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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: This is Premiere conferencing. Please stand by. We're about to begin. Good morning, ladies and gentlemen, and welcome to the Volvo Construction conference call. As a reminder, today's call is being recorded. At this time, I would like to turn the conference call over to Mr. Fredrik Brunell. Please go ahead, sir.
FREDRIK BRUNELL, INVESTOR RELATIONS, VOLVO CONSTRUCTION EQUIPMENT: Thank you and good morning and good afternoon, everyone. This is Fredrik Brunell, head of investor relations, wishing you welcome to this conference call on construction equipment. Today's call is initiated on the request for business update from several of you. And we have prepared a presentation that you will find on the volvo.com. The presentation will focus on - more on the strategic issues as we're getting closer to the quarter results. And, as you know, we don't give any financial forecast.
The call is expected to last one hour in total and we will start with a 20-minute presentation and we will then open for questions. From Volvo CE, I have Tony Helsham, President and - of Volvo Construction Equipment with me as well as Scott Hall, Executive Vice President, Marketing and Sales, and Gus Magnuson (ph), Head of Communications at Volvo CE. Having said that, I would like to turn over the call to you, Tony. Please go ahead.
TONY HELSHAM, PRESIDENT AND CEO, VOLVO CONSTRUCTION EQUIPMENT: Thank you, Fredrik, and good morning and good afternoon, ladies and gentlemen, and welcome to this conference call. Let me start by saying I'm going with the assumption here that you all have a good knowledge of Volvo and that you have a good or fair knowledge of Volvo CE as well as the construction equipment industry. And I will, therefore, not go into a lot of details in that area, particularly Volvo.
It's our intention here to be quite brief, to give you an update as - according to the presentation outline and then leave quite a lot of time for questions because I think we'll get - we'll all get more benefit out of this if we leave a good time for questions and answers.
I guess you all have a copy of the presentation outline, so if you would flip with me to page one, we are going to discuss briefly the company evolution, market development, market potential and growth potential, some words on our strategy and then we'll open it up to Q&A. If you flip with me to slide two, the evolution of Volvo CE over the last 10 or 12 years has very much followed business cycle management. In the period 1990 to 1992, which was the last major downturn in the construction equipment industry, we were focused, I would say, very much on survival and very much on staying afloat with a positive bottom line.
As the world market came out of the downturn, we were able to move into a period of growth and during that period, '93 through '98, growth very much came from a number of strategic acquisitions. Pel-job - we acquired Pel-job, the compact excavator business France. We acquired Champion Motor Graders in Canada. And the biggest acquisition that we made in that period was in June of 1998 where we acquired the construction equipment business from Samsung in South Korea.
The next few years, we entered into a phase of consolidation and restructuring. In terms of industrial We also In terms of industrial restructuring, we closed down the Eslov manufacturing facility in Sweden for excavators. restructuring, we closed down the Eslov manufacturing facility in Sweden for excavators. exited the fabrication of articulated haulers and wheel loaders. Now, I'm talking fabrication, not assembly, in Asheville. We dropped two product lines. We dropped the Akerman Excavator from Sweden and we also exited the rigid hauler business - the Euclid (ph) rigid hauler business, which we divested a portion to Hitachi.
One consequence of making all these acquisitions was the - along with the acquisitions came a large number of dealers in all the countries around the world. And it took us quite a number of years during this period of 1999 to 2001 where we were actually restructuring our dealer network, the end result being that we have slimmed down the total dealer network from 520 - approximately 520 dealer ownership groups down to approximately 160, globally. Equally important during this period, we were able to consolidate the brands that we had acquired and launch all our products with the one brand - the Volvo brand, which now forms part of our ongoing strategy to have only one brand. And we'll come back to that later this morning. In conjunction with launching and having all our products single brand Volvo, we were able to launch our - one of the strategies within the company for integrating all the acquired companies in a project that we call our one company vision.
And now, for 2002 going forward, we are entering, I believe, now into another phase of what we would call profitable growth. We have, during this period, made a number of strategic acquisitions, we've added a number of strategic acquisitions. We have acquired the intellectual property of a range of skid steers from OmniQuip. We have purchased telescopic handler from UpRight. We have made the small acquisition in compaction equipment from SuperPac. And, at the same time, we have finally launched our own fully developed, fully developed backhoe loader onto the market at the end of 2002.
At the same time, we have gone through an extensive product range renewal. We have launched over 40 new products in the last two years. We have also put on the block, put onto the map, our rental initiative and we are ramping up the numbers of stores that we are opening. From an industrial standpoint, we have focused very much on reducing the breakeven point, particularly on our wheel loaders, motor graders and articulated haulers and compact equipment. We see some very positive results coming out of those difficult activities.
And from an industrial restructuring standpoint, we have closed down the assembly of small wheel loaders in Eskilstuna, Sweden and moved that assembly to another wheel loader factory in Arvika, Sweden. And we have ceased the assembly of articulated haulers in Asheville and we've concentrated our articulated hauler manufacturing business in two locations rather than three, one being in Bralson (ph), Sweden where the articulated hauler head office is and the other in Pidenez (ph), in Brazil. And not the least, during this period, we have opened up a marketing and sales organization in China. We have begun production of excavators in China in a factory in Pu Don (ph) Region, south of Shanghai. And we have launched a spare parts warehouse in China.
We then flip to slide three. We have a graphical picture here of the growth of Volvo CE's volume in terms of units. If you, in the last 12 or 13 years, if you take the blue bars first, you can see that is the Volvo historical volume development. And by that we mean primarily the volume of wheel loaders and articulated haulers. And during this period, you can see that although there was some cyclicality, the average volume is some five to six - 6,000 to 7,000 machines. But on top of that and giving us most of the growth to date has been the volumes added through acquisitions. You can see here the volumes added through the acquisition of Zettelmeyer, which is the compact wheel loaders in 1990 and then on through this period.
Akerman was an excavator company that we acquired, a Swedish excavator company that we acquired in 1991 and, frankly, that was not a successful acquisition. And as a consequence of the Samsung acquisition, we phased out the Akerman business in Eslov in 1999. In 1996, we were able to acquire Pel-job, the compact excavator business. 1997 was Champion Motor Graders. You can see, starting halfway through 1998, the volume addition as a consequence of the Samsung acquisition.
And now, just starting to have an impact in the last few months of this year has been the addition of the backhoe loader business. And just at the top of the chart there you can see a very small contribution from skid steer loaders because we are …