The COVID-19 lockdown and related restrictions compelled EIE Group to re-evaluate its operations and find ways to streamline the business. The hard work paid off with EIE Group recording a healthy improvement in cashflow on 2019 and paying its employees full salaries throughout the lockdown period.

EIE CEO Gary Neubert says the operations side of the business, which encompasses service, maintenance, parts and rental, performed exceptionally well during the lockdown period, as did the pre-owned part of the business.

“The greatest knock to the business was on the sale of new equipment, with the market down by close to 40%. This was the result of customers making the decision to hold back on capital expenditure and ensure cashflow during the lockdown period.”

EIE Group decided early on to de-fleet some of its short-term rental machines and bring them back into stock by rebuilding them and selling them as pre-owned. This was a prudent decision, given the increased movement the business witnessed in the pre-owned market.

“Where we lost on the new equipment side, we gained on the pre-owned side. This bears testimony to our robust business model and overall agility,” notes Neubert.

While more customers chose to rent their equipment during the initial phases of the lockdown, this changed in October when EIE Group noted a 50/50 rental versus cash sales split.

“With an anticipated 70% rental versus 30% cash split, we expected the widespread uncertainty to compel many more customers to adopt the rental route going forward. Due to favourable bank lending rates and a greater willingness by the financial institutions to invest in industrial machinery, this has not happened,” says Neubert.

With more businesses in Europe choosing the rental route, the team at EIE Group does expect this trend to be adopted by more operations in South Africa in the foreseeable future.

Another trend EIE Group expects to see in 2021 is the decision by customers to extend the lives of their forklifts and maintain their products for longer periods of time, that is, sweating their assets to ensure greater cash flow.

Neubert says COVID-19 has also accelerated the adoption of new technologies at EIE Group. “Our Rapid response app, Mobile Mechanic and CRM systems are up and running and there is a major drive by our IT team to come up with new technologies that can support the business and make it more efficient.”

Amidst the pandemic, EIE Group continued to develop its employees and nurture young talent. “There is a big drive in the business to attract young talent. One of our greatest success stories this year is our successful sales cadet training programme.

We have always battled to find good salespeople for the business, so we made the decision at the beginning of year to launch an in-house initiative for young entrants into the market.

The first intake of 12 cadets graduated in late November 2020. EIE Group will assimilate them into the business, some into new sales and others into aftermarket sales.

“We will continue to run programmes like this to encourage young people to come into the business. In addition, our apprentice training programme, as well as our emerging leader and leadership training programmes are ongoing,” adds Neubert.

He says EIE Group does not always relish bringing competitor employees into the business.  “While we do bring people from competitors into the organisations from time to time, we prefer to grow our own talent. We are always on the lookout for fresh ideas and new approaches.”

Neubert does not expect automated guided vehicles (AGVs) to be on the cards for South Africa in the near future. “AGV forklifts are expensive and their return on investment is far down the line. With South Africa’s massive unemployment rate, going the AGV route is also not the socially responsible thing to do. We will, however, see more customers going for the electric forklift alternatives.”

Looking ahead, EIE Group does not expect 2021 to be an easy year. “We expect the operations side of the organisation to account for at least 70% of business next year (up from 60% in previous years). There will be major focus on driving the service, maintenance, parts, rental and pre-owned side of the business in the new year. To this end we have brought after-market sales reps on board - a new strategy for us.

“The after-effects of the pandemic will continue to flow into next year and while we know our new sales division will be under pressure, we believe our robust business model will ensure that we are well positioned to record a good year in 2021,” concludes Neubert.