Meet the Parents

Feature

Meet the Parents

UK manufacturer Douglas Equipment has seen its fair share of owners over the years and recently entered a new chapter in its history following the company's acquisition by the Hong Kong-based trading group Aquarius

By Michelle Garetson/p>

By Richard Rowe

December 2002

Feature ImageThe news that the ownership of Douglas Equipment, one of the UK's most prominent GSE suppliers, has changed hands was perhaps no big secret in an industry that usually has at least one ear to the ground. Much less is known, however, about its new owner, the Hong Kong-based Aquarius Group. Essentially a holding company, Aquarius is active in several industries from manufacturing office furniture and motorcycle parts to aviation interests such as running duty free concessions at airports.

The company is also no stranger to GSE, albeit on the marketing side rather than pure manufacturing. One of the Group's many subsidiaries, the GSE marketing company Denson Enterprises, has operated as a distributor for Douglas in Asia for 20 years and has also run the UK company's Far East and Southeast Asia field service support facility in Hong Kong since 1993.

The origins of the acquisition date back to the first quarter of 2002 when Aquarius first approached the Belgian venture capitalist Vehicle Solutions, the previous owner of Douglas. Vehicle Solutions itself had acquired both Douglas and German GSE manufacturer Schopf three years previously.

Timing is often crucial in such deals and this was no exception. In this instance, Aquarius made its approach at a point when Vehicle Solutions was in something of a quandary: what to do with two GSE businesses both operating in the same traumatised market?

Although separate, the two manufacturers had collaborated on specific projects for some time; SCHOPF, for instance, marketed the Douglas range of towbarless tractors in Germany, while Douglas reciprocated on the SCHOPF range of conventional tractors elsewhere.

Taking the next step forward, however, was proving more difficult for Vehicle Solutions; the possibility of merging the companies, with the manufacture of Douglas products moving to Germany, was just one option considered.

So, when Aquarius came in for Douglas, Vehicle Solutions found an answer to the conundrum. "I think the state of the industry presented a good opportunity for Aquarius to seek acquiring Douglas from a group that owned two tractor manufacturers and which was then looking at rationalising the product ranges of the two businesses," confirms Mike Doane, Sales Director and the public face of Douglas for so many years.

Certainly, given the long history of partnership between Denson and Douglas, Aquarius knew what it would be buying: a strong business with a recognised brand and a global customer base of airlines and handling agents.

On paper, the deal looks like a win-win for both parties. Aquarius adds an industry leader to its portfolio, while Douglas secures what most companies look for in a parent: financial stability and long-term commitment.

"The acquisition certainly provides us with membership of a large, financially strong and privately owned group that has a long-term interest in developing and growing Douglas, especially on the GSE side," confirms Doane.

Mike Doane, Sales Director of Douglas Equipment.
Mike Doane,
Sales Director of Douglas Equipment.

Perhaps the biggest challenge now is managing the gradual withdrawal from the past relationship with SCHOPF. Both camps are cagey about how this will happen and the exact timetable.

"We are still working on a number of joint projects and will continue to provide ongoing after sales support for each other's equipment in our home and selected markets," explains Doane. He admits, however, that the end result of having separate parents "will inevitably take us along different roads" as the two companies seek alternative solutions to meet customer needs.

Fixture
Douglas has been a fixture on the GSE circuit, albeit under many different owners, for more than 50 years. The company began life from humble origins in 1947 in the picturesque English Cotswolds, and has since become one of the world's leading suppliers of aviation tow tractors (primarily the Tugmaster range) and other ground support vehicles.

But it was perhaps in 1989 that Douglas really sealed its place as a major industry player with the introduction of what was then considered controversial and newfangled technology: handling tractors that lifted and locked on to an aircraft's nose wheel for pushback and towing rather than relying on the use of a separately fitted towbar.

Other manufacturers from the early 1970s onwards, principally in France and Germany, had explored the possibility of such technology, but Douglas is widely credited as being the first manufacturer to deliver a relatively affordable towbarless solution.

Today, the wide range of Douglas-Kalmar towbarless tractors can handle aircraft up to the largest fully laden B747. Worldwide, Douglas has sold more than 400 units and claims a market share approaching 55 to 60 percent in the field.

TBL 180 towing a Malev B737
TBL 180 towing a Malev B737.

In addition to its commercial aviation GSE, Douglas also manufactures yard shunting tractors for the distribution industry and Ro-Ro/Terminal tractors for seaport use, as well as the Mu-Meter runway friction measuring equipment. The final piece in the production puzzle is an important military division that manufactures a range of GSE from the EN Handler for military aircraft to a series of Mobilisers that convert standard ISO containers into self-contained towable trailers.

Aviation products may now represent 70percent of the Douglas business, but the company's market diversity has certainly helped it through what has been such a rough year for so many. "We were probably not as hard hit as others," explains Doane. "We had a full order book through to last February with no cancellations. But we certainly felt the effect after that."

Of course, Aquarius has not stepped in to see Douglas stand still and expects growth in all of its new acquisition's business segments. Doane stresses that the GSE product line, in particular, remains crucial, despite current industry difficulties.

"Financially and strategically, the GSE product line is very important to the overall business and in recent years has been a major contributor to Douglas," he explains. "The industry may have been in the doldrums but it will come back and we will be positioned to take advantage of the upturn."

The plan is for Aquarius to remain very much in the background, with the one major change being the appointment of Denson's General Manager, Lee Brewis, as Managing Director of Douglas. Brewis has more than 20 years of experience in the GSE business, including time spent with the Australian Air Force, and is considered well equipped to move the company forward.

"Really, it is very much business as usual, although we can now be much more aggressive in developing and marketing new products and seeking new markets," says Doane. Certainly, Aquarius's location in Hong Kong and knowledge of the region suggests that Mainland China, in particular, could become a lucrative market for Douglas in the future.

"Above all, we will continue to grow on the strong foundations we have in place, albeit with the added stability of being part of a large and financially strong group," adds Doane.

Importantly, customer reaction to date appears positive - airlines and handlers like stable suppliers, now more than ever - a reaction that is attributed to the perceived staying power of Douglas's new owners.

"We have been owned by several groups in the public sector over the last 14 years and customers now see our return to the private sector as bringing increased stability to our business," suggests Doane.

For now, the transition period during which Aquarius and Douglas will move from a sales and marketing relationship to a much more integral partnership will involve an inevitable getting to know you period. The priority is to consolidate the business and market share, which is likely to involve a full review of the overall manufacturing strategy.

"We must ensure that we offer products as competitively as possible without compromising design and reliability," confirms Doane. "We can then continue to develop our various product ranges to ensure we are meeting current and future requirements."

This year has already seen the company introduce its new Douglas-Kalmar TBL 50 towbarless tractor for pushback and maintenance towing operations for regional aircraft, as well as a new version of the Mu-Meter runway friction measuring equipment.

"We are also about to launch the Douglas-Kalmar TBL 25 battery electric towbarless pushback tractor," adds Doane. The unit will be able to handle general aviation, business and regional type aircraft with maximum ramp weights up to 30 tonnes.

At the other end of the scale, comes the introduction in early 2003 of the Douglas-Kalmar TBL600 for handling the new Airbus A380, itself due in service in 2006.

Looking forward, the omens are good for Douglas, particularly if the industry continues its gradual recovery. Indeed, the success or otherwise of the UK manufacturer may well influence its new parent's decision to explore additional GSE ventures.

"We'll just have to wait and see how Douglas develops first," says Doane.

Photos courtesy of Douglas Equipment.

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