FINANCE: Volvo CE customers on three continents attest to the value of dealing with Volvo Financial Services
Kelston Sparkes Group (KSG) Ltd, based just outside Bristol in south-west England, has 180 employees, owns 200 construction equipment machines and specializes in major civil engineering projects such as earthworks and quarrying, writes Tony Lawrence in the UK.
“Ours is a huge industry, involving huge projects, huge capital outlays and huge machines,” says company director Rob Stark. “But in terms of people, it’s very small. That’s why relationships built on trust and confidentiality are so important.”
Around eight years ago, the company embarked on a new relationship, linking up with Volvo Financial Services (VFS). The two remain in tandem today.
“When the credit crunch hit, we needed to diversify and extend our credit facilities to help us keep updating our machinery,” Stark explains. “That is where VFS came in. “They knew the industry was facing difficult times; they were competitive in terms of rates and it was bound to be an advantage that, unlike most commercial banks, they understood our business – we are machinery people and they understand the machines. They knew a lot about us, and about how much care we take in maintaining our fleet. That is all a big plus.”
Equally important is his eight-year rapport with David Busuttil-Thomas, VFS sales manager for the UK and Ireland. “That was a problem with the finance sector – people come and go, it can be transitional.”
“I work very closely with Rob,” agrees Busuttil-Thomas. “We have an understanding and we work together to put each finance deal together. It’s an ongoing process. VFS does not go away. We stay in touch and there is a lot of behind-the-scenes work.
“When KSG are looking to acquire a machine, I want VFS to be there, when the decision is being made and adding value at the point of sale. We want to provide options, and to be part of the offering rather than just a back-up service. We also want to make quick decisions – speed of execution is crucial for our customers.”
Having a one-stop, in-house finance division, adds Volvo CE business manager Gavin Clark, is invaluable: “It’s all about being able to cover all the bases. If the customer is happy, we are happy.”
In the early 1970s, KSG bought one of the first Volvo articulated haulers to reach the UK – it was recently refurbished, marking 25 years of partnership with Volvo CE,
and presented to former company head Kelston Sparkes. Around 65% of the KSG fleet today is Volvo.
“We have had thousands of Volvos since we started,” says Stark. “VFS is now part of the relationship. How long will we stay with them? For as long as they keep coming up with the goods – and they have so far.”
As it expands its quarry operations, Malaysia-based Spring Energy called on VFS to help it buy 10 Volvo A40F articulated haulers earlier this year, writes Justin Harper in Singapore.
Spring Energy has recently taken on a number of large-scale projects in Malaysia and wanted to beef up its fleet of equipment and vehicles. Along with the haulers, the quarry specialist has also purchased 10 excavators this year, taking its total fleet of Volvo machines to more than 60. And in June, it also took delivery of two new Volvo wheel loaders.
These purchases represent a major capital investment for Spring Energy but allow it to take on larger-scale quarry, mining and civil engineering contracts. The company has a strong affinity with the A40F, and the 10 new machines complement the 12 it bought between 2012 and 2013.
Yap Ho Huat, executive director of Spring Energy, says: “We have worked with Volvo for a number of years and have always been impressed by the Volvo team as they understand the products and our needs.’’
As the Kuala Lumpur-based business expands, the management wants to concentrate on growing its operations rather than getting bogged down in paperwork and form-filling. “We do have financing with local banks but I really like the VFS set-up as they are efficient, giving us lots of support and coming up with terms that suit our needs,’’ adds Yap. Being able to deliver financing solutions quickly, whether in the form of loans or leasing, is critical to any business, particularly those undergoing rapid expansion.
While projects are booming for Spring Energy in Malaysia, it is keen to expand internationally within Asia, a region that is undergoing massive transformation and huge wealth creation. Brandon Ross, business director for Volvo CE in Malaysia, says: “Malaysia is an exciting place to be based, in the heart of Asia where some huge construction projects are taking place through urbanization and expanding and improving infrastructure.’’
He adds that about 30% of sales in Malaysia are made using VFS. “The ability to discuss short-, medium- and long-term sales opportunities with VFS gives us a competitive edge, especially in relation to the pre-approval of finance.’’
Another plus point, according to Ross, is the streamlining of periodic payments, which means the equipment financing component and maintenance service costs can be combined in one monthly bill, reducing paperwork even further.
BACK FROM THE BRINK
Proof that many companies are storming back from the global financial crisis of 2007-08 lies just off the Florida Gulf Coast, writes Julian Gonzalez in the United States.
RIPA & Associates, a civil contracting company in the Tampa, Florida area, did what many companies were forced to do during those tough times – trim their workforce. Thankfully, shrewd business decisions quickly had RIPA back on its feet as the company grew from 175 employees to more than 500 by June 2015. In the meantime, VFS has been more than happy to play a part in that growth.
“They were the best option when we were buying Volvo equipment. VFS offers extremely competitive rates and terms. They were really a great option for us in terms of a financial standpoint,” says Chris Laface, president of RIPA.
Through the good times and the bad, VFS is there for companies such as RIPA. As a captive finance company, VFS can transform its lease terms to keep RIPA following a smooth, upward trend on its balance sheet.
“Typically, what we find when dealing with any of the major brands on heavy equipment, the financing arm associated with Volvo CE – VFS – is generally the most competitive when it comes to financing it,” explains Laface. “They know their equipment well and offer very strong terms.”
Founded in 1998, the company prides itself on the core fundamental values of strength, reliability and trust. With annual revenue constantly surpassing US$100,000, it is easy to see why RIPA would tie those values to VFS, which excels in helping clients in any way possible, especially when times get tough.
“Banks are in and out of the market, whereas as a captive, this is all we do. We can’t change our mindset and decide we want to do loans on medical equipment instead – this is our livelihood, this is all we do,” explains VFS district financial manager Lori Waldrop. “Back in 2008, when the economy took the big turn, we were willing to make modifications for customers who got into trouble, extend their terms, give them dispensations, do whatever it took to keep them in the equipment. The banks, meanwhile, were saying that once a customer’s line came up for renewal, they were calling the note and giving them 45 days to pay it off.”
With the financial crisis now in the rear-view mirror, RIPA continues to surge forward while reaping the rewards of having VFS at its side.
“They’ve been great to work with and our relationship is strengthening as we acquire more equipment with their help,” says Laface. “They do a nice job and treat us well.”