New Caterpillar schemes to help customers

Caterpillar, one of the leading manufacturers of earthmovers and other construction-related machinery, yesterday said it has started new financial schemes to support its customers in the region, especially in the UAE.

The company's sales in the UAE have fallen by almost 80 per cent this quarter compared to last year as the industry is going through one of its worst slowdowns.

Chris Hathaway, District Manager at Caterpillar in the UAE, yesterday told Emirates Business that most of the sales are to independent distributors.

"We are continuing the support to our customers and the UAE market. We have increased our finance availability in the UAE and we are also focusing on giving product support. Through Caterpillar we are able to secure some funds which we are making available for our customers on very attractive interest rates," he said.

"As far as payments are concerned, there have been some cases where customers were having difficulties. But we have reached some agreement to reschedule these payments," said Hathaway.

Saudi is the only market which is showing some signs of real growth, he told Emirates Business.

"Things have started to move forward in the Saudi market. Following a decline in sales across the Gulf, Caterpillar is looking for improving its performance in Saudi," said Hathaway.

"The slowdown in the Gulf market as a whole, excluding the Saudi market, is about 60 per cent. In Saudi Arabia, there was a four-month period when there was a complete stop in activity. Now it has resumed and we see a momentum there. It is picking up to 2007 levels," he said.

"The other market that is active is Qatar, where we are focusing on increasing our operations," said Hathaway.

With increasing number of infrastructure projects being awarded by government agencies, there is a visible surge in machineries used in this sector. "While we continue to sell the full range of products, large machines used at mega projects have slowed down. In the UAE, purchases are more for the utility range. Machineries used for infrastructure development are moving forward, especially in Saudi Arabia where major infrastructure projects are coming on board," he said.

Caterpillar, the world's largest maker of earthmovers, last week posted a net loss of $112 million (Dh411m), its first quarterly loss in 16 years.

The company has cut more than 24,000 jobs since December and imposed shutdowns, partial workweeks and executive pay cuts to cope with the global credit crisis and longest US slump in a quarter century.

Meanwhile, across Dubai, several companies renting machinery and equipment said they have had no work for several weeks.

Hundreds of JCB machines and other trucks are lined up in pavements near Mall of the Emirates, Jebel Ali and Al Qouz.

The rental cost of these machines have dropped by over 50 per cent, and drivers say many of them have been staying idle for several weeks.

Harnaik Singh, from Punjab in India, said the rental cost of JCB has fallen from Dh130-Dh150 per hour to less than Dh50.

"There was a situation last year when there were no machines available and we used to work in shifts. The whole of last week I had just five hours of work. There are many who have not removed their vehicles from here for more than two months now," said Singh.

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