Terex MP President Kieran Hegarty stresses that one talking point is dominating conversations with customers and dealers across the Terex business division brands exhibiting at Hillhead 2022 near Buxton, Derbyshire, England. "The big trend in our industry is electrification and hybrid power plant. It is accelerating for environmental reasons and for more immediate real-world stuff. For instance, a couple of months ago in the UK the Government took away the [construction and quarrying machinery] red diesel rebate. It was a wake-up call to many companies.
"I have heard customers here [at Hillhead 2022] say their diesel fuel bill has gone from £500,000 to £1 million a month. Not only are you having to cope with rising inflation, but you've got a huge increase in your fuel bill. A sum of £1 million a month is a huge bill for a big [crushing and screening] contractor.
"Electrification is in all our industries – crushing and screening, bulk material handling, and recycling plant; but battery power is not really applicable to us due to the higher horsepower required for the machinery we produce."
"Around 5% of our current crushing and screening plant sales are fully electric plant, with about 15% hybrid [diesel-electric] power," explains Brian. "We have a team that has just started to work on how manufacturing more fully electric-powered plant will change our factories? How do we reconfigure them for when the market moves to 20%, 50% or, ultimately, 100% fully electric plant? How do we get the right generators to test large volumes of fully electric plant? We need to start preparing for the future 'Electric Factory' now. In the last three years, over 70% of our R&D activity has been focused on electrification."
Asked whether Terex MP's future acquisitions or joint ventures will be geared toward the greater electrification of crushing and screening plant, Brian responds, "absolutely".
Illustrating how electrification within the off-highway equipment sector is a truly global trend, Hegarty says: "I was in India recently, and I was astounded how the electrification of plant there in the last two years is ahead of Europe. A lot of it has been driven by fuel cost but also by environmental concerns. China is another major market that is embracing electrification."
Garrison is cautious when asked to predict the timescale of wider fully electric quarrying plant use. "We think Terex MP is going to be operating in a hybrid power world for a long time; I think for decades. What I can say is that we have the strongest balance sheet in Terex's history, and many of our acquisitions going forward will be linked to developing the Terex Materials Processing business."
Garrison cites Terex's Q1 2022 investment in Viatec, a South Carolina, US-based manufacturer of plug-and-play electronic power take-off (PTO) systems that support the electrification of utility fleets, as an example of how an investment in technology for a different Terex business division may latterly be of use within Terex MP.
He continues: "Digitalisation is another huge industry trend: connecting the end-use customer, with their dealer and us through telematics platforms. If we are not working via iPads, iPhones, or other digital means, we are also not going to attract young people to our industry.
"I am very proud of the amount of new product that Terex MP has brought to market during the coronavirus pandemic. A lot of that was possible because of our digitised working processes."
"When you look at crushing and screening plant digitialisation, Terex MP was the pioneer in this industry," stresses Brian. "We constantly look at how customers can use data to better utliise their equipment assets and formed a Digital Solutions Group within Terex MP around six months ago. They are actively looking at digital innovation to help our end users and dealers."
Hegarty notes that customers, especially aggregate crushing and screening plant operators, need quality actionable data to improve their operating efficiency. "We are working on apps that allow the customer to not only see performance data of each machine but to select and order replacement parts and schedule servicing times."
Garrison adds: "Customers are looking for uptime and productivity – more tonnes per hour. Every minute down is a bad minute. That is never going to change – but we can give them new digital tools to help them."
The Terex MP business division includes the brands Powerscreen, Finlay, EvoQuip, Terex Minerals Processing Systems (Terex MPS), MDS International, Terex Washing Systems, Terex Ecotec, ProStack, CBI, Fuchs, Franna Pick and Carry Cranes and Terex Tower and Rough Terrain Cranes. After selling off several of its less profitable businesses, Garrison says Terex MP now represents over 60% of Terex Corporation's operating earnings – compared to 20% seven to eight years ago.
"It is a very important business segment for Terex and one we are investing in – in our people and in our new product development," he emphasises, adding, "It is a truly great global business with diverse products and customers, with aggregates crushing, screening, and washing at its core. It is a business that I have been excited about since I joined Terex."
In its latest trading figures, Terex announced first-quarter 2022 income from continuing operations of US$52.3 million on net sales of $1 billion. The Corporation revealed a record order backlog worth $3.5 billion due to high customer demand across all business divisions.
Focusing on Terex MP, Hegarty says: "Our markets have been extremely strong since the high covid period of 2020 – and that's across all our portfolio. Just remember that we're in minerals processing through our crushing and screening brands; concrete processing, primarily in the United States; we're in the environmental business with [Terex] Ecotec, which is also a growing part of our business; and we're in material handling with Fuchs and ProStack, and then we have our speciality cranes business, with Terex Tower and Franna. All parts of Terex MP have record order backlogs.
"We are also seeing great challenges relating to supply chains and [production] cost inflation. It is not specific to one industry and geography; it is a global problem. At this stage, based on our order backlog, our outlook remains very strong. We are very conscious of a lot of noise about recession and inflation, but we are not seeing any signs that this is affecting product demand. We think the macro long-term infrastructure drivers in the US and other markets like the UK, with projects like HS2, coupled with the need for the world to recycle more leaves us in a strong position."
Emphasising Terex MP's global market optimism, Hegarty cites Terex's recent acquisition of Steelweld, a Northern Ireland-based manufacturer of heavy fabrications, to support Terex MP's growth strategy by increasing fabrication capabilities in the province.
Hegarty also notes that Terex is finalising plans for a major new investment at its Ballymoney, Northern Ireland, fabrications facility.
The site has already seen a multi-million-pound investment in 2022 with new laser cutting equipment and robot welding cells, and Terex says 2023 will see a further major expansion and facility upgrade.
The site will host a new assembly hall and cranes, with a new powder coating line, as well as contemporary office space and employee facilities.
Powerscreen continues to do strong business in the over 20 billion tonnes a year Chinese aggregates market, with the Terex MP brand's crushing and screening plant now being manufactured at Terex MP's new 18,000m² manufacturing facility in the Jiading district of Shanghai. Opened a year ago, the Jiading facility is less than 200 kilometres from Terex Aerial Work Platforms' (AWP) longstanding Genie brand factory in Changzhou. That site has been expanded to enable production of Fuchs branded loading machines for port, recycling, scrap and timber handling.
"Powerscreen went into China [in 2016] as it was the last big market that we didn't have significant crushing and screening brand presence in," explains Hegarty. "The problem we've had in China more recently has been the covid lockdown. Our Jiading factory was shut for eight weeks, then three weeks ago, we were told it could open up as long as workers slept in the factory – so they did. There is also a lot of disruption around logistics and with needing people to quarantine for three weeks on arrival there."
Garrison adds: "The strategic reality is you have to manufacture in China if you want to do good business there. You are not going to win by importing products into China."
Brian says that Finlay's extensive range of crushing and screening plant will also be manufactured in Jiading, with the first plant coming off the production lines before the end of the year. "The China facility is delivering great productivity, and we have a lot of experience running multiple Terex MP brands in Asia."
News of Finlay crushing and screening plants' imminent production in China links well to the recent rebranding of Terex Finlay as Finlay – A Terex Brand. Commenting on it, Brian says: "We started with feedback from our customers and dealers, and the brand is under new leadership who wanted to take a step back and assess the business. Customers and dealers very much value the product support offered by a big American corporation, but this business is built on emotion. When it came to Terex Finlay, John Finlay is seen as an industry pioneer, and there was a heartfelt feeling among customers and dealers to have that heritage better reflected in the brand."
As the press conference draws to a close, there is just time for a response to a question on whether the success of the EvoQuip compact mobile crushing and screening brand range has impacted on sales of smaller Powerscreen and Finlay units.
"EvoQuip was introduced after we saw the growth in crushing and screening by contractors who did not traditionally crush and screen. They were working in urban and demolition environments, and we wanted to offer those customers a focused product range. We knew there would be a little bit of product overlap, but at its core, they don't," says Hegarty.
"EvoQuip, Powerscreen and Finlay do not always share the same distribution channels, and if you're a contractor starting up in crushing and screening, you may want a smaller EvoQuip machine," notes Brian. "In time, you might then want a bigger machine, and you know that EvoQuip is a Terex MP brand, so you invest in a Powerscreen or Finlay plant. It can be a great stepping up model."
A joking Garrison adds: "If you are going to be cannibalised, you may as well do it to yourself!"
