THE INTERNATIONAL STAGE

Colombia 2016 | ENERGY & MINING | INTERVIEW

TBY talks to Oliver Hoelzer, General Manager of Liebherr Colombia, on working in Barranquilla, foreign players, and the significance of the country for the group.

Oliver Hoelzer
BIOGRAPHY
Oliver Hoelzer has been with Liebherr for more than 15 years. He started out with the company in Madrid, before moving on to positions in France, where he served as group leader, and later Colombia, where he currently serves as General Operations Manager. Hoelzer has a degree in international business.

Last year was a record year in terms of worldwide revenues. How did Colombia contribute, and how was Liebherr's performance in Colombia?

First of all, Liebherr Colombia covers the mining line of Liebherr and the construction equipment, namely mobile cranes, deep foundation equipment, tower cranes, and the maritime division line. We are called a mixed-sales company. Of course, every division performed differently, and as you know, mining has been experiencing continuing difficulties since 2013, but other sectors relating to construction and infrastructure are performing pretty well. We want to continue walking that path, as we expect the Colombian construction sector will grow, although we will still focus on mining, as sooner or later the picture will change.

What is the competition like in Colombia? Have you seen many foreign players entering the market and competing against local players?

That depends on the product we are talking about. For example, in mining, which is the division that I am in charge of, we do not have unusual players. The big four in mining on the excavation side are Caterpillar, Ingersoll Rand, Hitachi, and Liebherr. In trucks, there are a couple more competitors, who are mostly Chinese, but at this stage they are not as strong. It is completely different in earthmoving, for example, where the smaller excavators are Chinese and really strong, but not yet in mining.

What gaps in the market can Liebherr help fill?

I do not think that there are any opportunities in the mining market that are not being tackled by us. The mining market in the country is rather small, consisting of a few mines and contractors, and that is it basically. There are a couple of quarry mines, and we also have some of our equipment in operation here in Bogotá, but even the smallest pieces of equipment for the quarry mines are still quite big.

Why did you decide on Barranquilla as the location for your head office?

We started in mining and there was no other division that wanted to join Liebherr Colombia, so we opted for Barranquilla. Barranquilla is the operational center for mining; all the sub-contractors are based here. Another factor was that Barranquilla was close to the mines where all of our equipment was operating; it is four to five hours to Cerrejon and to the Cesar region, which is why we opted for this city over Bogotá.

How important is Colombia for the Liebherr Group?

You cannot just take the figures. If you take the turnover generated by Colombia versus the turnover of the Leibherr Group in total, then we are not important. But we do have a couple of very important clients here that are using our mining equipment. Colombia is a mining country. There are opportunities on the horizon once coal prices improve.

Has devaluation affected Liebherr significantly?

Because we purchase goods from Europe to sell to customers here in Colombia, we have been affected. The COP devaluation is affecting our business and we are afraid that the operators in the construction sector, which is currently experiencing a boom, will decide that this is not a good time to buy equipment from Europe, and we expect customers to postpone purchases. The COP is the main determinant of our business right now. Last year our main sector was civil construction, while in mining we suffered a recession with regards to our sales figures. We had a positive turnover, increasing it by 3.4%, but it was not enough due to the mining crisis as well as the COP devaluation, as our liabilities are in Europe. Right now, our concern is that customers will decide to postpone purchases and projects, which represents a big opportunity for us. We are cautious about how this project will develop in this high dollar and euro environment.