Terex to accelerate engagement with developing markets
Terex Corp said it will accelerate the development of its business in developing markets such as Russia, Brazil, India and China through local production for local markets and by using its “entrepreneurial” spirit.
Steve Filipov, president of developing markets and strategic accounts, said the first phase of its globalisation strategy has been achieved – understanding the new markets and establishing people on the ground – and was now being followed by a second phase that will encompass local manufacturing and the development of local distribution networks.
“We’re going to go at the market and get market share in these developing areas”, he said at the company’s press conference at Intermat. “We’re going to get moving to a more local business model, and we’re going to move fast”.
A third of Terex‘s US$6.5 billion revenues last year were in developing markets. Filipov told IRN that a realistic target was 40% within three years.
One initiative is the joint venture in Russia with Russian Machines – announced last year – that will give it access to four manufacturing plants in the country. A wide range of construction equipment will be produced at these facilities, including excavators at the plant in Tver, and Mr Filipov announced that production of Terex backhoes would start there in May this year.
Terex chairman and CEO Ron de Feo said the focus for Terex now was on completing the integration of the Demag Cranes business acquired last year and improving its financial performance. He said Terex was “less than half way” to getting the level of profitability that it could.
“You won’t find me with a shopping bag walking around [Intermat] looking for someone to buy”, he said at the press conference, “You will find my team focusing on the business fundamentals.”
Mr De Feo also addressed the issue of increased Chinese participation in the construction market; “Chinese manufacturer have aspirations of global representation. It’s their right to try that. It’s our right to defend our position.”
He said it would not be easy for them to sell in North America and Europe; “I look forward to economic engagement – it makes us all better…I’d say to my Chinese colleagues, ‘Hard work is welcomed. Easy access will be prevented.'”