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Ritchie Bros. sets downturn on its ear

Nisku – Despite the oil and gas downturn, Ritchie Bros. industrial auctioneers sold more than $215 million of heavy equipment and trucks at its largest ever unreserved public auction in Canada.
There were rows and rows of heavy equipment for sale at Ritchie Bros.’ largest Canadian auction held in Nisku, Alta. from April 28-May 1.
Nisku – Despite the oil and gas downturn, Ritchie Bros. industrial auctioneers sold more than $215 million of heavy equipment and trucks at its largest ever unreserved public auction in Canada.
The auction was held in Nisku from April 28 to May 1 and beat last year’s sales record of approximately $143 million when commodity prices were much higher than today.
“Pricing has been solid, in fact, above expectations. It’s been very good,” said Randy Wall, president of Ritchie Bros. Canada during a May 1 media tour in Nisku.
That was when excavators, compactors, forestry equipment, and oil and gas and drilling equipment went on the block, but Wall noted everything in the yard can be or is directly or indirectly related to the energy sector. 
“But most of it as well can be used in multiple applications,” said Wall.
“So it could be used in forestry. It could be used in transportation with heavy trucks. It could be pushing dirt in the oil patch or it could be pushing dirt on the farm or in the U.S. on a housing subdivision.
“There’s lot of different applications, but today does have some specialty oilfield drilling equipment, but it’s a very small portion of what we have here for sale.”
Those final auction items helped Ritchie Bros. set a company of a record 7,700 plus lots sold and a record number of 14,000 registered bidders.
“As you can see from the amount of equipment here and the number of people we’ve had registered, there’s a tremendous amount of interest and a lot of money out there,” said Wall.
“Surprising as some people might find that, it doesn’t surprise us. 
“We believe with all these industries playing on top of each other as well as international buyers – Americans – offshore, that there is tremendous strength globally still in the industrial sector.”
More than $192 million or 89 percent of the equipment was purchased by Canadian buyers, in Nisku including 51 percent purchased by buyers from Alberta.
The rest of the equipment was sold to buyers from around the world, as far away as the United Arab Emirates, Germany, Egypt, Malaysia, Thailand, Poland and the Netherlands.
“The vast majority of this equipment actually stays in the province of Alberta,” Wall said.
“Despite what people think about weakness, there is still a lot of work here.”
Earlier this year, industry analysts forecasted Alberta would lose over 30,000 jobs in the energy sector in 2015 due to companies cutting capital expenditures in the low commodity price environment. 
“A lot of these companies that play specifically in the energy space have been watching their fleets and managing them for well over a year with what they expect to see coming up in terms of work,” explained Wall.
“Some of the bigger contractors actually have been buying here at the auction. “
Wall said there is a complete range of reasons why people put their equipment up for auction or place bids especially during the spring Nisku event.
“It’s a great time for contractors and alike to dispose of their gear for the winter season and get ready for the busy summer season. It’s a great time and a great sale,” he said.
“There could be a small contractor who just needs to upgrade and get a newer machine. 
“It could be jobs that are finishing and they need to dispose of their fleet – they don’t need it all for the next job. Perhaps, they need a different mix of equipment for the next job.
“Summer work and winter work are quite different, so we traditionally have our biggest auction right now, and that tends to be the winter season product being sold. Then companies gear up for more of the dirt jobs in the summer.
“We have a lot of dispersals here in this auction.”
Ritchie Bros. sold equipment for more than 760 sellers, including a complete dispersal for Earth & Iron Inc. and a fleet realignment for A-1 Rentals, two Alberta-based companies.
“I’m very proud of my iron, and I’m proud of what Ritchie Bros. did to market it. Together we sent Earth & Iron equipment to new buyers around the world,” said Dean Gray, president of Earth & Iron in a news release. 
“I’m very pleased with the results. There is no other company in the world that can do what Ritchie Bros. does. I watched the sale online and saw bidders participating from all around the world.”
“This is the third time we’ve done realignment through Ritchie Bros., and we keep coming back because returns have been so strong,” said Guy Turnbull, owner and president of A-1 Rentals in a statement. 
Turnbull also spoke with Pipeline News in a separate story in this edition about his company.
“While there is certainly less work for some sectors in Alberta, there’s still money here and people are still buying equipment,” added Turnbull. 
He was one of 6,000 people that attended the auction in person at Ritchie Bros.’ 150 acre yard in Nisku.
“A lot of people come in advance of the event. They do their inspection. It’s such a large array of product that they can choose from, so they come and do their shopping selections early,” said Wall. 
The record-setting selection of heavy equipment and trucks included more than 240 excavators, 225 crawler tractors, 200 compactors, 100 articulated dump trucks, 80 wheel loaders, 7 motor graders, 40 motor scrapers, 50 agricultural tractors, 195 truck tractors and more. 
Every item was sold to the highest bidder on auction day, with no minimum bids or reserve prices.
The oil and gas auction on May 1 included projected images of the equipment and live real time bids on monitors inside the auction ring.
“Depending on the day and the type of product we have, it will either be live or the items will be driven across the auction theatre or the ramp in front of the bidding crowd,” said Wall.
“Today, because of the nature of the items – some of them are non-mobile – such as some of the specialized drilling equipment, so that’s sold always by screen.”
The auction set additional company records for online sales of over $105 million, the number of online bidders (8,150) total buyers (3,200) and online buyers (1,850).
Bids were made in person at the Edmonton auction site, online in real time at Ritchie Bros’ auction web site and by proxy.
“It’s a tremendous week. It’s fantastic. It’s exciting,” said Wall as he put it into perspective for his company.
“It sets another bar for us to try to do better and exceed next time.”
There will be celebration of sorts he suggested that night, but it would be a short lived one.
“We’ll have a nice meal tonight and maybe a beer or a glass of wine, but we’ll also be looking at what we did well, where the equipment went – we want to look after our customers,” he said.
“Just because the last item sold today it doesn’t mean that the sale is over. 
“We still have to collect the funds. We have to report back to the owners and now we also have to release all this equipment.
“We have about 8,000 items that have to get back on trucks and leave the yard. We’re far from done.”
The Ritchie Bros. auction calendar currently features more than 80 unreserved public auctions around the world, including their next unreserved public auction in Edmonton, AB, from June 9 – 10.
The company will also hold equipment auctions in Saskatoon in June 22-23 and in Regina on July 14. 
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