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More efficient forest machines are shrinking the market

The Swedish market for forest machinery is seemingly in decline. That is the conclusion of a review of forwarder registrations over the past six years. The average drop is 16 percent and the trend also applies to harvesters.

During the period 2013 to 2015, an average of 282 forwarders were registered per annum in Sweden. The average for the preceding three-year period was 335, which means that the market declined by 16 percent or 54 forwarders. The review is based on official forwarder registration figures from the Swedish Transport Agency (Transportstyrelsen) analysed by Elmia AB though it is noted that small-scale forwarders and harvesters are not subject to registration with the Transport Agency. However machinery manufacturers can see several factors behind the decline.

Larger and fewer

– Machines are becoming ever more efficient, with a higher capacity utilisation rate and longer service life. Logging volumes remain relatively constant from year to year so that fewer machines are needed, said Rolf Andersson, President of Rottne.

According to Peter Hasselryd, CEO of Komatsu Forest, the share of final felling has been unusually large.

– We have sold fewer but larger machines, he says, pointing to coming pulp mill capacity increases at Södra Värö and SCA Ortviken. It may be so that forest companies have temporarily reduced their thinning operations in order to have stock when the capacity comes on line, said Hasselryd.

Tougher financing

Another explanation offered is that banks and other financial institutions have toughened terms for forest machine financing which has lead to contractors hanging on to machinery instead of replacing it.

– In essence, it is a healthy development that can assist in improving the financials of contractors, said Martin Bredefeldt, CEO of Gremo.

The trend is also notable in the aftermarket. In the past, welding repair work on frames and centre pivots were common. Today, due to stronger structures, such repair work hardly ever occurs regardless of manufacturer.

Top shuffle

New registrations of forwarders fell by five percent in 2015, from 301 to 287 machines. John Deere regained the leadership spot with 127 registered forwarders, which is a market share of just over 44 percent.

– We were in the midst of changing our model programme in 2014 and had eight-month delivery on some models. The new models are in place, which the statistics show, explained Dieter Reinisch of John Deere.

Komatsu Forest topped the list in 2014 with 101 sold machines but dropped back to 85 in 2015, which does not worry Peter Hasselryd.

– 2014 was a good year with the successful launch of new models. Over time we have had a 30 percent market share, and that is where we are now, he said.

Gremo was one of those who backed the most. According to the official statistics five Gremo forwarders were sold in Sweden in 2015. According to the manufacturer seven machines were sold, but even that is almost halved compared to 2014 when it sold twelve.

– We’ve slowed operations and landed at the planned level. Most of our production, 70-75 percent, is exported, commented Martin Bredefeldt.

Smaller machines gain market share?

Another explanation for the shrinking market may be attributed to the success of small professional machines, which are not registered with the Swedish Transport Agency. But according to the manufacturers, the competition is marginal.

– We do feel it when it comes to our smallest model for the active larger private forest owners, conceded Rolf Andersson, Rottne.

5275/AS

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