The significant industry demand, combined with the immense success of our new MAX-Series line of compact track loaders, has led to ASV increasing production capacity by 30 percent in Q1 of 2021. This will create 28 new jobs in our Grand Rapids, Minnesota, facility – made up of assemblers, welders, warehouse clerks, production staff, and more. The increased capacity will be a massive leap forward for our business and will strengthen ASV machine availability in the compact equipment industry.
Overall, the industry outlook remains positive and in 2021 we are optimistic in the growth we have planned, with this change being a clear example. We are thankful to have a strong team and dealer network that has not only stood with us throughout the pandemic, but invested in the many opportunities in front of us.
Brokk and Aquajet are not new companies. Both have a long history of innovation. For decades, our customers have relied on our cutting-edge demolition and Hydrodemolition robots to outmaneuver labor shortfalls – reducing risk and physical requirements to keep skilled employees on the jobsite and drawing in younger workers with new technology. Pre-pandemic, for example, one contractor was able to effectively complete a large parking garage renovation six months faster with an Aqua Cutter 710V and a six-person crew instead of the 18 they had estimated. Another cut crew size by 15 to 20 on an interior demolition using one of our smaller Brokk demolition robots.
As we continue on the road to recovery, we expect more contractors will realize the benefits of demolition and Hydrodemolition robots as a long-term solution to labor shortages – not only in terms of safety and efficiency, but also as a valuable tool to maintain productivity despite workforce disruptions.
We gained big wins in 2020, which helped to balance out the downswing faced by the industry. Most notably, we hired an experienced outside salesman in the Midwest – Tim Smith – who has been a great source of support and knowledge for our customers. We are looking to further expand our sales team in 2021, to continue growing our dealer network in regions like the Southwest. We are confident that the market will come back strong and look at these expansions as a support system for customers nationwide.
The largest adjustment in our operations has been the way we communicate with customers. Traveling to jobsites for hands-on training has always been important to us. Considering the current climate, we’ve had to adapt. We put more of a focus on virtual communication methods and put emphasis on building our video library of applications. Whether in person or through virtual communication, we are committed to supporting our customers and their success.
With the varying levels of shutdowns and limitations, we were fortunate to have seen a decent amount of movement among contractors, municipalities and other groups. We are optimistic about 2021 and the possible growth in the industry as we all rebound from 2020.
One of the benefits of being a smaller operation is the opportunity to take time to focus on things that will positively affect our business going forward. Because of a slowdown in production, we were able to step back and assess a few details of our operation. We took a hard look at improving our assembly times, plant layout, and overall efficiencies. These improvements will play a large role as we escalate production into 2021.
The last few months also enabled us to find new ways to stay connected to customers and build new relationships. Our teams spent many hours conducting Zoom meetings, training sessions, and connecting with one another in both new and traditional ways.
We anticipate that 2021 is going to come back positively and dramatically. Since we have focused on business improvements, we look forward to putting them into place to fulfill orders and support customers. We are optimistic about rental centers going through replacement cycles and contractors eager to fill their fleet in anticipation for more jobs coming their way.
We adjusted work schedules to reduce contact between staff, as the safety of our employees and families is a priority. We alternated between two groups of the team in the office on consecutive weeks to reduce the potential for exposure. Since the case numbers in our area have not spiked, we are now operating back at full staff with normal speeds and conditions.
It is hard to estimate what the future of the industry will hold, but we look forward to helping our customers succeed. This goes even further than finding the right tools for their needs; it also includes providing the highest level of customer support and assistance even after the sale. We will continue to support our customers as we head into 2021, working with them on payment schedules, quick delivery rates and great customer service.
Despite positive movement in Q4 of 2020, we expect the construction market will remain unpredictable and turbulent into 2021. Decreases in demand resulted in many of our industry peers restructuring/downsizing. There’s little reason to believe that the situation in 2021 will suddenly stabilize – on the contrary, there is evidence to suggest that available capital for infrastructure spending will decrease further. However, we believe our crawler skid excavators and swing loaders are ideally suited to help the North American market bounce back by streamlining jobsites and injecting game-changing productivity.
Given our market positioning, our relatively recent launch in North America, and our still nascent geographic coverage, we are optimistic that despite the headwinds, Mecalac will continue to grow briskly. We added five new dealers in 2020 and are already in talks for further dealers throughout 2021. Customers are re-ordering from existing dealers. The market is responding positively to the unique capabilities of our machines. While certainly not immune to the vagaries of a troubled global economy, we believe that these other circumstances will prevail, and we are planning accordingly.
This is thanks in part to widespread optimism for an eminent transportation bill. The need for a solid infrastructure bill has been clear for some time, but with the added stress of the pandemic, approving spending early in 2021 will be a great way to increase jobs and jump-start the economy.
New legislation won’t be instantaneous, but we expect the benefits of infrastructure spending will quickly trickle down through the markets. We will have to see how things play out in Washington before we know exactly what we can expect, but overall, we are hopeful production and spending will rebound to 2019 levels or higher.
Flexibility will remain a key challenge throughout the industry as we all strive to meet deadlines amid slowdowns, shutdowns and any number of unforeseen potholes. Before, this might have stopped us, but we’ve adapted and will continue working together for overall success.