools are sometimes open eyes and an open mind.
