As good as new
Richard Piper travels to Rioja, Spain, to visit used and refurbished equipment supplier Lacueva.
As I received a text message from my mobile phone supplier on arrival at Zaragoza airport I happened to look at the other messages I’d been sent over the past two months advising me of the various charges that would be levied should I need to use my cell whilst abroad. The list was longer than I expected – from Switzerland to Thailand, Germany to the US, on to Mexico and now to Spain.
Some may be thinking how nice it is to have such an abundance of annual leave to use for what would truly be a lot of holidays for one man to take in such a short space of time, but the truth is that every one of these trips, without exception, was to visit you – our readers.
So it was in Spain, as publishing director Neil McRitchie and I descended upon a heavy hitter in the used and refurbished three-piece equipment market, namely Lacueva Can Making Machinery.
The company was founded in 1968 by Octavio Lacueva, who started as a machine maker for Barcelona firm Blanch. During his time at the company he was seconded to a firm in La Rioja, Spain, for one year, to do maintenance on a can line in the region. It was whilst there that he realised the potential for a new business opportunity of his own, servicing the can makers and fillers that had emerged in the area to fulfil the packaging requirements of an abundance of local produce. And so Lacueva was born.
Starting initially with a service workshop, he quickly realised the potential for second hand machinery and took the decision to diversify. Now, nearly 50 years later, son Oscar Lacueva is at the helm.
With his father being an old fashioned man, he ensured that nothing was taken for granted by his son, making the then 19 year old start at the very bottom as sweeper of the warehouse for 480 Euros per month. “Today I earn around 10% more than this,” laughs Oscar.
Taking a look around the company’s nine warehouses it is easy to see just how far the business has come over the last five decades. As far as the eye can see there are machines in various states of repair and his nine staff appear to be very busy indeed. Oscar tells me that his team are equipped to fully refurbish any amount of different can making machines – all for the three-piece market – and the evidence of this is all around.
First the machines that he buys are stripped of their original paint, rubbed down and the necessary parts resprayed. “My guy who does the paintwork came to me from the car industry,” says Oscar, “so he is very good at what he does.” The majority of machines have an original green colour, which is very rough to the touch and gives the impression of having been hand painted – which they may well have been. Oscar prefers to repaint the refurbished machines in a brilliant white colour, with a rich blue and bright red painted on certain smaller parts.
Some are just in need of a touch up here and there, with minor parts needing to be replaced, others are in need of a complete overhaul, with new parts being made to order and then installed by his team of engineers.
You can see from the pictures we have included just what a difference can be made with a hardworking and dedicated team of professionals.
I ask how long it would take to set up a can line from scratch using his machines if I were in the market to start my own business in this field (which, by the way, I am not looking to do for now).
“It would really depend on your requirements,” he says. “But we can offer an installation service and advice, and I think you could have an operational line in as little as two months.”
Indeed, you could set up several lines with the machinery he has in stock, which amounts to an incredible 4,000 separate pieces of kit.
This level of inventory was achieved at considerable (if slightly calculated) risk. “I am always looking to expand the business if the market demand is right,” says Oscar, “and last year I completed the biggest deal of my life.”
The deal, to buy Grupo Zapata in Gerona, was a shrewd move as it turned out. Oscar put his company up as collateral to purchase 122 trucks full of machinery from Zapata, in a sale that would finally be decided by sealed bids. “In Spain you cannot do deals on machinery ahead of time in order to ensure you have clients waiting for you when you close a deal like this. First you must buy the machines, then you can do business,” says Oscar.
It certainly seems to have paid off, as he tells me that the initial loan from the bank he secured to make the purchase was paid back to them in less than three months ¬– an unbelievably quick return on investment. “They asked me how it was possible in such a short time,” says Oscar, before smiling almost imperceptibly to himself and giving a small shrug of the shoulders. He is justifiably proud of this it seems. It was possible, in fact, because an incredible 80 per cent of the machinery purchased was sold within that three month period.
In addition, and partly due to an abundance of vacant properties in Spain at present, he was able to secure a warehouse facility from a company that had fallen foul of the receivers this year. The warehouse and plot gives him several thousand square feet of storage space and the level of investment under the circumstances was very low compared to the site’s real value. “I have also bought 15,000 square metres of land around our existing warehouses in case we need to expand,” says Oscar. “This business is not just for today, not just for tomorrow, but for many years into the future. I am always trying to plan ahead so that we are able to meet customers’ requirements as the market demands.”
Going forward, I ask what the future holds for Lacueva. Again, another small shrug from Oscar. “For now we are working on four new lines, so we are very busy,” he says. After that, we will see. As I said, I am constantly listening to what our customers are saying and trying to gauge where the industry will go in the future. Next year I intend to travel a lot, to visit my clients and to see what trends are emerging. South America at the moment is a very big market for us, but we are also seeing many orders from Eastern Europe, from countries like the Ukraine.”
Wherever the market goes there will always be a need for used and refurbished equipment, especially machines that have been brought up to the standards that Lacueva demands of its team. The three-piece market has had its ups and downs, but this company’s on-going success seems to suggest that the current and future needs of three-piece can making will continue to grow and grow.
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