Articles
Business Model
There are numerous business concerns involved in the repair and reconditioning of industrial equipment in the local market. Rather than compete for such business in the local market, the Directors decided to focus on the Middle East Region where demand for used industrial equipment has risen significantly due to rapid economic development.
The company has appointed marketing agents in a number of countries in the Middle East Region such as Dubai, Oman and Qatar.
Currently a substantial portion of the used forklifts are purchased from Japan and exported to buyers primarily located in the Middle East region. All purchases of used forklifts are on cash basis and terms of update 90 days are offered to buyers. The credit term has got to be offered so that the buyers have time to refurbish the machines before offering them for sale. The company has also successfully placed used forklifts at auctions of industrial equipment by well reputed international auction houses such as Ritchie Bros Auctioneers (ME) Limited, Dubai and World Wide Auctioneers LTD, Dubai. Should Bank finance be made available, the company intends to prospect for supply of used forklifts from other countries such as China, United States and Europe where supply is plentiful. In addition it is also intends to supply more units for international auctions as past experience has shown that demand from buyers is very strong at such auctions and offers the company an alternative source of customers. It is also possible to purchase used machines at such auctions in bulk and at very competitive prices. All overseas sales will be against letters of credit from established Banks or against sight payment of documents in order to ensure that counter party payment risk is kept to the minimum. The company now is applying for credit facilities with a view to increasing turnover and margins and aims to achieve this by adopting the following strategies :-
- Paying for acquisition of used forklifts on cash basis from a wider network.
- Extending longer credit terms to buyers.
- Entering into new supply contracts with established counterparties in Middle East and Africa.
- Enhance trading in spare parts by purchasing in bulk from China.
- Focus on supplying reconditioned forklifts for sale at major equipment auctions for used industrial equipment.
- Penetrate the local market for used forklifts on rental basis.
- Offer expertise to repair and re condition forklifts to dealers of such equipment in the country Such as UMW TOYOTA, TRACTOR MALAYSIA, KOMATSU, NISSAN and etc.
