Interview: How Cramo plans to reclaim “leading position” in Latvia

Lewis Tyler Editor, International Rental News

28 October 2024

Dmitrijs Sazonovs, rental manager at Cramo Latvia

Cramo is a name well established across the Baltic and Nordic regions respectively. Now, having been acquired by Boels in 2019, the company has big plans for growth in a number of its core markets.

That’s certainly the case in Latvia, where the company is aiming to reclaim “a leading position” in a market that it re-entered in 2021.

The company, which has three depots in the capital city of Riga, saw revenue increase by 173% compared to 2022, reaching almost €3.5 million.

Dmitrijs Sazonovs, rental manager at Cramo Latvia, talks IRN through its growth journey since returning and reveals how the company aims to utilise fleet investment, depot expansion and M&A to drive further growth.

IRN: Cramo recently said it has ambitious plans to reclaim its position in Latvia. What are those plans?

DS: Our ambitious plans to regain positions in Latvia include both tactical and strategic approach.

We plan to increase our customer base and work in several areas, including construction, agriculture, industrial, energy and military sectors. We are planning to open a new depot outside Riga.

Without significant investments and human resources, these plans would not be feasible, thus, we are looking for professional and persistent colleagues, with whom we will move towards our goals.

On the other hand, in order to improve the rental experience of customers, we plan to launch an e-commerce platform that will allow customers to place orders online, apply for the return of equipment and manage their invoices.

IRN: Any plans to open new depots (aside from the planned Riga location)?

DS: As I have already mentioned, our ambitions in the Latvian market are very big. We plan to conquer this market and regain the market share that Cramo had in 2017, and by doubling our indicators every year we plan to do it in a couple of years.

We are strengthening our position in Riga, but we plan to expand outside of Riga as early as next year.

IRN: Are there any plans for mergers and acquisitions to increase growth?

DS: Yes, we are considering such options and evaluating the potential benefits, as well as carefully analysing market trends and potential collaborations or mergers to drive growth. Everything is possible.

IRN: Could you provide a breakdown of revenues each year since moving into Latvia?

DS: With great ambitions we returned to the Latvian market in 2021. This decision was carefully considered, taking into account the market situation and expected market changes in the coming years, competitors’ positions, potential customers, the availability of investments for a new fleet and the overall economic indicators of the country.

Thanks to a well-thought-out strategy, significant investments in the fleet and a solid team of employees, which we managed to create in a very short period of time, our company’s indicators are growing rapidly.

In 2022, compared to 2021, the profit increased by 143%, while in 2023, we at Cramo Latvia doubled these revenues indicators.

Currently, we actively continue to invest in development to ensure high service quality, implement new digital solutions and foster the company’s growth.

IRN: What has fleet investment been each year since moving back?

DS: Every year, investments for the expansion of the fleet are growing significantly. Comparing the investment indicators of 2021 and 2023, they were increased by almost 600%.

This year, the fleet was supplemented with new equipment, with an emphasis on hand tools.

We also actively invest in green energy technologies, such as the latest generation of lifts and other equipment, to ensure sustainable solutions.

IRN: Is there a particular type of equipment you are looking to invest in for the Latvian market?

DS: Currently, we are one of the Latvian market leaders in module solutions, offering the opportunity to create combined modular solutions tailored to the client’s needs.

We also plan to strengthen our position in this segment by investing in modular solutions for offices and construction sites.

In addition, we plan to expand the range of hand tools, which is already one of the largest in the Latvian market.

Since we have also started cooperation with private customers, the goal is to become leaders in this category by purchasing the most modern and multifunctional equipment.

IRN: Are you investing in alternative-powered models?

DS: 85% of Cramo’s rental fleet is powered by electricity. We continuously work to mitigate our climate impact by reducing energy consumption, therefore, actively invest in green energy technologies, switching from diesel-powered models to equipment that works with alternative energy sources.

Our range of equipment includes various lifts and other machinery with electric motors (Eco Choice), thus contributing to the sustainable operation of our clients’ projects.

IRN: Are customers willing to pay for alternative-powered models?

DS: I would say “not yet”, as Latvia has only recently begun to focus on the green energy, and currently customers in the rental industry are not ready to overpay for rental equipment that works with alternative engines.

These technologies are not fully thought through. In winter, green energy equipment often loses efficiency compared to diesel-powered equipment because it is not yet developed enough to be able to operate efficiently in all conditions.

However, I think it’s only a matter of time. Equipment manufacturers are actively working on the modernisation and improvement of models.

Rental prices for alternative energy models do not differ significantly, so customers always have a free choice of which equipment to choose.

IRN: How are you dealing with the energy transition?

DS: Green energy is our future and it is important for us to keep up with the times, adapting to the market and innovations, keeping in mind future generations.

Expanding our fleet with green energy equipment, we constantly organise trainings for our colleagues - service department, warehouse employees and sales representatives.

Thus, they can provide professional support and consultation to every customer.

Since we have not yet completely abandoned diesel-powered equipment, the transition to green energy is not so rapid, and very noticeable to us or to our customers. Currently, customers have a choice - to rent an electric or diesel lift, depending on their needs.

IRN: With regards to Boels, is Cramo given the autonomy to invest in fleet, or is this done through Boels?

DS: We, Boels-Cramo, are a very large company with a wide fleet of equipment and experience in the field of rental. We are pleased to have the opportunity to work with Boels and receive support from experienced managers.

Most of the equipment orders are centralised, but there is a part of the equipment that we purchase locally in order to be able to quickly and qualitatively serve and provide our customers.

Of course, every purchase is discussed with me as the Latvian rental manager, taking into account our specific needs for equipment in the Latvian market.

I feel I have freedom in making decisions and our wishes are always listened to.