Southeast Asia’s dynamic growth has created a thirst for machine tools that is driving an ever-growing trade in used machine tools, and creating an eagerness among suppliers in countries such as the United Kingdom to meet that demand. Companies from the region that are buying these equipments have a wide choice of supply channels. By David Wiggins, sales and marketing director at Machinery Market
As well as experienced dealers who can provide a fully supported export service, there are online auctions that are opening up new opportunities for buyers world-wide. With its links to the region and export experience, the UK is ideally placed to deal with ASEAN buyers, although there is also much on offer from other parts of Europe and North America.
Time To Buy
David Gadsden, managing director of Electro Motion UK (Export), says the increased level of competition across the world for used machinery means that pricing can be a sensitive issue.
“Currently, there is strong demand from Southeast Asia, but many buyers do not readily accept the price of the equipment available. I think such acceptance is still a year or two away, but there is only a limited window of opportunity. In the longer term, prices are only going to go up. The message to ASEAN buyers is that if they do not take advantage of the current buying opportunities, they may have difficulty sourcing the required equipment at competitive prices in the future,” Mr Gadsden said.
He also added that if people want a machine immediately, a new machine may not be available “off the shelf”, in which case a used machine may be the best option—provided they are prepared to be a little flexible with their specification.
“Few machines are now built for stock, so lead times are getting longer. Buyers should be considering both the cost of a second-hand machine compared to a new one and its availability, but they should be prepared to take what is available and fit it to their job, rather than expect to find an exact match for their specification.”
That said, Mr Gadsden says visitors to the UK will have plenty of opportunity to find the right machine. “In the UK, there are some 200 machine tool dealers, and it is possible to visit most of the major players in about a week and they are all experienced in exporting. Indeed, UK dealers are predominantly exporters.”
Dealing With Dealers
Steven Mooney of Steven Mooney Machinery says that most of his ASEAN customers are dealers themselves, and that the UK market can provide the two types of machinery that are particularly attractive to them: manual machines that are no longer economical to operate in the UK, and large equipment, such as big presses and machinery from industries (such as shipbuilding) that are no longer active to any great extent in the UK.
“ASEAN companies can still take manual machines and make them work. In the UK we cannot, and we have had to close those plants down because our overheads are too high. Countries in Southeast Asia can still use cam autos to make basic parts cost-effectively, whereas the UK cannot; no matter how fast UK manufacturers run these machines, they can never match the price of an ASEAN manufacturer. Southeast Asia is a natural market for this equipment,” Mr Mooney said.
Mr Mooney, former vice president of the EAMTM (European Association of Machine Tool Merchants), says that one way to find a dealer you can trust is to talk to Association members. “The EAMTM is a very strong organisation that polices its members. If an ASEAN dealer or buyer had a complaint against one of the Association’s members, the matter would be thoroughly investigated.”
The Association represents more than 250 dealers in used metal-working machinery in 25 countries worldwide. Most of the members are small or medium-size companies that can supply machines from their stock. They are also bound to trade according to a strict code of ethics that includes requirements to honour contracts and agreements, describe machines accurately and honestly, and uphold guarantees. Any company failing to live up to this code, or failing to honour the precept of mutual trust implied by membership, can be suspended or expelled.
In addition, publications such as Machinery Market supply the industry news and technical information, while websites such as Machinery-Locator.com also give access to the machines advertised for sale in its classified pages.
Another area of machine tool sales that has seen tremendous growth in recent years is the online auction.
One of the companies in online auction sales is Apex Auctions, which operates in the UK. Stephen Dugard, managing director of the company, says that the business has changed dramatically in recent years as online auctions reach into new markets.
Mr Dugard added that this trend has brought obvious advantages to anyone in Southeast Asia who is interested in buying second-hand machines: “The power of the online sales process is that it allows people from all over the world to participate in the auction. Historically—going back around thirty years—we have always had a lot of overseas buyers at our engineering sales. With the advent of webcast auction bidding—introduced around the millennium—people could participate in a live auction from their home. Webcast was the first step that allowed people to actually bid into the auction room.”
While webcasts did increase the number of overseas buyers, Mr Dugard says that the real boost came with the move to pure online auctions, because overseas buyers seemed to feel much more comfortable with these.
“Auctions have been done in the same way for thousands of years, but the advent of online auctions has dramatically changed the world in which we now operate. Online auctions has also allowed a much greater number of participants to join in the auction process—a process that is growing fast.”
“We do not tend to sell individual items by auction, although we might sell the occasional big machine,” Mr Dugard said. “Some dealers are now using online auctions to sell, so rather than buying machines for stock, they are selling them on very quickly. After a sale, we often have to clear the site quite quickly, and one of our challenges is to help ASEAN buyers pay quickly and organise things such as transport.”
The company runs auctions in the UK, the US and Europe, and these auctions are now conducted almost exclusively online. Moreover, it has tailored its online sales more in the style of a live auction rather than the strict cut-off auctions found on the likes of eBay.
“The disadvantage of eBay is that an expert buyer can win out over someone who is less used to bidding. Our system has overtime bidding, so when the closing time comes, the system will carry on until all the bids run out. This ensures that people who are interested in buying, and might have been prepared to pay more for a machine, are not beaten by someone getting in at the last minute without having a chance to bid higher.
As a general rule, Mr Dugard said that one of the arguments in favour of buying at auction is that the buyer knows that he is paying a fair market value: “Historically, overseas buyers have seen online auctions as a way to get cheap deals, and indeed there are still bargains to be had, but users are paying market value for good machines that they would not necessarily be able to get anywhere else. For ASEAN buyers, European sources give them access to machines they cannot get elsewhere.”
He says that if buyers want a higher level of service, with warranties and after-sales support, then these are available through the dealers that back the online auction company. At an auction, buyers purchase machines with their eyes open. They know that the machines have been in production, and they are given as much information about the equipment as is possible, but once they have bought it, then it is their own responsibility. That said, the company will do as much as possible to help, including offering advice on transport.
“The key to successful participation in an online auction is preparation. Work out what you want, how much you are prepared to pay for it, and what questions you want answered—well in advance. It is important to get all the information you want in good time; certainly, do not leave it until the day of the sale,” said Mr Dugard.
He also added that bidders should have the means of payment in place and be prepared to pay quickly. Because of the time taken to clear payments, and because a site has to be cleared soon after a sale, there is generally only a five-day payment window for buyers from Southeast Asia.
Furthermore, only certain payment methods are acceptable—essentially debit cards and wire payments such as CHAPS and BACS—so buyers may need to make arrangements with their banks ahead of the sale. Transport will also need to be arranged quickly.
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